Capital City Bank Group, Inc. Reports Second Quarter 2010 Results
TALLAHASSEE, Fla., July 20, 2010 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2010 totaling $0.7 million ($0.04 per diluted share) compared to a net loss of $3.5 million ($0.20 per diluted share) for the first quarter of 2010 and net income of $0.8 million ($0.04 per diluted share) for the second quarter of 2009. For the first six months of 2010, the Company reported a net loss of $2.7 million ($0.16 per diluted share) compared to net income of $1.4 million ($0.08 per diluted share) for the same period in 2009.
Net income for the second quarter reflects a loan loss provision of $3.6 million compared to $10.7 million for the first quarter of 2010 and $8.4 million for the second quarter of 2009. The decline in the loan loss provision was the primary factor driving earnings improvement over the first quarter. Operating revenues (net interest income plus noninterest income) increased $1.1 million, or 2.8%, over the first quarter due to higher fee income and an improved net interest margin, but were offset by higher noninterest expense of $1.2 million, or 3.7%. Compared to the second quarter of 2009, a $4.8 million reduction in the loan loss provision was offset by a decline in net interest income of $2.7 million, or 10.1%, and higher noninterest expense of $1.7 million, or 5.1%.
The decline in earnings for the first half of 2010 is attributable to lower net interest income of $5.7 million, or 10.5%, as well as higher noninterest expense of $2.8 million, or 4.3%. For the first six months of 2010, the Company recorded a loan loss provision of $14.4 million compared to $16.8 million for the same period of 2009.
"Improvement in our credit quality metrics was an encouraging sign during the second quarter," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. "While we continue to anticipate the road to recovery will be bumpy, we are encouraged by our return to profitability and overall performance in the second quarter.
"Other positive aspects of the quarter include healthy capital ratios, which were essentially unchanged quarter over quarter, ample liquidity affording us flexibility in an uncertain market and a very stable, low cost core deposit base. Although we have worked hard to continue to originate loans throughout this prolonged cycle, the availability of quality new credits remains limited and has resulted in a net reduction in our loan portfolio over the last three quarters," Smith stated.
The Return on Average Assets was .11% and the Return on Average Equity was 1.11% for the second quarter of 2010. These metrics were -.52% and -5.23% for the first quarter of 2010, and .12% and 1.12% for the second quarter of 2009, respectively.
For the first half of 2010, the Return on Average Assets was -.20% and the Return on Average Equity was -2.07% compared to .12% and 1.03%, respectively, for the first half of 2009.
Discussion of Financial Condition
Average earning assets were $2.329 billion for the second quarter of 2010, a decrease of $28.9 million, or 1.2%, from the first quarter of 2010, and an increase of $91.8 million, or 4.1%, from the fourth quarter of 2009. The decrease from the first quarter is primarily attributable to a reduction in the funds position of $35.7 million and a decline in the loan portfolio of $45.0 million, partially offset by an increase to the investment portfolio of $51.8 million. Growth over the fourth quarter is primarily attributable to an increase in the overnight funds position of $154.8 million and a higher investment portfolio of $40.5 million, partially offset by a $103.5 million decline in the loan portfolio. Average loans have declined throughout the portfolio, driven primarily by reductions in the commercial real estate and construction loan categories. The portfolio continues to be impacted by diminished loan demand, attributable to the weak economy, as we have experienced lower production levels in recent quarters. In addition to lower production and normal amortization and payoffs, the reduction in the portfolio is also attributable to charge-offs and the transfer of loans to the Other Real Estate Owned category, which collectively, accounted for $43.7 million, or 42%, of the net reduction during the first half of 2010.
At the end of the second quarter, nonperforming assets (including nonaccrual loans, restructured loans and other real estate owned) totaled $149.8 million, a decrease of $3.9 million from the first quarter of 2010, driven primarily by a decrease in restructured loans of $3.6 million. Nonaccrual loans decreased $1.9 million in the current quarter reflecting the continued slowing of loans migrating into our problem loan pool and the transfer of loans to the other real estate owned category, which increased $1.7 million. Quarter over quarter, gross additions to our problem loan pool fell by more than 50%. Nonperforming assets represented 8.01% of loans and other real estate at the end of the second quarter compared to 8.10% at the prior quarter-end and 7.38% at year-end 2009.
Average total deposits were $2.234 billion for the second quarter, a decrease of $14.6 million, or 0.7%, from the first quarter of 2010 and an increase of $144.2 million, or 6.9%, from the fourth quarter of 2009. Deposit levels remain strong but down slightly from the first quarter level, primarily attributable to lower money market balances and public funds. Our money market account promotion, which was launched during the third quarter of 2009 and concluded in the fourth quarter, has experienced runoff as rates were eased during the current quarter, but has generated in excess of $50.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank's overall liquidity position. Public funds balances have declined slightly from the linked quarter reflecting anticipated seasonality within this deposit category. Our Absolutely Free Checking ("AFC") products continue to be successful as both balances and the number of accounts continue to post growth quarter over quarter. We continue to pursue prudent pricing discipline and to manage the mix of our deposits. Therefore, we are not attempting to compete with higher rate paying competitors for deposits. The improvement from the fourth quarter reflects higher public funds of $80.2 million and core deposits of $58.6 million fueled primarily by the success of the AFC products.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $262.2 million during the second quarter of 2010 compared to an average net overnight funds sold position of $112.8 million in the fourth quarter of 2009 and an average overnight funds sold position of $297.0 million in the prior quarter. The favorable variance as compared to year-end is primarily attributable to the growth in deposits and net reductions in the loan portfolios, partially offset by higher balance in the investment portfolio. The lower balance when compared to the linked quarter primarily reflects the purchase of investment securities. If appropriate, we will continue to look to deploy a portion of the funds sold position in the investment portfolio during the second half of 2010.
Equity capital was $261.7 million as of June 30, 2010, compared to $262.0 million as of March 31, 2010 and $267.9 million as of December 31, 2009. Our leverage ratio was 9.58%, 9.64%, and 10.39%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.14% at June 30, 2010 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At June 30, 2010, our tangible common equity ratio was 6.80%, compared to 6.62% at March 31, 2010 and 6.84% at December 31, 2009.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2010 was $24.7 million compared to $24.5 million for the first quarter of 2010 and $27.7 million for the second quarter of 2009. For the first half of 2010, tax equivalent net interest income totaled $49.2 million compared to $55.3 million in 2009.
The increase of $0.2 million in tax equivalent net interest income on a linked quarter basis was due to one additional calendar day, a decrease in foregone interest on nonaccrual loans and lower interest expense, partially offset by a reduction in loan income, attributable to declining loan balances, and continued unfavorable asset repricing. Lower interest expense reflects a reduction in deposit rates primarily in the categories of money market accounts and certificates of deposit.
The decrease of $6.1 million in tax equivalent net interest income for the first half of 2010, as compared to the same period in 2009, resulted from a reduction in loans outstanding, lower earning assets yields reflecting unfavorable asset repricing, higher foregone interest and lower loan fees, partially offset by a reduction in interest expense.
The net interest margin in the second quarter of 2010 was 4.26%, an increase of five basis points over the linked quarter and a decline of 85 basis points from the second quarter of 2009. The increase in the margin when compared to the linked quarter was a result of a 10 basis point reduction in the cost of funds, partially offset by a lower yield on earning assets of five basis points. The lower cost of funds was a result of a reduction in the rates on the money market promotional accounts and certificates of deposit. The decline from the second quarter of 2009 is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a favorable variance in our average cost of funds. Strong deposit growth in recent quarters has improved our liquidity position, but has adversely impacted our margin in the short term as a significant portion of this growth is currently invested in overnight funds. As we determine what portion of this growth is permanent, if appropriate, we will begin deploying the overnight funds into the investment portfolio.
The provision for loan losses for the second quarter of 2010 was $3.6 million compared to $10.7 million in the first quarter of 2010 and $8.4 million for the second quarter of 2009. For the first six months of 2010, the loan loss provision totaled $14.4 million compared to $16.8 million for the same period in 2009. The lower provision for the current quarter and first half of the year primarily reflects a significant reduction in the level of loans migrating into our problem loan pool. A lower level of inherent losses for the non-impaired portion of our loan portfolio, driven by improving risk factors, also favorably impacted the provision for the current quarter. Net charge-offs in the second quarter totaled $6.4 million, or .55% of average loans, compared to $13.5 million, or 2.91%, in the first quarter of 2010. The reduction in net charge-offs compared to the first quarter primarily reflects charge-offs realized in the prior quarter for three large real estate loans that were migrating to the other real estate category. At quarter-end, the allowance for loan losses was 2.11% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 2.23% and 38%, respectively, at the end of the prior quarter.
Noninterest income for the second quarter of 2010 increased $707,000, or 5.1%, from the first quarter of 2010 attributable to higher deposit fees of $411,000 and retail brokerage fees of $281,000. The improvement in deposit fees reflects a favorable one-day calendar variance and higher activity levels. The increase in retail brokerage fees was primarily driven by higher trading volume. For the first six months of 2010, we realized a $34,000, or 0.1%, decline in noninterest income, primarily reflecting lower deposit and mortgage banking fees, partially offset by an increase in retail brokerage fees and debit card fees.
Noninterest expense increased $1.2 million, or 3.7%, from the first quarter of 2010 driven by higher expense for other real estate properties of $1.3 million, which includes holding costs as well as valuation adjustments due to property devaluation, and increased FDIC insurance premiums of $795,000. Lower expense for cash and stock incentives of $800,000, attributable to lower than expected associate and company performance, partially offset the aforementioned increases. For the first six months of 2010, as compared to the same period in 2009, noninterest expense increased $2.8 million, or 4.3%, due primarily to higher expense for other real estate properties of $4.8 million, partially offset by lower pension expense of $1.2 million and intangible amortization of $0.6 million.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.7 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 70 banking offices and 79 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 frequency and magnitude of foreclosure of the Company's loans; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company's financial statement estimates and assumptions, including the estimate for the Company's loan loss provision; the Company's ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; 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, 2009, 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.
EARNINGS HIGHLIGHTS
-----------------------------------------------------------------------
Three Months Ended Six Months Ended
-------------------------- -----------------
(Dollars in thousands, Jun 30, Mar 31, Jun 30, Jun 30, Jun 30,
except per share data) 2010 2010 2009 2010 2009
------------------------ ------- -------- ------- -------- -------
EARNINGS
Net Income(Loss) $731 $(3,463) $774 $(2,732) $1,424
Net Income(Loss) Per
Common Share $0.04 $(0.20) $0.04 $(0.16) $0.08
------------------------ ------- -------- ------- -------- -------
PERFORMANCE
Return on Average Equity 1.11% -5.23% 1.12% -2.07% 1.03%
Return on Average Assets 0.11% -0.52% 0.12% -0.20% 0.12%
Net Interest Margin 4.26% 4.21% 5.11% 4.24% 5.13%
Noninterest Income as %
of Operating Revenue 37.58% 36.77% 35.07% 37.18% 34.65%
Efficiency Ratio 86.06% 85.00% 75.44% 85.54% 75.26%
------------------------ ------- -------- ------- -------- -------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 12.78% 12.81% 12.85% 12.78% 12.85%
Total Capital Ratio 14.14% 14.16% 14.20% 14.14% 14.20%
Tangible Capital Ratio 6.80% 6.62% 7.47% 6.80% 7.47%
Leverage Ratio 9.58% 9.64% 11.07% 9.58% 11.07%
Equity to Assets 9.87% 9.65% 10.80% 9.87% 10.80%
------------------------ ------- -------- ------- -------- -------
ASSET QUALITY
Allowance as % of
Non-Performing Loans 37.80% 38.42% 33.71% 37.80% 33.71%
Allowance as a % of
Loans 2.11% 2.23% 2.12% 2.11% 2.12%
Net Charge-Offs as % of
Average Loans 1.39% 2.91% 1.39% 2.16% 1.23%
Nonperforming Assets as
% of Loans and ORE 8.01% 8.10% 7.19% 8.01% 7.19%
------------------------ ------- -------- ------- -------- -------
STOCK PERFORMANCE
High $18.25 $14.61 $17.35 $18.25 $27.31
Low $12.36 $11.57 $11.01 $11.57 $9.50
Close $12.38 $14.25 $16.85 $12.38 $16.85
Average Daily Trading
Volume 46,507 26,854 40,130 36,917 57,342
------------------------ ------- -------- ------- -------- -------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
---------------------------------------------------------------------------------------------
Six Months Ended
June 30
2010 2010 2009 2009 2009
(Dollars in thousands, Second First Fourth Third Second
except per share data) Quarter Quarter Quarter Quarter Quarter 2010 2009
-------------------------- ------- -------- -------- -------- ------- -------- -------
INTEREST INCOME
Interest and Fees on Loans $26,644 $26,992 $28,582 $29,463 $29,742 $53,636 $59,279
Investment Securities 1,114 990 1,097 1,323 1,437 2,104 2,950
Funds Sold 176 172 77 1 1 348 4
-------------------------- ------- -------- -------- -------- ------- -------- -------
Total Interest Income 27,934 28,154 29,756 30,787 31,180 56,088 62,233
-------------------------- ------- -------- -------- -------- ------- -------- -------
INTEREST EXPENSE
Deposits 2,363 2,938 2,964 2,626 2,500 5,301 4,995
Short-Term Borrowings 12 17 22 113 88 29 156
Subordinated Notes Payable 639 651 936 936 931 1,290 1,858
Other Long-Term Borrowings 551 526 542 560 566 1,077 1,134
-------------------------- ------- -------- -------- -------- ------- -------- -------
Total Interest Expense 3,565 4,132 4,464 4,235 4,085 7,697 8,143
-------------------------- ------- -------- -------- -------- ------- -------- -------
Net Interest Income 24,369 24,022 25,292 26,552 27,095 48,391 54,090
Provision for Loan Losses 3,633 10,740 10,834 12,347 8,426 14,373 16,836
-------------------------- ------- -------- -------- -------- ------- -------- -------
Net Interest Income after
Provision for Loan Losses 20,736 13,282 14,458 14,205 18,669 34,018 37,254
-------------------------- ------- -------- -------- -------- ------- -------- -------
NONINTEREST INCOME
Service Charges on Deposit
Accounts 7,039 6,628 7,183 7,099 7,162 13,667 13,860
Data Processing Fees 919 900 948 914 896 1,819 1,766
Asset Management Fees 1,080 1,020 1,065 960 930 2,100 1,900
Retail Brokerage Fees 846 565 772 765 625 1,411 1,118
Gain on Sale of Investment
Securities -- 5 -- 4 6 5 6
Mortgage Banking Revenues 641 508 550 663 902 1,149 1,486
Merchant Fees 384 665 345 393 663 1,049 1,621
Interchange Fees 1,289 1,212 1,129 1,129 1,118 2,501 2,174
ATM/Debit Card Fees 1,073 963 892 876 884 2,036 1,747
Other 1,403 1,501 1,527 1,501 1,448 2,904 2,998
-------------------------- ------- -------- -------- -------- ------- -------- -------
Total Noninterest Income 14,674 13,967 14,411 14,304 14,634 28,641 28,676
-------------------------- ------- -------- -------- -------- ------- -------- -------
NONINTEREST EXPENSE
Salaries and Associate
Benefits 15,584 16,779 16,121 15,660 16,049 32,363 33,286
Occupancy, Net 2,585 2,408 2,458 2,455 2,540 4,993 4,885
Furniture and Equipment 2,192 2,181 2,261 2,193 2,304 4,373 4,642
Intangible Amortization 710 710 1,010 1,011 1,010 1,420 2,021
Other 13,558 11,306 13,463 10,296 11,027 24,864 20,353
-------------------------- ------- -------- -------- -------- ------- -------- -------
Total Noninterest Expense 34,629 33,384 35,313 31,615 32,930 68,013 65,187
-------------------------- ------- -------- -------- -------- ------- -------- -------
OPERATING PROFIT(LOSS) 781 (6,135) (6,444) (3,106) 373 (5,354) 743
Provision for Income Taxes 50 (2,672) (3,037) (1,618) (401) (2,622) (681)
-------------------------- ------- -------- -------- -------- ------- -------- -------
NET INCOME(LOSS) $731 $(3,463) $(3,407) $(1,488) $774 $(2,732) $1,424
-------------------------- ------- -------- -------- -------- ------- -------- -------
PER SHARE DATA
Basic Earnings $0.04 $(0.20) $(0.20) $(0.08) $0.04 $(0.16) $0.08
Diluted Earnings $0.04 $(0.20) $(0.20) $(0.08) $0.04 $(0.16) $0.08
Cash Dividends 0.100 0.190 0.190 0.190 0.190 0.290 0.380
AVERAGE SHARES
Basic 17,063 17,057 17,034 17,024 17,010 17,060 17,059
Diluted 17,074 17,070 17,035 17,025 17,010 17,071 17,060
-------------------------- ------- -------- -------- -------- ------- -------- -------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
---------------------------------------------------------------------------------------------------
2010 2010 2009 2009 2009
(Dollars in thousands, except Second First Fourth Third Second
per share data) Quarter Quarter Quarter Quarter Quarter
----------------------------- ------------ ------------ ------------ ------------ ------------
ASSETS
Cash and Due From Banks $ 52,380 $ 52,615 $ 57,877 $ 79,275 $ 92,394
Funds Sold and Interest
Bearing Deposits 250,508 293,413 276,416 828 2,016
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Cash and Cash
Equivalents 302,888 346,028 334,293 80,103 94,410
Investment Securities,
Available-for-Sale 218,785 217,606 176,673 183,944 194,002
Loans, Net of Unearned
Interest
Commercial, Financial, &
Agricultural 161,268 169,766 189,061 203,813 201,589
Real Estate - Construction 56,910 79,145 111,249 128,476 153,507
Real Estate - Commercial 676,516 729,011 716,791 704,595 686,420
Real Estate - Residential 450,997 394,132 406,262 424,715 447,652
Real Estate - Home Equity 247,726 245,185 246,722 243,808 235,473
Consumer 215,723 224,793 233,524 241,672 241,467
Other Loans 9,498 6,888 10,207 7,790 7,933
Overdrafts 3,144 2,701 2,124 3,163 3,022
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Loans, Net of Unearned
Interest 1,821,782 1,851,621 1,915,940 1,958,032 1,977,063
Allowance for Loan Losses (38,442) (41,198) (43,999) (45,401) (41,782)
----------------------------- ------------ ------------ ------------ ------------ ------------
Loans, Net 1,783,340 1,810,423 1,871,941 1,912,631 1,935,281
Premises and Equipment, Net 116,802 117,055 115,439 111,797 109,050
Intangible Assets 87,421 88,131 88,841 89,851 90,862
Other Real Estate Owned 48,110 46,444 36,134 33,371 19,671
Other Assets 93,398 89,416 85,003 80,240 82,563
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Other Assets 345,731 341,046 325,417 315,259 302,146
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Assets $ 2,650,744 $ 2,715,103 $ 2,708,324 $ 2,491,937 $ 2,525,839
----------------------------- ------------ ------------ ------------ ------------ ------------
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 460,168 $ 446,855 $ 427,791 $ 397,943 $ 424,125
NOW Accounts 891,636 890,570 899,649 687,679 733,526
Money Market Accounts 303,369 376,091 373,105 301,662 300,683
Regular Savings Accounts 132,174 130,936 122,370 122,040 123,257
Certificates of Deposit 412,964 438,488 435,319 440,666 424,339
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Deposits 2,200,311 2,282,940 2,258,234 1,949,990 2,005,930
Short-Term Borrowings 21,376 18,900 35,841 103,711 73,989
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 55,605 50,679 49,380 50,665 52,354
Other Liabilities 48,885 37,738 34,083 56,269 57,973
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities 2,389,064 2,453,144 2,440,425 2,223,522 2,253,133
----------------------------- ------------ ------------ ------------ ------------ ------------
SHAREOWNERS' EQUITY
Common Stock 171 171 170 170 170
Additional Paid-In Capital 36,633 36,816 36,099 36,065 35,698
Retained Earnings 238,779 239,755 246,460 253,104 257,828
Accumulated Other
Comprehensive Loss, Net of
Tax (13,903) (14,783) (14,830) (20,924) (20,990)
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Shareowners' Equity 261,680 261,959 267,899 268,415 272,706
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities and
Shareowners' Equity $ 2,650,744 $ 2,715,103 $ 2,708,324 $ 2,491,937 $ 2,525,839
----------------------------- ------------ ------------ ------------ ------------ ------------
OTHER BALANCE SHEET DATA
Earning Assets $ 2,291,075 $ 2,362,640 $ 2,369,029 $ 2,142,804 $ 2,173,081
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 1,910 2,572 3,233 4,196 5,159
Other 700 748 797 844 892
Interest Bearing Liabilities 1,880,011 1,968,551 1,978,551 1,769,310 1,771,035
----------------------------- ------------ ------------ ------------ ------------ ------------
Book Value Per Diluted Share $ 15.32 $ 15.34 $ 15.72 $ 15.76 $ 16.03
Tangible Book Value Per
Diluted Share 10.21 10.18 10.51 10.48 10.70
----------------------------- ------------ ------------ ------------ ------------ ------------
Actual Basic Shares
Outstanding 17,067 17,063 17,036 17,032 17,010
Actual Diluted Shares
Outstanding 17,078 17,076 17,037 17,033 17,010
----------------------------- ------------ ------------ ------------ ------------ ------------
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
------------------------------------------------------------------------------------------
2010 2010 2009 2009 2009
Second First Fourth Third Second
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
------------------------------ ---------- ---------- ---------- ---------- ----------
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 41,199 $ 43,999 $ 45,401 $ 41,782 $ 40,172
Provision for Loan Losses 3,633 10,740 10,834 12,347 8,426
Transfer of Unfunded Reserve
to Other Liability -- -- 392 -- --
Net Charge-Offs 6,390 13,540 11,844 8,728 6,816
------------------------------ ---------- ---------- ---------- ---------- ----------
Balance at End of Period $ 38,442 $ 41,199 $ 43,999 $ 45,401 $ 41,782
------------------------------ ---------- ---------- ---------- ---------- ----------
As a % of Loans 2.11% 2.23% 2.30% 2.32% 2.12%
As a % of Nonperforming Loans 37.80% 38.42% 40.77% 40.90% 33.71%
As a % of Nonperforming Assets 25.66% 26.81% 30.54% 31.45% 29.09%
------------------------------ ---------- ---------- ---------- ---------- ----------
CHARGE-OFFS
Commercial, Financial and
Agricultural $ 405 $ 842 $ 712 $ 633 $ 388
Real Estate - Construction 1,220 3,722 2,040 2,315 3,356
Real Estate - Commercial 920 4,631 1,584 1,707 123
Real Estate - Residential 4,725 3,727 7,377 3,394 2,379
Consumer 360 1,507 1,324 1,324 1,145
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Charge-Offs $ 7,630 $ 14,429 $ 13,037 $ 9,373 $ 7,391
------------------------------ ---------- ---------- ---------- ---------- ----------
RECOVERIES
Commercial, Financial and
Agricultural $ 181 $ 77 $ 343 $ 64 $ 84
Real Estate - Construction 8 -- 5 150 --
Real Estate - Commercial 43 157 43 8 1
Real Estate - Residential 638 114 331 92 51
Consumer 370 541 471 331 439
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Recoveries $ 1,240 $ 889 $ 1,193 $ 645 $ 575
------------------------------ ---------- ---------- ---------- ---------- ----------
NET CHARGE-OFFS $ 6,390 $ 13,540 $ 11,844 $ 8,728 $ 6,816
------------------------------ ---------- ---------- ---------- ---------- ----------
Net Charge-Offs as a % of
Average Loans(1) 1.39% 2.91% 2.42% 1.76% 1.39%
------------------------------ ---------- ---------- ---------- ---------- ----------
RISK ELEMENT ASSETS
Nonaccruing Loans $ 74,504 $ 76,382 $ 86,274 $ 91,880 $ 111,039
Restructured Loans 27,200 30,843 21,644 19,121 12,916
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Loans 101,704 107,225 107,918 111,001 123,955
Other Real Estate 48,110 46,444 36,134 33,371 19,671
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Assets $ 149,814 $ 153,669 $ 144,052 $ 144,372 $ 143,626
------------------------------ ---------- ---------- ---------- ---------- ----------
Past Due Loans 90 Days or More $ -- $ -- $ -- $ 486 $ --
------------------------------ ---------- ---------- ---------- ---------- ----------
Nonperforming Loans as a % of
Loans 5.58% 5.79% 5.63% 5.67% 6.27%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.01% 8.10% 7.38% 7.25% 7.19%
Nonperforming Assets as a % of
Capital(2) 49.92% 50.69% 46.19% 46.01% 45.67%
------------------------------ ---------- ---------- ---------- ---------- ----------
(1) Annualized
(2) Capital includes allowance for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
----------------------------------------------------------------------------------------------------------------------
Second Quarter 2010 First Quarter 2010 Fourth Quarter 2009
----------------------------- ----------------------------- -----------------------------
Average Average Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
------------------------- ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
ASSETS:
Loans, Net of Unearned
Interest $1,841,379 26,795 5.84% $1,886,367 27,180 5.84% $1,944,873 28,813 5.88%
Investment Securities
Taxable Investment
Securities 128,268 708 2.21% 71,325 500 2.81% 72,537 498 2.74%
Tax-Exempt Investment
Securities 92,140 624 2.71% 97,316 753 3.10% 107,361 921 3.43%
------------------------- ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
Total Investment
Securities 220,408 1,332 2.42% 168,641 1,253 2.98% 179,898 1,419 3.15%
Funds Sold 267,578 176 0.26% 303,280 172 0.23% 112,790 77 0.27%
------------------------- ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
Total Earning Assets 2,329,365 $28,303 4.87% $28,605 4.92% $30,309 5.38%
-------- ------- 2,358,288 -------- ------- 2,237,561 -------- -------
Cash and Due From Banks 50,739 54,873 69,687
Allowance for Loan Losses (41,074) (44,584) (46,468)
Other Assets 339,458 329,842 314,470
------------------------- ---------- ---------- ----------
Total Assets $2,678,488 $2,698,419 $2,575,250
------------------------- ---------- ---------- ----------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $879,329 $400 0.18% $867,004 $384 0.18% $740,550 $308 0.17%
Money Market Accounts 333,976 331 0.40% 374,161 689 0.75% 361,104 625 0.69%
Savings Accounts 131,333 17 0.05% 126,352 15 0.05% 122,158 16 0.05%
Time Deposits 430,571 1,615 1.50% 438,112 1,850 1.71% 439,654 2,015 1.82%
------------------------- ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
Total Interest Bearing
Deposits 1,775,209 2,363 0.53% 1,805,629 2,938 0.66% 1,663,466 2,964 0.71%
Short-Term Borrowings 22,694 12 0.20% 30,673 17 0.22% 47,114 22 0.18%
Subordinated Notes
Payable 62,887 639 4.02% 62,887 651 4.14% 62,887 936 5.83%
Other Long-Term
Borrowings 52,704 551 4.20% 49,981 526 4.27% 50,026 542 4.30%
------------------------- ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
Total Interest Bearing
Liabilities 1,913,494 $3,565 0.75% $4,132 0.86% $4,464 0.97%
-------- ------- 1,949,170 -------- ------- 1,823,493 -------- -------
Noninterest Bearing
Deposits 458,969 443,131 426,542
Other Liabilities 42,152 37,563 56,659
------------------------- ---------- ---------- ----------
Total Liabilities 2,414,615 2,429,864 2,306,694
SHAREOWNERS' EQUITY: $263,873 $268,555 $268,556
------------------------- ---------- ---------- ----------
Total Liabilities and
Shareowners' Equity $2,678,488 $2,698,419 $2,575,250
------------------------- ---------- ---------- ----------
Interest Rate Spread $24,738 4.12% $24,473 4.06% $25,845 4.41%
------------------------- ---------- -------- ------- -------- ------- -------- -------
Interest Income and Rate
Earned(1) $28,303 4.87% $28,605 4.92% $30,309 5.38%
Interest Expense and Rate
Paid(2) 3,565 0.61% 4,132 0.71% 4,464 0.79%
------------------------- ---------- -------- ------- -------- ------- -------- -------
Net Interest Margin $24,738 4.26% $24,473 4.21% $25,845 4.59%
------------------------- ---------- -------- ------- -------- ------- -------- -------
-------------------------------------------------------------------------------------------
Third Quarter 2009 Second Quarter 2009
------------------------------ ------------------------------
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
--------------------------- ----------- -------- ------- ----------- -------- -------
ASSETS:
Loans, Net of Unearned
Interest $1,964,984 29,695 6.00% $1,974,197 29,954 6.09%
Investment Securities
Taxable Investment
Securities 81,777 682 3.32% 89,574 742 3.31%
Tax-Exempt Investment
Securities 107,307 985 3.67% 106,869 1,067 4.00%
--------------------------- ----------- -------- ------- ----------- -------- -------
Total Investment Securities 189,084 1,667 3.52% 196,443 1,809 3.68%
Funds Sold 3,294 1 0.11% 4,641 1 0.10%
--------------------------- ----------- -------- ------- ----------- -------- -------
Total Earning Assets 2,157,362 $31,363 5.77% $31,764 5.86%
-------- ------- 2,175,281 -------- -------
Cash and Due From Banks 76,622 81,368
Allowance for Loan Losses (42,774) (41,978)
Other Assets 306,759 291,681
--------------------------- ----------- -----------
Total Assets $2,497,969 $2,506,352
--------------------------- ----------- -----------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $678,292 $257 0.15% $709,039 $249 0.14%
Money Market Accounts 301,230 281 0.37% 298,007 192 0.26%
Savings Accounts 122,934 15 0.05% 123,034 15 0.05%
Time Deposits 430,944 2,073 1.91% 417,545 2,044 1.96%
--------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Deposits 1,533,400 2,626 0.68% 1,547,625 2,500 0.65%
Short-Term Borrowings 97,305 113 0.45% 87,768 88 0.40%
Subordinated Notes Payable 62,887 936 5.83% 62,887 931 5.86%
Other Long-Term Borrowings 51,906 560 4.28% 52,775 566 4.30%
--------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Liabilities 1,745,498 $4,235 0.96% $4,085 0.94%
-------- ------- 1,751,055 -------- -------
Noninterest Bearing
Deposits 416,770 423,566
Other Liabilities 60,674 54,617
--------------------------- ----------- -----------
Total Liabilities 2,222,942 2,229,238
SHAREOWNERS' EQUITY: $275,027 $277,114
--------------------------- ----------- -----------
Total Liabilities and
Shareowners' Equity $2,497,969 $2,506,352
--------------------------- ----------- -----------
Interest Rate Spread $27,128 4.81% $27,679 4.92%
--------------------------- ----------- -------- ------- -------- -------
Interest Income and Rate
Earned(1) $31,363 5.77% $31,764 5.86%
Interest Expense and Rate
Paid(2) 4,235 0.78% 4,085 0.75%
--------------------------- ----------- -------- ------- -------- -------
Net Interest Margin $27,128 4.99% $27,679 5.11%
--------------------------- ----------- -------- ------- -------- -------
--------------------------------------------------------------------------------------------
June 2010 YTD June 2009 YTD
------------------------------ ------------------------------
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ----------- -------- ------- ----------- -------- -------
ASSETS:
Loans, Net of Unearned
Interest $1,863,749 53,975 5.84% $1,969,169 59,678 6.11%
Investment Securities
Taxable Investment
Securities 99,954 1,208 2.42% 90,248 1,518 3.37%
Tax-Exempt Investment
Securities 94,713 1,377 2.91% 104,005 2,200 4.23%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Investment Securities 194,667 2,585 2.66% 194,253 3,718 3.83%
Funds Sold 285,331 348 0.24% 7,363 4 0.12%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Earning Assets 2,343,747 $56,908 4.90% $63,400 5.89%
-------- ------- 2,170,785 -------- -------
Cash and Due From Banks 52,795 79,109
Allowance for Loan Losses (42,820) (40,003)
Other Assets 334,677 286,801
---------------------------- ----------- -----------
Total Assets $2,688,399 $2,496,692
---------------------------- ----------- -----------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $873,200 $784 0.18% $714,123 $474 0.13%
Money Market Accounts 353,958 1,020 0.58% 309,719 382 0.25%
Savings Accounts 128,856 32 0.05% 120,601 29 0.05%
Time Deposits 434,321 3,465 1.61% 404,847 4,110 2.05%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Deposits 1,790,335 5,301 0.60% 1,549,290 4,995 0.65%
Short-Term Borrowings 26,662 29 0.21% 86,550 156 0.36%
Subordinated Notes Payable 62,887 1,290 4.08% 62,887 1,858 5.88%
Other Long-Term Borrowings 51,350 1,077 4.23% 52,997 1,134 4.31%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Liabilities 1,931,234 $7,697 0.80% $8,143 0.94%
-------- ------- 1,751,724 -------- -------
Noninterest Bearing Deposits 451,094 415,020
Other Liabilities 39,870 50,586
---------------------------- ----------- -----------
Total Liabilities 2,422,198 2,217,330
SHAREOWNERS' EQUITY: $266,201 $279,362
---------------------------- ----------- -----------
Total Liabilities and
Shareowners' Equity $2,688,399 $2,496,692
---------------------------- ----------- -----------
Interest Rate Spread $49,211 4.10% $55,257 4.95%
---------------------------- ----------- -------- ------- -------- -------
Interest Income and Rate
Earned(1) $56,908 4.90% $63,400 5.89%
Interest Expense and Rate
Paid(2) 7,697 0.66% 8,143 0.76%
---------------------------- ----------- -------- ------- -------- -------
Net Interest Margin $49,211 4.24% $55,257 5.13%
---------------------------- ----------- -------- ------- -------- -------
(1) Interest and average rates are calculated on a tax-equivalent basis using the 35%
Federal tax rate.
(2) Rate calculated based on average earning assets.
CONTACT: Capital City Bank Group, Inc.
J. Kimbrough Davis, Executive Vice President
and Chief Financial Officer
850.402.7820
Released July 20, 2010