Capital City Bank Group, Inc. Reports First Quarter 2020 Results

TALLAHASSEE, Fla., April 23, 2020 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $4.3 million, or $0.25 per diluted share for the first quarter of 2020 compared to net income of $8.6 million, or $0.51 per diluted share for the fourth quarter of 2019, and $6.4 million, or $0.38 per diluted share for the first quarter of 2019. 

Net income for the first quarter of 2020 included a $5.0 million provision for credit losses, which exceeded net loan charge-offs of $1.1 million.  The higher provision reflected a build in reserves due to deteriorating economic conditions related to COVID-19. 

HIGHLIGHTS

  • Diversified revenue and strong balance sheet buffered impact of COVID-19 and Fed interest rate actions
  • Average loans (ex-held for sale) up 0.8% sequentially and 4.2% over 2019
  • Loan loss provision of $5.0 million reflected reserve build for COVID-19 impact
  • March 1st acquisition of a 51% membership interest in Brand Mortgage Group, LLC (now operated as Capital City Home Loans (“CCHL”)) – nominal net impact on earnings

“After posting a solid 2019, the country now finds itself in a highly uncertain economic environment, but Capital City enters this cycle in a strong financial position,” said William G. Smith, Jr., Chairman, President and CEO.  “A lot has transpired over the last three months.  Along with many other banks, our team has been busy accepting and processing SBA Paycheck Protection Program loan applications and is glad to be in a position to assist our small business clients in this time of need.  On March 1st we consummated our strategic alliance with Capital City Home Loans and I am excited to welcome our new partners in the mortgage banking business, which should triple our historical production levels.  During the first quarter we adopted the new loan loss reserve accounting methodology referred to as “CECL” and booked a provision of $5.0 million primarily to address potential credit issues that may arise as a result of the COVID-19 pandemic.  Compared to December 31, 2019, our reserve increased $7.2 million or 52%.  While the first quarter brought forth many challenges, I believe our underlying fundamentals remain intact.  On April 1st I am proud to share with you that we celebrated our 125th birthday.  During our history we have weathered the Great Depression, two world wars and the more recent financial crisis.  We will, once again, with a prudent and measured approach look to manage through this impending crisis by focusing on our associates, communities, clients and shareowners.  I continue to be optimistic about the long-term outlook for Capital City and appreciate your continued support.”

COVID-19 Response

Clients

  • Implemented business continuity plans to help ensure that clients have adequate access to banking services while at the same time working to protect clients through heightened safety procedures
  • SBA PPP loan approvals of $145 million in first phase of funding – will continue to actively assist clients under this program
  • Implemented loan extension program to support eligible clients and communities throughout this period of uncertainty
  • Announced temporary closure of banking office lobbies (operating drive-thru only) – focused on the enhanced digital banking experience

Associates

  • Heightened safety procedures, including social-distancing for essential associates and work-at-home arrangements for non-essential associates
  • Increased hourly wage for non-exempt associates for a period of time
  • Increased paid time off for affected associates for a period of time
  • Enhanced medical benefits in the short-term

Discussion of Operating Results

Summary Overview

Compared to the fourth quarter of 2019, the $5.8 million decrease in operating profit was attributable to a $5.2 million increase in the provision for credit losses, higher noninterest expense of $1.8 million, and lower net interest income of $0.5 million, partially offset by higher noninterest income of $1.7 million. 

Compared to the first quarter of 2019, the $3.2 million decrease in operating profit reflected a $4.2 million increase in the provision for credit losses and higher noninterest expense of $2.8 million, partially offset by higher noninterest income of $2.9 million and net interest income of $0.9 million.

Our return on average assets (“ROA”) was 0.57% and our return on average equity (“ROE”) was 5.20% for the first quarter of 2020.  These metrics were 1.14% and 10.39% for the fourth quarter of 2019, respectively, and 0.87% and 8.49% for the first quarter of 2019, respectively. 

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the first quarter of 2020 was $25.9 million compared to $26.4 million for the fourth quarter of 2019 and $25.0 million for the first quarter of 2019.  The decrease in tax-equivalent net interest income compared to the prior quarter reflects lower rates earned on overnight funds, investment securities and variable rate loans, partially offset by a lower cost on our negotiated rate deposits.  The increase in tax-equivalent net interest income compared to the first quarter of 2019 was primarily due to loan growth and a reduction in the cost of our negotiated rate deposits, partially offset by lower rates on our earning assets.

The federal funds target rate ended the first quarter of 2020 in a range of 0.00%-0.25%, after two unscheduled FED cuts during the quarter totaling 150 basis points.  These rate decreases have resulted in lower repricing of our variable and adjustable rate earning assets.  We continue to prudently manage our deposit mix and overall cost of funds, which was 23 basis points for the first quarter of 2020 compared to 26 basis points for the fourth quarter of 2019.  Due to highly competitive fixed-rate loan pricing in our markets, we continue to review our loan pricing and make adjustments where we believe appropriate and prudent.     

Our net interest margin for the first quarter of 2020 was 3.78%, a decrease of 11 basis points compared to the fourth quarter of 2019 and an increase of three basis points over the first quarter of 2019.  The decrease in margin compared to the fourth quarter of 2019 was attributable to lower rates on our variable and adjustable rate earning assets.  The increase in the margin compared to the first quarter of 2019 was due to a 19 basis point reduction in our cost of funds, partially offset by a 16 basis point reduction in yield on earning assets.

Provision for Credit Loss

The provision for credit losses for the first quarter of 2020 was $5.0 million which exceeded net loan charge-offs of $1.1 million.  The increase in the provision for the first quarter of 2020 reflected a build in reserves due to deteriorating economic conditions related to COVID-19.  We discuss this exposure further below.

Noninterest Income and Noninterest Expense

Noninterest income for the first quarter of 2020 totaled $15.5 million compared to $13.8 million for the fourth quarter of 2019 and $12.6 million for the first quarter of 2019.  The increase over both periods was primarily attributable to higher mortgage banking fees, which reflected the acquisition of a 51% membership interest in Brand Mortgage Group, LLC that became effective on March 1, 2020.  Higher deposit fees also contributed to the increase in both periods and bank card fees contributed to the increase over the first quarter of 2019.         

Noninterest expense for the first quarter of 2020 totaled $31.0 million compared to $29.1 million for the fourth quarter of 2019 and $28.2 million for the first quarter of 2019.  The increase over the fourth quarter of 2019 was primarily attributable to higher compensation expense of $2.4 million and occupancy expense of $0.3 million, partially offset by lower other real estate (“ORE”) expense of $0.9 million.  The increase in compensation and occupancy expense was primarily due to the aforementioned integration of the Brand Mortgage acquisition.  The reduction in ORE expense reflected a $1.0 million gain on the sale of a banking office.  The same aforementioned factors were the primary drivers in the variance compared to the first quarter of 2019.

CCHL’s mortgage banking operations impacted our noninterest income and noninterest expense for the first quarter of 2020, and thus, the period over period comparison due to the late quarter closing.  Overall, CCHL operations for the month of March had a nominal impact on our net income for the first quarter of 2020.  Excluding CCHL, our noninterest income totaled $13.3 million and noninterest expense totaled $28.0 million for the first quarter of 2020. 

Income Taxes

We realized income tax expense of $1.3 million (effective rate of 24%) for the first quarter of 2020 compared to $2.5 million (effective rate of 23%) for the fourth quarter of 2019 and $2.1 million (effective rate of 24%) for the first quarter of 2019.  Absent discrete items, we expect our annual effective tax rate to approximate 24%. 

Discussion of Financial Condition

Earning Assets

Average earning assets were $2.752 billion for the first quarter of 2020, an increase of $57.2 million, or 2.1%, over the fourth quarter of 2019, and an increase of $47.1 million, or 1.7%, over the first quarter of 2019.  The increase in average earning assets from the fourth quarter of 2019 was primarily driven by higher deposit balances which funded growth in the loan and investment portfolios.  The change in the earning asset mix compared to the first quarter 2019 reflected higher loan balances that were funded with overnight funds and investment balances.      

We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $234.4 million during the first quarter of 2020 compared to $228.1 million in the fourth quarter of 2019 and $265.7 million in the first quarter of 2019.  The increase in the average net overnight funds compared to the fourth quarter of 2019 was driven by higher deposit balances, primarily seasonally higher public fund balances.  The decrease in overnight funds compared to the first quarter of 2019 was driven by loan growth.    

Average loans (excluding held for sale (“HFS”) loans) increased $13.7 million, or 0.8% compared to the fourth quarter of 2019 and $74.8 million, or 4.2% compared to the first quarter of 2019.  Average HFS loans increased $22.8 million and $27.5 million over the same respective periods primarily reflecting the integration of CCHL.  The increase (excluding HFS loans) reflected growth in all loan types except commercial, institutional, and HELOCs.  The increase compared to the first quarter of 2019 reflected growth in all loan types, except institutional and HELOCs.  Loan demand from the SBA Paycheck Protection Program has been extremely strong, resulting in 1,062 loan requests totaling $145 million that have been approved for funding in the first phase of the program.  The majority, if not all, of these loans are expected to be funded from our current on balance sheet liquidity.    

Allowance for Credit Losses

At March 31, 2020, the allowance for credit losses of $21.1 million represented 1.13% of outstanding loans (excluding HFS loans) and provided coverage of 433% of nonperforming loans compared to $13.9 million, or 0.75% and 311% of loans at December 31, 2019.  The adoption of ASC 326 (“CECL”) on January 1, 2020 had an impact of $4.0 million ($3.3 million increase in the allowance for credit losses and $0.7 million increase in the allowance for unfunded loan commitments (liability account)).  The $3.9 million build in the allowance for credit losses for the first quarter of 2020 reflected a forecasted decline in economic conditions, primarily a higher rate of unemployment due to the impact of the COVID-19 pandemic.   

Credit Quality/COVID-19 Exposure

Nonperforming assets (nonaccrual loans and OREO) totaled $6.3 million at March 31, 2020, a $0.9 million increase over December 31, 2019 and a $0.6 million decrease from March 31, 2019.  Nonaccrual loans totaled $4.9 million at March 31, 2020, a $0.4 million increase over December 31, 2019 and a $0.2 million decrease from March 31, 2019.   The balance of OREO totaled $1.5 million at March 31, 2020, an increase of $0.5 million over December 31, 2019 and a $0.4 million decrease from March 31, 2019.

We continue to analyze our loan portfolio for segments that might be directly affected by the stressed economic and business conditions caused by the pandemic.  Certain at-risk segments total 11% of our loan balances at March 31, 2020, including hotel (3%), restaurant (1%), retail and shopping centers (5%), stock secured (1%), and other (1%).  The other segment includes churches, non-profits, education, and recreational.  To assist our clients, we implemented a loan extension program in mid-March that allows for a 60 day extension for affected borrowers.  Through April 15th, we have extended 1,069 loans totaling $268 million (14% of loan portfolio).  Approximately 85% of these loans were for commercial borrowers and 15% for consumer borrowers.        

Funding (Deposits/Debt)

Average total deposits were $2.553 billion for the first quarter of 2020, an increase of $27.7 million, or 1.1% over the fourth quarter of 2019, and a decrease of $12.0 million, or 0.5% over the first quarter of 2019.  The increase in average deposits compared to the fourth quarter of 2019 reflected increases in negotiated NOW public fund deposits and savings accounts.  The seasonal influx of negotiated public NOW accounts has most likely peaked for this cycle, and is expected to gradually decline through the fourth quarter of 2020.  The decrease in average deposits compared to the first quarter of 2019 was primarily due to declines in certificates of deposit, MMAs, and one large, non-public negotiated account, which were partially offset by increases in noninterest bearing accounts and savings accounts.

Deposit levels remain strong, and average core deposits grew over last quarter.  As a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and our participation in the Paycheck Participation Program (PPP) to support small businesses, the potential exists for our deposit levels to be volatile over the coming quarters due to the government’s distribution of economic impact payments and the funding of PPP loans.  It is anticipated that current liquidity levels will remain adequate due to our strong overnight funds sold position, in addition to cash flow generated from the investment portfolio. However, if necessary, short-term advances from the FHLB or FRB could be considered.  We monitor deposit rates on an ongoing basis and adjust if necessary, as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings increased $25.1 million compared to the fourth quarter of 2019 and increased $19.6 million compared to the first quarter of 2019.  The increase over both prior periods reflected short-term borrowings added as part of the Capital City Home Loans acquisition (warehouse lines used to support HFS loans).

Capital

Shareowners’ equity was $328.5 million at March 31, 2020 compared to $327.0 million at December 31, 2019 and $309.0 million at March 31, 2019.  During the first quarter of 2020, shareowners’ equity was positively impacted by net income of $4.3 million, a $2.6 million increase in the unrealized gain on investment securities, net adjustments totaling $0.5 million related to transactions under our stock compensation plans, and stock compensation accretion of $0.3 million.  Shareowners’ equity was reduced by a $3.1 million (net of tax) adjustment to retained earnings for the adoption of ASC 326 (“CECL”), common stock dividend of $2.4 million ($0.14 per share) and shares repurchases of $0.7 million (33,074 shares).

At March 31, 2020, our total risk-based capital ratio was 17.19% compared to 17.90% at December 31, 2019 and 17.09% at March 31, 2019.  Our common equity tier 1 capital ratio was 13.55%, 14.47%, and 13.62%, respectively, on these dates.  Our leverage ratio was 10.81%, 11.25%, and 10.53%, respectively, on these dates.  All of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.  Further, our tangible common equity ratio was 7.98% at March 31, 2020 compared to 8.06% and 7.56% at December 31, 2019 and March 31, 2019, respectively.                      

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $3.1 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 57 banking offices and 85 ATMs/ITMs 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 magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; 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; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; 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; 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, 2019, 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 reconciliations are provided below.

(Dollars in Thousands, except per share data) Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Shareowners' Equity (GAAP)   $ 328,507   $ 327,016   $ 321,562   $ 314,595   $ 308,986  
Less: Goodwill (GAAP)     89,275     84,811     84,811     84,811     84,811  
Tangible Shareowners' Equity (non-GAAP) A   239,232     242,205     236,751     229,784     224,175  
Total Assets (GAAP)     3,086,523     3,088,953     2,934,513     3,017,654     3,052,051  
Less: Goodwill (GAAP)     89,275     84,811     84,811     84,811     84,811  
Tangible Assets (non-GAAP) B $ 2,997,248   $ 3,004,142   $ 2,849,702   $ 2,932,843   $ 2,967,240  
Tangible Common Equity Ratio (non-GAAP) A/B   7.98 %   8.06 %   8.31 %   7.83 %   7.56 %
Actual Diluted Shares Outstanding (GAAP) C   16,878,536     16,855,161     16,797,241     16,773,449     16,840,496  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 14.17   $ 14.37   $ 14.09   $ 13.70   $ 13.31  


             
             
CAPITAL CITY BANK GROUP, INC.            
EARNINGS HIGHLIGHTS            
Unaudited            
             
    Three Months Ended
(Dollars in thousands, except per share data)   Mar 31, 2020   Dec 31, 2019   Mar 31, 2019
EARNINGS            
Net Income $ 4,287   $ 8,565   $ 6,436  
Diluted Net Income Per Share $ 0.25   $ 0.51   $ 0.38  
PERFORMANCE            
Return on Average Assets   0.57 %   1.14 %   0.87 %
Return on Average Equity   5.20 %   10.39 %   8.49 %
Net Interest Margin   3.78 %   3.89 %   3.75 %
Noninterest Income as % of Operating Revenue   37.52 %   34.50 %   33.51 %
Efficiency Ratio   74.89 %   72.48 %   75.01 %
CAPITAL ADEQUACY            
Tier 1 Capital   16.12 %   17.16 %   16.34 %
Total Capital   17.19 %   17.90 %   17.09 %
Leverage   10.81 %   11.25 %   10.53 %
Common Equity Tier 1   13.55 %   14.47 %   13.62 %
Tangible Common Equity (1)   7.98 %   8.06 %   7.56 %
Equity to Assets   10.64 %   10.59 %   10.12 %
ASSET QUALITY            
Allowance as % of Non-Performing Loans   432.61 %   310.99 %   279.77 %
Allowance as a % of Loans   1.13 %   0.75 %   0.78 %
Net Charge-Offs as % of Average Loans   0.23 %   0.05 %   0.20 %
Nonperforming Assets as % of Loans and OREO   0.34 %   0.29 %   0.39 %
Nonperforming Assets as % of Total Assets   0.21 %   0.18 %   0.23 %
STOCK PERFORMANCE            
High $ 30.62   $ 30.95   $ 25.87  
Low   15.61     25.75     21.04  
Close $ 20.12   $ 30.50   $ 21.78  
Average Daily Trading Volume   40,536     41,247     18,407  
             
(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 4.
             


                     
CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
  2020   2019
(Dollars in thousands) First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
ASSETS                    
Cash and Due From Banks $ 72,676   $ 60,087   $ 61,151   $ 53,731   $ 49,501  
Funds Sold and Interest Bearing Deposits   196,936     318,336     177,389     234,097     304,213  
Total Cash and Cash Equivalents   269,612     378,423     238,540     287,828     353,714  
                     
Investment Securities Available for Sale   382,514     403,601     376,981     410,851     429,016  
Investment Securities Held to Maturity   251,792     239,539     240,303     229,516     226,179  
Total Investment Securities   634,306     643,140     617,284     640,367     655,195  
                     
Loans Held for Sale   80,535     9,509     13,075     9,885     4,557  
                     
Loans, Net of Unearned Interest                    
Commercial, Financial, & Agricultural   249,020     255,365     259,870     265,001     238,942  
Real Estate - Construction   122,595     115,018     111,358     101,372     87,123  
Real Estate - Commercial   656,084     625,556     610,726     614,618     615,129  
Real Estate - Residential   354,150     353,642     354,545     349,843     338,574  
Real Estate - Home Equity   196,443     197,360     197,326     201,579     209,194  
Consumer   275,981     279,565     277,970     288,196     296,351  
Other Loans   6,580     7,808     14,248     13,131     10,430  
Overdrafts   1,534     1,615     1,710     1,442     1,362  
Total Loans, Net of Unearned Interest   1,862,387     1,835,929     1,827,753     1,835,182     1,797,105  
Allowance for Loan Losses   (21,083 )   (13,905 )   (14,319 )   (14,593 )   (14,120 )
Loans, Net   1,841,304     1,822,024     1,813,434     1,820,589     1,782,985  
                     
Premises and Equipment, Net   87,684     84,543     85,810     86,005     86,846  
Goodwill   89,275     84,811     84,811     84,811     84,811  
Other Real Estate Owned   1,463     953     526     1,010     1,902  
Other Assets   82,344     65,550     81,033     87,159     82,041  
Total Other Assets   260,766     235,857     252,180     258,985     255,600  
Total Assets $ 3,086,523   $ 3,088,953   $ 2,934,513   $ 3,017,654   $ 3,052,051  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,066,607   $ 1,044,699   $ 1,022,774   $ 1,024,898   $ 995,853  
NOW Accounts   779,467     902,499     728,395     810,568     887,453  
Money Market Accounts   210,124     217,839     239,410     240,181     244,628  
Regular Savings Accounts   384,480     374,396     372,601     371,773     372,414  
Certificates of Deposit   104,907     106,021     109,827     113,684     116,946  
Total Deposits   2,545,585     2,645,454     2,473,007     2,561,104     2,617,294  
                     
Short-Term Borrowings   76,516     6,404     10,622     9,753     8,983  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   5,896     6,514     6,963     7,313     7,661  
Other Liabilities   70,044     50,678     69,472     72,002     56,240  
Total Liabilities   2,750,928     2,761,937     2,612,951     2,703,059     2,743,065  
                     
Temporary Equity   7,088     -     -     -     -  
                     
SHAREOWNERS' EQUITY                    
Common Stock   168     168     167     167     168  
Additional Paid-In Capital   32,100     32,092     31,075     30,751     31,929  
Retained Earnings   321,772     322,937     316,551     310,247     304,763  
Accumulated Other Comprehensive Loss, Net of Tax   (25,533 )   (28,181 )   (26,231 )   (26,570 )   (27,874 )
Total Shareowners' Equity   328,507     327,016     321,562     314,595     308,986  
Total Liabilities, Temporary Equity and Shareowners' Equity $ 3,086,523   $ 3,088,953   $ 2,934,513   $ 3,017,654   $ 3,052,051  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 2,774,165   $ 2,806,913   $ 2,635,501   $ 2,719,530   $ 2,761,070  
Interest Bearing Liabilities   1,614,277     1,666,560     1,520,705     1,606,159     1,690,972  
Book Value Per Diluted Share $ 19.46   $ 19.40   $ 19.14   $ 18.76   $ 18.35  
Tangible Book Value Per Diluted Share(1)   14.17     14.37     14.09     13.70     13.31  
Actual Basic Shares Outstanding   16,845     16,772     16,749     16,746     16,812  
Actual Diluted Shares Outstanding   16,879     16,855     16,797     16,773     16,840  
(1)  Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 4.


                     
                     
CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF OPERATIONS              
Unaudited                    
                     
    2020   2019
(Dollars in thousands, except per share data)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
                     
INTEREST INCOME                    
Interest and Fees on Loans $ 23,593   $ 23,842   $ 23,992 $ 23,765 $ 22,616
Investment Securities   3,015     3,221     3,307   3,393   3,513
Funds Sold   757     945     1,142   1,507   1,593
Total Interest Income   27,365     28,008     28,441   28,665   27,722
                     
INTEREST EXPENSE                    
Deposits   939     1,157     1,596   1,988   2,099
Short-Term Borrowings   132     16     27   31   35
Subordinated Notes Payable   471     525     558   596   608
Other Long-Term Borrowings   50     56     63   66   72
Total Interest Expense   1,592     1,754     2,244   2,681   2,814
Net Interest Income   25,773     26,254     26,197   25,984   24,908
Provision for Credit Losses   4,990     (162 )   776   646   767
Net Interest Income after Provision for
  Loan Losses
  20,783     26,416     25,421   25,338   24,141
                     
NONINTEREST INCOME                    
Deposit Fees   5,015     4,980     4,961   4,756   4,775
Bank Card Fees   3,051     3,131     2,972   3,036   2,855
Wealth Management Fees   2,604     2,761     2,992   2,404   2,323
Mortgage Banking Fees   3,030     1,542     1,587   1,199   993
Other   1,778     1,414     1,391   1,375   1,606
Total Noninterest Income   15,478     13,828     13,903   12,770   12,552
                     
NONINTEREST EXPENSE                    
Compensation   19,736     17,363     16,203   16,437   16,349
Occupancy, Net   4,979     4,680     4,710   4,537   4,509
Other Real Estate, Net   (798 )   102     6   75   363
Other   7,052     6,997     6,954   7,347   6,977
Total Noninterest Expense   30,969     29,142     27,873   28,396   28,198
                     
OPERATING PROFIT   5,292     11,102     11,451   9,712   8,495
Income Tax Expense   1,282     2,537     2,970   2,387   2,059
Net Income   4,010     8,565     8,481   7,325   6,436
Net Loss Attributable to Noncontrolling Interest   277     -     -   -   -
Net Income Attributable to Common Shareowners $ 4,287   $ 8,565   $ 8,481 $ 7,325 $ 6,436
                     
PER COMMON SHARE                    
Basic Net Income $ 0.25   $ 0.51   $ 0.51 $ 0.44 $ 0.38
Diluted Net Income   0.25     0.51     0.50   0.44   0.38
Cash Dividend $ 0.14   $ 0.13   $ 0.13 $ 0.11 $ 0.11
AVERAGE SHARES                    
Basic   16,815     16,750     16,747   16,791   16,791
Diluted   16,849     16,834     16,795   16,818   16,819


                     
                     
CAPITAL CITY BANK GROUP, INC.                    
ALLOWANCE FOR CREDIT LOSSES                    
AND RISK ELEMENT ASSETS                    
Unaudited                    
                     
    2020   2019
(Dollars in thousands, except per share data)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
                     
ALLOWANCE FOR CREDIT LOSSES                    
Balance at Beginning of Period $ 13,905   $ 14,319   $ 14,593   $ 14,120   $ 14,210  
Impact of Adopting ASC 326 (CECL)   3,269     -     -     -     -  
Provision for Credit Losses   4,990     (162 )   776     646     767  
Net Charge-Offs   1,081     252     1,050     173     857  
Balance at End of Period(2) $ 21,083   $ 13,905   $ 14,319   $ 14,593   $ 14,120  
As a % of Loans   1.13 %   0.75 %   0.78 %   0.79 %   0.78 %
As a % of Nonperforming Loans   432.61 %   310.99 %   290.55 %   259.55 %   279.77 %
                     
CHARGE-OFFS                    
Commercial, Financial and Agricultural $ 362   $ 149   $ 289   $ 235   $ 95  
Real Estate - Construction   -     58     223     -     -  
Real Estate - Commercial   11     33     26     -     155  
Real Estate - Residential   110     27     44     65     264  
Real Estate - Home Equity   31     -     333     45     52  
Consumer   864     819     744     520     795  
Overdrafts(3)   702     -     -     -     -  
Total Charge-Offs $ 2,080   $ 1,086   $ 1,659   $ 865   $ 1,361  
                     
RECOVERIES                    
Commercial, Financial and Agricultural $ 40   $ 127   $ 86   $ 58   $ 74  
Real Estate - Construction   -     -     -     -     -  
Real Estate - Commercial   191     266     142     100     70  
Real Estate - Residential   40     116     46     223     44  
Real Estate - Home Equity   33     25     58     60     32  
Consumer   268     300     277     251     284  
Overdrafts(3)   427     -     -     -     -  
Total Recoveries $ 999   $ 834   $ 609   $ 692   $ 504  
                     
NET CHARGE-OFFS $ 1,081   $ 252   $ 1,050   $ 173   $ 857  
                     
Net Charge-Offs as a % of Average Loans(1)   0.23 %   0.05 %   0.23 %   0.04 %   0.20 %
                     
RISK ELEMENT ASSETS                    
Nonaccruing Loans $ 4,874   $ 4,472   $ 4,928   $ 5,622   $ 5,047  
Other Real Estate Owned   1,463     953     526     1,010     1,902  
Total Nonperforming Assets $ 6,337   $ 5,425   $ 5,454   $ 6,632   $ 6,949  
                     
Past Due Loans 30-89 Days $ 5,077   $ 4,871   $ 5,120   $ 5,443   $ 4,682  
Past Due Loans 90 Days or More   -     -     -     -     -  
Classified Loans   16,548     20,847     21,323     26,406     22,219  
Performing Troubled Debt Restructuring's $ 15,934   $ 16,888   $ 18,284   $ 18,737   $ 20,791  
                     
Nonperforming Loans as a % of Loans   0.26 %   0.24 %   0.27 %   0.30 %   0.28 %
Nonperforming Assets as a % of Loans and Other Real Estate   0.34 %   0.29 %   0.30 %   0.36 %   0.39 %
Nonperforming Assets as a % of  Total Assets   0.21 %   0.18 %   0.19 %   0.22 %   0.23 %
                     
(1) Annualized                    
(2) Does not include $1 million for unfunded commitments recorded in other liabilities            
(3) Prior to the first quarter 2020, overdraft losses were reflected in noninterest income (deposit fees)


CAPITAL CITY BANK GROUP, INC.                                                          
AVERAGE BALANCE AND INTEREST RATES(1)
                                               
Unaudited                                                                      
                                                                       
    First Quarter 2020     Fourth Quarter 2019     Third Quarter 2019     Second Quarter 2019     First Quarter 2019  
(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
 
ASSETS:                                                                      
Loans, Net of Unearned Interest $ 1,882,703   $ 23,692   5.06 % $ 1,846,190   $ 23,958   5.15 % $ 1,837,548   $ 24,113   5.21 % $ 1,823,311     23,873   5.25 % $ 1,780,406   $ 22,718   5.18 %
                                                                       
Investment Securities                                                                      
Taxable Investment Securities   629,512     2,995   1.91     610,046     3,186   2.08     607,363     3,249   2.13     614,775     3,301   2.15     618,127     3,387   2.20  
Tax-Exempt Investment Securities   5,293     25   1.86     10,327     43   1.67     18,041     73   1.63     29,342     116   1.58     40,575     158   1.56  
                                                                       
Total Investment Securities   634,805     3,020   1.91     620,373     3,229   2.08     625,404     3,322   2.12     644,117     3,417   2.12     658,702     3,545   2.16  
                                                                       
Funds Sold   234,372     757   1.30     228,137     945   1.64     207,129     1,142   2.19     251,789     1,507   2.40     265,694     1,593   2.43  
                                                                       
Total Earning Assets   2,751,880   $ 27,469   4.01 %   2,694,700   $ 28,132   4.14 %   2,670,081   $ 28,577   4.25 %   2,719,217   $ 28,797   4.25 %   2,704,802   $ 27,856   4.17 %
                                                                       
Cash and Due From Banks   56,958               53,174               50,981               51,832               53,848            
Allowance for Loan Losses   (14,389 )             (14,759 )             (14,863 )             (14,513 )             (14,347 )          
Other Assets   244,339               249,089               253,111               254,126               252,208            
                                                                       
Total Assets $ 3,038,788             $ 2,982,204             $ 2,959,310             $ 3,010,662             $ 2,996,511            
                                                                       
LIABILITIES:                                                                      
Interest Bearing Deposits                                                                      
NOW Accounts $ 808,811   $ 725   0.36 % $ 755,625   $ 889   0.47 % $ 749,678   $ 1,235   0.65 % $ 832,982   $ 1,623   0.78 % $ 884,277   $ 1,755   0.80 %
Money Market Accounts   212,211     117   0.22     227,479     170   0.30     238,565     264   0.44     237,921     265   0.45     239,516     247   0.42  
Savings Accounts   379,237     46   0.05     372,518     46   0.05     372,593     46   0.05     371,716     46   0.05     364,783     44   0.05  
Time Deposits   105,542     51   0.19     108,407     52   0.19     111,447     51   0.18     115,442     54   0.19     118,839     53   0.18  
Total Interest Bearing Deposits   1,505,801     939   0.25 %   1,464,029     1,157   0.31 %   1,472,283     1,596   0.43 %   1,558,061     1,988   0.51 %   1,607,415     2,099   0.53 %
                                                                       
Short-Term Borrowings   32,915     132   1.61 %   7,448     16   0.87 %   8,697     27   1.24 %   9,625     31   1.30 %   11,378     35   1.26 %
Subordinated Notes Payable   52,887     471   3.52     52,887     525   3.88     52,887     558   4.13     52,887     596   4.46     52,887     608   4.60  
Other Long-Term Borrowings   6,312     50   3.21     6,723     56   3.33     7,158     63   3.47     7,509     66   3.53     8,199     72   3.55  
                                                                       
Total Interest Bearing Liabilities   1,597,915   $ 1,592   0.40 %   1,531,087   $ 1,754   0.45 %   1,541,025   $ 2,244   0.58 %   1,628,082   $ 2,681   0.66 %   1,679,879   $ 2,814   0.68 %
                                                                       
Noninterest Bearing Deposits   1,046,889               1,060,922               1,023,472               1,007,370               957,300            
Other Liabilities   59,587               63,291               74,540               61,611               52,070            
                                                                       
Total Liabilities   2,704,391               2,655,300               2,639,037               2,697,063               2,689,249            
Temporary Equity   2,506               -               -               -               -            
                                                                       
SHAREOWNERS' EQUITY:   331,891               326,904               320,273               313,599               307,262            
                                                                       
Total Liabilities, Temporary Equity and Shareowners' Equity $ 3,038,788             $ 2,982,204             $ 2,959,310             $ 3,010,662             $ 2,996,511            
                                                                       
Interest Rate Spread     $ 25,877   3.61 %     $ 26,378   3.69 %     $ 26,333   3.67 %     $ 26,116   3.59 %     $ 25,042   3.49 %
                                                                       
Interest Income and Rate Earned(1)       27,469   4.01         28,132   4.14         28,577   4.25         28,797   4.25         27,856   4.17  
Interest Expense and Rate Paid(2)       1,592   0.23         1,754   0.26         2,244   0.33         2,681   0.40         2,814   0.42  
                                                                       
Net Interest Margin     $ 25,877   3.78 %     $ 26,378   3.89 %     $ 26,333   3.92 %     $ 26,116   3.85 %     $ 25,042   3.75 %
                                                                       
(1)  Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.                                    
(2)  Rate calculated based on average earning assets.
                                     
                                       

For Information Contact:
J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820

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Source: Capital City Bank Group