Capital City Bank Group, Inc. Reports First Quarter 2010 Results
TALLAHASSEE, Fla., April 19, 2010 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported a net loss of $3.5 million, or $0.20 per diluted share for the first quarter of 2010 compared to a net loss of $3.4 million, or $0.20 per diluted share in the fourth quarter of 2009 and net income of $0.7 million, or $0.04 per diluted share for the first quarter of 2009.
The net loss reported for the first quarter of 2010 reflects a loan loss provision of $10.7 million, or $0.39 per diluted share versus $10.8 million, or $0.39 per diluted share for the linked fourth quarter of 2009 and $8.4 million, or $0.30 per diluted share in the first quarter of 2009. Compared to the linked fourth quarter of 2009, lower operating expenses of $1.9 million contributed to earnings, but were offset by a $1.7 million reduction in operating revenues (net interest income plus noninterest income) and a lower tax benefit of $0.3 million.
"We believe many of the economic indicators across our footprint appear to be in the early stages of stabilization, but uncertainty and a weak economy continue to affect our banking markets," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. "Consumers and businesses alike appear to be waiting for more economic certainty and confidence before resuming traditional spending patterns or business expansion plans. Although our margin remains strong at 4.21%, these market realities have adversely impacted loan volume and thereby our margin in recent quarters. Concerning credit quality, we are encouraged by positive developments in some of our underlying credit metrics, specifically, a slowdown in the level of gross additions to our problem loans. Nonaccrual loans have declined for three consecutive quarters. The slight increase in total nonperforming assets this quarter was driven by migration into restructured loans, which are accruing interest and other real estate, which is an end stage to resolution. Migration of the problem loans from nonaccruing to the restructured and other real estate categories simply puts us in a stronger position to ultimately resolve these situations.
"Without question, this is the most difficult operating environment our team has faced during our 20-30 year careers. We believe the collective experience of our management team, knowledge of our local markets, strength of our brand, healthy capital and the company's underlying performance metrics will enable us to successfully manage through this current economic cycle and capitalize on opportunities as our markets recover," said Smith.
The Return on Average Assets was -0.52% and the Return on Average Equity was -5.23% for the first quarter of 2010. These metrics were -0.52% and -5.03%, respectively for the fourth quarter of 2009, and 0.11% and 0.94%, respectively for the comparable quarter in 2009.
Discussion of Financial Condition
Average earning assets were $2.358 billion for the first quarter of 2010, an increase of $120.7 million, or 5.4% from the fourth quarter of 2009, and an increase of $192.1 million, or 8.9% from the first quarter of 2009. The improvement from the fourth quarter is primarily attributable to an increase in the overnight funds position of $190.5 million, partially offset by an $11.3 million and $58.5 million decrease in the investment and loan portfolios, respectively. The improvement in the funds position primarily reflects core deposit growth and to a lesser extent an influx of public funds. Average loans declined throughout the portfolio driven by reduction in the residential real estate and construction loan categories primarily reflecting the transfer of loans to the other real estate category as well as loan charge-offs. Additionally, the portfolio has been impacted by diminished loan demand, primarily attributable to the weak economy, as we have experienced lower production levels in recent quarters. Compared to the first quarter of 2009, the increase in average earning assets primarily reflects growth in the overnight funds position partially offset by a reduction in the loan portfolio and investment securities. Our loan production levels began to decline during the second half of 2009 with the trend continuing through the recent quarter.
Nonperforming assets of $153.7 million increased from the linked fourth quarter by $9.6 million and from the first quarter of 2009 by $26.9 million. Nonaccrual loans decreased $9.9 million and $33.8 million, respectively, from the same prior-year periods. For the first quarter, the migration of loans into our problem loan pool slowed as the gross additions declined for the second straight quarter and the level of our past due loans improved significantly. More specifically, gross additions to our portfolio of nonaccruing loans have declined in four of the last five quarters, including the first quarter of 2010. Furthermore, our collection and loan work-out efforts continue to produce positive momentum reflective of the increased level of loans migrating into both the restructured loan and other real estate categories. Restructured loans totaled $30.8 million at the end of the first quarter reflecting an increase of $9.2 million over year-end 2009 and $25.7 million over the first quarter of 2009. Four large loans were added to the restructured category during the first quarter and reflect our efforts to alleviate these borrowers near term cash flow strains. Our current restructured loan portfolio consists of 150 loans that are all on fully accruing status and maintain a weighted average interest rate of 5.86%. Other real estate owned totaled $46.4 million at the end of the quarter compared to $36.1 million at year-end 2009 and $11.4 million at the end of the first quarter of 2009, reflecting the continued migration of our problem loan pool through the foreclosure process which has picked up momentum over the last two quarters. Nonperforming assets represented 8.10% of loans and other real estate at the end of the first quarter compared to 7.38% at year-end 2009 and 6.39% at the end of the first quarter of 2009. The increase in this percentage is partially attributable to a decline in loans outstanding.
Average total deposits were $2.249 billion for the first quarter, an increase of $158.8 million, or 7.6%, from the fourth quarter and an increase of $291.4 million, or 14.9%, from the first quarter of 2009. On a linked quarter basis, the increase reflects core deposit growth of approximately $66.3 million resulting from a successful money market promotion, higher deposit balances maintained by several larger, non-public depositors, as well as continued growth in our Absolutely Free Checking ("AFC") accounts. Additionally, average public funds increased approximately $92.0 million from the linked quarter attributable to seasonal inflow and the addition of new relationships. The money market account promotion, which was launched during the third quarter and concluded in the fourth quarter, has generated in excess of $100.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank's overall liquidity position. Our AFC products continue to be successful as both balances and the number of accounts continue to post growth quarter over quarter. The improvement from the first quarter of 2009 primarily reflects the increase in core deposits mentioned above.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $303.3 million during the first 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 purchased position of $33.9 million in the first quarter of 2009. The favorable variance as compared to both the fourth and first quarters of 2009, is primarily attributable to the growth in core deposits mentioned above and net reductions in both the loan and investment portfolios. The investment portfolio was expanded at the end of the first quarter with the purchase of $50.0 million of US Treasuries in relatively short maturities. If appropriate, we will continue to look to deploy a portion of the funds sold position in the investment portfolio during the second quarter.
Equity capital was $262.0 million as of March 31, 2010, compared to $267.9 million as of December 31, 2009 and $275.5 million as of March 31, 2009. Our leverage ratio was 9.64%, 10.39%, and 11.25%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.16% at March 31, 2010 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At March 31, 2010, our tangible common equity ratio was 6.62%, compared to 6.84% at December 31, 2009 and 7.63% at March 31, 2009.
Discussion of Operating Results
Tax equivalent net interest income for the first quarter of 2010 was $24.5 million compared to $25.8 million for the fourth quarter of 2009 and $27.6 million for the first quarter of 2009. The decrease of $1.3 million in net interest income on a linked quarter basis was due to two less calendar days, a shift in earning asset mix and unfavorable asset repricing, partially offset by a decrease in foregone interest on nonaccrual loans and lower interest expense. Interest income was primarily impacted by declining balances in our investment and loan portfolios as well as continued unfavorable repricing in each of these portfolios. These unfavorable volume and rate variances were partially offset by a favorable variance in foregone interest on nonaccrual loans and a reduction in interest expense, primarily attributable to lower rates on certificates of deposit and subordinated notes payable. With the exception of calendar days, the $3.1 million unfavorable variance over the first quarter of 2009 is primarily attributable to the trends as noted above in comparing the first quarter 2010 to fourth quarter 2009.
The net interest margin in the first quarter of 2010 was 4.21%, a decline of 38 basis points over the linked quarter and 95 basis points over the first quarter of 2009. The lower margin 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. When we determine what portion of this growth is permanent we will begin deploying the overnight funds into higher yielding earning assets. As noted earlier, late in the first quarter we invested an additional $50 million in the investment portfolio.
The provision for loan losses for the current quarter was $10.7 million compared to $10.8 million in the linked fourth quarter of 2009 and $8.4 million for the first quarter of 2009. The provision for the current quarter primarily reflects required reserves for loans added to impaired status during the quarter and to a lesser extent collateral devaluation on existing impaired loans. An increase in loan loss factors also impacted the level of loan loss provision for the quarter. Net charge-offs in the first quarter totaled $13.5 million, or 2.91%, of average loans compared to $11.8 million, or 2.42% in the linked fourth quarter of 2009 and $5.2 million, or 1.08% in the first quarter of 2009. The increase in net charge-offs compared to the linked fourth quarter reflects losses recorded on three large previously impaired loans that are working through the foreclosure process -- these loans were substantially reserved for in the prior quarter. At quarter-end, the allowance for loan losses was 2.23% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 2.30% and 41%, respectively, at the end of the prior quarter.
Noninterest income for the first quarter decreased $444,000, or 3.1%, from the fourth quarter of 2009 and declined $75,000, or 0.53%, from the first quarter of 2009. Compared to the linked fourth quarter, the decrease is attributable to lower deposit fees ($554,000) and retail brokerage fees ($207,000), partially offset by higher merchant fees ($320,000). The reduction in deposit fees compared to the prior linked quarter reflects a two-day calendar variance, and a lower level of NSF/overdraft activity reflective of current economic conditions and a higher level of consumer awareness that have both impacted consumer and business spending habits. The decline in retail brokerage fees was driven by lower trading volume by clients. The increase in merchant fees reflects higher processing volume for our sole remaining merchant that is scheduled to convert to another processor early in the third quarter. Compared to the first quarter of 2009, the slight decline is attributable to a lower level of merchant fees ($293,000) reflective of a higher number of remaining merchants in early 2009. Partially offsetting the reduction in merchant fees was an increase in bank card fees ($256,000) primarily driven by growth in transaction accounts as well as a debit card rewards program that was implemented in late 2009.
Noninterest expense decreased $1.9 million, or 5.5%, from the fourth quarter of 2009 and increased $1.1 million, or 3.5%, over the first quarter of 2009. The decrease compared to the fourth quarter was driven by lower expense for other real estate properties ($700,000), which includes holding costs as well as valuation adjustments due to property devaluation. Lower expense for loan collection legal support ($215,000), professional fees ($554,000), advertising ($272,000), and intangible amortization ($301,000) also contributed to the decline for the quarter. The reduction in legal expense was due to a lower level of legal assistance needed for complex loan work-out arrangements as well as various cost control strategies implemented to reduce this cost. Professional fees was elevated in the fourth quarter due to a one-time payment to a consulting firm for services related to a review of our vendor maintenance contracts that will result in future cost reductions. The decline in advertising expense primarily reflects lower direct mail costs for our ongoing AFC product promotion and, to a lesser extent, costs incurred in support of our money market account promotion, which was recognized in the fourth quarter of 2009. Intangible amortization declined due to the fact that the scheduled amortization of one of our core deposit intangible assets concluded during the fourth quarter of 2009. Compared to the first quarter of 2009, the increase in noninterest expense was attributable to higher expense for other real estate properties ($1.8 million), partially offset by lower pension plan expense ($618,000).
We realized a tax benefit of $2.7 million for the first quarter of 2010 and a tax benefit of $3.0 million for the fourth quarter of 2009, both of which primarily reflect the impact of a higher level of permanent book/tax differences (primarily tax exempt income) in relation to our book operating profit. The reduction in benefit for the current quarter primarily reflects a lower level of tax exempt income.
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 69 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
----------------------------
(Dollars in thousands, Mar 31, Dec 31, Mar 31,
except per share data) 2010 2009 2009
------------------------ --------- -------- -------
EARNINGS
Net Income $(3,463) (3,407) $650
Diluted Earnings Per
Common Share $(0.20) (0.20) $0.04
------------------------ --------- -------- -------
PERFORMANCE
Return on Average Equity -5.23% -5.03% 0.94%
Return on Average Assets -0.52% -0.52% 0.11%
Net Interest Margin 4.21% 4.59% 5.16%
Noninterest Income as %
of Operating Revenue 36.77% 36.30% 34.22%
Efficiency Ratio 85.00% 85.21% 75.07%
------------------------ --------- -------- -------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 12.81% 12.76% 13.09%
Total Capital Ratio 14.16% 14.11% 14.40%
Tangible Capital Ratio 6.62% 6.84% 7.63%
Leverage Ratio 9.64% 10.39% 11.25%
Equity to Assets 9.65% 9.89% 11.02%
------------------------ --------- -------- -------
ASSET QUALITY
Allowance as % of
Non-Performing Loans 38.42% 40.77% 34.82%
Allowance as a % of
Loans 2.23% 2.30% 2.04%
Net Charge-Offs as % of
Average Loans 2.91% 2.42% 1.08%
Nonperforming Assets as
% of Loans and ORE 8.10% 7.38% 6.39%
------------------------ --------- -------- -------
STOCK PERFORMANCE
High $14.61 $14.34 $27.31
Low $11.57 $11.00 $9.50
Close $14.25 $13.84 $11.46
Average Daily Trading
Volume 26,854 39,672 75,117
------------------------ --------- -------- -------
CAPITAL CITY BANK GROUP,
INC.
CONSOLIDATED STATEMENT OF
INCOME
Unaudited
-------------------------- -------- -------- -------- ------- -------
2010 2009 2009 2009 2009
(Dollars in thousands, First Fourth Third Second First
except per share data) Quarter Quarter Quarter Quarter Quarter
-------------------------- -------- -------- -------- ------- -------
INTEREST INCOME
Interest and Fees on Loans $26,992 $28,582 $29,463 $29,742 $29,537
Investment Securities 990 1,097 1,323 1,437 1,513
Funds Sold 172 77 1 1 3
-------------------------- -------- -------- -------- ------- -------
Total Interest Income 28,154 29,756 30,787 31,180 31,053
-------------------------- -------- -------- -------- ------- -------
INTEREST EXPENSE
Deposits 2,938 2,964 2,626 2,500 2,495
Short-Term Borrowings 17 22 113 88 68
Subordinated Notes Payable 651 936 936 931 927
Other Long-Term Borrowings 526 542 560 566 568
-------------------------- -------- -------- -------- ------- -------
Total Interest Expense 4,132 4,464 4,235 4,085 4,058
-------------------------- -------- -------- -------- ------- -------
Net Interest Income 24,022 25,292 26,552 27,095 26,995
Provision for Loan Losses 10,740 10,834 12,347 8,426 8,410
-------------------------- -------- -------- -------- ------- -------
Net Interest Income after
Provision for Loan Losses 13,282 14,458 14,205 18,669 18,585
-------------------------- -------- -------- -------- ------- -------
NONINTEREST INCOME
Service Charges on Deposit
Accounts 6,628 7,183 7,099 7,162 6,698
Data Processing Fees 900 948 914 896 870
Asset Management Fees 1,020 1,065 960 930 970
Retail Brokerage Fees 565 772 765 625 493
Gain on Sale of Investment
Securities 5 -- 4 6 --
Mortgage Banking Revenues 508 550 663 902 584
Merchant Fees 665 345 393 663 958
Interchange Fees 1,212 1,129 1,129 1,118 1,056
Gain on Sale of Portion of
Merchant Services
Portfolio -- -- -- -- --
ATM/Debit Card Fees 963 892 876 884 863
Other 1,501 1,527 1,501 1,448 1,550
-------------------------- -------- -------- -------- ------- -------
Total Noninterest Income 13,967 14,411 14,304 14,634 14,042
-------------------------- -------- -------- -------- ------- -------
NONINTEREST EXPENSE
Salaries and Associate
Benefits 16,779 16,121 15,660 16,049 17,237
Occupancy, Net 2,408 2,458 2,455 2,540 2,345
Furniture and Equipment 2,181 2,261 2,193 2,304 2,338
Intangible Amortization 710 1,010 1,011 1,010 1,011
Other 11,306 13,463 10,296 11,027 9,326
-------------------------- -------- -------- -------- ------- -------
Total Noninterest Expense 33,384 35,313 31,615 32,930 32,257
-------------------------- -------- -------- -------- ------- -------
OPERATING PROFIT (6,135) (6,444) (3,106) 373 370
Provision for Income Taxes (2,672) (3,037) (1,618) (401) (280)
-------------------------- -------- -------- -------- ------- -------
NET INCOME $(3,463) $(3,407) $(1,488) $774 $650
-------------------------- -------- -------- -------- ------- -------
PER SHARE DATA
Basic Earnings $(0.20) $(0.20) $(0.08) $0.04 $0.04
Diluted Earnings $(0.20) $(0.20) $(0.08) $0.04 $0.04
Cash Dividends 0.190 0.190 0.190 0.190 0.190
AVERAGE SHARES
Basic 17,057 17,034 17,024 17,010 17,109
Diluted 17,070 17,035 17,025 17,010 17,131
-------------------------- -------- -------- -------- ------- -------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL
CONDITION
Unaudited
----------------------------- ------------ ------------ ------------ ------------ ------------
2010 2009 2009 2009 2009
(Dollars in thousands, except First Fourth Third Second First
per share data) Quarter Quarter Quarter Quarter Quarter
----------------------------- ------------ ------------ ------------ ------------ ------------
ASSETS
Cash and Due From Banks $ 52,615 $ 57,877 $ 79,275 $ 92,394 $ 81,317
Funds Sold and Interest
Bearing Deposits 293,413 276,416 828 2,016 4,241
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Cash and Cash
Equivalents 346,028 334,293 80,103 94,410 85,558
Investment Securities,
Available-for-Sale 217,606 176,673 183,944 194,002 195,767
Loans, Net of Unearned
Interest
Commercial, Financial, &
Agricultural 169,766 189,061 203,813 201,589 202,038
Real Estate - Construction 79,145 111,249 128,476 153,507 154,102
Real Estate - Commercial 729,011 716,791 704,595 686,420 673,066
Real Estate - Residential 394,132 406,262 424,715 447,652 464,358
Real Estate - Home Equity 245,185 246,722 243,808 235,473 223,505
Consumer 224,793 233,524 241,672 241,467 243,280
Other Loans 6,888 10,207 7,790 7,933 8,068
Overdrafts 2,701 2,124 3,163 3,022 3,195
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Loans, Net of Unearned
Interest 1,851,621 1,915,940 1,958,032 1,977,063 1,971,612
Allowance for Loan Losses (41,198) (43,999) (45,401) (41,782) (40,172)
----------------------------- ------------ ------------ ------------ ------------ ------------
Loans, Net 1,810,423 1,871,941 1,912,631 1,935,281 1,931,440
Premises and Equipment, Net 117,055 115,439 111,797 109,050 107,259
Intangible Assets 88,131 88,841 89,851 90,862 91,872
Other Assets 135,860 121,137 113,611 102,234 87,483
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Other Assets 341,046 325,417 315,259 302,146 286,614
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Assets $ 2,715,103 $ 2,708,324 $ 2,491,937 $ 2,525,839 $ 2,499,379
----------------------------- ------------ ------------ ------------ ------------ ------------
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 446,855 $ 427,791 $ 397,943 $ 424,125 $ 413,608
NOW Accounts 890,570 899,649 687,679 733,526 726,069
Money Market Accounts 376,091 373,105 301,662 300,683 312,541
Regular Savings Accounts 130,936 122,370 122,040 123,257 121,245
Certificates of Deposit 438,488 435,319 440,666 424,339 416,326
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Deposits 2,282,940 2,258,234 1,949,990 2,005,930 1,989,789
Short-Term Borrowings 18,900 35,841 103,711 73,989 68,193
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 50,679 49,380 50,665 52,354 53,448
Other Liabilities 37,738 34,083 56,269 57,973 49,518
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities 2,453,144 2,440,425 2,223,522 2,253,133 2,223,835
----------------------------- ------------ ------------ ------------ ------------ ------------
SHAREOWNERS' EQUITY
Common Stock 171 170 170 170 170
Additional Paid-In Capital 36,816 36,099 36,065 35,698 35,841
Retained Earnings 239,755 246,460 253,104 257,828 260,287
Accumulated Other
Comprehensive Loss, Net of
Tax (14,783) (14,830) (20,924) (20,990) (20,754)
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Shareowners' Equity 261,959 267,899 268,415 272,706 275,544
----------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities and
Shareowners' Equity $ 2,715,103 $ 2,708,324 $ 2,491,937 $ 2,525,839 $ 2,499,379
----------------------------- ------------ ------------ ------------ ------------ ------------
OTHER BALANCE SHEET DATA
Earning Assets $ 2,362,640 $ 2,369,029 $ 2,142,804 $ 2,173,081 $ 2,171,620
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Deposit Base 2,572 3,233 4,196 5,159 6,121
Other 748 797 844 892 940
Interest Bearing Liabilities 1,968,551 1,978,551 1,769,310 1,771,035 1,760,709
----------------------------- ------------ ------------ ------------ ------------ ------------
Book Value Per Diluted Share $ 15.34 $ 15.72 $ 15.76 $ 16.03 $ 16.18
Tangible Book Value Per
Diluted Share 10.18 10.51 10.48 10.70 10.80
----------------------------- ------------ ------------ ------------ ------------ ------------
Actual Basic Shares
Outstanding 17,063 17,036 17,032 17,010 17,010
Actual Diluted Shares
Outstanding 17,076 17,037 17,033 17,010 17,031
----------------------------- ------------ ------------ ------------ ------------ ------------
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
------------------------------ ---------- ---------- ---------- ---------- ----------
2010 2009 2009 2009 2009
First Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
------------------------------ ---------- ---------- ---------- ---------- ----------
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 43,999 $ 45,401 $ 41,782 $ 40,172 $ 37,004
Provision for Loan Losses 10,740 10,834 12,347 8,426 8,410
Transfer of Unfunded Reserve
to Other Liability 5 392 -- -- --
Net Charge-Offs 13,536 11,844 8,728 6,816 5,242
------------------------------ ---------- ---------- ---------- ---------- ----------
Balance at End of Period $ 41,198 $ 43,999 $ 45,401 $ 41,781 $ 40,172
------------------------------ ---------- ---------- ---------- ---------- ----------
As a % of Loans 2.23% 2.30% 2.32% 2.12% 2.04%
As a % of Nonperforming Loans 38.42% 40.77% 40.90% 33.71% 34.82%
As a % of Nonperforming Assets 26.81% 30.54% 31.45% 29.09% 31.69%
------------------------------ ---------- ---------- ---------- ---------- ----------
CHARGE-OFFS
Commercial, Financial and
Agricultural $ 842 $ 712 $ 633 $ 388 $ 857
Real Estate - Construction 3,722 2,040 2,315 3,356 320
Real Estate - Commercial 4,631 1,584 1,707 123 1,002
Real Estate - Residential 3,727 7,377 3,394 2,379 1,975
Consumer 1,507 1,324 1,324 1,145 2,117
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Charge-Offs $ 14,429 $ 13,037 $ 9,373 $ 7,391 $ 6,271
------------------------------ ---------- ---------- ---------- ---------- ----------
RECOVERIES
Commercial, Financial and
Agricultural $ 77 $ 343 $ 64 $ 84 $ 74
Real Estate - Construction -- 5 150 -- 385
Real Estate - Commercial 157 43 8 1 --
Real Estate - Residential 114 331 92 51 58
Consumer 545 471 331 439 512
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Recoveries $ 893 $ 1,193 $ 645 $ 575 $ 1,029
------------------------------ ---------- ---------- ---------- ---------- ----------
NET CHARGE-OFFS $ 13,536 $ 11,844 $ 8,728 $ 6,816 $ 5,242
------------------------------ ---------- ---------- ---------- ---------- ----------
Net Charge-Offs as a % of
Average Loans(1) 2.91% 2.42% 1.76% 1.39% 1.08%
------------------------------ ---------- ---------- ---------- ---------- ----------
RISK ELEMENT ASSETS
Nonaccruing Loans $ 76,382 $ 86,274 $ 91,880 $ 111,039 $ 110,200
Restructured Loans 30,843 21,644 19,121 12,916 5,157
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Loans 107,225 107,918 111,001 123,955 115,357
Other Real Estate 46,444 36,134 33,371 19,671 11,425
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Assets $ 153,669 $ 144,052 $ 144,372 $ 143,626 $ 126,783
------------------------------ ---------- ---------- ---------- ---------- ----------
Past Due Loans 90 Days or More $ -- $ -- $ 486 $ -- $ --
------------------------------ ---------- ---------- ---------- ---------- ----------
Nonperforming Loans as a % of
Loans 5.79% 5.63% 5.67% 6.27% 5.85%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.10% 7.38% 7.25% 7.19% 6.39%
Nonperforming Assets as a % of
Capital(2) 50.69% 46.19% 46.01% 45.67% 40.16%
------------------------------ ---------- ---------- ---------- ---------- ----------
(1) Annualized
(2) Capital includes allowance
for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
First Quarter 2010 Fourth Quarter 2009 Third Quarter 2009
------------------------------ ------------------------------ -------------------------------
(Dollars in Average Average Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
ASSETS:
Loans, Net of
Unearned Interest $ 1,886,367 27,180 5.84% $ 1,944,873 28,813 5.88% $ 1,964,984 29,695 6.00%
Investment Securities
Taxable Investment
Securities 71,325 500 2.81% 72,537 498 2.74% 81,777 682 3.32%
Tax-Exempt
Investment
Securities 97,316 753 3.10% 107,361 921 3.43% 107,307 985 3.67%
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
Total Investment
Securities 168,641 1,253 2.98% 179,898 1,419 3.15% 189,084 1,667 3.52%
Funds Sold 303,280 172 0.23% 112,790 77 0.27% 3,294 1 0.11%
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
Total Earning Assets 2,358,288 $ 28,605 4.92% $ 30,309 5.38% $ 31,363 5.77%
-------- ------- 2,237,561 -------- ------- 2,157,362 --------- -------
Cash and Due From
Banks 54,873 69,687 76,622
Allowance for Loan
Losses (44,584) (46,468) (42,774)
Other Assets 329,842 314,470 306,759
--------------------- ----------- ----------- -----------
Total Assets $ 2,698,419 $ 2,575,250 $ 2,497,969
--------------------- ----------- ----------- -----------
LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 867,004 $ 384 0.18% $ 740,550 $ 308 0.17% $ 678,292 257 0.15%
Money Market Accounts 374,161 689 0.75% 361,104 625 0.69% 301,230 281 0.37%
Savings Accounts 126,352 15 0.05% 122,158 16 0.05% 122,934 15 0.05%
Time Deposits 438,112 1,850 1.71% 439,654 2,015 1.82% 430,944 2,073 1.91%
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
Total Interest
Bearing Deposits 1,805,629 2,938 0.66% 1,663,466 2,964 0.71% 1,533,400 2,626 0.68%
Short-Term Borrowings 30,673 17 0.22% 47,114 22 0.18% 97,305 113 0.45%
Subordinated Notes
Payable 62,887 651 4.14% 62,887 936 5.83% 62,887 936 5.83%
Other Long-Term
Borrowings 49,981 526 4.27% 50,026 542 4.30% 51,906 560 4.28%
--------------------- ----------- -------- ------- ----------- -------- ------- ----------- --------- -------
Total Interest
Bearing Liabilities 1,949,170 $ 4,132 0.86% $ 4,464 0.97% $ 4,235 0.96%
-------- ------- 1,823,493 -------- ------- 1,745,498 --------- -------
Noninterest Bearing
Deposits 443,131 426,542 416,770
Other Liabilities 37,563 56,659 60,674
--------------------- ----------- ----------- -----------
Total Liabilities 2,429,864 2,306,694 2,222,942
SHAREOWNERS' EQUITY: $ 268,555 $ 268,556 $ 275,027
--------------------- ----------- ----------- -----------
Total Liabilities and
Shareowners' Equity $ 2,698,419 $ 2,575,250 $ 2,497,969
--------------------- ----------- ----------- -----------
Interest Rate Spread $ 24,473 4.06% $ 25,845 4.41% $ 27,128 4.81%
--------------------- ----------- -------- ------- -------- ------- --------- -------
Interest Income and
Rate Earned(1) $ 28,605 4.92% $ 30,309 5.38% $ 31,363 5.77%
Interest Expense and
Rate Paid(2) 4,132 0.71% 4,464 0.79% 4,235 0.78%
--------------------- ----------- -------- ------- -------- ------- --------- -------
Net Interest Margin $ 24,473 4.21% $ 25,845 4.59% $ 27,128 4.99%
--------------------- ----------- -------- ------- -------- ------- --------- -------
(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.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
---------------------------- ----------- -------- ------- ----------- -------- -------
Second Quarter 2009 First Quarter 2009
------------------------------ ------------------------------
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ----------- -------- ------- ----------- -------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,974,197 29,954 6.09% $ 1,964,086 29,724 6.14%
Investment Securities
Taxable Investment
Securities 89,574 742 3.31% 90,927 776 3.43%
Tax-Exempt Investment
Securities 106,869 1,067 4.00% 101,108 1,133 4.48%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Investment Securities 196,443 1,809 3.68% 192,035 1,909 3.98%
Funds Sold 4,641 1 0.10% 10,116 3 0.13%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Earning Assets 2,175,281 $ 31,764 5.86% $ 31,636 5.92%
-------- ------- 2,166,237 -------- -------
Cash and Due From Banks 81,368 76,826
Allowance for Loan Losses (41,978) (38,007)
Other Assets 291,681 281,869
---------------------------- ----------- -----------
Total Assets $ 2,506,352 $ 2,486,925
---------------------------- ----------- -----------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 709,039 $ 249 0.14% $ 719,265 $ 225 0.13%
Money Market Accounts 298,007 192 0.26% 321,562 190 0.24%
Savings Accounts 123,034 15 0.05% 118,142 14 0.05%
Time Deposits 417,545 2,044 1.96% 392,006 2,066 2.14%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Deposits 1,547,625 2,500 0.65% 1,550,975 2,495 0.65%
Short-Term Borrowings 87,768 88 0.40% 85,318 68 0.32%
Subordinated Notes Payable 62,887 931 5.86% 62,887 927 5.89%
Other Long-Term Borrowings 52,775 566 4.30% 53,221 568 4.33%
---------------------------- ----------- -------- ------- ----------- -------- -------
Total Interest Bearing
Liabilities 1,751,055 $ 4,085 0.94% $ 4,058 0.94%
-------- ------- 1,752,401 -------- -------
Noninterest Bearing Deposits 423,566 406,380
Other Liabilities 54,617 46,510
---------------------------- ----------- -----------
Total Liabilities 2,229,238 2,205,291
SHAREOWNERS' EQUITY: $ 277,114 $ 281,634
---------------------------- ----------- -----------
Total Liabilities and
Shareowners' Equity $ 2,506,352 $ 2,486,925
---------------------------- ----------- -----------
Interest Rate Spread $ 27,679 4.92% $ 27,578 4.98%
---------------------------- ----------- -------- ------- -------- -------
Interest Income and Rate
Earned(1) $ 31,764 5.86% $ 31,636 5.92%
Interest Expense and Rate
Paid(2) 4,085 0.75% 4,058 0.76%
---------------------------- ----------- -------- ------- -------- -------
Net Interest Margin $ 27,679 5.11% $ 27,578 5.16%
---------------------------- ----------- -------- ------- -------- -------
(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 April 19, 2010