Capital City Bank Group, Inc. Reports Second Quarter 2009 Results
TALLAHASSEE, Fla., July 21, 2009 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2009 totaling $0.8 million ($0.04 per diluted share) compared to net income of $0.6 million ($0.04 per diluted share) for the first quarter of 2009 and $4.8 million ($0.28 per diluted share) for the second quarter of 2008. Earnings for the first six months of 2009 totaled $1.4 million ($.08 per diluted share) compared to $12.1 million ($0.70 per diluted share) for 2008.
Earnings for the three and six month periods reflect loan loss provisions of $8.4 million ($0.30 per diluted share) and $16.8 million ($0.61 per diluted share), respectively, and a one-time special FDIC assessment of approximately $1.2 million ($0.04 per diluted share) recorded in the second quarter.
"Given the very tough ongoing operating environment in Florida, we are pleased to be reporting net income for each of the first two quarters," said William G. Smith, Jr., Chairman, President and Chief Executive Officer of Capital City Bank Group. "Quarter over quarter, excluding the special FDIC insurance assessment, our operating revenues were up and expenses were down, reflecting the underlying strength of our overall business strategy.
"At June 30, nonperforming assets (which include nonaccrual loans, restructured loans, and other real estate owned) were up $16.8 million, or 13% over the first quarter. However, we were encouraged to see past due loans and gross additions to the nonaccrual loan portfolio decline for two consecutive quarters. This, coupled with continued improvement in problem loan resolutions resulted in a net increase of $0.8 million in the nonaccrual portfolio. Restructured loans and other real estate owned, which increased $7.8 million and $8.2 million, respectively, accounted for essentially all of the increase in nonperforming assets, which is a favorable and natural progression as problem loans migrate through the resolution phase. Consequently, we believe we are in an improved position to ultimately collect on these loans or dispose of the properties.
"While we view the slowdown in gross additions to nonaccruing loans and the migration among nonperforming categories as positive changes in the status of our nonperforming assets, it may still be too early to call a peak in nonperforming loans. However, we believe these recent developments suggest a trend towards more stability at this point in the credit cycle.
"Also, on a positive note, loan and deposit growth have been steady during the second quarter and the first half of the year, reflecting the fact that our associates are doing a good job recognizing quality opportunities in this disrupted banking marketplace. Lenders are successfully converting clients who are interested in moving or expanding their banking relationships. On the deposit side, core deposits are higher primarily in noninterest demand accounts and CDs, as our free checking product continues to grow in both balances and number of accounts, and competitive rate pressure affecting our CD production has eased in many markets. Our net interest margin was 5.11% for the second quarter," said Smith.
The Return on Average Assets was .12% and the Return on Average Equity was 1.12% for the second quarter of 2009. These metrics were .11% and .94% for the first quarter of 2009 and .73% and 6.43% for the second quarter of 2008, respectively.
For the first half of 2009, the Return on Average Assets was .12% and the Return on Average Equity was 1.03% compared to .92% and 8.14%, respectively, for the first half of 2008.
Discussion of Financial Condition
Average earning assets were $2.175 billion for the second quarter of 2009, an increase of $9.0 million, or 0.4% from the first quarter of 2009, and an increase of $24.4 million, or 1.1% from the fourth quarter of 2008. The increase from the first quarter is primarily attributable to a $4.4 million and $10.1 million increase in the investment and loan portfolios, respectively. An increase in deposits funded the earning asset growth. Compared to the fourth quarter of 2008, the increase in earning assets primarily reflects growth in the loan portfolio partially offset by a reduction in short-term investments. We have now experienced loan growth for four consecutive quarters as production has increased and loan payoffs and paydowns have slowed. We believe this trend continued through the recent quarter due to the efforts of our bankers to reach clients who are interested in moving or expanding their banking relationships. Loan growth was primarily attributable to commercial real estate mortgages and home equity loans.
At the end of the second quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $143.6 million, an increase of $16.8 million, or 13% from the first quarter and $35.8 million, or 33% from the fourth quarter of 2008. The increase from the prior linked quarter reflects an increase of $7.8 million in restructured loans and an increase of $8.2 million in other real estate owned properties. Nonaccrual loans totaled $111.0 million at the end of the second quarter, a net increase of $0.8 million from the prior linked quarter. The level of gross additions to non-accruing loans has declined by $15.2 million and $6.8 million, respectively, for the last two quarters and the volume of problem loan resolutions has improved including the resolutions of several larger credits during the second quarter. Nonperforming assets represented 7.19% of loans and other real estate at the end of the second quarter compared to 6.39% at the prior quarter-end and 5.48% at year-end 2008.
Average total deposits were $1.971 billion for the second quarter, an increase of $13.8 million, or 0.7%, from the first quarter and an increase of $25.3 million, or 1.3%, from the fourth quarter of 2008. On a linked quarter basis, the increase in deposits reflects higher core deposits primarily in noninterest demand accounts and certificates of deposit, which have been partially offset by declining public fund balances. Our absolutely free checking product continues to be successful as both balances and the number of accounts continue to post growth quarter over quarter. Certificates of deposit balances have grown as rate pressures from higher paying institutions have eased in most of our markets. Compared to year-end 2008, the increase in average deposits reflects higher core deposits and public funds. Core deposits have increased as discussed above and, while an influx of public funds was experienced late in the first quarter of 2009, there has been an easing in these balances, which began in late April. Additionally, money market balances have experienced a steady decline during the first half of 2009. 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 these deposits.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) purchased position of $49.8 million during the second quarter of 2009 compared to an average net overnight funds purchased position of $33.9 million in the first quarter and an average overnight funds purchased position of $3.2 million at year-end 2008. The unfavorable variance in funds purchased position during both periods is attributable to an increase in the investment and loan portfolios, higher non-earning assets and lower equity. Deposit growth partially offset this decline.
Equity capital was $272.7 million as of June 30, 2009, compared to $275.5 million as of March 31, 2009 and $278.8 million as of December 31, 2008. Our leverage ratio was 11.07%, 11.25%, and 11.51%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.20% at June 30, 2009 exceeds the 8.0% minimum requirement and the 10% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. During the first quarter 2009, we repurchased approximately 146,000 shares of our common stock at a weighted average stock price of $10.65; no shares were repurchased during the second quarter. Our strong capital position has allowed us to continue paying a quarterly dividend to our shareowners despite lower earnings performance. We will continue to monitor our capital and liquidity position to ensure that continuation of our dividend does not place unnecessary strain on our capital levels.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2009 was $27.7 million compared to $27.6 million for the first quarter of 2009 and $28.1 million for the second quarter of 2008. For the first half of 2009, tax equivalent net interest income totaled $55.3 million compared to $55.2 million in 2008.
The increase in the net interest income on a linked quarter basis was partially due to one additional calendar day in the second quarter and was favorably impacted by the recovery of interest on several larger loans, which were resolved during the quarter. Higher foregone interest on nonaccrual loans and a decline in loan fees partially offset the improvement in net interest income. The decline in loan fees resulted from a one-time write-off totaling $175,000. Additionally, the loan portfolio continued to reprice lower without the offsetting benefit in funding costs.
The decline from the second quarter of 2008 reflects the downward repricing of earning assets, higher foregone interest on nonaccrual loans, and lower loan fees. Partially offsetting the decline was the lower costs of funds. We have responded aggressively to the federal funds rate reductions, which began in September 2007. This, coupled with a favorable shift in mix of deposits, has resulted in a significantly lower cost of funds year over year.
The net interest margin of 5.11% declined five basis points over the linked quarter, attributable to lower earning assets yields. As compared to the second quarter of 2008, the margin improved 21 basis points reflecting the favorable shift in the mix of deposits and aggressive deposit repricing.
The slight increase in net interest income for the first half of 2009 as compared to the same period in 2008 resulted from lower costs of funds discussed above; mostly offset by lower earning assets yields, higher foregone interest and lower loan fees.
The provision for loan losses was $8.4 million for both the second and first quarters of 2009 compared to $5.4 million for the second quarter of 2008. The loan loss provision for both quarters and the first half of the year reflects a higher level of required general reserves driven by an increased level of net loan charge-offs and higher loss ratios associated with real estate loans, primarily loans to builders/investors secured by residential houses and vacant land. For the same comparable periods, our level of specific reserves on impaired loans has also increased due to both a higher level of nonaccrual loans and real estate collateral devaluation, though not as significant in the current quarter due to the resolution of some larger problem loans and the slowing of loans migrating to nonaccrual status. Net charge-offs in the second quarter totaled $6.8 million, or 1.39%, of average loans compared to $5.2 million, or 1.08% in the first quarter. At quarter-end, the allowance for loan losses was 2.12% of outstanding loans (net of overdrafts) and provided coverage of 34% of nonperforming loans.
Noninterest income for the second quarter increased $0.6 million, or 4.2%, from the first quarter reflective of higher deposit fees ($464,000) and mortgage banking fees ($317,000), partially offset by lower merchant fees ($295,000). The increase in deposit fees primarily reflects an adjustment to our deposit fees midway through the first quarter. Mortgage banking fees increased due to higher secondary market loan production, which was driven by the historically low interest rate environment. The lower level of merchant fees is an expected seasonal variance for our sole remaining merchant who has historically had lower sales during the summer months. Compared to the second quarter of 2008, noninterest income declined by $1.1 million, or 6.9%, primarily due to lower merchant fees related to the sale of a major portion of the bank's merchant services portfolio in July, 2008. For the first six months of 2009, as compared to the comparable period of 2008, noninterest income decreased $4.8 million, or 14.4%, due to the aforementioned merchant services portfolio sale as well as a $2.4 million pre-tax gain from the redemption of Visa shares realized in the first quarter of 2008.
Noninterest expense increased $0.7 million, or 2.1%, from the first quarter due to the one-time FDIC special assessment ($1.2 million) and a higher level ($550,000) of expense associated with other real estate owned properties, including write-downs due to valuation declines. Lower compensation expense of $1.2 million, primarily reflective of the adjustments to our stock and cash incentive plans partially offset these unfavorable variances. Compared to the second quarter of 2008, noninterest expense increased $2.2 million, or 7.1%, primarily reflective of the higher FDIC insurance premiums of $2.0 million, which includes the special assessment, higher expense ($1.2 million) for other real estate properties owned, and an increase in our pension expense ($1.0 million). The adjustments to our stock and cash incentive plans as well as a lower level of interchange fees partially offset these unfavorable variances. For the first six months of 2009, as compared to the comparable period for 2008, noninterest expense increased $4.6 million, or 7.7%, due to the same aforementioned factors, including the impact of the reversal of a portion ($1.1 million) of our Visa litigation accrual in the first quarter of 2008.
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 $2.5 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 68 banking offices and 79 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. 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, 2008, 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) 2009 2009 2008 2009 2008 ---------------------------------------------------------------------- EARNINGS Net Income $ 774 $ 650 $ 4,810 $ 1,424 $12,090 Diluted Earnings Per Common Share $ 0.04 $ 0.04 $ 0.28 $ 0.08 $ 0.70 ---------------------------------------------------------------------- PERFORMANCE Return on Average Equity 1.12% 0.94% 6.43% 1.03% 8.14% Return on Average Assets 0.12% 0.11% 0.73% 0.12% 0.92% Net Interest Margin 5.11% 5.16% 4.90% 5.13% 4.81% Noninterest Income as % of Operating Revenue 35.07% 34.22% 36.39% 34.65% 38.33% Efficiency Ratio 75.44% 75.07% 66.89% 75.26% 65.00% ---------------------------------------------------------------------- CAPITAL ADEQUACY Tier 1 Capital Ratio 12.85% 13.09% 13.15% 12.85% 13.15% Total Capital Ratio 14.20% 14.40% 14.35% 14.20% 14.35% Tangible Capital Ratio 7.47% 7.63% 7.87% 7.47% 7.87% Leverage Ratio 11.07% 11.25% 10.61% 11.07% 10.61% Equity to Assets 10.80% 11.02% 11.19% 10.80% 11.19% ---------------------------------------------------------------------- ASSET QUALITY Allowance as % of Non-Performing Loans 33.71% 34.82% 51.80% 33.71% 51.80% Allowance as a % of Loans 2.12% 2.04% 1.18% 2.12% 1.18% Net Charge-Offs as % of Average Loans 1.39% 1.08% 0.67% 1.23% 0.54% Nonperforming Assets as % of Loans and ORE 7.19% 6.39% 2.49% 7.19% 2.49% ---------------------------------------------------------------------- STOCK PERFORMANCE High $ 17.35 $ 27.31 $ 30.19 $ 27.31 $ 30.19 Low $ 11.01 $ 9.50 $ 21.76 $ 9.50 $ 21.76 Close $ 16.85 $ 11.46 $ 21.76 $ 16.85 $ 21.76 Average Daily Trading Volume 40,130 75,117 36,196 57,342 34,064 ---------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF INCOME Unaudited --------------------------------------------------------------------- 2009 2009 2008 2008 2008 (Dollars in thousands, Second First Fourth Third Second except per share data) Quarter Quarter Quarter Quarter Quarter --------------------------------------------------------------------- INTEREST INCOME Interest and Fees on Loans $29,742 $29,537 $31,570 $32,435 $33,422 Investment Securities 1,437 1,513 1,627 1,744 1,810 Funds Sold 1 3 32 475 1,028 --------------------------------------------------------------------- Total Interest Income 31,180 31,053 33,229 34,654 36,260 --------------------------------------------------------------------- INTEREST EXPENSE Deposits 2,500 2,495 3,848 5,815 7,162 Short-Term Borrowings 88 68 110 230 296 Subordinated Notes Payable 931 927 937 936 931 Other Long-Term Borrowings 566 568 587 488 396 --------------------------------------------------------------------- Total Interest Expense 4,085 4,058 5,482 7,469 8,785 --------------------------------------------------------------------- Net Interest Income 27,095 26,995 27,747 27,185 27,475 Provision for Loan Losses 8,426 8,410 12,497 10,425 5,432 --------------------------------------------------------------------- Net Interest Income after Provision for Loan Losses 18,669 18,585 15,250 16,760 22,043 --------------------------------------------------------------------- NONINTEREST INCOME Service Charges on Deposit Accounts 7,162 6,698 6,807 7,110 7,060 Data Processing Fees 896 870 937 873 812 Asset Management Fees 930 970 935 1,025 1,125 Retail Brokerage Fees 625 493 630 565 735 Gain on Sale of Investment Securities 6 -- 3 27 30 Mortgage Banking Revenues 902 584 292 331 506 Merchant Fees 663 958 650 616 2,074 Interchange Fees 1,118 1,056 1,007 1,073 1,076 Gain on Sale of Portion of Merchant Services Portfolio -- -- -- 6,250 -- ATM/Debit Card Fees 884 863 744 742 758 Other 1,448 1,550 1,306 1,600 1,542 --------------------------------------------------------------------- Total Noninterest Income 14,634 14,042 13,311 20,212 15,718 --------------------------------------------------------------------- NONINTEREST EXPENSE Salaries and Associate Benefits 16,049 17,237 15,492 15,417 15,318 Occupancy, Net 2,540 2,345 2,503 2,373 2,491 Furniture and Equipment 2,304 2,338 2,368 2,369 2,583 Intangible Amortization 1,010 1,011 1,308 1,459 1,459 Other 11,027 9,326 9,331 8,298 8,905 --------------------------------------------------------------------- Total Noninterest Expense 32,930 32,257 31,002 29,916 30,756 --------------------------------------------------------------------- OPERATING PROFIT 373 370 (2,441) 7,056 7,005 Provision for Income Taxes (401) (280) (738) 2,218 2,195 --------------------------------------------------------------------- NET INCOME $ 774 $ 650 $(1,703) $ 4,838 $ 4,810 --------------------------------------------------------------------- PER SHARE DATA Basic Earnings $ 0.04 $ 0.04 $ (0.10) $ 0.29 $ 0.28 Diluted Earnings $ 0.04 $ 0.04 $ (0.10) $ 0.29 $ 0.28 Cash Dividends 0.190 0.190 0.190 0.185 0.185 AVERAGE SHARES Basic 17,010 17,109 17,126 17,124 17,146 Diluted 17,010 17,131 17,135 17,128 17,147 --------------------------------------------------------------------- Six Months Ended June 30 (Dollars in thousands, except per share data) 2009 2008 --------------------------------------------------------------------- INTEREST INCOME Interest and Fees on Loans $59,279 $68,677 Investment Securities 2,950 3,703 Funds Sold 4 2,603 --------------------------------------------------------------------- Total Interest Income 62,233 74,983 --------------------------------------------------------------------- INTEREST EXPENSE Deposits 4,995 17,643 Short-Term Borrowings 156 817 Subordinated Notes Payable 1,858 1,862 Other Long-Term Borrowings 1,134 727 --------------------------------------------------------------------- Total Interest Expense 8,143 21,049 --------------------------------------------------------------------- Net Interest Income 54,090 53,934 Provision for Loan Losses 16,836 9,574 --------------------------------------------------------------------- Net Interest Income after Provision for Loan Loss 37,254 44,360 --------------------------------------------------------------------- NONINTEREST INCOME Service Charges on Deposit Accounts 13,860 13,825 Data Processing Fees 1,766 1,625 Asset Management Fees 1,900 2,275 Retail Brokerage Fees 1,118 1,204 Gain on Sale of Investment Securities 6 95 Mortgage Banking Revenues 1,486 1,000 Merchant Fees 1,621 4,282 Interchange Fees 2,174 2,085 Gain on Sale of Portion of Merchant Services Port -- -- ATM/Debit Card Fees 1,747 1,502 Other 2,998 5,624 --------------------------------------------------------------------- Total Noninterest Income 28,676 33,517 --------------------------------------------------------------------- NONINTEREST EXPENSE Salaries and Associate Benefits 33,286 30,922 Occupancy, Net 4,885 4,853 Furniture and Equipment 4,642 5,165 Intangible Amortization 2,021 2,918 Other 20,353 16,696 --------------------------------------------------------------------- Total Noninterest Expense 65,187 60,554 --------------------------------------------------------------------- OPERATING PROFIT 743 17,323 Provision for Income Taxes (681) 5,233 --------------------------------------------------------------------- NET INCOME $ 1,424 $12,090 --------------------------------------------------------------------- PER SHARE DATA Basic Earnings $ 0.08 $ 0.70 Diluted Earnings $ 0.08 $ 0.70 Cash Dividends 0.380 0.370 AVERAGE SHARES Basic 17,059 17,158 Diluted 17,060 17,159 --------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF FINANCIAL CONDITION Unaudited --------------------------------------------------------------------- (Dollars in thousands, 2009 2008 2008 2008 2008 except per Second First Fourth Third Second share data) Quarter Quarter Quarter Quarter Quarter --------------------------------------------------------------------- ASSETS Cash and Due From Banks $ 92,394 $ 81,317 $ 88,143 $ 71,062 $ 108,672 Funds Sold and Interest Bearing Deposits 2,016 4,241 6,806 27,419 192,786 --------------------------------------------------------------------- Total Cash and Cash Equivalents 94,410 85,558 94,949 98,481 301,458 Investment Securities, Available-for- Sale 194,002 195,767 191,569 193,978 185,971 Loans, Net of Unearned Interest Commercial, Financial, & Agricultural 201,589 202,038 206,230 189,676 196,075 Real Estate - Construction 153,507 154,102 141,973 148,160 150,907 Real Estate - Commercial 686,420 673,066 656,959 639,443 622,282 Real Estate - Residential 447,652 464,358 468,399 473,962 481,397 Real Estate - Home Equity 235,473 223,505 218,500 212,118 205,536 Consumer 241,467 243,280 246,973 252,743 244,071 Other Loans 7,933 8,068 15,838 7,378 9,436 Overdrafts 3,022 3,195 2,925 3,749 7,111 --------------------------------------------------------------------- Total Loans, Net of Unearned Interest 1,977,063 1,971,612 1,957,797 1,927,229 1,916,815 Allowance for Loan Losses (41,782) (40,172) (37,004) (30,544) (22,518) --------------------------------------------------------------------- Loans, Net 1,935,281 1,931,440 1,920,793 1,896,685 1,894,297 Premises and Equipment, Net 109,050 107,259 106,433 104,806 102,559 Intangible Assets 90,862 91,872 92,883 94,192 95,651 Other Assets 102,234 87,483 82,072 66,308 69,479 --------------------------------------------------------------------- Total Other Assets 302,146 286,614 281,388 265,306 267,689 --------------------------------------------------------------------- Total Assets $2,525,839 $2,499,379 $2,488,699 $2,454,450 $2,649,415 --------------------------------------------------------------------- LIABILITIES Deposits: Noninterest Bearing Deposits $ 424,125 $ 413,608 $ 419,696 $ 382,878 $ 416,992 NOW Accounts 733,526 726,069 758,976 698,509 814,380 Money Market Accounts 300,683 312,541 324,646 368,453 387,011 Regular Savings Accounts 123,257 121,245 115,261 116,858 118,307 Certificates of Deposit 424,339 416,326 373,595 396,086 426,236 --------------------------------------------------------------------- Total Deposits 2,005,930 1,989,789 1,992,174 1,962,784 2,162,926 Short-Term Borrowings 73,989 68,193 62,044 47,069 51,783 Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887 Other Long-Term Borrowings 52,354 53,448 51,470 53,074 36,857 Other Liabilities 57,973 49,518 41,294 29,841 38,382 --------------------------------------------------------------------- Total Liabilities 2,253,133 2,223,835 2,209,869 2,155,655 2,352,835 --------------------------------------------------------------------- SHAREOWNERS' EQUITY Common Stock 170 170 171 171 171 Additional Paid-In Capital 35,698 35,841 36,783 36,681 36,382 Retained Earnings 257,828 260,287 262,890 267,853 266,171 Accumulated Other Comprehensive Loss, Net of Tax (20,990) (20,754) (21,014) (5,910) (6,144) --------------------------------------------------------------------- Total Shareowners' Equity 272,706 275,544 278,830 298,795 296,580 --------------------------------------------------------------------- Total Liabilities and Shareowners' Equity $2,525,839 $2,499,379 $2,488,699 $2,454,450 $2,649,415 --------------------------------------------------------------------- OTHER BALANCE SHEET DATA Earning Assets $2,173,081 $2,171,620 $2,156,172 $2,148,626 $2,295,572 Intangible Assets Goodwill 84,811 84,811 84,811 84,811 84,811 Deposit Base 5,159 6,121 7,084 8,345 9,756 Other 892 940 988 1,036 1,084 Interest Bearing Liabilities 1,771,035 1,760,709 1,748,879 1,742,936 1,897,461 --------------------------------------------------------------------- Book Value Per Diluted Share $ 16.03 $ 16.18 $ 16.27 $ 17.45 $ 17.33 Tangible Book Value Per Diluted Share 10.70 10.80 10.85 11.94 11.74 --------------------------------------------------------------------- Actual Basic Shares Outstanding 17,010 17,010 17,127 17,125 17,111 Actual Diluted Shares Outstanding 17,010 17,031 17,136 17,129 17,112 --------------------------------------------------------------------- CAPITAL CITY BANK GROUP, INC. ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS Unaudited ---------------------------------------------------------------------- 2009 2009 2008 2008 2008 (Dollars in Second First Fourth Third Second thousands) Quarter Quarter Quarter Quarter Quarter ---------------------------------------------------------------------- ALLOWANCE FOR LOAN LOSSES Balance at Beginning of Period $ 40,172 $ 37,004 $ 30,544 $ 22,518 $ 20,277 Provision for Loan Losses 8,426 8,410 12,497 10,425 5,432 Net Charge-Offs 6,816 5,242 6,037 2,399 3,191 ---------------------------------------------------------------------- Balance at End of Period $ 41,782 $ 40,172 $ 37,004 $ 30,544 $ 22,518 ---------------------------------------------------------------------- As a % of Loans 2.12% 2.04% 1.89% 1.59% 1.18% As a % of Nonperforming Loans 33.71% 34.82% 37.52% 48.55% 51.80% As a % of Nonperforming Assets 29.09% 31.69% 34.31% 45.10% 47.12% ---------------------------------------------------------------------- CHARGE-OFFS Commercial, Financial and Agricultural $ 388 $ 857 $ 331 $ 275 $ 407 Real Estate - Construction 3,356 320 1,774 77 158 Real Estate - Commercial 123 1,002 293 (35) 1,115 Real Estate - Residential 2,379 1,975 2,264 797 817 Consumer 1,145 2,117 1,993 1,797 1,232 ---------------------------------------------------------------------- Total Charge-Offs $ 7,391 $ 6,271 $ 6,655 $ 2,911 $ 3,729 ---------------------------------------------------------------------- RECOVERIES Commercial, Financial and Agricultural $ 84 $ 74 $ 68 $ 68 $ 55 Real Estate - Construction -- 385 -- 4 -- Real Estate - Commercial 1 -- -- 1 13 Real Estate - Residential 51 58 128 6 24 Consumer 439 512 422 433 446 ---------------------------------------------------------------------- Total Recoveries $ 575 $ 1,029 $ 618 $ 512 $ 538 ---------------------------------------------------------------------- NET CHARGE-OFFS $ 6,816 $ 5,242 $ 6,037 $ 2,399 $ 3,191 ---------------------------------------------------------------------- Net Charge-Offs as a % of Average Loans(1) 1.39% 1.08% 1.24% 0.50% 0.67% ---------------------------------------------------------------------- RISK ELEMENT ASSETS Nonaccruing Loans $111,039 $110,200 $ 96,876 $ 61,509 $ 41,738 Restructured Loans 12,916 5,157 1,744 1,403 1,733 ---------------------------------------------------------------------- Total Nonperforming Loans 123,955 115,357 98,620 62,912 43,471 Other Real Estate 19,671 11,425 9,222 4,813 4,322 ---------------------------------------------------------------------- Total Nonperforming Assets $143,626 $126,782 $107,842 $ 67,725 $ 47,793 ---------------------------------------------------------------------- Past Due Loans 90 Days or More $ -- $ -- $ 88 $ 50 $ 896 ---------------------------------------------------------------------- Nonperforming Loans as a % of Loans 6.27% 5.85% 5.04% 3.26% 2.27% Nonperforming Assets as a % of Loans and Other Real Estate 7.19% 6.39% 5.48% 3.51% 2.49% Nonperforming Assets as a % of Capital(2) 45.67% 40.16% 34.15% 20.56% 14.98% ---------------------------------------------------------------------- (1) Annualized (2) Capital includes allowance for loan losses. AVERAGE BALANCE AND INTEREST RATES(1) Unaudited ---------------------------------------------------------------------- Second Quarter 2009 First Quarter 2009 --------------------------- -------------------------- (Dollars in Average Average Average Average 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% 2,166,237 $31,636 5.92% -------------- -------------- 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% 1,752,401 $ 4,058 0.94% -------------- -------------- 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% ------------------------------------------ -------------- Fourth Quarter 2008 ---------------------------- Average Average (Dollars in thousands) Balance Interest Rate ---------------------------------------------------- -------- ------- ASSETS: Loans, Net of Unearned Interest $1,940,083 31,772 6.52% Investment Securities Taxable Investment Securities 90,296 813 3.59% Tax-Exempt Investment Securities 103,817 1,252 4.82% --------------------------------------------------------------------- Total Investment Securities 194,113 2,065 4.25% Funds Sold 16,645 32 0.74% --------------------------------------------------------------------- Total Earning Assets 2,150,841 $33,869 6.27% --------------- Cash and Due From Banks 76,027 Allowance for Loan Losses (30,347) Other Assets 266,797 ---------------------------------------------------- Total Assets $2,463,318 ---------------------------------------------------- LIABILITIES: Interest Bearing Deposits NOW Accounts $ 684,246 $ 636 0.37% Money Market Accounts 360,940 716 0.79% Savings Accounts 117,311 28 0.09% Time Deposits 379,266 2,468 2.59% --------------------------------------------------------------------- Total Interest Bearing Deposits 1,541,763 3,848 0.99% Short-Term Borrowings 69,079 110 0.62% Subordinated Notes Payable 62,887 937 5.83% Other Long-Term Borrowings 53,261 587 4.39% --------------------------------------------------------------------- Total Interest Bearing Liabilities 1,726,990 $ 5,482 1.26% --------------- Noninterest Bearing Deposits 404,103 Other Liabilities 29,998 ---------------------------------------------------- Total Liabilities 2,161,091 SHAREOWNERS' EQUITY: $ 302,227 ---------------------------------------------------- Total Liabilities and Shareowners' Equity $2,463,318 ---------------------------------------------------- Interest Rate Spread $28,387 5.01% --------------- Interest Income and Rate Earned(1) $33,869 6.27% Interest Expense and Rate Paid(2) 5,482 1.01% --------------- Net Interest Margin $28,387 5.26% --------------- (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 ---------------------------------------------------------------------- Third Quarter 2008 Second Quarter 2008 --------------------------- -------------------------- (Dollars in Average Average Average Average thousands) Balance Interest Rate Balance Interest Rate ------------------------- -------- ------- --------- -------- ------- ASSETS: Loans, Net of Unearned Interest $1,915,008 32,622 6.78% $1,908,802 33,610 7.08% Investment Securities Taxable Investment Securities 93,723 940 3.99% 93,814 1,028 4.38% Tax-Exempt Investment Securities 98,966 1,234 4.99% 94,371 1,200 5.09% ---------------------------------------------------------------------- Total Investment Securities 192,689 2,174 4.50% 188,185 2,228 4.73% Funds Sold 99,973 475 1.86% 206,984 1,028 1.96% ---------------------------------------------------------------------- Total Earning Assets 2,207,670 $35,271 6.36% 2,303,971 $36,866 6.43% -------------- -------------- Cash and Due From Banks 77,309 82,182 Allowance for Loan Losses (22,851) (20,558) Other Assets 266,510 269,176 -------------------------- ---------- Total Assets $2,528,638 $2,634,771 -------------------------- ---------- LIABILITIES: Interest Bearing Deposits NOW Accounts $ 727,754 $ 1,443 0.79% $ 788,237 $ 1,935 0.99% Money Market Accounts 369,544 1,118 1.20% 376,996 1,210 1.29% Savings Accounts 117,970 30 0.10% 117,182 29 0.10% Time Deposits 410,101 3,224 3.13% 443,006 3,988 3.62% ---------------------------------------------------------------------- Total Interest Bearing Deposits 1,625,369 5,815 1.42% 1,725,421 7,162 1.67% Short-Term Borrowings 51,738 230 1.76% 55,830 296 2.13% Subordinated Notes Payable 62,887 936 5.83% 62,887 931 5.86% Other Long-Term Borrowings 43,237 488 4.48% 34,612 396 4.60% ---------------------------------------------------------------------- Total Interest Bearing Liabilities 1,783,231 $ 7,469 1.67% 1,878,750 $ 8,785 1.88% -------------- -------------- Noninterest Bearing Deposits 405,314 415,125 Other Liabilities 36,498 40,006 -------------------------- ---------- Total Liabilities 2,225,043 2,333,881 SHAREOWNERS' EQUITY: $ 303,595 $ 300,890 -------------------------- ---------- Total Liabilities and Shareowners' Equity $2,528,638 $2,634,771 -------------------------- ---------- Interest Rate Spread $27,802 4.69% $28,081 4.55% ------------------------------------------ -------------- Interest Income and Rate Earned(1) $35,271 6.36% $36,866 6.43% Interest Expense and Rate Paid(2) 7,469 1.35% 8,785 1.53% ------------------------------------------ -------------- Net Interest Margin $27,802 5.01% $28,081 4.90% ------------------------------------------ -------------- (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 ---------------------------------------------------------------------- June 2009 YTD June 2008 YTD --------------------------- -------------------------- (Dollars in Average Average Average Average thousands) Balance Interest Rate Balance Interest Rate -------------------------- -------- ------- --------- -------- ------- ASSETS: Loans, Net of Unearned Interest $1,969,169 59,678 6.11% $1,909,187 69,063 7.27% Investment Securities Taxable Investment Securities 90,248 1,518 3.37% 94,300 2,136 4.52% Tax-Exempt Investment Securities 104,005 2,200 4.23% 92,581 2,407 5.20% ---------------------------------------------------------------------- Total Investment Securities 194,253 3,718 3.83% 186,881 4,543 4.86% Funds Sold 7,363 4 0.12% 206,649 2,602 2.49% ---------------------------------------------------------------------- Total Earning Assets 2,170,785 $63,400 5.89% 2,302,717 $76,208 6.65% -------------- -------------- Cash and Due From Banks 79,109 88,214 Allowance for Loan Losses (40,003) (19,392) Other Assets 286,801 269,083 -------------------------- ---------- Total Assets $2,496,692 $2,640,622 -------------------------- ---------- LIABILITIES: Interest Bearing Deposits NOW Accounts $ 714,123 474 0.13% $ 781,064 $ 5,375 1.38% Money Market Accounts 309,719 382 0.25% 383,412 3,408 1.79% Savings Accounts 120,601 29 0.05% 115,172 63 0.11% Time Deposits 404,847 4,110 2.05% 455,143 8,797 3.89% ---------------------------------------------------------------------- Total Interest Bearing Deposits 1,549,290 4,995 0.65% 1,734,791 17,643 2.05% Short-Term Borrowings 86,550 156 0.36% 61,963 817 2.64% Subordinated Notes Payable 62,887 1,858 5.88% 62,887 1,862 5.86% Other Long-Term Borrowings 52,997 1,134 4.31% 31,128 727 4.70% ---------------------------------------------------------------------- Total Interest Bearing Liabilities 1,751,724 $ 8,143 0.94% 1,890,769 $21,049 2.24% -------------- -------------- Noninterest Bearing Deposits 415,020 409,918 Other Liabilities 50,586 41,088 -------------------------- ---------- Total Liabilities 2,217,330 2,341,775 SHAREOWNERS' EQUITY: $ 279,362 $ 298,847 -------------------------- ---------- Total Liabilities and Shareowners' Equity $2,496,692 $2,640,622 -------------------------- ---------- Interest Rate Spread $55,257 4.95% $55,159 4.41% ------------------------------------------ -------------- Interest Income and Rate Earned(1) $63,400 5.89% $76,208 6.65% Interest Expense and Rate Paid(2) 8,143 0.76% 21,049 1.84% ------------------------------------------ -------------- Net Interest Margin $55,257 5.13% $55,159 4.81% ------------------------------------------ -------------- (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 21, 2009