Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2008 Results
TALLAHASSEE, Fla., Jan. 26, 2009 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported a net loss of $1.7 million ($0.10 per diluted share) for the fourth quarter of 2008 compared to net income of $4.8 million ($0.29 per diluted share) for the third quarter of 2008 and net income of $7.7 million ($0.44 per diluted share) in the fourth quarter of 2007. Net income for the year ended 2008 totaled $15.2 million ($.89 per diluted share) compared to $29.7 million ($1.66 per diluted share) for 2007.
Earnings for the fourth quarter of 2008 include a loan loss provision of $12.5 million ($.45 per diluted share) versus $10.4 million ($.37 per diluted share) in the third quarter of 2008 and $1.7 million ($.06 per diluted share) in the fourth quarter of 2007. Earnings for the third quarter of 2008 also included a $6.25 million gain ($0.22 per diluted share) from the sale of a major portion of the bank's merchant services portfolio.
Earnings for the full year 2008 include a loan loss provision of $32.5 million ($1.16 per diluted share) versus $6.2 million ($.21 per diluted share) for 2007. In addition to the third quarter gain from the sale of a portion of the bank's merchant services portfolio, earnings for the full year included a $2.4 million gain from the redemption of Visa, Inc. shares related to its initial public offering and the reversal of $1.1 million in Visa related litigation reserves.
"While disappointed with the fourth quarter, we are pleased with Capital City's overall performance for the year," said William G. Smith, Jr., chairman, president and chief executive officer. "During the fourth quarter, management took aggressive action with problem credits, including charge-offs of $6.1 million and the addition of $6.5 million to the loan loss reserve. During the year, Capital City doubled its loan loss reserve to $37.0 million and ended the year with a loan loss reserve equal to 1.89% of loans. While problem credits and other real estate often involve protracted workout periods, we have reviewed the major relationships in these areas and are very encouraged by the workout plans the Capital City team has in place. While we are acutely focused on problem credits, Capital City will continue to pursue its underlying business growth strategy in 2009 and is prepared to capitalize on opportunities, both specific client relationships and acquisitions.
"Capital City expects to be working the collections process aggressively, often going for court-ordered judgments to produce cash from liquidations occurring ahead of the lengthy foreclosure process. We want history to eventually show that we had the most effective strategy and results among the Florida banks for managing our institution through this cycle.
"As we move into 2009, Capital City Bank Group continues to maintain a very strong and internally generated capital position, substantially above the regulatory guidelines to be considered well-capitalized. At year-end the Tier I Risk-Based Capital, Total Risk-Based Capital and Tangible Equity to Assets ratios were 13.4%, 14.7% and 7.7%, respectively," said Smith. "We believe Capital City has sufficient capital to execute its business plan in 2009 and for the years ahead."
The Return on Average Assets was -.28% and the Return on Average Equity was -2.24% for the fourth quarter of 2008. These metrics were .76% and 6.34% for the third quarter of 2008 and 1.21% and 10.16% for the fourth quarter of 2007, respectively.
For the full year of 2008, the Return on Average Assets was .59% and the Return on Average Equity was 5.06% compared to 1.18% and 9.68%, respectively, for the full year of 2007.
Discussion of Financial Condition
Average earning assets were $2.151 billion for the fourth quarter, a decrease of $56.8 million, or 2.57% from the third quarter of 2008, and a decrease of $40.4 million, or 1.84% from the fourth quarter of 2007. The decrease from the linked quarter is primarily attributable to an $83.3 million decrease in short-term investments driven by the decline in client deposits (see discussion below), partially offset by a $25.1 million increase in average loans. Compared to the fourth quarter of 2007, the decrease primarily reflects a decrease in average short-term investments ($80.1 million) partially offset by a $32.0 million increase in average loans and a $7.7 million increase in investment securities. Our loan pipelines have increased during the second half of the year due to the efforts of our bankers to reach quality clients who are interested in moving or expanding their banking relationships. Year over year, growth was primarily attributable to commercial real estate mortgages and home equity loans.
At the end of the fourth quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $107.8 million, an increase of $40.1 million, or 59% from the third quarter and $79.7 million, or 283% from the fourth quarter of 2007. The level of nonaccrual loans increased $35.4 million to $96.9 million compared to the prior linked quarter due primarily to the addition of loans to builders, investors, and other borrowers whom operate within our residential real estate markets, which are experiencing continued stress due to general economic conditions, significant slow-down in purchase activity, and property de-valuation. Vacant residential land loans represented 49% of our nonaccrual balance at year-end. In aggregate, a reserve equal to approximately 31% has been allocated to these loans. Restructured loans totaled $1.7 million at the end of the fourth quarter. Other real estate owned totaled $9.2 million at the end of the fourth quarter. Nonperforming assets represented 5.48% of loans and other real estate at the end of the fourth quarter compared to 3.51% and 1.47% at the end of the prior quarter and year-end 2007, respectively.
Average total deposits were $1.946 billion for the fourth quarter, a decrease of $84.8 million, or 4.2%, from the third quarter and a decrease of $70.9 million, or 3.5%, from the fourth quarter of 2007. On a linked quarter basis, the decline in deposits primarily reflects a lower level of NOW account balances (primarily public funds and legal settlement accounts) and certificates of deposit balances. This decline in the public funds balances generally reflects the timing of tax receipts and certain public entity clients seeking higher yield. Compared to the fourth quarter of 2007, a majority of the decrease in deposits has been realized in the money market and certificates of deposit categories. The decrease in the money market account balance is due to lower account balances maintained by both businesses and individuals, which we believe is attributable to lower rates and distressed economic conditions. The decline in the certificate of deposit category reflects a combination of proceeds migrating to other deposit categories, as well as transferring to higher rate paying competitors. Despite the disruption in the market, we continue to pursue prudent pricing discipline and have chosen not 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 $18.0 million during the fourth quarter of 2008 as compared to an average net overnight funds sold position of $86.5 million in the third quarter of 2008 and $84.1 million in the fourth quarter of 2007. The decline in the funds position primarily reflects a decline in deposit balances as discussed above, coupled with growth in the loan portfolio.
Discussion of Operating Results
Tax equivalent net interest income for the fourth quarter of 2008 was $28.4 million compared to $27.8 million for the third quarter of 2008 and $28.2 million for the fourth quarter of 2007. For the twelve months of 2008, tax equivalent net interest income totaled $111.3 million compared to $114.7 million in 2007.
The increase in the net interest income on a linked quarter basis and from the fourth quarter of 2007 reflects lower cost of funds resulting from a favorable shift in the mix of deposits and lower market rates. Management responded aggressively to the federal funds rate reductions which began in September 2007, and believe we have successfully neutralized the overall impact. Higher foregone interest on nonaccrual loans and a decline in loan fees partially offset the improvement in net interest income. Additionally, the fourth quarter of 2008 was favorably impacted by $784,000 attributable to the resolution of a problem loan which was acquired in a prior acquisition. The net interest margin of 5.26% expanded by 25 basis points over the linked quarter and 16 basis points over the fourth quarter of 2007, primarily attributable to the favorable shift in the mix of deposits and aggressive deposit repricing.
The decrease in net interest income for the twelve months ended December 31, 2008 as compared to the same period of 2007 was attributable to a higher level of foregone interest associated with the increased level of nonperforming assets. Year over year, the increase in foregone interest coupled with the influx of municipal deposits, which produce relatively thin spreads, led to compression in our net interest margin of 29 basis points.
Average negotiated deposits, which include public funds, grew from $377 million in the fourth quarter of 2007 to $435 million in the current quarter, but were down from $538 million in the second quarter of 2008. We believe this reduction is partially attributable to state budgetary concerns and local governments seeking higher yields. Although the year over year growth in public funds has had a positive impact on net interest income, it has had an adverse impact on our margin percentage due to the relatively thin spreads.
The provision for loan losses for the current quarter was $12.5 million compared to $10.4 million in the third quarter of 2008 and $1.7 million for the fourth quarter of 2007. The provision for the full year of 2008 totaled $32.5 million compared to $6.2 million in 2007. The increase in the provision for both periods generally reflects current stressed economic conditions and the associated impact on consumers, housing, and real estate markets. Over the course of the year, a majority of the increase in our provision has been driven by higher reserves needed for our consumer loan portfolio and for loans where repayment is reliant on activity within residential real estate markets, primarily loans to builders and investors (both business and individual). The increase in the provision for the current quarter reflects a higher level of loan charge-offs which were $6.0 million, or 1.24% of average loans, and an increase in both general and impaired loan reserves required for loans where repayment is tied to residential real estate market activity, which has significantly slowed and has been hampered by property de-valuation. We continue to perform a detailed review and valuation assessment of our impaired loans on a quarterly basis and adjust specific reserves or charge off losses, as appropriate, based on collateral valuations. At quarter-end, the allowance for loan losses was 1.89% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 1.59% and 49%, respectively at the end of the third quarter and .95% and 72%, respectively at the end of the fourth quarter of 2007.
Noninterest income for the fourth quarter decreased $6.9 million, or 34.1%, from the third quarter of 2008 primarily attributable to a pre-tax gain of $6.25 million from the sale of a portion of the bank's merchant services portfolio and a one-time gain from the sale of a banking office ($241,000), both of which were recognized in the third quarter. Lower deposit fees of $303,000 driven by a three day processing variance also contributed to the decline for the quarter. As compared to the fourth quarter of 2007, noninterest income declined $2.5 million, or 15.9% due to lower deposit fees ($449,000) primarily reflective of a higher level of overdraft charge-offs, and a lower level of trust fees ($165,000) and mortgage banking fees ($133,000), both of which reflect turbulent market conditions. Merchant fees also declined $1.1 million, or 62.7%, reflecting a sale of a major portion of this portfolio early in the third quarter of 2008. A one-time gain of $540,000 recognized during the fourth quarter of 2007 from the sale of a banking office also contributed to the unfavorable variance. For the full year of 2008, noninterest income grew $7.7 million, or 13.0%, from the comparable period in 2007 due primarily to the aforementioned gain from the merchant services portfolio sale, a gain from the redemption of Visa Inc. shares during the first quarter of 2008 ($2.4 million) and strong improvement in deposit fees ($1.6 million). These improvements were partially offset by reductions in mortgage banking fees ($1.0 million) and merchant services fees ($1.7 million).
Noninterest expense for the fourth quarter increased $1.1 million, or 3.6%, over the third quarter of 2008 primarily attributable to higher expenses for advertising ($459,000), legal ($201,000), and professional fees ($284,000). Other real estate owned write-downs also increased $186,000 during the quarter. The increase in advertising was driven by our branding campaign which kicked off in late November. Legal expense increased due to a higher level of legal support needed for problem loan collection/workout efforts. The increase in professional fees primarily reflects an increase to both our internal and external audit expense accruals. As compared to the same quarter in 2007, noninterest expense declined $612,000 or 1.9% due to a one-time pre-tax charge of $1.9 million in the fourth quarter of 2007 for Visa Inc. litigation. The favorable variance created by the Visa charge was partially offset by higher pension expense.
For the full year of 2008, noninterest expense declined $520,000 or .43% reflecting the impact of the one-time $1.9 million Visa litigation charge in the fourth quarter of 2007 and the reversal of $1.1 million in Visa reserves during the first quarter of 2008. Lower interchange expense ($1.5 million) reflecting the aforementioned sale of a portion of the merchant services portfolio also contributed to the favorable variance for the year. Partially offsetting the aforementioned favorable variances was higher salary expense ($1.1 million), legal fees ($501,000), FDIC insurance premiums ($555,000), commission fees ($879,000), and other real estate owned expenses ($1.0 million). The increase in salary expense reflects routine merit raises during the course of the year. Legal expense increased due to a higher level of legal support needed for problem loan collection/workout efforts. Our FDIC insurance premium increased during the second half of the year primarily reflecting the full use of our premium credits. The variance in commission fees reflects the cost of supporting our working capital financing product; the revenues of which are reflected in noninterest income and more than offset the higher expense. Expense related to our other real estate owned properties was higher due to an increase in general holding costs driven by a higher level of properties, but more significantly the unfavorable variance was driven by subsequent valuation adjustments (write-downs) on properties.
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 80 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, 2007, 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
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(Dollars in Three Months Ended Twelve Months Ended
thousands, ------------------------------------------------
except per Dec 31, Sep 30, Dec 31, Dec 31, Dec 31,
share data) 2008 2008 2007 2008 2007
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EARNINGS
Net Income $ (1,703) $ 4,838 $ 7,664 $ 15,225 $ 29,683
Diluted Earnings
Per Common Share $ (0.10) $ 0.29 $ 0.44 $ 0.89 $ 1.66
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PERFORMANCE -- -- -- -- --
Return on Average
Equity -2.24% 6.34% 10.16% 5.06% 9.68%
Return on Average
Assets -0.28% 0.76% 1.21% 0.59% 1.18%
Net Interest Margin 5.26% 5.01% 5.10% 4.96% 5.25%
Non-interest Income
as % of Operating
Revenue 32.42% 42.64% 36.49% 38.11% 34.57%
Efficiency Ratio 71.21% 59.27% 68.51% 64.91% 66.77%
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CAPITAL ADEQUACY -- -- -- -- --
Tier 1 Capital Ratio 13.34% 13.54% 13.05% 13.34% 13.05%
Total Capital Ratio 14.69% 15.15% 14.05% 14.69% 14.05%
Tangible Capital
Ratio 7.76% 8.67% 7.71% 7.76% 7.71%
Leverage Ratio 11.51% 11.21% 10.83% 11.51% 10.83%
Equity to Assets 11.20% 12.17% 11.19% 11.20% 11.19%
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ASSET QUALITY -- -- -- -- --
Allowance as % of
Non-Performing
Loans 37.52% 48.55% 71.92% 37.52% 71.92%
Allowance as a % of
Loans 1.89% 1.59% 0.95% 1.89% 0.95%
Net Charge-Offs as
% of Average Loans 1.24% 0.50% 0.34% 0.71% 0.27%
Nonperforming Assets
as % of Loans and
ORE 5.48% 3.51% 1.47% 5.48% 1.47%
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STOCK PERFORMANCE -- -- -- --
High $ 33.32 $ 34.50 $ 34.00 $ 34.50 $ 36.40
Low $ 21.06 $ 19.20 $ 24.60 $ 19.20 $ 24.60
Close $ 27.24 $ 31.35 $ 28.22 $ 27.24 $ 28.22
Average Daily
Trading Volume 43,379 45,717 52,489 39,293 39,385
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
--------------------------------------------------------------------
(Dollars in 2008 2008 2008 2008 2007
thousands, except Fourth Third Second First Fourth
per share data) Quarter Quarter Quarter Quarter Quarter
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INTEREST INCOME
Interest and Fees
on Loans $ 31,570 $ 32,435 $ 33,422 $ 35,255 $ 37,730
Investment
Securities 1,627 1,744 1,810 1,894 1,992
Funds Sold 32 475 1,028 1,574 1,064
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Total Interest
Income 33,229 34,654 36,260 38,723 40,786
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INTEREST EXPENSE
Deposits 3,848 5,815 7,162 10,481 11,323
Short-Term
Borrowings 110 230 296 521 639
Subordinated Notes
Payable 937 936 931 931 936
Other Long-Term
Borrowings 587 488 396 331 343
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Total Interest
Expense 5,482 7,469 8,785 12,264 13,241
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Net Interest Income 27,747 27,185 27,475 26,459 27,545
Provision for
Loan Losses 12,497 10,425 5,432 4,142 1,699
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Net Interest
Income after
Provision for
Loan Losses 15,250 16,760 22,043 22,317 25,846
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NONINTEREST INCOME
Service Charges
on Deposit Accounts 6,807 7,110 7,060 6,765 7,256
Data Processing Fees 937 873 812 813 853
Asset Management
Fees 935 1,025 1,125 1,150 1,100
Retail Brokerage
Fees 630 565 735 469 619
Gain on Sale of
Investment
Securities 3 27 30 65 7
Mortgage Banking
Revenues 292 331 506 494 425
Merchant Fees 650 616 2,074 2,208 1,743
Interchange Fees 1,007 1,073 1,076 1,009 962
Gain on Sale of
Portion of Merchant
Services Portfolio -- 6,250 -- -- --
ATM/Debit Card Fees 744 742 758 744 705
Other 1,306 1,600 1,542 4,082 2,153
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Total Noninterest
Income 13,311 20,212 15,718 17,799 15,823
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NONINTEREST EXPENSE
Salaries and
Associate Benefits 15,492 15,417 15,318 15,604 14,472
Occupancy, Net 2,503 2,373 2,491 2,362 2,378
Furniture and
Equipment 2,368 2,369 2,583 2,582 2,534
Intangible
Amortization 1,308 1,459 1,459 1,459 1,458
Other 9,331 8,298 8,905 7,791 10,772
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Total Noninterest
Expense 31,002 29,916 30,756 29,798 31,614
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OPERATING PROFIT (2,441) 7,056 7,005 10,318 10,055
Provision for
Income Taxes (738) 2,218 2,195 3,038 2,391
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NET INCOME $ (1,703) $ 4,838 $ 4,810 $ 7,280 $ 7,664
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PER SHARE DATA
Basic Earnings $ (0.10) $ 0.29 $ 0.28 $ 0.42 $ 0.44
Diluted Earnings $ (0.10) $ 0.29 $ 0.28 $ 0.42 $ 0.44
Cash Dividends 0.190 0.185 0.185 0.185 0.185
AVERAGE SHARES
Basic 17,126 17,124 17,146 17,170 17,444
Diluted 17,135 17,128 17,147 17,178 17,445
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Twelve Months Ended
December 31
(Dollars in thousands, except per share data) 2008 2007
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INTEREST INCOME
Interest and Fees on Loans $132,682 $154,567
Investment Securities 7,075 7,843
Funds Sold 3,109 2,913
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Total Interest Income 142,866 165,323
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INTEREST EXPENSE
Deposits 27,306 44,687
Short-Term Borrowings 1,157 2,871
Subordinated Notes Payable 3,735 3,730
Other Long-Term Borrowings 1,802 1,794
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Total Interest Expense 34,000 53,082
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Net Interest Income 108,866 112,241
Provision for Loan Losses 32,496 6,163
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Net Interest Income after Provision for
Loan Losses 76,370 106,078
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NONINTEREST INCOME
Service Charges on Deposit Accounts 27,742 26,130
Data Processing Fees 3,435 3,133
Asset Management Fees 4,235 4,700
Retail Brokerage Fees 2,399 2,510
Gain on Sale of Investment Securities 125 14
Mortgage Banking Revenues 1,623 2,596
Merchant Fees 5,548 7,257
Interchange Fees 4,165 3,757
Gain on Sale of Portion of Merchant Services
Portfolio 6,250 --
ATM/Debit Card Fees 2,988 2,692
Other 8,530 6,511
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Total Noninterest Income 67,040 59,300
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NONINTEREST EXPENSE
Salaries and Associate Benefits 61,831 60,279
Occupancy, Net 9,729 9,347
Furniture and Equipment 9,902 9,890
Intangible Amortization 5,685 5,834
Other 34,325 36,642
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Total Noninterest Expense 121,472 121,992
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OPERATING PROFIT 21,938 43,386
Provision for Income Taxes 6,713 13,703
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NET INCOME $ 15,225 $ 29,683
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PER SHARE DATA
Basic Earnings $ 0.89 $ 1.66
Diluted Earnings $ 0.89 $ 1.66
Cash Dividends 0.745 0.710
AVERAGE SHARES
Basic 17,141 17,909
Diluted 17,147 17,912
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
--------------------------------------------------------------------
(Dollars in 2008 2008 2008
thousands, except Fourth Third Second
per share data) Quarter Quarter Quarter
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ASSETS
Cash and Due From Banks $ 88,143 $ 71,062 $ 108,672
Funds Sold and Interest Bearing
Deposits 6,806 27,419 192,786
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Total Cash and Cash Equivalents 94,949 98,481 301,458
Investment Securities,
Available-for-Sale 191,569 193,978 185,971
Loans, Net of Unearned Interest
Commercial, Financial, &
Agricultural 206,230 189,676 196,075
Real Estate - Construction 141,973 148,160 150,907
Real Estate - Commercial 656,959 639,443 622,282
Real Estate - Residential 468,399 473,962 481,397
Real Estate - Home Equity 218,500 212,118 205,536
Consumer 246,973 252,743 244,071
Other Loans 15,838 7,378 9,436
Overdrafts 2,925 3,749 7,111
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Total Loans, Net of Unearned
Interest 1,957,797 1,927,229 1,916,815
Allowance for Loan Losses (37,004) (30,544) (22,518)
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Loans, Net 1,920,793 1,896,685 1,894,297
Premises and Equipment, Net 106,433 104,806 102,559
Intangible Assets 92,883 94,192 95,651
Other Assets 82,072 66,308 69,479
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Total Other Assets 281,388 265,306 267,689
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Total Assets $2,488,699 $2,454,450 $2,649,415
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LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 419,696 $ 382,878 $ 416,992
NOW Accounts 758,976 698,509 814,380
Money Market Accounts 324,646 368,453 387,011
Regular Savings Accounts 115,261 116,858 118,307
Certificates of Deposit 373,595 396,086 426,236
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Total Deposits 1,992,174 1,962,784 2,162,926
Short-Term Borrowings 62,044 47,069 51,783
Subordinated Notes Payable 62,887 62,887 62,887
Other Long-Term Borrowings 51,470 53,074 36,857
Other Liabilities 41,294 29,841 38,382
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Total Liabilities 2,209,869 2,155,655 2,352,835
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SHAREOWNERS' EQUITY
Common Stock 171 171 171
Additional Paid-In Capital 36,783 36,681 36,382
Retained Earnings 262,890 267,853 266,171
Accumulated Other Comprehensive
Loss, Net of Tax (21,014) (5,910) (6,144)
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Total Shareowners' Equity 278,830 298,795 296,580
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Total Liabilities and
Shareowners' Equity $2,488,699 $2,454,450 $2,649,415
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OTHER BALANCE SHEET DATA
Earning Assets $2,156,172 $2,148,626 $2,295,572
Intangible Assets
Goodwill 84,811 84,811 84,811
Deposit Base 7,084 8,345 9,756
Other 988 1,036 1,084
Interest Bearing Liabilities 1,748,879 1,742,936 1,897,461
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Book Value Per Diluted Share $ 16.27 $ 17.45 $ 17.33
Tangible Book Value Per
Diluted Share 10.85 11.94 11.74
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Actual Basic Shares Outstanding 17,127 17,125 17,111
Actual Diluted Shares
Outstanding 17,136 17,129 17,112
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2008 2007
First Fourth
(Dollars in thousands, except per share data) Quarter Quarter
--------------------------------------------------------------------
ASSETS
Cash and Due From Banks $ 97,525 $ 93,437
Funds Sold and Interest Bearing Deposits 241,202 166,260
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Total Cash and Cash Equivalents 338,727 259,697
Investment Securities, Available-for-Sale 186,944 190,719
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 202,238 208,864
Real Estate - Construction 152,060 142,248
Real Estate - Commercial 624,826 634,920
Real Estate - Residential 482,058 481,150
Real Estate - Home Equity 197,093 192,428
Consumer 238,663 243,415
Other Loans 10,506 7,222
Overdrafts 7,014 5,603
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Total Loans, Net of Unearned Interest 1,914,458 1,915,850
Allowance for Loan Losses (20,277) (18,066)
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Loans, Net 1,894,181 1,897,784
Premises and Equipment, Net 100,145 98,612
Intangible Assets 97,109 98,568
Other Assets 75,406 70,947
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Total Other Assets 272,660 268,127
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Total Assets $2,692,512 $2,616,327
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LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 432,904 $ 432,659
NOW Accounts 800,128 744,093
Money Market Accounts 381,474 386,619
Regular Savings Accounts 116,018 111,600
Certificates of Deposit 462,081 467,373
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Total Deposits 2,192,605 2,142,344
Short-Term Borrowings 61,781 53,131
Subordinated Notes Payable 62,887 62,887
Other Long-Term Borrowings 29,843 26,731
Other Liabilities 47,723 38,559
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Total Liabilities 2,394,839 2,323,652
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SHAREOWNERS' EQUITY
Common Stock 172 172
Additional Paid-In Capital 38,042 38,243
Retained Earnings 264,538 260,325
Accumulated Other Comprehensive Loss,
Net of Tax (5,079) (6,065)
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Total Shareowners' Equity 297,673 292,675
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Total Liabilities and Shareowners' Equity $2,692,512 $2,616,327
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OTHER BALANCE SHEET DATA
Earning Assets $2,342,604 $2,272,829
Intangible Assets
Goodwill 84,811 84,811
Deposit Base 11,167 12,578
Other 1,131 1,179
Interest Bearing Liabilities 1,914,212 1,852,434
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Book Value Per Diluted Share $ 17.33 $ 17.03
Tangible Book Value Per Diluted Share 11.67 11.30
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Actual Basic Shares Outstanding 17,175 17,183
Actual Diluted Shares Outstanding 17,183 17,184
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CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
--------------------------------------------------------------------
2008 2008 2008 2008 2007
(Dollars in Fourth Third Second First Fourth
thousands) Quarter Quarter Quarter Quarter Quarter
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ALLOWANCE FOR
LOAN LOSSES
Balance at
Beginning of
Period $ 30,544 $ 22,518 $ 20,277 $ 18,066 $ 18,001
Provision for
Loan Losses 12,497 10,425 5,432 4,142 1,699
Net Charge-Offs 6,037 2,399 3,191 1,931 1,634
--------------------------------------------------------------------
Balance at End
of Period $ 37,004 $ 30,544 $ 22,518 $ 20,277 $ 18,066
--------------------------------------------------------------------
As a % of Loans 1.89% 1.59% 1.18% 1.06% 0.95%
As a % of
Nonperforming
Loans 37.52% 48.55% 51.80% 54.32% 71.92%
As a % of
Nonperforming
Assets 34.31% 45.10% 47.12% 49.34% 64.15%
--------------------------------------------------------------------
CHARGE-OFFS
Commercial,
Financial and
Agricultural $ 331 $ 275 $ 407 $ 636 $ 370
Real Estate -
Construction 1,774 77 158 $ 572 58
Real Estate -
Commercial 293 (35) 1,115 126 133
Real Estate -
Residential 2,264 797 817 176 209
Consumer 1,993 1,797 1,232 1,170 1,302
--------------------------------------------------------------------
Total Charge-Offs $ 6,655 $ 2,911 $ 3,729 $ 2,680 $ 2,072
--------------------------------------------------------------------
RECOVERIES
Commercial,
Financial and
Agricultural $ 68 $ 68 $ 55 $ 139 $ 47
Real Estate -
Construction -- 4 -- -- --
Real Estate -
Commercial -- 1 13 1 2
Real Estate -
Residential 128 6 24 3 5
Consumer 422 433 446 606 384
--------------------------------------------------------------------
Total Recoveries $ 618 $ 512 $ 538 $ 749 $ 438
--------------------------------------------------------------------
NET CHARGE-OFFS $ 6,037 $ 2,399 $ 3,191 $ 1,931 $ 1,634
--------------------------------------------------------------------
Net Charge-Offs
as a % of Average
Loans(1) 1.24% 0.50% 0.67% 0.41% 0.34%
--------------------------------------------------------------------
RISK ELEMENT ASSETS
Nonaccruing Loans $ 96,876 $ 61,509 $ 41,738 $ 35,352 $ 25,120
Restructured Loans 1,744 1,403 1,733 1,980 --
--------------------------------------------------------------------
Total Nonperforming
Loans 98,620 62,912 43,471 37,332 25,120
Other Real Estate 9,222 4,813 4,322 3,768 3,043
--------------------------------------------------------------------
Total Nonperforming
Assets $107,842 $ 67,725 $ 47,793 $ 41,100 $ 28,163
--------------------------------------------------------------------
Past Due Loans 90
Days or More $ 88 $ 50 $ 896 $ 842 $ 416
--------------------------------------------------------------------
Nonperforming Loans
as a % of Loans 5.04% 3.26% 2.27% 1.95% 1.31%
Nonperforming Assets
as a % of Loans and
Other Real Estate 5.48% 3.51% 2.49% 2.14% 1.47%
Nonperforming Assets
as a % of
Capital(2) 34.15% 20.56% 14.98% 12.93% 9.06%
--------------------------------------------------------------------
(1) Annualized
(2) Capital includes allowance for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
--------------------------------------------------------------------
Fourth Quarter 2008 Third Quarter 2008
------------------------ ------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
-------------------------- ------- ---- ---------- ------- ----
ASSETS:
Loans, Net of
Unearned
Interest $1,940,083 31,772 6.52% $1,915,008 32,622 6.78%
Investment
Securities
Taxable
Investment
Securities 90,296 813 3.59% 93,723 940 3.99%
Tax-Exempt
Investment
Securities 103,817 1,252 4.82% 98,966 1,234 4.99%
--------------------------------------------------------------------
Total Investment
Securities 194,113 2,065 4.25% 192,689 2,174 4.50%
Funds Sold 16,645 32 0.74% 99,973 475 1.86%
--------------------------------------------------------------------
Total Earning
Assets 2,150,841 $33,869 6.27% 2,207,670 $35,271 6.36%
------------- -------------
Cash and Due
From Banks 76,027 77,309
Allowance for
Loan Losses (30,347) (22,851)
Other Assets 266,797 266,510
--------------------------- ----------
Total Assets $2,463,318 $2,528,638
--------------------------- ----------
LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 684,246 $ 636 0.37% $ 727,754 $ 1,443 0.79%
Money Market
Accounts 360,940 716 0.79% 369,544 1,118 1.20%
Savings Accounts 117,311 28 0.09% 117,970 30 0.10%
Time Deposits 379,266 2,468 2.59% 410,101 3,224 3.13%
--------------------------------------------------------------------
Total Interest
Bearing Deposits 1,541,763 3,848 0.99% 1,625,369 5,815 1.42%
Short-Term
Borrowings 69,079 110 0.62% 51,738 230 1.76%
Subordinated
Notes Payable 62,887 937 5.83% 62,887 936 5.83%
Other Long-Term
Borrowings 53,261 587 4.39% 43,237 488 4.48%
--------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,726,990 $ 5,482 1.26% 1,783,231 $ 7,469 1.67%
------------- -------------
Noninterest
Bearing Deposits 404,103 405,314
Other Liabilities 29,998 36,498
--------------------------- ----------
Total
Liabilities 2,161,091 2,225,043
SHAREOWNERS'
EQUITY: $ 302,227 $ 303,595
--------------------------- ----------
Total Liabilities
and Shareowners'
Equity $2,463,318 $2,528,638
--------------------------- ----------
Interest Rate
Spread $28,387 5.01% $27,802 4.69%
----------------------------------------- -------------
Interest Income
and Rate
Earned(1) $33,869 6.27% $35,271 6.36%
Interest
Expense and
Rate Paid(2) 5,482 1.01% 7,469 1.35%
----------------------------------------- -------------
Net Interest
Margin $28,387 5.26% $27,802 5.01%
----------------------------------------- -------------
(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 2008 First Quarter 2008
------------------------ ------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
-------------------------- ------- ---- ---------- ------- ----
ASSETS:
Loans, Net of
Unearned
Interest $1,908,802 33,610 7.08% $1,909,574 35,453 7.47%
Investment
Securities
Taxable
Investment
Securities 93,814 1,028 4.38% 94,786 1,108 4.67%
Tax-Exempt
Investment
Securities 94,371 1,200 5.09% 90,790 1,207 5.32%
--------------------------------------------------------------------
Total Investment
Securities 188,185 2,228 4.73% 185,576 2,315 4.99%
Funds Sold 206,984 1,028 1.96% 206,313 1,574 3.02%
--------------------------------------------------------------------
Total Earning
Assets 2,303,971 $36,866 6.43% 2,301,463 $39,342 6.87%
------------- -------------
Cash and Due
From Banks 82,182 94,247
Allowance for
Loan Losses (20,558) (18,227)
Other Assets 269,176 268,991
--------------------------- ----------
Total Assets $2,634,771 $2,646,474
--------------------------- ----------
LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 788,237 $ 1,935 0.99% $ 773,891 $ 3,440 1.79%
Money Market
Accounts 376,996 1,210 1.29% 389,828 2,198 2.27%
Savings Accounts 117,182 29 0.10% 113,163 34 0.12%
Time Deposits 443,006 3,988 3.62% 467,280 4,809 4.14%
--------------------------------------------------------------------
Total Interest
Bearing Deposits 1,725,421 7,162 1.67% 1,744,162 10,481 2.42%
Short-Term
Borrowings 55,830 296 2.13% 68,095 521 3.06%
Subordinated
Notes Payable 62,887 931 5.86% 62,887 931 5.96%
Other Long-Term
Borrowings 34,612 396 4.60% 27,644 331 4.82%
--------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,878,750 $ 8,785 1.88% 1,902,788 $12,264 2.59%
------------- -------------
Noninterest
Bearing Deposits 415,125 404,712
Other Liabilities 40,006 42,170
--------------------------- ----------
Total
Liabilities 2,333,881 2,349,670
SHAREOWNERS'
EQUITY: $ 300,890 $ 296,804
--------------------------- ----------
Total Liabilities
and Shareowners'
Equity $2,634,771 $2,646,474
--------------------------- ----------
Interest Rate
Spread $28,081 4.55% $27,078 4.28%
----------------------------------------- -------------
Interest Income
and Rate
Earned(1) $36,866 6.43% $39,342 6.87%
Interest
Expense and
Rate Paid(2) 8,785 1.53% 12,264 2.14%
----------------------------------------- -------------
Net Interest
Margin $28,081 4.90% $27,078 4.73%
----------------------------------------- -------------
(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
------------------------
Fourth Quarter 2007
------------------------
(Dollars in Average Average
thousands) Balance Interest Rate
----------------------------------------------------- ------- ----
ASSETS:
Loans, Net of Unearned Interest $1,908,069 37,969 7.89%
Investment Securities
Taxable Investment Securities 99,055 1,226 4.93%
Tax-Exempt Investment Securities 87,358 1,178 5.39%
--------------------------------------------------------------------
Total Investment Securities 186,413 2,404 5.15%
Funds Sold 96,748 1,064 4.31%
--------------------------------------------------------------------
Total Earning Assets 2,191,230 $41,437 7.50%
-------------
Cash and Due From Banks 85,598
Allowance for Loan Losses (18,127)
Other Assets 260,981
------------------------------------------------------
Total Assets $2,519,682
------------------------------------------------------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 608,347 $ 2,980 1.94%
Money Market Accounts 404,406 3,217 3.16%
Savings Accounts 113,527 57 0.20%
Time Deposits 471,454 5,069 4.27%
--------------------------------------------------------------------
Total Interest Bearing Deposits 1,597,734 11,323 2.81%
Short-Term Borrowings 64,842 639 3.89%
Subordinated Notes Payable 62,887 936 5.91%
Other Long-Term Borrowings 28,215 343 4.83%
--------------------------------------------------------------------
Total Interest Bearing Liabilities 1,753,678 $13,241 3.00%
-------------
Noninterest Bearing Deposits 419,002
Other Liabilities 47,660
------------------------------------------------------
Total Liabilities 2,220,340
SHAREOWNERS' EQUITY: $ 299,342
------------------------------------------------------
Total Liabilities and Shareowners' Equity $2,519,682
------------------------------------------------------
Interest Rate Spread $28,196 4.50%
--------------------------------------------------------------------
Interest Income and Rate Earned(1) $41,437 7.50%
Interest Expense and Rate Paid(2) 13,241 2.40%
--------------------------------------------------------------------
Net Interest Margin $28,196 5.10%
--------------------------------------------------------------------
(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
--------------------------------------------------------------------
December 2008 YTD December 2007 YTD
------------------------ ------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
-------------------------- ------- ---- ---------- ------- ----
ASSETS:
Loans, Net of
Unearned
Interest $1,918,417 133,457 6.96% $1,934,850 155,434 8.03%
Investment
Securities
Taxable
Investment
Securities 93,149 3,889 5.04% 103,840 4,949 4.76%
Tax-Exempt
Investment
Securities 97,010 4,893 4.16% 84,849 4,447 5.24%
--------------------------------------------------------------------
Total Investment
Securities 190,159 8,782 4.61% 188,689 9,396 4.97%
Funds Sold 132,073 3,109 2.32% 59,989 2,913 4.79%
--------------------------------------------------------------------
Total Earning
Assets 2,240,649 $145,348 6.48% 2,183,528 $167,743 7.68%
------------- -------------
Cash and Due
From Banks 82,410 86,692
Allowance for
Loan Losses (23,015) (17,535)
Other Assets 267,861 254,532
--------------------------- ----------
Total Assets $2,567,905 $2,507,217
--------------------------- ----------
LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 743,327 $ 7,454 1.00% $ 557,060 $ 10,748 1.93%
Money Market
Accounts 374,278 5,242 1.40% 397,193 13,667 3.44%
Savings Accounts 116,413 121 0.10% 119,700 279 0.23%
Time Deposits 424,748 14,489 3.41% 474,728 19,993 4.21%
--------------------------------------------------------------------
Total Interest
Bearing Deposits 1,658,766 27,306 1.65% 1,548,681 44,687 2.89%
Short-Term
Borrowings 61,181 1,157 1.88% 66,397 2,871 4.31%
Subordinated
Notes Payable 62,887 3,735 5.84% 62,887 3,730 5.93%
Other Long-Term
Borrowings 39,735 1,802 4.54% 37,936 1,794 4.73%
--------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,822,569 $ 34,000 1.87% 1,715,901 $ 53,082 3.09%
------------- -------------
Noninterest
Bearing Deposits 407,299 441,765
Other Liabilities 37,147 42,934
--------------------------- ----------
Total
Liabilities 2,267,015 2,200,600
SHAREOWNERS'
EQUITY: $ 300,890 $ 306,617
--------------------------- ----------
Total Liabilities
and Shareowners'
Equity $2,567,905 $2,507,217
--------------------------- ----------
Interest Rate
Spread $111,348 4.61% $114,661 4.59%
----------------------------------------- -------------
Interest Income
and Rate
Earned(1) $145,348 6.48% $167,743 7.68%
Interest Expense
and Rate Paid(2) 34,000 1.52% 53,082 2.43%
----------------------------------------- -------------
Net Interest
Margin $111,348 4.96% $114,661 5.25%
----------------------------------------- -------------
(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 January 26, 2009