Capital City Bank Group, Inc. Reports Second Quarter 2008 Results
TALLAHASSEE, Fla., July 22, 2008 (PRIME NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2008 totaling $4.8 million ($0.28 per diluted share) compared to $7.3 million ($0.42 per diluted share) in the first quarter of 2008 and $7.9 million ($0.43 per diluted share) for the second quarter of 2007. Earnings for the second quarter of 2008 include a loan loss provision of $5.4 million ($.20 per diluted share) versus $4.1 million ($.15 per diluted share) in the first quarter of 2008 and $1.7 million ($.06 per diluted share) in the second quarter of 2007.
Earnings for the first half of 2008 totaled $12.1 million ($0.70 per diluted share) compared to $14.8 million ($0.81 per diluted share) for the first half of 2007. Year-to-date earnings include a loan loss provision of $9.6 million ($0.34 per diluted share). Earnings also include a $2.4 million pre-tax gain from the redemption of Visa, Inc. shares related to its initial public offering, the reversal of $1.1 million (pre-tax) in Visa related litigation reserves, the reversal of $577,000 (pre-tax) in accrued expense for our 2011 Incentive Plan, and the reversal of a $425,000 tax reserve related to the resolution of a tax contingency, all four of which were recorded in the prior quarter.
"Overall, our underlying business is fundamentally sound -- after adjusting for the gain on redemption of Visa shares, operating revenues grew quarter over quarter and our expenses are in check. In Florida, we are managing through a challenging credit cycle and we have responded appropriately by increasing our provision and reserve in both the first and second quarters of this year," said William G. Smith, Jr., chairman, president & CEO. "Because our housing markets did not experience the rapid price appreciation as evidenced in other areas of the state, we believe credit-related problems across our markets may be less severe over an extended economic slowdown. Additionally, our portfolios are well-diversified by loan type and we think our higher-risk loan relationships tend to be smaller in size than most of our Florida-based peers due to our relatively low in-house lending limit and overall lending authorities.
"We are taking a prudent approach in monitoring collateral values for our problem real estate loans, allocating more resources to the review of updated valuations as market conditions change and, where appropriate, recognizing losses prior to final resolution of the problem asset.
"Our capital position is quite strong. Our total shareowners' equity currently stands at $297 million, or 11.2% of total assets and our total risk-based capital ratio equals 14.35%. These measures are well in excess of regulatory minimums for an institution to be considered well-capitalized and are after the repurchase of $45.6 million of our common stock over the last eighteen months. We believe the strength of our balance sheet will allow us to participate in opportunities that naturally arise during periods of economic stress and disruption," said Smith.
The Return on Average Assets was .73% and the Return on Average Equity was 6.43% for the second quarter of 2008. These metrics were 1.11% and 9.87% for the first quarter of 2008 and 1.26% and 10.23% for the second quarter of 2007, respectively.
For the first half of 2008, the Return on Average Assets was .92% and the Return on Average Equity was 8.14% compared to 1.19% and 9.57%, respectively, for the first half of 2007.
Discussion of Financial Condition
Average earning assets were $2.304 billion for the second quarter, an increase of $2.5 million, or .11% from the first quarter of 2008, and $112.7 million, or 5.2% from the fourth quarter of 2007. The increase over the linked quarter is primarily attributable to a $2.6 million increase in investment securities. Compared to the fourth quarter of 2007, the increase primarily reflects a $110.2 million increase in short-term investments which was driven primarily by an increase in our client deposit balances (see discussion below). Average loans were down slightly from both the prior quarter and fourth quarter of 2007 by $.8 million and $.7 million, respectively, as production essentially matched pay-downs and pay-offs. Given our risk management practices, the lack of loan growth in this current economic environment is not unexpected.
Nonperforming assets of $47.8 million increased from the first quarter by $6.7 million and from the fourth quarter of 2007 by $19.6 million. For the same periods, nonaccrual loans totaling $41.7 million increased $6.4 million and $16.6 million, respectively. The increase from the first quarter primarily reflects the migration of smaller balance residential real estate loans to builders and investors to nonaccrual status. Restructured loans totaled $1.7 million at the end of the quarter. Other real estate owned totaled $4.3 million at the end of the second quarter compared to $3.8 million at the end of the first quarter and $3.0 million at year-end 2007. Nonperforming assets represented 2.49% of loans and other real estate at the end of the second quarter compared to 2.14% and 1.47% at the end of the prior quarter and year-end 2007, respectively.
Average total deposits were $2.141 billion for the second quarter, a decrease of $8.3 million, or 0.39%, from the first quarter and an increase of $123.8 million, or 6.1%, over the fourth quarter of 2007. Compared to the first quarter, non-maturity deposits increased primarily as a result of growth in noninterest bearing and negotiated rate NOW accounts, but this increase was more than offset by a decline in the money market accounts and certificates of deposit. Strong growth in public funds deposits is primarily attributable to a migration of deposits from the Florida State Board of Administration's Local Government Investment Pool, which began in the fourth quarter and has continued through the second quarter. Declines in money market accounts and certificates of deposit reflect management's strategy not to compete with higher rate paying competitors. Compared to the fourth quarter of 2007, a majority of the increase in deposits has come in the NOW account category reflecting the aforementioned trend in negotiated rate NOW accounts.
The Company had approximately $195.5 million in average net overnight funds sold for the second quarter of 2008 as compared to $186.8 million in the first quarter of 2008 and $84.1 million in the fourth quarter of 2007. The influx of public deposits generated in the first half of 2008 was the primary factor driving the growth of overnight funds for both periods.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2008 was $28.1 million compared to $27.1 million for the first quarter and $29.0 million for the second quarter of 2007. For the first six months of 2008, tax equivalent net interest income totaled $55.2 million compared to $57.9 million for the comparable period in 2007.
The increase in the net interest income on a linked quarter basis reflects lower interest costs as management has responded aggressively to the Federal Reserve's 225 basis point rate reduction during 2008. The lower interest cost was partially offset by declines in earning asset yields and a slight increase in foregone interest on nonaccrual loans. During this same period, the net interest margin expanded by 17 basis points to 4.90%, attributable to lower deposit rates.
The decline in net interest income for the three and six months ended June 30, 2008, as compared to the same periods of 2007 was primarily the result of a higher level of foregone interest associated with the increased level of nonperforming assets and an unfavorable shift in the mix of earning assets as the loan balances declined throughout the first nine months of 2007. These factors, coupled with the influx of higher cost municipal deposits in 2008, led to compression in our net interest margin of 43 and 50 basis points, respectively. We continue to believe we have been successful in neutralizing the impact of reductions in the Federal Reserve's target rate over the last three quarters.
Average negotiated deposits, which include municipal deposits, have grown from $287 million in the second quarter of 2007 to $538 million in the current quarter. Although this growth in deposits has had a positive impact on net interest income, it has had an adverse impact on our margin due to the relatively thin spreads on the municipal deposits. See "Discussion of Financial Condition" for a more detailed analysis of nonperforming assets and deposit growth.
The provision for loan losses for the current quarter was $5.4 million compared to $4.1 million in the first quarter of 2008 and $1.7 million for the second quarter of 2007. The provision for the first six months of 2008 totaled $9.6 million compared to $2.9 million for the same period in 2007. The increase in the provision for the current quarter and for the first six months of the year generally reflects the current economic slowdown and the impact of the stressed housing and real estate markets. Compared to the prior quarter, the increase in the provision reflects a higher level of reserves allocated to our commercial loan and residential real estate loan portfolios. The increase in the provision for the first half of 2008 compared to the same period in 2007 reflects the aforementioned trends as well as stress on our consumer loan portfolios, primarily indirect auto lending. For the quarter, net charge-offs totaled $3.2 million, or .67%, of average loans compared to $1.9 million, or .41%, in the first quarter of 2008 and $1.3 million, or .27%, in the second quarter of 2007. The increase in net charge offs for the current quarter primarily reflects a higher level of consumer (indirect auto), residential real estate, and commercial real estate loan charge-offs. Management performs a detailed review and valuation assessment of impaired loans on a quarterly basis and, in accordance with its current charge-off procedures, writes existing nonaccrual loans down to fair value when principal is deemed uncollectible. Increased resources have been allocated to the aforementioned process to review impaired loans migrating through the foreclosure process and record write-downs on these loans as market conditions change. Due to elevated case loads, it is taking longer for cases to move through the court system and, therefore, where appropriate, we are recognizing losses prior to final resolution of the problem asset. At quarter-end, the allowance for loan losses was 1.18% of outstanding loans (net of overdrafts) and provided coverage of 52% of nonperforming loans.
Noninterest income for the second quarter decreased $2.1 million, or 11.7%, from the first quarter of 2008 attributable to a pre-tax gain of $2.4 million realized in the first quarter of 2008 from the redemption of Visa, Inc. shares. Compared to the second quarter of 2007, noninterest income increased $634,000, or 4.0%, due to increases in deposit fees and retail brokerage fees. For the first six months of 2008, noninterest income grew $4.5 million, or 15.4%, from the comparable period in 2007 due to the aforementioned gain on redemption of Visa, Inc. shares, and strong gains in deposit fees and bank card fees.
Noninterest expense for the second quarter increased $958,000, or 3.2%, from the first quarter of 2008 attributable to a one-time entry of $1.1 million realized in the first quarter of 2008 to reverse a portion of our Visa, Inc. litigation accrual. In addition, we reversed $577,000 in accrued expense in the first quarter of 2008 related to the termination of our 2011 Incentive Plan. Compared to the second quarter of 2007, noninterest expense increased $859,000, or 2.9%, due primarily to an increase in compensation and occupancy costs. The increase in compensation is attributable to higher associate base salaries reflective of annual merit/market based raises and the opening of three new banking offices in 2007. The increase in occupancy is primarily due to higher depreciation expense also attributable to the aforementioned new banking offices and the implementation of a new telephone system in early 2008. For the first six months of 2008, noninterest expense grew $95,000, or .16%, from the comparable period in 2007 primarily due to the aforementioned higher compensation and occupancy expense, with the one-time reversal of our Visa, Inc. litigation accrual partially offsetting those increases. Higher expense for commission fees related to processing cost for our accounts receivable financing product also increased over this period. Management continues to work on expense reduction opportunities and improvement in cost controls as a core strategic objective.
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, one mortgage lending office, and 82 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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Three Months Ended Six Months Ended
------------------------- ----------------
(Dollars in thousands, Jun 30, Mar 31, Jun 30, Jun 30, Jun 30,
except per share data) 2008 2008 2007 2008 2007
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EARNINGS
Net Income $ 4,810 $ 7,280 $ 7,891 $12,090 $14,848
Diluted Earnings Per
Common Share $ 0.28 $ 0.42 $ 0.43 $ 0.70 $ 0.81
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PERFORMANCE
Return on Average Equity 6.43% 9.87% 10.23% 8.14% 9.57%
Return on Average Assets 0.73% 1.11% 1.26% 0.92% 1.19%
Net Interest Margin 4.90% 4.73% 5.33% 4.81% 5.31%
Noninterest Income as
% of Operating Revenue 36.39% 40.22% 34.64% 38.33% 33.84%
Efficiency Ratio 66.89% 63.15% 64.44% 65.00% 66.15%
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CAPITAL ADEQUACY
Tier 1 Capital Ratio 13.15% 12.94% 13.67% 13.15% 13.67%
Total Capital Ratio 14.35% 14.01% 14.66% 14.35% 14.66%
Leverage Ratio 10.54% 10.32% 11.14% 10.54% 11.14%
Equity to Assets 11.19% 11.06% 11.91% 11.19% 11.91%
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ASSET QUALITY
Allowance as % of
Non-Performing Loans 51.80% 54.32% 193.69% 51.80% 193.69%
Allowance as a % of
Loans 1.18% 1.06% 0.91% 1.18% 0.90%
Net Charge-Offs as %
of Average Loans 0.67% 0.41% 0.27% 0.54% 0.27%
Nonperforming Assets
as % of Loans and ORE 2.49% 2.14% 0.52% 2.49% 0.52%
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STOCK PERFORMANCE
High $ 30.19 $ 29.99 $ 33.69 $ 30.19 $ 35.91
Low $ 21.76 $ 24.76 $ 29.12 $ 21.76 $ 29.12
Close $ 21.76 $ 29.00 $ 31.34 $ 21.76 $ 31.34
Average Daily Trading
Volume 36,196 31,827 40,051 34,064 32,338
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
---------------------------------------------------------------------
2008 2008 2007 2007 2007
(Dollars in thousands, Second First Fourth Third Second
except per share data) Quarter Quarter Quarter Quarter Quarter
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INTEREST INCOME
Interest and Fees on
Loans $33,422 $35,255 $37,730 $38,692 $39,092
Investment Securities 1,810 1,893 1,992 1,968 1,943
Funds Sold 1,028 1,575 1,064 639 689
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Total Interest Income 36,260 38,723 40,786 41,299 41,724
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INTEREST EXPENSE
Deposits 7,162 10,481 11,323 11,266 11,098
Short-Term Borrowings 296 521 639 734 737
Subordinated Notes
Payable 931 931 936 936 932
Other Long-Term
Borrowings 396 331 343 453 496
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Total Interest Expense 8,785 12,264 13,241 13,389 13,263
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Net Interest Income 27,475 26,459 27,545 27,910 28,461
Provision for Loan Losses 5,432 4,142 1,699 1,552 1,675
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Net Interest Income
after Provision for
Loan Losses 22,043 22,317 25,846 26,358 26,786
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NONINTEREST INCOME
Service Charges on
Deposit Accounts 7,060 6,765 7,256 6,387 6,442
Data Processing 812 813 853 775 790
Asset Management Fees 1,125 1,150 1,100 1,200 1,175
Retail Brokerage Fees 735 469 619 625 804
Gain on Sale of
Investment Securities 30 65 7 -- --
Mortgage Banking
Revenues 506 494 425 642 850
Merchant Fees 2,074 2,208 1,743 1,686 1,892
Interchange Fees 1,076 1,009 962 934 951
ATM/Debit Card Fees 758 744 705 685 661
Other 1,542 4,082 2,153 1,497 1,519
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Total Noninterest
Income 15,718 17,799 15,823 14,431 15,084
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NONINTEREST EXPENSE
Salaries and Associate
Benefits 15,318 15,604 14,472 15,096 14,992
Occupancy, Net 2,491 2,362 2,378 2,409 2,324
Furniture and Equipment 2,583 2,582 2,534 2,513 2,494
Intangible Amortization 1,459 1,459 1,458 1,459 1,458
Other 8,905 7,791 10,772 8,442 8,629
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Total Noninterest
Expense 30,756 29,798 31,614 29,919 29,897
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OPERATING PROFIT 7,005 10,318 10,055 10,870 11,973
Provision for Income
Taxes 2,195 3,038 2,391 3,699 4,082
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NET INCOME $ 4,810 $ 7,280 $ 7,664 $ 7,171 $ 7,891
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PER SHARE DATA
Basic Earnings $ 0.28 $ 0.42 $ 0.44 $ 0.41 $ 0.43
Diluted Earnings $ 0.28 $ 0.42 $ 0.44 $ 0.41 $ 0.43
Cash Dividends 0.185 0.185 0.185 0.175 0.175
AVERAGE SHARES
Basic 17,146 17,170 17,444 17,709 18,089
Diluted 17,147 17,178 17,445 17,719 18,089
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Six Months Ended
June 30
(Dollars in thousands, except per share data) 2008 2007
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INTEREST INCOME
Interest and Fees on Loans $68,677 $78,145
Investment Securities 3,703 3,883
Funds Sold 2,603 1,210
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Total Interest Income 74,983 83,238
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INTEREST EXPENSE
Deposits 17,643 22,098
Short-Term Borrowings 817 1,498
Subordinated Notes Payable 1,862 1,858
Other Long-Term Borrowings 727 998
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Total Interest Expense 21,049 26,452
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Net Interest Income 53,934 56,786
Provision for Loan Losses 9,574 2,912
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Net Interest Income after Provision for Loan Losses 44,360 53,874
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NONINTEREST INCOME
Service Charges on Deposit Accounts 13,825 12,487
Data Processing 1,625 1,505
Asset Management Fees 2,275 2,400
Retail Brokerage Fees 1,204 1,266
Gain on Sale of Investment Securities 95 7
Mortgage Banking Revenues 1,000 1,529
Merchant Fees 4,282 3,828
Interchange Fees 2,085 1,861
ATM/Debit Card Fees 1,502 1,302
Other 5,624 2,861
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Total Noninterest Income 33,517 29,046
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NONINTEREST EXPENSE
Salaries and Associate Benefits 30,922 30,711
Occupancy, Net 4,853 4,560
Furniture and Equipment 5,165 4,843
Intangible Amortization 2,918 2,917
Other 16,696 17,428
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Total Noninterest Expense 60,554 60,459
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OPERATING PROFIT 17,323 22,461
Provision for Income Taxes 5,233 7,613
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NET INCOME $12,090 $14,848
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PER SHARE DATA
Basic Earnings $ 0.70 $ 0.81
Diluted Earnings $ 0.70 $ 0.81
Cash Dividends 0.370 0.350
AVERAGE SHARES
Basic 17,158 18,248
Diluted 17,159 18,248
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
---------------------------------------------------------------------
(Dollars in
thousands, 2008 2008 2007 2007 2007
except per Second First Fourth Third Second
share data) Quarter Quarter Quarter Quarter Quarter
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ASSETS
Cash and Due
From Banks $ 108,672 $ 97,525 $ 93,437 $ 91,378 $ 95,573
Funds Sold and
Interest
Bearing
Deposits 192,786 241,202 166,260 19,599 77,297
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Total Cash
and Cash
Equivalents 301,458 338,727 259,697 110,977 172,870
Investment
Securities,
Available-for-
Sale 185,971 186,944 190,719 184,609 189,680
Loans, Net of
Unearned
Interest
Commercial,
Financial, &
Agricultural 196,075 202,238 208,864 205,628 203,555
Real Estate -
Construction 150,907 152,060 142,248 145,343 159,751
Real Estate -
Commercial 622,282 624,826 634,920 631,418 640,172
Real Estate -
Residential 481,397 482,058 481,150 480,488 493,783
Real Estate -
Home Equity 205,536 197,093 192,428 183,620 175,781
Consumer 244,071 238,663 243,415 246,137 240,110
Other Loans 9,436 10,506 7,222 8,739 14,715
Overdrafts 7,111 7,014 5,603 2,515 2,844
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Total Loans,
Net of
Unearned
Interest 1,916,815 1,914,458 1,915,850 1,903,888 1,930,711
Allowance for
Loan Losses (22,518) (20,277) (18,066) (18,001) (17,469)
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Loans, Net 1,894,297 1,894,181 1,897,784 1,885,887 1,913,242
Premises and
Equipment, Net 102,559 100,145 98,612 95,816 92,656
Intangible
Assets 95,651 97,109 98,568 100,026 101,485
Other Assets 69,479 75,406 70,947 62,611 60,815
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Total Other
Assets 267,689 272,660 268,127 258,453 254,956
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Total Assets $2,649,415 $2,692,512 $2,616,327 $2,439,926 $2,530,748
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LIABILITIES
Deposits:
Noninterest
Bearing
Deposits $ 416,992 $ 432,904 $ 432,659 $ 419,242 $ 456,986
NOW Accounts 814,380 800,128 744,093 530,619 559,050
Money Market
Accounts 387,011 381,474 386,619 399,578 401,415
Regular
Savings
Accounts 118,307 116,018 111,600 115,955 119,585
Certificates
of Deposit 426,236 462,081 467,373 472,019 472,554
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Total
Deposits 2,162,926 2,192,605 2,142,344 1,937,413 2,009,590
Short-Term
Borrowings 51,783 61,781 53,131 63,817 74,307
Subordinated
Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term
Borrowings 36,857 29,843 26,731 29,725 41,276
Other
Liabilities 38,382 47,723 38,559 47,031 41,251
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Total
Liabilities 2,352,835 2,394,839 2,323,652 2,140,873 2,229,311
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SHAREOWNERS'
EQUITY
Common Stock 171 172 172 176 179
Additional
Paid-In Capital 36,382 38,042 38,243 50,789 58,001
Retained
Earnings 266,171 264,538 260,325 255,876 251,838
Accumulated
Other
Comprehensive
Loss, Net of
Tax (6,144) (5,079) (6,065) (7,788) (8,581)
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Total
Shareowners'
Equity 296,580 297,673 292,675 299,053 301,437
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Total
Liabilities and
Shareowners'
Equity $2,649,415 $2,692,512 $2,616,327 $2,439,926 $2,530,748
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OTHER BALANCE
SHEET DATA
Earning Assets $2,295,572 $2,342,604 $2,272,829 $2,108,096 $2,197,688
Intangible
Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Deposit Base 9,756 11,167 12,578 13,988 15,399
Other 1,084 1,131 1,179 1,227 1,275
Interest
Bearing
Liabilities 1,897,461 1,914,212 1,852,434 1,674,600 1,731,074
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Book Value Per
Diluted Share $ 17.33 $ 17.33 $ 17.03 $ 16.95 $ 16.87
Tangible Book
Value Per
Diluted Share 11.74 11.67 11.30 11.28 11.19
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Actual Basic
Shares
Outstanding 17,111 17,175 17,183 17,628 17,869
Actual Diluted
Shares
Outstanding 17,112 17,183 17,184 17,639 17,869
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CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
---------------------------------------------------------------------
2008 2008 2007 2007 2007
Second First Fourth Third Second
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
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ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of
Period $20,277 $18,066 $18,001 $17,469 $17,108
Provision for Loan Losses 5,432 4,142 1,699 1,552 1,675
Net Charge-Offs 3,191 1,931 1,634 1,020 1,314
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Balance at End of Period $22,518 $20,277 $18,066 $18,001 $17,469
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As a % of Loans 1.18% 1.06% 0.95% 0.95% 0.91%
As a % of Nonperforming
Loans 51.80% 54.32% 71.92% 145.49% 193.68%
As a % of Nonperforming
Assets 47.12% 49.34% 64.15% 128.05% 172.62%
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CHARGE-OFFS
Commercial, Financial and
Agricultural $ 407 $ 636 $ 370 $ 279 $ 253
Real Estate - Construction 158 572 58 -- --
Real Estate - Commercial 1,115 126 133 245 5
Real Estate - Residential 817 176 209 161 992
Consumer 1,232 1,170 1,302 854 534
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Total Charge-Offs $ 3,729 $ 2,680 $ 2,072 $ 1,539 $ 1,784
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RECOVERIES
Commercial, Financial
and Agricultural $ 55 $ 139 $ 47 $ 44 $ 47
Real Estate - Construction -- -- -- -- --
Real Estate - Commercial 13 1 2 2 5
Real Estate - Residential 24 3 5 2 26
Consumer 446 606 384 471 392
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Total Recoveries $ 538 $ 749 $ 438 $ 519 $ 470
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NET CHARGE-OFFS $ 3,191 $ 1,931 $ 1,634 $ 1,020 $ 1,314
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Net Charge-Offs as a %
of Average Loans(1) 0.67% 0.41% 0.34% 0.21% 0.27%
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RISK ELEMENT ASSETS
Nonaccruing Loans $41,738 $35,352 $25,120 $12,373 $ 9,019
Restructured Loans 1,733 1,980 -- -- --
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Total Nonperforming Loans 43,471 37,332 25,120 12,373 9,019
Other Real Estate 4,322 3,768 3,043 1,685 1,102
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Total Nonperforming
Assets $47,793 $41,100 $28,163 $14,058 $10,121
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Past Due Loans 90 Days
or More $ 896 $ 842 $ 416 $ 874 $ 332
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Nonperforming Loans as
a % of Loans 2.27% 1.95% 1.31% 0.65% 0.47%
Nonperforming Assets as
a % of Loans and Other
Real Estate 2.49% 2.14% 1.47% 0.74% 0.52%
Nonperforming Assets as
a % of Capital(2) 14.98% 12.93% 9.06% 4.43% 3.17%
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(1) Annualized
(2) Capital includes allowance for loan losses.
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%
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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 Liabil-
ities 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%
-------------------------------------------- -------------
---------------------------------------------------------------------
Fourth Quarter 2007
---------------------------------------------------------------------
Average Average
(Dollars in 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%
---------------------------------------------------------------------
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Third Quarter 2007 Second Quarter 2007
------------------------- -------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
-------------------------- ------- ---- ---------- ------- ----
ASSETS:
Loans, Net of
Unearned
Interest $1,907,235 38,901 8.09% $1,944,969 39,300 8.10%
Investment
Securities
Taxable
Investment
Securities 102,618 1,224 4.75% 105,425 1,236 4.68%
Tax-Exempt
Investment
Securities 85,446 1,142 5.35% 83,907 1,088 5.19%
---------------------------------------------------------------------
Total
Investment
Securities 188,064 2,366 5.02% 189,332 2,324 4.91%
Funds Sold 49,438 639 5.06% 52,935 689 5.15%
---------------------------------------------------------------------
Total Earning
Assets 2,144,737 $41,906 7.75% 2,187,236 $42,313 7.76%
------------- -------------
Cash and Due
From Banks 84,477 88,075
Allowance for
Loan Losses (17,664) (17,263)
Other Assets 256,153 253,204
-------------------------- ----------
Total Assets $2,467,703 $2,511,252
-------------------------- ----------
LIABILITIES:
Interest
Bearing
Deposits
NOW Accounts $ 525,795 $ 2,531 1.91% $ 541,525 $ 2,611 1.93%
Money Market
Accounts 403,957 3,565 3.50% 393,403 3,458 3.53%
Savings
Accounts 117,451 70 0.24% 122,560 74 0.24%
Time Deposits 471,868 5,100 4.29% 474,761 4,955 4.19%
---------------------------------------------------------------------
Total Interest
Bearing
Deposits 1,519,071 11,266 2.94% 1,532,249 11,098 2.91%
Short-Term
Borrowings 65,130 734 4.45% 66,764 737 4.41%
Subordinated
Notes Payable 62,887 936 5.91% 62,887 932 5.94%
Other Long-Term
Borrowings 38,269 453 4.70% 42,284 496 4.71%
---------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,685,357 $13,389 3.15% 1,704,184 $13,263 3.12%
------------- -------------
Noninterest
Bearing
Deposits 435,089 455,169
Other
Liabilities 45,721 42,547
-------------------------- ----------
Total
Liabilities 2,166,167 2,201,900
SHAREOWNERS'
EQUITY: $ 301,536 $ 309,352
-------------------------- ----------
Total Liabil-
ities and
Shareowners'
Equity $2,467,703 $2,511,252
-------------------------- ----------
Interest Rate
Spread $28,517 4.60% $29,050 4.64%
----------------------------------------- -------------
Interest
Income and
Rate Earned(1) $41,906 7.75% $42,313 7.76%
Interest
Expense and
Rate Paid(2) 13,389 2.48% 13,263 2.43%
----------------------------------------- -------------
Net Interest
Margin $28,517 5.27% $29,050 5.33%
----------------------------------------- -------------
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
June 2008 YTD June 2007 YTD
-----------------------------------------------------
(Dollars in Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate
-------------------------- ------- ---- ---------- ------- ----
ASSETS:
Loans, Net of
Unearned
Interest 1,909,187 69,063 7.27% $1,962,499 78,564 8.07%
Investment
Securities
Taxable
Investment
Securities 94,300 2,136 4.52% 106,894 2,499 4.68%
Tax-Exempt
Investment
Securities 92,581 2,407 5.20% 83,270 2,127 5.11%
---------------------------------------------------------------------
Total
Investment
Securities 186,881 4,543 4.86% 190,164 4,626 4.87%
Funds Sold 206,649 2,602 2.49% 46,669 1,210 5.16%
---------------------------------------------------------------------
Total Earning
Assets 2,302,717 $76,208 6.65% 2,199,332 $84,400 7.73%
------------- -------------
Cash and Due
From Banks 88,214 88,376
Allowance for
Loan Losses (19,392) (17,169)
Other Assets 269,083 250,428
-------------------------- ----------
Total Assets 2,640,622 $2,520,967
-------------------------- ----------
LIABILITIES:
Interest
Bearing
Deposits
NOW Accounts 781,064 $ 5,375 1.38% $ 546,884 $ 5,237 1.93%
Money Market
Accounts 383,412 3,408 1.79% 390,088 6,885 3.56%
Savings
Accounts 115,172 63 0.11% 123,982 152 0.25%
Time Deposits 455,143 8,797 3.89% 477,845 9,824 4.15%
---------------------------------------------------------------------
Total Interest
Bearing
Deposits 1,734,791 17,643 2.05% 1,538,799 22,098 2.90%
Short-Term
Borrowings 61,963 817 2.64% 67,832 1,498 4.44%
Subordinated
Notes Payable 62,887 1,862 5.86% 62,887 1,858 5.96%
Other Long-Term
Borrowings 31,128 727 4.70% 42,708 998 4.71%
---------------------------------------------------------------------
Total Interest
Bearing
Liabilities 1,890,769 $21,049 2.24% 1,712,226 $26,452 3.11%
------------- -------------
Noninterest
Bearing
Deposits 409,918 456,728
Other
Liabilities 41,088 39,115
-------------------------- ----------
Total
Liabilities 2,341,775 2,208,069
SHAREOWNERS'
EQUITY: 298,847 $ 312,898
-------------------------- ----------
Total Liabil-
ities and
Shareowners'
Equity 2,640,622 $2,520,967
-------------------------- ----------
Interest Rate
Spread $55,159 4.41% $57,948 4.62%
----------------------------------------- -------------
Interest
Income and
Rate Earned(1) $76,208 6.65% $84,400 7.73%
Interest
Expense and
Rate Paid(2) 21,049 1.84% 26,452 2.42%
----------------------------------------- -------------
Net Interest
Margin $55,159 4.81% $57,948 5.31%
----------------------------------------- -------------
(1) Interest and average rates are calculated on a tax-equivalent
basis using the 35% Federal tax rate.
(2) Rate calculated based on average earnings assets.
CONTACT: Capital City Bank Group, Inc.
J. Kimbrough Davis, Executive Vice President and
Chief Financial Officer
850.402.7820
Released July 22, 2008