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

TALLAHASSEE, Fla., Jan. 26, 2021 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $7.7 million, or $0.46 per diluted share for the fourth quarter of 2020 compared to net income of $10.4 million, or $0.62 per diluted share for the third quarter of 2020, and $8.6 million, or $0.51 per diluted share, for the fourth quarter of 2019.

For the full year of 2020, net income totaled $31.6 million, or $1.88 per diluted share, compared to net income of $30.8 million, or $1.83 per diluted share, for 2019.

Fourth Quarter 2020 HIGHLIGHTS

  • Operating revenues (excluding mortgage fees) improved 1.8%  
    • Net interest income held firm, declining $0.1 million
    • 7% increase in other fee revenues (deposit, bankcard, and wealth management)
  • Noninterest expense included $0.9 million related to other real estate valuation adjustments ($0.5 million) and other expenses totaling $0.4 million (additional funding for our foundation and consulting/legal costs related to a strategic initiative)
  • Period-end core loans (excluding SBA PPP) increased $20 million, or 1.1% sequentially
    • SBA PPP loan forgiveness pay-offs totaled $12 million - $178 million in balances and $3.2 million in related fees remain at period-end
  • Credit quality remains strong with no significant problem loan migration
    • 97% of loan balances for pandemic related extensions have resumed payments – only $9 million remains on extension
  • Capital City Home Loans (“CCHL”) contributed $0.10 per share

Full Year 2020 HIGHLIGHTS

  • Operating revenues (excluding mortgage fees) held firm as unfavorable asset re-pricing was offset by SBA PPP loan fees and higher other fee revenues   
  • Loan balances buoyed by SBA PPP loan originations which totaled $190 million
    • Core loan balances (excluding SBA PPP) held firm due to stronger loan production in the fourth quarter
  • Reserve build of $6.6 million (provision of $9.0 million less net charge-offs of $2.4 million) in response to potential credit losses related to the pandemic
    • Allowance coverage ratio (excluding SBA PPP) was 1.30% at year-end
  • Deposits grew $572 million (period-end) and $307 million (average) and reflected stimulus inflows as well as strong core deposit growth
  • Acquired 51% ownership in Brand Mortgage, LLC on March 1, 2020 (renamed CCHL) – contributed $0.52 per share

“Our strategic alliance with CCHL and the origination of $190 million in SBA PPP loans more than offset the adverse impact of our reserve build and lower interest rates, resulting in year over year earnings growth,” said William G. Smith, Jr., Chairman, President and CEO.  “As we entered 2020, I certainly didn’t anticipate the difficulties we would face, but I could not be prouder of our team’s response to the COVID-19 pandemic.  We continue to put the safety and well-being of our associates and clients first, as we reach out to assist our communities through the origination of SBA PPP loans, grants and volunteer hours, and endeavor to meet the needs of our clients through both in-person and virtual delivery channels.  2021 will bring challenges and opportunities, but I am confident our team has the skills and capacity to successfully navigate the future, and we will continue to focus on implementing strategies that produce long-term value for our shareowners.  My outlook for Capital City remains optimistic, and I appreciate your continued support.”

COVID-19 Update

  • We continue to monitor and adhere to national guidelines and local safety ordinances to protect both clients and associates and respond to changing conditions with the pandemic and its impact on client and associate interactions
  • We continue to monitor COVID-19 case count trends in our markets and respond appropriately to help ensure client and associate safety
  • On November 24, 2020 we proactively closed lobby access to clients in response to higher case count trends in our markets - banking services are being provided via drive-thru or in-person by appointment only (subject to safety protocols)
  • On November 30, 2020 we reinstated remote work arrangements for non-retail associates
  • We continue to provide enhanced digital banking options available for banking products and access to sales associates
  • We continue to support clients with the Small Business Administration Payment Protection Program (“SBA PPP”) by actively assisting with the Round 1 forgiveness process and will offer funding for clients eligible for Round 2

Discussion of Operating Results

Summary Overview

Compared to the third quarter of 2020, the $5.6 million decrease in operating profit was attributable to a $4.5 million decrease in noninterest income, a $1.0 million increase in noninterest expense, and a $0.1 million decrease in net interest income.  

Compared to the fourth quarter of 2019, the $1.7 million increase in operating profit was attributable to a $16.7 million increase in noninterest income, partially offset by higher noninterest expense of $12.2 million, a $1.5 million increase in the provision for credit losses and lower net interest income of $1.3 million.

The $12.1 million increase in operating profit for the full year 2020 versus 2019 was attributable to higher noninterest income of $58.1 million, partially offset by higher noninterest expense of $36.4 million, a $7.6 million increase in the provision for credit losses and lower net interest income of $2.0 million.

The aforementioned year over year variances primarily reflect the acquisition of a 51% membership interest and consolidation of CCHL on March 1, 2020.

Our return on average assets (“ROA”) was 0.84% and our return on average equity (“ROE”) was 8.97% for the fourth quarter of 2020. These metrics were 1.17% and 12.16% for the third quarter of 2020, respectively, and 1.14% and 10.39% for the fourth quarter of 2019, respectively. For the full year 2020, our ROA was 0.93% and our ROE was 9.36% compared to 1.03% and 9.72%, respectively, for 2019.

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2020 was $25.1 million compared to $25.2 million for the third quarter of 2020 and $26.4 million for the fourth quarter of 2019. For the full year 2020, tax-equivalent net interest income totaled $101.8 million compared to $103.9 million for 2019. The decrease compared to all prior periods reflected lower rates earned on investment securities and variable/adjustable rate loans. The year-over-year decline also reflected lower rates on overnight funds. Partially offsetting these declines were higher volumes of earning assets, including lower yielding SBA PPP loans and overnight funds.

The federal funds target rate has remained in the range of 0.00%-0.25% since March 2020 when the Fed reduced its overnight rate by 150 basis points, and as a result we continue to experience lower repricing of our variable/adjustable rate earning assets and investment securities. Our overall cost of funds remained low during the fourth quarter of 2020 at 0.14%, an increase of one basis point compared to the third quarter of 2020, due to a higher mix of seasonal public deposits.   

Our net interest margin for the fourth quarter of 2020 was 3.00%, a decrease of 12 basis points from the third quarter of 2020 and 89 basis points from the fourth quarter of 2019. For the full year 2020, the net interest margin decreased 55 basis points to 3.30%. The decreases were primarily attributable to significant growth in overnight funds which reduced our margin. Our net interest margin for the fourth quarter of 2020, excluding the impact of overnight funds in excess of $200 million, was 3.50%. We discuss the effect of the pandemic related stimulus programs on our balance sheet in more detail below under Discussion of Financial Condition.

Provision for Credit Loss

The provision for credit losses was $1.3 million for both the third and fourth quarters of 2020, and was negative $0.2 million for the fourth quarter of 2019. For the full year 2020, the provision was $9.6 million ($9.0 million for loans held for investment (“HFI”) and $0.6 million for unfunded loan commitments) compared to $2.0 million in 2019. The higher provision in 2020 reflected expected losses due to deterioration in economic conditions related to COVID-19. We discuss the allowance for credit losses and COVID-19 exposure further below.

Noninterest Income and Noninterest Expense

CCHL’s mortgage banking operations impacted our noninterest income and noninterest expense for the three and twelve month periods ended December 31, 2020, and thus, the period over period comparisons reflect the impact of the CCHL consolidation, which occurred on March 1, 2020. The table below provides an overview of CCHL’s impact on our noninterest income and noninterest expense for 2020.

Noninterest income for the fourth quarter of 2020 totaled $30.5 million compared to $35.0 million for the third quarter of 2020 and $15.5 million for the fourth quarter of 2019. For the full year 2020, noninterest income totaled $111.2 million compared to $53.1 million for 2019. The decrease from the third quarter of 2020 was primarily due to lower mortgage banking revenues which reflected a seasonal slowdown in loan production and a lower gain on sale margin. The improvement over both periods of 2019 was primarily attributable to higher mortgage banking revenues at CCHL with higher wealth management fees and bank card fees contributing, but to a lesser extent. For the full year 2020, deposit fees declined primarily due to the impact of government stimulus in the second quarter related to the COVID-19 pandemic. The decline in fees realized in the second quarter reversed in the third and fourth quarters of 2020 reflecting higher utilization of our overdraft product.

Noninterest expense for the fourth quarter of 2020 totaled $41.3 million compared to $40.3 million for the third quarter of 2020 and $29.1 million for the fourth quarter of 2019.   The increase over the third quarter of 2020 was primarily attributable to higher compensation expense of $0.6 million and other real estate expense of $0.3 million. The increase in compensation reflected higher commission expense of $0.2 million, salary expense of $0.2 million, and cash incentive expense of $0.2 million.   Valuation adjustments totaling $0.5 million for two properties drove the increase in other real estate expense. In addition, we recognized $0.4 million in expenses during the fourth quarter of 2020 related to additional funding of our foundation and consulting/legal costs for a strategic initiative.  

For the full year 2020, noninterest expense totaled $150.0 million, an increase of $36.4 million over 2019 primarily attributable to the addition of expenses at CCHL, including compensation expense of $32.4 million, occupancy expense of $2.8 million, and other expense of $4.8 million. Core CCBG noninterest expense decreased $3.6 million and reflected lower compensation expense of $2.5 million, ORE expense of $0.4 million, and other expense of $2.2 million, partially offset by higher occupancy expense of $1.5 million.   The decrease in compensation expense was primarily attributable to lower commission expense of $2.2 million related to the transfer of our legacy mortgage production division to CCHL and to a lesser extent, higher realized loan cost of $0.4 million related to the aforementioned increase in SBA PPP loan originations. A $1.0 million gain from the sale of a banking office in the first quarter of 2020 drove the reduction in ORE expense. The decline in other expense was primarily attributable to lower service cost expense for our pension plan. Higher expense for FF&E depreciation and maintenance agreements (related to technology investment and upgrades), higher than normal premises maintenance, and pandemic related cleaning/supply costs drove the increase in occupancy.   The same aforementioned factors drove the decrease in compensation, occupancy, and other expense from the fourth quarter of 2019.   

Overall, CCHL contributed significantly to the improvement in our efficiency ratio for 2020.

                                         
    Three Months Ended   Twelve Months Ended
    Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Dec 31, 2020   Dec 31, 2019
(Dollars in thousands)   Core
CCBG
  CCHL   Core
CCBG
  CCHL   Core
CCBG
  CCHL   Core
CCBG
  CCHL   Core
CCBG
  CCHL
Deposit Fees $ 4,713   - $ 4,316 $ - $ 4,980 $ - $ 17,800 $ - $ 19,472 $ -
Bank Card Fees   3,462   -   3,389   -   3,131   -   13,044   -   11,994   -
Wealth Management Fees   3,069   -   2,808   -   2,761   -   11,035   -   10,480   -
Mortgage Banking Fees   302   17,409   208   22,775   1,542   -   1,889   61,455   5,321   -
Other   1,205   363   1,182   287   1,414   -   4,992   950   5,786   -
Total Noninterest Income $ 12,751 $ 17,772 $ 11,903 $ 23,062 $ 13,828 $ - $ 48,760 $ 62,405 $ 53,053 $ -
                                         
Salaries $ 12,384 $ 10,398 $ 11,603 $ 10,753 $ 13,374 $ - $ 49,072 $ 31,774 $ 50,688 $ -
Other Associate Benefits   3,470   200   3,616   192   3,989   -   14,789   645   15,664   -
Total Compensation   16,124   10,598   15,219   10,945   17,363   -   63,861   32,419   66,352   -
                                         
Occupancy, Net   5,056   920   5,061   845   4,680   -   19,895   2,764   18,436   -
Other   6,899   1,751   6,930   1,342   7,099   -   26,225   4,798   28,821   -
Total Noninterest Expense $ 28,079 $ 13,269 $ 27,210 $ 13,132 $ 29,142 $ - $ 109,981 $ 39,981 $ 113,609 $ -

Income Taxes

We realized income tax expense of $2.8 million (effective rate of 22%) for the fourth quarter of 2020 compared to $3.2 million (effective rate of 17%) for the third quarter of 2020 and $2.5 million (effective rate of 23%) for the fourth quarter of 2019. For the full year 2020, we realized income tax expense of $10.2 million (effective rate of 19%) compared to $10.0 million (effective rate of 24%) for the same period of 2019.   Tax expense for the fourth quarter of 2020 was unfavorably impacted by a $0.3 million discrete tax expense. The decrease in our effective tax rate in 2020 reflected the impact of converting CCHL to a partnership for tax purposes in the second quarter of 2020.   Absent discrete items, we expect our annual effective tax rate to approximate 18%-19% in 2021. 

Discussion of Financial Condition

Earning Assets

Average earning assets were $3.337 billion for the fourth quarter of 2020, an increase of $113.6 million, or 3.5%, over the third quarter of 2020, and an increase of $642.7 million, or 23.9% over the fourth quarter of 2019. The increase over both prior periods was primarily driven by higher deposit balances, which funded growth in both overnight funds sold and SBA PPP loans. Deposit balances increased as a result of strong core deposit growth, in addition to funding retained at the bank from SBA PPP loans, and various other stimulus programs.

We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $705.1 million during the fourth quarter of 2020 compared to an average net overnight funds sold position of $567.9 million in the third quarter of 2020 and $228.1 million in the fourth quarter of 2019. The increase compared to both prior periods was driven by strong core deposit growth, in addition to pandemic related stimulus programs (see below – Funding).

Average loans HFI decreased $11.7 million, or 0.6%, from the third quarter of 2020 and increased $159.4 million, or 8.7%, over the fourth quarter of 2019. In 2020, we originated SBA PPP loans totaling $190 million (reflected in the commercial loan category) which averaged $185 million in the fourth quarter and totaled $178 million at period-end. Compared to the third quarter of 2020, the decline in average loans was primarily due to lower commercial and commercial mortgage balances with the decline in commercial loans due to the reduction in SBA PPP loans and lower utilization of commercial lines of credit reflective of the economic slowdown.   Period-end HFI loans increased $8.3 million, or 0.4%, over the third quarter of 2020 and increased $170.5 million, or 9.3%, over the fourth quarter of 2019. The increase over the third quarter of 2020 reflected higher home equity, construction, and residential loan balances.

To date, approximately $12 million in SBA PPP loans have been forgiven and paid-off. Forgiveness applications are expected to accelerate over the next three to six months driven by the recent COVID Relief Bill which allows a streamlined forgiveness application process for loans of $150,000 and less. At December 31, 2020, SBA PPP loans of $150,000 or less totaled $69 million. SBA PPP loan fees totaled approximately $0.8 million for the fourth quarter of 2020, $0.6 million for the third quarter of 2020, and $0.4 million for the second quarter of 2020. At December 31, 2020 we had $3.2 million (net) in deferred SBA PPP loan fees.

Allowance for Credit Losses

At December 31, 2020, the allowance for credit losses totaled $23.8 million compared to $23.1 million at September 30, 2020 and $13.9 million at December 31, 2019. At December 31, 2020, the allowance represented 1.19% of HFI loans and provided coverage of 406% of nonperforming loans compared to 1.16% and 420%, respectively, at September 30, 2020 and 0.75% and 311%, respectively, at December 31, 2019. At December 31, 2020, excluding SBA PPP loans (100% government guaranteed), the allowance represented 1.30% of loans held for investment.

The adoption of ASC 326 (“CECL”) on January 1, 2020 had an impact of $4.0 million ($3.3 million increase in the allowance for credit losses and $0.7 million increase in the allowance for unfunded loan commitments (other liability account)). The $6.6 million build (provision of $9.0 million less net charge-offs of $2.4 million) in the allowance for credit losses in 2020 was attributable to stressed economic conditions related to the COVID-19 pandemic and its potential effect on rates of default.

Credit Quality/COVID-19 Exposure

Nonperforming assets (nonaccrual loans and OREO) totaled $6.7 million at December 31, 2020, comparable to September 30, 2020, and a $1.3 million increase over December 31, 2019. Nonaccrual loans totaled $5.9 million at December 31, 2020, a $0.4 million increase over September 30, 2020 and a $1.4 million increase over December 31, 2019. The balance of OREO totaled $0.8 million at December 31, 2020, a decrease of $0.4 million from September 30, 2020 and a $0.1 million decrease from December 31, 2019.

We continue to analyze our loan portfolio for segments that have been affected by the stressed economic and business conditions caused by the pandemic. Certain at-risk segments total 8% of our loan balances at December 31, 2020, including hotel (3%), restaurant (1%), retail and shopping centers (3%), and other (1%). The other segment includes churches, non-profits, education, and recreational. To assist our clients, in mid-March of 2020, we began allowing short term 60 to 90 day loan extensions for affected borrowers. We have extended loans totaling $333 million of which 75% were for commercial borrowers and 25% were for consumer borrowers. Approximately $324 million, or 97% of the loan balances associated with these borrowers have resumed making regularly scheduled payments. Of the $9 million that remains on extension, no loans were classified at December 31, 2020. Of the $324 million that have resumed payments, loan balances totaling $3.5 million were over 30 days delinquent and an additional $0.4 million was on nonaccrual status at December 31, 2020.             

Funding (Deposits/Debt)

Average total deposits were $3.066 billion for the fourth quarter of 2020, an increase of $94.9 million, or 3.2%, over the third quarter of 2020 and $541.2 million, or 21.4%, over the fourth quarter of 2019. The estimated deposit inflows related to the first round of pandemic related stimulus programs that occurred primarily during the second quarter were $179 million (SBA PPP) and $64 million (Economic Impact Payment stimulus checks). Average seasonal public funds increased $30 million over the third quarter of 2020 and $81 million over the fourth quarter of 2019.   For each quarter during 2020, we’ve also realized strong core deposit growth. Given these large increases as well as the incoming second round of stimulus checks, the potential exists for our deposit levels to be volatile in 2021 due to the uncertain timing of the outflows of the stimulus related balances and the economic recovery. It is anticipated that current liquidity levels will remain robust due to our strong overnight funds sold position.

Average short-term borrowings increased $20.7 million over the third quarter of 2020 and $87.8 million over the fourth quarter of 2019, which reflected warehouse line borrowings used to support CCHL’s loans held for sale.

Capital

Shareowners’ equity was $320.8 million at December 31, 2020 compared to $339.4 million at September 30, 2020 and $327.0 million at December 31, 2019.   For the full year of 2020, shareowners’ equity was positively impacted by net income of $31.6 million, a $1.8 million increase in the unrealized gain on investment securities, net adjustments totaling $1.4 million related to transactions under our stock compensation plans, stock compensation accretion of $0.9 million, and a $0.4 million increase in fair value of the interest rate swap related to subordinated debt. Shareowners’ equity was reduced by an $18.2 million increase in the accumulated other comprehensive loss for our pension plan, common stock dividends of $9.6 million ($0.57 per share), a $3.1 million (net of tax) adjustment to retained earnings for the adoption of CECL, reclassification of $9.4 million to temporary equity to increase the redemption value of the non-controlling interest in CCHL, and share repurchases of $2.0 million (99,952 shares).

At December 31, 2020, our total risk-based capital ratio was 17.30% compared to 17.88% at September 30, 2020 and 17.90% at December 31, 2019. Our common equity tier 1 capital ratio was 13.71%, 14.20%, and 14.47%, respectively, on these dates. Our leverage ratio was 9.33%, 9.64%, and 11.25%, respectively, on these dates. All of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio was 6.25% at December 31, 2020 compared to 7.16% and 8.06% at September 30, 2020 and December 31, 2019, respectively.   Our tangible capital ratio was unfavorably impacted at December 31, 2020 by the aforementioned annual adjustment to the other comprehensive loss for our pension plan which was negatively impacted due to the lower discount rate used to calculate the present value of the pension obligation. The lower discount rate reflected the significant decline in long-term interest rates in 2020.  

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $3.8 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 57 banking offices and 86 ATMs/ITMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURES

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Shareowners' Equity (GAAP)   $ 320,837   $ 339,425   $ 335,057   $ 328,507   $ 327,016  
Less: Goodwill (GAAP)     89,095     89,095     89,095     89,275     84,811  
Tangible Shareowners' Equity (non-GAAP) A   231,742     250,330     245,962     239,232     242,205  
Total Assets (GAAP)     3,798,071     3,587,041     3,499,524     3,086,523     3,088,953  
Less: Goodwill (GAAP)     89,095     89,095     89,095     89,275     84,811  
Tangible Assets (non-GAAP) B $ 3,708,976   $ 3,497,946   $ 3,410,429   $ 2,997,248   $ 3,004,142  
Tangible Common Equity Ratio (non-GAAP) A/B   6.25 %   7.16 %   7.21 %   7.98 %   8.06 %
Actual Diluted Shares Outstanding (GAAP) C   16,844,997     16,800,563     16,821,743     16,845,462     16,855,161  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 13.76   $ 14.90   $ 14.62   $ 14.20   $ 14.37  


CAPITAL CITY BANK GROUP, INC.            
EARNINGS HIGHLIGHTS            
Unaudited            
                       
    Three Months Ended   Twelve Months Ended  
(Dollars in thousands, except per share data)   Dec 31, 2020   Sep 30, 2020   Dec 31, 2019   Dec 31, 2020   Dec 31, 2019  
EARNINGS                      
Net Income Attributable to Common Shareowners $ 7,746 $ 10,397 $ 8,565 $ 31,576 $ 30,807  
Diluted Net Income Per Share $ 0.46 $ 0.62 $ 0.51 $ 1.88 $ 1.83  
PERFORMANCE                      
Return on Average Assets   0.84 % 1.17 % 1.14 % 0.93 % 1.03 %
Return on Average Equity   8.97   12.16   10.39   9.36   9.72  
Net Interest Margin   3.00   3.12   3.89   3.30   3.85  
Noninterest Income as % of Operating Revenue   55.00   58.19   34.50   52.32   33.92  
Efficiency Ratio   74.36 % 67.01 % 72.48 % 70.43 % 72.40 %
CAPITAL ADEQUACY                      
Tier 1 Capital   16.19 % 16.77 % 17.16 % 16.19 % 17.16 %
Total Capital   17.30   17.88   17.90   17.30   17.90  
Leverage   9.33   9.64   11.25   9.33   11.25  
Common Equity Tier 1   13.71   14.20   14.47   13.71   14.47  
Tangible Common Equity (1)   6.25   7.16   8.06   6.25   8.06  
Equity to Assets   8.45 % 9.46 % 10.59 % 8.45 % 10.59 %
ASSET QUALITY                      
Allowance as % of Non-Performing Loans   405.66 % 420.30 % 310.99 % 405.66 % 310.99 %
Allowance as a % of Loans HFI   1.19   1.16   0.75   1.19   0.75  
Net Charge-Offs as % of Average Loans HFI   0.09   0.11   0.05   0.12   0.13  
Nonperforming Assets as % of Loans HFI and OREO 0.33   0.34   0.29   0.33   0.29  
Nonperforming Assets as % of Total Assets   0.18 % 0.19 % 0.18 % 0.18 % 0.18 %
STOCK PERFORMANCE                      
High $ 26.35 $ 21.71 $ 30.95 $ 30.62 $ 30.95  
Low   18.14   17.55   25.75   15.61   21.04  
Close $ 24.58 $ 18.79 $ 30.50 $ 24.58 $ 30.50  
Average Daily Trading Volume   22,271   28,517   41,247   35,125   27,496  
                       
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.  


CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited          
                     
  2020     2019  
(Dollars in thousands) Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter
ASSETS                    
Cash and Due From Banks $ 67,919   $ 76,509   $ 75,155   $ 72,676   $ 60,087  
Funds Sold and Interest Bearing Deposits   860,630     626,104     513,273     196,936     318,336  
Total Cash and Cash Equivalents   928,549     702,613     588,428     269,612     378,423  
                     
Investment Securities Available for Sale   324,870     328,253     341,180     382,514     403,601  
Investment Securities Held to Maturity   169,939     202,593     232,178     251,792     239,539  
Total Investment Securities   494,809     530,846     573,358     634,306     643,140  
                     
Loans Held for Sale ("HFS")   114,039     116,561     76,610     82,598     9,509  
                     
Loans Held for Investment ("HFI"):                    
Commercial, Financial, & Agricultural   393,930     402,997     421,270     249,020     255,365  
Real Estate - Construction   135,831     125,804     117,794     122,595     115,018  
Real Estate - Commercial   648,393     656,064     662,434     656,084     625,556  
Real Estate - Residential   342,664     335,713     353,831     354,150     353,642  
Real Estate - Home Equity   205,479     197,363     194,479     196,443     197,360  
Consumer   269,520     268,393     266,417     275,982     279,565  
Other Loans   9,879     10,488     4,883     6,580     7,808  
Overdrafts   730     1,339     1,069     1,533     1,615  
Total Loans Held for Investment   2,006,426     1,998,161     2,022,177     1,862,387     1,835,929  
Allowance for Credit Losses   (23,816 )   (23,137 )   (22,457 )   (21,083 )   (13,905 )
Loans Held for Investment, Net   1,982,610     1,975,024     1,999,720     1,841,304     1,822,024  
                     
Premises and Equipment, Net   86,791     87,192     87,972     87,684     84,543  
Goodwill   89,095     89,095     89,095     89,275     84,811  
Other Real Estate Owned   808     1,227     1,059     1,463     953  
Other Assets   101,370     84,483     83,282     80,281     65,550  
Total Other Assets   278,064     261,997     261,408     258,703     235,857  
Total Assets $ 3,798,071   $ 3,587,041   $ 3,499,524   $ 3,086,523   $ 3,088,953  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,328,809   $ 1,378,314   $ 1,377,033   $ 1,066,607   $ 1,044,699  
NOW Accounts   1,046,408     827,506     808,244     779,467     902,499  
Money Market Accounts   266,649     247,823     240,754     210,124     217,839  
Regular Savings Accounts   474,100     451,944     423,924     384,480     374,396  
Certificates of Deposit   101,594     103,859     105,041     104,907     106,021  
Total Deposits   3,217,560     3,009,446     2,954,996     2,545,585     2,645,454  
                     
Short-Term Borrowings   79,654     90,936     63,958     76,516     6,404  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   3,057     5,268     5,583     5,896     6,514  
Other Liabilities   102,076     71,880     75,702     70,044     50,678  
Total Liabilities   3,455,234     3,230,417     3,153,126     2,750,928     2,761,937  
                     
Temporary Equity   22,000     17,199     11,341     7,088     -  
                     
SHAREOWNERS' EQUITY                    
Common Stock   168     168     168     168     168  
Additional Paid-In Capital   32,283     31,425     31,575     32,100     32,092  
Retained Earnings   332,528     333,545     328,570     321,772     322,937  
Accumulated Other Comprehensive Loss, Net of Tax   (44,142 )   (25,713 )   (25,256 )   (25,533 )   (28,181 )
Total Shareowners' Equity   320,837     339,425     335,057     328,507     327,016  
Total Liabilities, Temporary Equity and Shareowners' Equity $ 3,798,071   $ 3,587,041   $ 3,499,524   $ 3,086,523   $ 3,088,953  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 3,475,904   $ 3,271,672   $ 3,185,418   $ 2,776,228   $ 2,806,913  
Interest Bearing Liabilities   2,024,349     1,780,223     1,700,391     1,614,277     1,666,560  
Book Value Per Diluted Share $ 19.05   $ 20.20   $ 19.92   $ 19.50   $ 19.40  
Tangible Book Value Per Diluted Share(1)   13.76     14.90     14.62     14.20     14.37  
Actual Basic Shares Outstanding   16,791     16,761     16,780     16,812     16,772  
Actual Diluted Shares Outstanding   16,845     16,801     16,822     16,845     16,855  
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.


CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited              
                             
                        Twelve Months Ended
    2020     2019     December 31,
(Dollars in thousands, except per share data)   Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  2020     2019
                             
INTEREST INCOME                            
Interest and Fees on Loans $ 23,878   $ 23,594   $ 23,687   $ 23,593   $ 23,842   $ 94,752   $ 94,215
Investment Securities   2,096     2,426     2,737     3,015     3,221     10,274     13,434
Funds Sold   180     146     88     757     945     1,171     5,187
Total Interest Income   26,154     26,166     26,512     27,365     28,008     106,197     112,836
                             
INTEREST EXPENSE                            
Deposits   201     190     218     939     1,157     1,548     6,840
Short-Term Borrowings   639     498     421     132     16     1,690     109
Subordinated Notes Payable   311     316     374     471     525     1,472     2,287
Other Long-Term Borrowings   30     40     41     50     56     161     257
Total Interest Expense   1,181     1,044     1,054     1,592     1,754     4,871     9,493
Net Interest Income   24,973     25,122     25,458     25,773     26,254     101,326     103,343
Provision for Credit Losses   1,342     1,308     2,005     4,990     (162 )   9,645     2,027
Net Interest Income after Provision for Credit Losses   23,631     23,814     23,453     20,783     26,416     91,681     101,316
                             
NONINTEREST INCOME                            
Deposit Fees   4,713     4,316     3,756     5,015     4,980     17,800     19,472
Bank Card Fees   3,462     3,389     3,142     3,051     3,131     13,044     11,994
Wealth Management Fees   3,069     2,808     2,554     2,604     2,761     11,035     10,480
Mortgage Banking Fees   17,711     22,983     19,397     3,253     1,542     63,344     5,321
Other   1,568     1,469     1,350     1,555     1,414     5,942     5,786
Total Noninterest Income   30,523     34,965     30,199     15,478     13,828     111,165     53,053
                             
NONINTEREST EXPENSE                            
Compensation   26,722     26,164     23,658     19,736     17,363     96,280     66,352
Occupancy, Net   5,976     5,906     5,798     4,979     4,680     22,659     18,436
Other Real Estate, Net   567     219     116     (798 )   102     104     546
Other   8,083     8,053     7,731     7,052     6,997     30,919     28,275
Total Noninterest Expense   41,348     40,342     37,303     30,969     29,142     149,962     113,609
                             
OPERATING PROFIT   12,806     18,437     16,349     5,292     11,102     52,884     40,760
Income Tax Expense   2,833     3,165     2,950     1,282     2,537     10,230     9,953
Net Income   9,973     15,272     13,399     4,010     8,565     42,654     30,807
Pre-Tax Income Attributable to Noncontrolling Interest (2,227 )   (4,875 )   (4,253 )   277     -     (11,078 )   -
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 7,746   $ 10,397   $ 9,146   $ 4,287   $ 8,565   $ 31,576   $ 30,807
                             
PER COMMON SHARE                            
Basic Net Income $ 0.46   $ 0.62   $ 0.55   $ 0.25   $ 0.51   $ 1.88   $ 1.84
Diluted Net Income   0.46     0.62     0.55     0.25     0.51     1.88     1.83
Cash Dividend $ 0.15   $ 0.14   $ 0.14   $ 0.14   $ 0.13   $ 0.57   $ 0.48
AVERAGE SHARES                            
Basic   16,763     16,771     16,797     16,808     16,750     16,785     16,770
Diluted   16,817     16,810     16,839     16,842     16,834     16,822     16,827


CAPITAL CITY BANK GROUP, INC.               
ALLOWANCE FOR CREDIT LOSSES                
AND RISK ELEMENT ASSETS               
Unaudited               
                               
                          Twelve Months Ended
    2020     2019       December 31,
(Dollars in thousands, except per share data)   Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
    2020     2019  
                               
ALLOWANCE FOR CREDIT LOSSES                              
Balance at Beginning of Period $ 23,137   $ 22,457   $ 21,083   $ 13,905   $ 14,319     $ 13,905   $ 14,210  
Impact of Adopting ASC 326 (CECL)   -     -     -     3,269     -       3,269     -  
Provision for Credit Losses - HFI   1,165     1,265     1,615     4,990     (162 )     9,035     2,027  
Net Charge-Offs   486     585     241     1,081     252       2,393     2,332  
Balance at End of Period(2) $ 23,816   $ 23,137   $ 22,457   $ 21,083   $ 13,905     $ 23,816   $ 13,905  
As a % of Loans HFI   1.19 %   1.16 %   1.11 %   1.13 %   0.75 %     1.19 %   0.75 %
As a % of Nonperforming Loans   405.66 %   420.30 %   322.37 %   432.61 %   310.99 %     405.66 %   310.99 %
                               
CHARGE-OFFS                              
Commercial, Financial and Agricultural $ 104   $ 137   $ 186   $ 362   $ 149     $ 789   $ 768  
Real Estate - Construction   -     -     -     -     58       -     281  
Real Estate - Commercial   -     17     -     11     33       28     214  
Real Estate - Residential   38     1     1     110     27       150     400  
Real Estate - Home Equity   10     58     52     31     -       151     430  
Consumer   668     619     634     864     819       2,785     2,878  
Overdrafts(3)   564     450     541     702     -       2,257     -  
Total Charge-Offs $ 1,384   $ 1,282   $ 1,414   $ 2,080   $ 1,086     $ 6,160   $ 4,971  
                               
RECOVERIES                              
Commercial, Financial and Agricultural $ 64   $ 74   $ 74   $ 40   $ 127     $ 252   $ 345  
Real Estate - Construction   50     -     -     -     -       50     -  
Real Estate - Commercial   27     30     70     191     266       318     578  
Real Estate - Residential   153     35     51     40     116       279     429  
Real Estate - Home Equity   40     41     64     33     25       178     175  
Consumer   306     280     365     268     300       1,219     1,112  
Overdrafts(3)   258     237     549     427     -       1,471     -  
Total Recoveries $ 898   $ 697   $ 1,173   $ 999   $ 834     $ 3,767   $ 2,639  
                               
NET CHARGE-OFFS $ 486   $ 585   $ 241   $ 1,081   $ 252     $ 2,393   $ 2,332  
                               
Net Charge-Offs as a % of Average Loans HFI(1)   0.09 %   0.11 %   0.05 %   0.23 %   0.05 %     0.12 %   0.13 %
                               
RISK ELEMENT ASSETS                              
Nonaccruing Loans $ 5,871   $ 5,505   $ 6,966   $ 4,874   $ 4,472            
Other Real Estate Owned   808     1,227     1,059     1,463     953            
Total Nonperforming Assets ("NPAs") $ 6,679   $ 6,732   $ 8,025   $ 6,337   $ 5,425            
                               
Past Due Loans 30-89 Days $ 4,594   $ 3,191   $ 2,948   $ 5,077   $ 4,871            
Past Due Loans 90 Days or More   -     -     -     -     -            
Classified Loans   17,631     16,772     17,091     16,548     20,847            
Performing Troubled Debt Restructuring's $ 13,887   $ 14,693   $ 15,133   $ 15,934   $ 16,888            
                               
Nonperforming Loans as a % of Loans HFI   0.29 %   0.28 %   0.34 %   0.26 %   0.24 %          
NPAs as a % of Loans HFI and Other Real Estate 0.33 %   0.34 %   0.40 %   0.34 %   0.29 %          
NPAs as a % of Total Assets   0.18 %   0.19 %   0.23 %   0.21 %   0.18 %          
                               
(1) Annualized               
(2) Does not include $1.6 million for unfunded commitments recorded in other liabilities at 12/31/2020.              
(3) Prior to the first quarter 2020, overdraft losses were reflected in noninterest income (deposit fees).          


CAPITAL CITY BANK GROUP, INC.               
AVERAGE BALANCE AND INTEREST RATES(1)                       
Unaudited                                                    
                                                                                                   
    Fourth Quarter 2020     Third Quarter 2020     Second Quarter 2020     First Quarter 2020     Fourth Quarter 2019     Dec 2020 YTD     Dec 2019 YTD  
(Dollars in thousands)   Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
    Average
Balance
  Interest   Average
Rate
 
ASSETS:                                                                                                  
Loans HFI and HFS $ 2,114,522   $ 23,981   4.52 % $ 2,097,700   $ 23,698   4.50 % $ 2,057,925   $ 23,785   4.65 % $ 1,882,703     23,692   5.06 % $ 1,846,190   $ 23,958   5.15 % $ 2,038,701   $ 95,156   4.67 % $ 1,822,087   $ 94,662   5.20 %
                                                                                                   
Investment Securities                                                                                                  
Taxable Investment Securities   513,277     2,072   1.61     553,395     2,401   1.73     601,509     2,708   1.80     629,512     2,995   1.91     610,046     3,186   2.08     574,199     10,176   1.77     612,541     13,123   2.14  
Tax-Exempt Investment Securities   4,485     30   2.71     4,860     32   2.66     5,865     37   2.51     5,293     25   1.86     10,327     43   1.67     5,123     124   2.42     24,471     390   1.60  
                                                                                                   
Total Investment Securities   517,762     2,102   1.62     558,255     2,433   1.74     607,374     2,745   1.81     634,805     3,020   1.91     620,373     3,229   2.08     579,322     10,300   1.78     637,012     13,513   2.12  
                                                                                                   
Funds Sold   705,125     180   0.10     567,883     146   0.10     351,473     88   0.10     234,372     757   1.30     228,137     945   1.64     465,652     1,171   0.25     237,999     5,187   2.18  
                                                                                                   
Total Earning Assets   3,337,409   $ 26,263   3.14 %   3,223,838   $ 26,277   3.25 %   3,016,772   $ 26,618   3.55 %   2,751,880   $ 27,469   4.01 %   2,694,700   $ 28,132   4.14 %   3,083,675   $ 106,627   3.46 %   2,697,098   $ 113,362   4.20 %
                                                                                                   
Cash and Due From Banks   73,968               69,893               72,647               56,958               53,174               68,386               52,453            
Allowance for Loan Losses   (23,725 )             (22,948 )             (21,642 )             (14,389 )             (14,759 )             (20,690 )             (14,622 )          
Other Assets   264,784               268,549               261,449               244,339               249,089               259,700               252,127            
                                                                                                   
Total Assets $ 3,652,436             $ 3,539,332             $ 3,329,226             $ 3,038,788             $ 2,982,204             $ 3,391,071             $ 2,987,056            
                                                                                                   
LIABILITIES:                                                                                                  
Interest Bearing Deposits                                                                                                  
NOW Accounts $ 879,564   $ 66   0.03 % $ 826,776   $ 61   0.03 % $ 789,378   $ 78   0.04 % $ 808,811   $ 725   0.36 % $ 755,625   $ 889   0.47 % $ 826,280   $ 930   0.11 % $ 805,134   $ 5,502   0.68 %
Money Market Accounts   261,543     34   0.05     247,185     32   0.05     222,377     40   0.07     212,211     117   0.22     227,479     170   0.30     235,931     223   0.09     235,845     946   0.40  
Savings Accounts   466,116     57   0.05     438,762     54   0.05     409,366     50   0.05     379,237     46   0.05     372,518     46   0.05     423,529     207   0.05     370,430     182   0.05  
Time Deposits   102,809     44   0.17     104,522     43   0.16     104,718     50   0.19     105,542     51   0.19     108,407     52   0.19     104,393     188   0.18     113,499     210   0.19  
Total Interest Bearing Deposits   1,710,032     201   0.05 %   1,617,245     190   0.05 %   1,525,839     218   0.06 %   1,505,801     939   0.25 %   1,464,029     1,157   0.31 %   1,590,133     1,548   0.10 %   1,524,908     6,840   0.45 %
                                                                                                   
Short-Term Borrowings   95,280     639   2.67 %   74,557     498   2.66 %   73,377     421   2.31 %   32,915     132   1.61 %   7,448     16   0.87 %   69,119     1,690   2.44 %   9,275     109   1.19 %
Subordinated Notes Payable   52,887     311   2.30     52,887     316   2.34     52,887     374   2.80     52,887     471   3.52     52,887     525   3.88     52,887     1,472   2.74     52,887     2,287   4.26  
Other Long-Term Borrowings   3,700     30   3.18     5,453     40   2.91     5,766     41   2.84     6,312     50   3.21     6,723     56   3.33     5,304     161   3.03     7,393     257   3.48  
                                                                                                   
Total Interest Bearing Liabilities   1,861,899   $ 1,181   0.25 %   1,750,142   $ 1,044   0.24 %   1,657,869   $ 1,054   0.26 %   1,597,915   $ 1,592   0.40 %   1,531,087   $ 1,754   0.45 %   1,717,443   $ 4,871   0.28 %   1,594,463   $ 9,493   0.60 %
                                                                                                   
Noninterest Bearing Deposits   1,356,104               1,354,032               1,257,614               1,046,889               1,060,922               1,254,214               1,012,581            
Other Liabilities   74,605               83,192               72,073               59,587               63,291               72,400               62,940            
                                                                                                   
Total Liabilities   3,292,608               3,187,366               2,987,556               2,704,391               2,655,300               3,044,057               2,669,984            
Temporary Equity   16,154               11,893               8,155               2,506.00               -               9,701               -            
                                                                                                   
SHAREOWNERS' EQUITY:   343,674               340,073               333,515               331,891               326,904               337,313               317,072            
                                                                                                   
Total Liabilities, Temporary Equity and Shareowners' Equity $ 3,652,436             $ 3,539,332             $ 3,329,226             $ 3,038,788             $ 2,982,204             $ 3,391,071             $ 2,987,056            
                                                                                                   
Interest Rate Spread     $ 25,082   2.88 %     $ 25,233   3.01 %     $ 25,564   3.30 %     $ 25,877   3.61 %     $ 26,378   3.69 %     $ 101,756   3.18 %     $ 103,869   3.61 %
                                                                                                   
Interest Income and Rate Earned(1)       26,263   3.14         26,277   3.25         26,618   3.55         27,469   4.01         28,132   4.14         106,627   3.46         113,362   4.20  
Interest Expense and Rate Paid(2)       1,181   0.14         1,044   0.13         1,054   0.14         1,592   0.23         1,754   0.26         4,871   0.16         9,493   0.35  
                                                                                                   
Net Interest Margin     $ 25,082   3.00 %     $ 25,233   3.12 %     $ 25,564   3.41 %     $ 25,877   3.78 %     $ 26,378   3.89 %     $ 101,756   3.30 %     $ 103,869   3.85 %
                                                                                                   
(1) Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate. 
(2) Rate calculated based on average earning assets.                                
 

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



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Source: Capital City Bank Group