Capital City Bank Group, Inc. Reports Third Quarter 2022 Results

TALLAHASSEE, Fla., Oct. 25, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $11.3 million, or $0.67 per diluted share, for the third quarter of 2022 compared to net income of $8.7 million, or $0.51 per diluted share, for the second quarter of 2022, and $10.1 million, or $0.60 per diluted share, for the third quarter of 2021.

For the first nine months of 2022, net income attributable to common shareowners totaled $28.5 million, or $1.68 per diluted share, compared to net income of $27.0 million, or $1.60 per diluted share, for the same period of 2021.

QUARTER HIGHLIGHTS (3rd Quarter 2022 versus 2nd Quarter 2022)

  • Continued strong growth in net interest income of 18% - net interest margin percentage grew 44 bps to 3.31%
  • Solid loan growth of 6.0% (end of period) and 8.6% (average)
  • Continued strong credit quality metrics – higher credit loss provision driven primarily by loan growth
  • Noninterest income decreased $2.0 million, or 7.9%, due to lower mortgage banking revenues at CCHL -- strong adjustable rate portfolio production by CCHL contributed to loan growth for the quarter
  • Noninterest expense decreased $0.7 million, or 1.7%, primarily due to lower mortgage and wealth commissions, partially offset by higher performance-based compensation
  • Tangible book value per share increased $0.07, or 0.4%

“We continued to see steady loan growth and margin expansion this quarter, which contributed to nice improvement in our operating leverage,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “I was particularly pleased to see tangible book value growth and stable deposit balances, both current headwinds for the industry. On a relative basis, our residential mortgage business has held up well given the higher rate environment and slowdown in secondary market loan sales, and we continued to use our balance sheet to book a steady flow of adjustable rate portfolio production, which has contributed to our earnings. Our credit metrics remain strong, and a large portion of our credit loss provision for the quarter was driven by loan growth. While the environment remains highly uncertain, I like our positioning, particularly, the value that our core deposit franchise should contribute in a higher rate environment. I also feel good about our credit risk management discipline. The team is excited to open two new full-service offices in Watersound, Florida and Marietta, Georgia in the fourth quarter and to ramp up our service to those communities. As we plan for 2023, we are focused on strategies that will further diversify and grow our revenue base, both product and geography, and improve our efficiency.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the third quarter of 2022 totaled $33.4 million, compared to $28.4 million for the second quarter of 2022, and $27.7 million for the third quarter of 2021. For the first nine months of 2022, tax-equivalent net interest income totaled $86.6 million compared to $78.4 million for the same period of 2021. Compared to the referenced prior periods, the increase primarily reflected strong loan growth, higher investment balances, and higher rates across a majority of our earning assets.

Our net interest margin for the third quarter of 2022 was 3.31%, an increase of 44 basis points over the second quarter of 2022 and 33 basis points over the third quarter of 2021, both driven by higher interest rates and an overall improved earning asset mix. For the month of September 2022, our net interest margin was 3.41%. Excluding the impact of overnight funds in excess of $200 million, our net interest margin for the third quarter of 2022 was 3.54%. Compared to the nine month period of 2021, the net interest margin remained flat at 2.91% as the favorable impact of higher interest rates and an improved earning asset mix offset the favorable impact in 2021 from a significant level of SBA PPP fee income.

Provision for Credit Losses

We recorded a provision for credit losses of $2.1 million for the third quarter of 2022 compared to $1.5 million in the second quarter of 2022 and no provision for the third quarter of 2021. For the first nine months of 2022, the provision was $3.6 million compared to a benefit of $1.6 million for the same period of 2021. The higher level of provision compared to all prior periods was primarily attributable to strong loan growth. The credit loss provision in 2021 was favorably impacted by strong loan recoveries. We discuss the allowance for credit losses further below. 

Noninterest Income and Noninterest Expense

Noninterest income for the third quarter of 2022 totaled $22.9 million compared to $24.9 million for the second quarter of 2022 and $26.6 million for the third quarter of 2021. The $2.0 million decrease from the second quarter of 2022 was primarily attributable to lower mortgage banking revenues of $1.9 million. Compared to the third quarter of 2021, the $3.6 million decrease was attributable to lower mortgage banking revenues of $5.2 million, partially offset by higher deposit fees of $0.9 million, other income of $0.3 million, and wealth management fees of $0.3 million.

For the first nine months of 2022, noninterest income totaled $73.7 million compared to $82.9 million for the same period of 2021 and reflected lower mortgage banking revenues of $17.5 million, partially offset by higher deposit fees of $3.0 million and wealth management fees of $4.4 million (primarily insurance revenues of $3.5 million and retail brokerage fees of $0.9 million). Lower mortgage banking revenues for 2022 reflected a reduction in refinancing activity and, to a lesser degree, lower purchase mortgage originations primarily driven by higher interest rates. In addition, gain on sale margins have been pressured due to a lower level of governmental loan originations and mandatory delivery loan sales (both of which provide a higher gain on sale percentage). During 2022, strong best efforts origination volume has allowed us to book a steady flow of adjustable rate residential loans in our portfolio and has contributed to loan growth and earnings. In addition, continued stability in our construction/permanent loan program has partially offset the slowdown in secondary market originations. For 2022, Capital City Home Loans (CCHL) contributed $0.5 million ($0.03 per diluted share) to earnings versus $3.4 million ($0.21 per diluted share) in 2021, which has largely been offset by a $1.2 million ($0.07 per diluted share) contribution to earnings by Capital City Strategic Wealth (CCSW) and improvement in both deposit fees and retail brokerage fees, which reflects our continued commitment to revenue diversification.

Noninterest expense for the third quarter of 2022 totaled $39.8 million compared to $40.5 million for the second quarter of 2022 and $39.7 million for the third quarter of 2021. The $0.7 million decrease from the second quarter of 2022 was primarily attributable to lower variable/performance-based compensation expense at CCHL and CCSW totaling $1.5 million, partially offset by variable/performance-based compensation of $0.6 million and base salaries (primarily annual merit raises) of $0.2 million at the Bank. Compared to the third quarter of 2021, the $0.1 million increase reflected higher other real estate expense of $1.0 million, partially offset by lower compensation expense of $0.5 million and pension settlement expense of $0.4 million. The higher level of other real estate expense was attributable to a gain from the sale of a banking office in the third quarter of 2021. The decrease in compensation expense reflected lower variable/performance-based compensation at CCHL totaling $1.6 million, partially offset by higher variable/performance-based compensation of $0.7 million and base salaries of $0.3 million at the Bank.

For the first nine months of 2022, noninterest expense totaled $119.5 million compared to $122.3 million for the same period of 2021 and reflected lower compensation expense of $1.7 million, pension settlement expense of $2.0 million, and other expense of $0.8 million, partially offset by higher other real estate expense of $1.4 million and occupancy expense of $0.3 million. The reduction in compensation expense was primarily due to lower variable/performance-based compensation at CCHL totaling $7.0 million, partially offset by higher variable/performance-based compensation totaling $2.8 million, base salaries (merit and new market staffing additions) of $2.0 million, and associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million at the Bank. A lower level of lump sum retirement payments drove the decrease in pension settlement expense compared to both prior year periods. We expect additional pension settlement expense for the remainder of 2022 based on our current estimate of lump sum pension pay-outs to retirees. The net $0.8 million decrease in other expense reflected lower pension plan expense (non-service component) of $3.7 million that was partially offset by higher advertising and travel/entertainment expense totaling $1.0 million (return to pre-pandemic levels and market expansion), mortgage servicing right amortization of $0.6 million at CCHL, other losses of $0.5 million (debit card fraud), and other miscellaneous expenses related to training, hiring, and variable loan related costs. The sale of two banking offices in 2021 drove the increase in other real estate expense.

Income Taxes

We realized income tax expense of $3.1 million (effective rate of 21.4%) for the third quarter of 2022 compared to $2.2 million (effective rate of 19.4%) for the second quarter of 2022 and $2.9 million (effective rate of 20.3%) for the third quarter of 2021. For the first nine months of 2022, we realized income tax expense of $7.5 million (effective rate of 20.3%) compared to $7.8 million (effective rate of 19.4%) for the same period of 2021. Absent discrete items, we expect our annual effective tax rate to approximate 21%.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.010 billion for the third quarter of 2022, an increase of $35.7 million, or 0.9%, over the second quarter of 2022, and an increase of $218.6 million, or 5.8%, over the fourth quarter of 2021. The increase over both prior periods was primarily driven by higher deposit balances (see below – Funding). The mix of earning assets continues to improve driven by strong loan growth.

We maintained an average net overnight funds (interest bearing deposits with banks plus FED funds sold less FED funds purchased) sold position of $570.0 million in the third quarter of 2022 compared to $691.9 million in the second quarter of 2022 and $789.1 million in the fourth quarter of 2021. The declining overnight funds position reflects growth in average loans.

Average loans held for investment (“HFI”) increased $179.4 million, or 8.6%, over the second quarter of 2022 and increased $315.8 million, or 16.2%, over the fourth quarter of 2021. Period end loans increased $132.5 million, or 6.0%, over the second quarter of 2022 and $414.7 million, or 21.5%, over the fourth quarter of 2021. The growth in 2022 has been broad based with increases realized in all loan categories, more significantly, residential mortgage, residential construction and commercial real estate. The slowdown in secondary market residential loan sales has allowed us to book a steady flow of CCHL’s adjustable rate production in our loan portfolio through 2022.

Allowance for Credit Losses

At September 30, 2022, the allowance for credit losses for HFI loans totaled $22.5 million compared to $21.3 million at June 30, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 9. The $1.2 million increase in the allowance for the third quarter was driven by incremental reserves needed for loan growth and, to a lesser extent, a higher projected rate of unemployment and its potential effect on rates of default. Net charge-offs decreased $0.4 million to $0.7 million for the third quarter of 2022. At September 30, 2022, the allowance represented 0.96% of HFI loans and provided coverage of 964% of nonperforming loans compared to 0.96% and 678%, respectively, at June 30, 2022, and 1.12% and 500%, respectively, at December 31, 2021.

Credit Quality

Overall credit quality remains strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $2.4 million at September 30, 2022 compared to $3.2 million at June 30, 2022 and $4.3 million at December 31, 2021. At September 30, 2022, nonperforming assets as a percent of total assets equaled 0.06%, compared to 0.07% at June 30, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $2.4 million at September 30, 2022, a $0.7 million decrease from June 30, 2022 and a $1.9 million decrease from December 31, 2021. Further, classified loans increased $1.4 million over the second quarter of 2022 to $21.0 million.

Funding (Deposits/Debt)

Average total deposits were $3.770 billion for the third quarter of 2022, an increase of $4.5 million, or 0.1%, over the second quarter of 2022 and $220.7 million, or 6.2%, over the fourth quarter of 2021. Compared to the second quarter of 2022, the increase reflected higher noninterest bearing and savings balances. Compared to the fourth quarter of 2021, we have had strong growth in our noninterest bearing deposits, NOW accounts, and savings account balances. Over the past few years, we have experienced strong core deposit growth. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment. It is anticipated that liquidity levels will remain strong given our current level of overnight funds.

Average borrowings increased $14.9 million over the second quarter of 2022, primarily due to an increase in short-term repurchase agreements and CCHL’s warehouse line.

Capital

Shareowners’ equity was $373.2 million at September 30, 2022 compared to $371.7 million at June 30, 2022 and $383.2 million at December 31, 2021. For the first nine months of 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $28.5 million, a $3.3 million increase in the fair value of the interest rate swap related to subordinated debt, stock compensation accretion of $0.9 million, net adjustments totaling $0.8 million related to transactions under our stock compensation plans, and a $0.4 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $8.3 million ($0.49 per share) and a $35.6 million increase in the unrealized loss on investment securities.

At September 30, 2022, our total risk-based capital ratio was 15.75% compared to 16.07% at June 30, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 12.83%, 13.07%, and 13.86%, respectively, on these dates. Our leverage ratio was 8.91%, 8.77%, and 8.95%, respectively, on these dates. Further, our tangible common equity ratio was 6.61% at September 30, 2022 compared to 6.54% and 6.95% at June 30, 2022 and December 31, 2021, respectively. The decline in our regulatory capital ratios compared to 2021 was attributable to strong loan growth during 2022. At September 30, 2022, all of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.

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 $4.3 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, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection 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: fluctuations in inflation, interest rates, or monetary policies; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; the effects of security breaches and computer viruses that may affect our computer systems; 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; risks from the ongoing COVID-19 pandemic; 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, 2021, 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 and other intangibles 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) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021
Shareowners' Equity (GAAP)   $ 373,165   $ 371,675   $ 372,145   $ 383,166   $ 348,868  
Less: Goodwill and Other Intangibles (GAAP)     93,133     93,173     93,213     93,253     93,293  
Tangible Shareowners' Equity (non-GAAP) A   280,032     278,502     278,932     289,913     255,575  
Total Assets (GAAP)     4,332,671     4,354,297     4,310,045     4,263,849     4,048,733  
Less: Goodwill and Other Intangibles (GAAP)     93,133     93,173     93,213     93,253     93,293  
Tangible Assets (non-GAAP) B $ 4,239,538   $ 4,261,124   $ 4,216,832   $ 4,170,596   $ 3,955,440  
Tangible Common Equity Ratio (non-GAAP) A/B   6.61 %   6.54 %   6.61 %   6.95 %   6.46 %
Actual Diluted Shares Outstanding (GAAP) C   16,998,177     16,981,614     16,962,362     16,935,389     16,911,715  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 16.47   $ 16.40   $ 16.44   $ 17.12   $ 15.11  


CAPITAL CITY BANK GROUP, INC.                      
EARNINGS HIGHLIGHTS                      
Unaudited                      
                       
    Three Months Ended   Nine Months Ended  
(Dollars in thousands, except per share data)   Sep 30, 2022   Jun 30, 2022   Sep 30, 2021   Sep 30, 2022   Sep 30, 2021  
EARNINGS                      
Net Income Attributable to Common Shareowners $ 11,315 $ 8,713 $ 10,091 $ 28,483 $ 27,024    
Diluted Net Income Per Share $ 0.67 $ 0.51 $ 0.60 $ 1.68 $ 1.60    
PERFORMANCE                      
Return on Average Assets   1.03 % 0.81 % 0.99 % 0.88 % 0.92   %
Return on Average Equity   11.83   9.36   11.72   10.05   10.87    
Net Interest Margin   3.31   2.87   2.98   2.91   2.91    
Noninterest Income as % of Operating Revenue   40.76   46.78   48.99   46.03   51.47    
Efficiency Ratio   70.66 % 75.96 % 73.09 % 74.60 % 75.83   %
CAPITAL ADEQUACY                      
Tier 1 Capital   14.80 % 15.13 % 15.69 % 14.80 % 15.69   %
Total Capital   15.75   16.07   16.70   15.75   16.70    
Leverage   8.91   8.77   9.05   8.91   9.05    
Common Equity Tier 1   12.83   13.07   13.45   12.83   13.45    
Tangible Common Equity (1)   6.61   6.54   6.46   6.61   6.46    
Equity to Assets   8.61 % 8.54 % 8.62 % 8.61 % 8.62   %
ASSET QUALITY                      
Allowance as % of Non-Performing Loans   934.53 % 677.57 % 710.39 % 934.53 % 710.39   %
Allowance as a % of Loans HFI   0.96   0.96   1.11   0.96   1.11    
Net Charge-Offs as % of Average Loans HFI   0.12   0.22   0.03   0.17   (0.05 )  
Nonperforming Assets as % of Loans HFI and OREO   0.10   0.15   0.17   0.10   0.17    
Nonperforming Assets as % of Total Assets   0.06 % 0.07 % 0.08 % 0.06 % 0.08   %
STOCK PERFORMANCE                      
High $ 33.93 $ 28.55 $ 26.10 $ 33.93 $ 28.98    
Low   27.41   24.43   22.02   24.43   21.42    
Close $ 31.11 $ 27.89 $ 24.74 $ 31.11 $ 24.74    
Average Daily Trading Volume   30,546   25,342   30,515   26,677   29,925    
                       
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.        
                       


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
  2022     2021  
(Dollars in thousands) Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter
ASSETS                    
Cash and Due From Banks $ 72,686   $ 91,209   $ 77,963   $ 65,313   $ 73,132  
Funds Sold and Interest Bearing Deposits   497,679     603,315     790,465     970,041     708,988  
Total Cash and Cash Equivalents   570,365     694,524     868,428     1,035,354     782,120  
                     
Investment Securities Available for Sale   416,745     601,405     624,361     654,611     645,844  
Investment Securities Held to Maturity   676,178     528,258     518,678     339,601     341,228  
Other Equity Securities   1,349     900     855     861     -  
Total Investment Securities   1,094,272     1,130,563     1,143,894     995,073     987,072  
                     
Loans Held for Sale   50,304     48,708     50,815     52,532     77,036  
                     
Loans Held for Investment ("HFI"):                    
Commercial, Financial, & Agricultural   246,304     247,902     230,213     223,086     218,929  
Real Estate - Construction   237,718     225,664     174,293     174,394     177,443  
Real Estate - Commercial   715,870     699,093     669,110     663,550     683,379  
Real Estate - Residential   573,963     478,121     368,020     346,756     355,958  
Real Estate - Home Equity   202,512     194,658     188,174     187,821     187,642  
Consumer   347,949     359,906     347,785     321,511     309,983  
Other Loans   20,822     6,854     6,692     13,265     6,792  
Overdrafts   1,047     1,455     1,222     1,082     1,299  
Total Loans Held for Investment   2,346,185     2,213,653     1,985,509     1,931,465     1,941,425  
Allowance for Credit Losses   (22,510 )   (21,281 )   (20,756 )   (21,606 )   (21,500 )
Loans Held for Investment, Net   2,323,675     2,192,372     1,964,753     1,909,859     1,919,925  
                     
Premises and Equipment, Net   81,736     82,932     82,518     83,412     84,750  
Goodwill and Other Intangibles   93,133     93,173     93,213     93,253     93,293  
Other Real Estate Owned   13     90     17     17     192  
Other Assets   119,173     111,935     106,407     94,349     104,345  
Total Other Assets   294,055     288,130     282,155     271,031     282,580  
Total Assets $ 4,332,671   $ 4,354,297   $ 4,310,045   $ 4,263,849   $ 4,048,733  
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,737,046   $ 1,724,671   $ 1,704,329   $ 1,668,912   $ 1,592,345  
NOW Accounts   990,021     1,036,757     1,062,498     1,070,154     926,201  
Money Market Accounts   292,932     289,337     288,877     274,611     286,065  
Regular Savings Accounts   646,526     639,594     614,599     599,811     559,714  
Certificates of Deposit   92,853     95,899     95,204     99,374     101,637  
Total Deposits   3,759,378     3,786,258     3,765,507     3,712,862     3,465,962  
                     
Short-Term Borrowings   52,271     39,463     30,865     34,557     51,410  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   562     612     806     884     1,610  
Other Liabilities   84,657     93,319     77,323     67,735     113,720  
Total Liabilities   3,949,755     3,972,539     3,927,388     3,868,925     3,685,589  
                     
Temporary Equity   9,751     10,083     10,512     11,758     14,276  
SHAREOWNERS' EQUITY                    
Common Stock   170     170     169     169     169  
Additional Paid-In Capital   36,234     35,738     35,188     34,423     33,876  
Retained Earnings   384,964     376,532     370,531     364,788     359,550  
Accumulated Other Comprehensive Loss, Net of Tax   (48,203 )   (40,765 )   (33,743 )   (16,214 )   (44,727 )
Total Shareowners' Equity   373,165     371,675     372,145     383,166     348,868  
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,332,671   $ 4,354,297   $ 4,310,045   $ 4,263,849   $ 4,048,733  
OTHER BALANCE SHEET DATA                    
Earning Assets $ 3,988,440   $ 3,996,238   $ 3,970,684   $ 3,949,111   $ 3,714,521  
Interest Bearing Liabilities   2,128,052     2,154,549     2,145,736     2,132,278     1,979,524  
Book Value Per Diluted Share $ 21.95   $ 21.89   $ 21.94   $ 22.63   $ 20.63  
Tangible Book Value Per Diluted Share(1)   16.47     16.40     16.44     17.12     15.11  
Actual Basic Shares Outstanding   16,962     16,959     16,948     16,892     16,878  
Actual Diluted Shares Outstanding   16,998     16,982     16,962     16,935     16,912  
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.


                             
CAPITAL CITY BANK GROUP, INC.                            
CONSOLIDATED STATEMENT OF OPERATIONS                      
Unaudited                            
                             
    2022     2021     September 30,
(Dollars in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2022     2021  
INTEREST INCOME                            
Loans, including Fees $ 27,761   $ 24,072   $ 22,133   $ 22,744   $ 25,885   $ 73,966   $ 73,817  
Investment Securities   4,372     3,840     2,896     2,505     2,350     11,108     6,287  
Federal Funds Sold and Interest Bearing Deposits   3,231     1,408     409     300     285     5,048     698  
Total Interest Income   35,364     29,320     25,438     25,549     28,520     90,122     80,802  
INTEREST EXPENSE                            
Deposits   1,052     266     224     213     210     1,542     626  
Short-Term Borrowings   536     343     192     307     317     1,071     1,053  
Subordinated Notes Payable   443     370     317     306     307     1,130     922  
Other Long-Term Borrowings   6     8     9     12     14     23     51  
Total Interest Expense   2,037     987     742     838     848     3,766     2,652  
Net Interest Income   33,327     28,333     24,696     24,711     27,672     86,356     78,150  
Provision for Credit Losses   2,099     1,542     -     -     -     3,641     (1,553 )
Net Interest Income after Provision for Credit Losses   31,228     26,791     24,696     24,711     27,672     82,715     79,703  
NONINTEREST INCOME                            
Deposit Fees   5,947     5,447     5,191     5,300     5,075     16,585     13,582  
Bank Card Fees   3,860     4,034     3,763     3,872     3,786     11,657     11,402  
Wealth Management Fees   3,937     4,403     6,070     3,706     3,623     14,410     9,987  
Mortgage Banking Revenues   7,116     9,065     8,946     9,800     12,283     25,127     42,625  
Other   2,074     1,954     1,848     1,994     1,807     5,876     5,277  
Total Noninterest Income   22,934     24,903     25,818     24,672     26,574     73,655     82,873  
NONINTEREST EXPENSE                            
Compensation   24,738     25,383     24,856     24,783     25,245     74,977     76,687  
Occupancy, Net   6,153     6,075     6,093     5,960     6,032     18,321     17,972  
Other Real Estate, Net   (92 )   (29 )   25     26     (1,126 )   (96 )   (1,514 )
Pension Settlement   102     169     209     572     500     480     2,500  
Other   8,909     8,900     8,050     8,866     9,051     25,859     26,656  
Total Noninterest Expense   39,810     40,498     39,233     40,207     39,702     119,541     122,301  
OPERATING PROFIT   14,352     11,196     11,281     9,176     14,544     36,829     40,275  
Income Tax Expense   3,074     2,177     2,235     2,040     2,949     7,486     7,795  
Net Income   11,278     9,019     9,046     7,136     11,595     29,343     32,480  
Pre-Tax Income Attributable to Noncontrolling Interest   37     (306 )   (591 )   (764 )   (1,504 )   (860 )   (5,456 )
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$ 11,315   $ 8,713   $ 8,455   $ 6,372   $ 10,091   $ 28,483   $ 27,024  
PER COMMON SHARE                            
Basic Net Income $ 0.67   $ 0.51   $ 0.50   $ 0.38   $ 0.60   $ 1.68   $ 1.60  
Diluted Net Income   0.67     0.51     0.50     0.38     0.60     1.68     1.60  
Cash Dividend $ 0.17   $ 0.16   $ 0.16   $ 0.16   $ 0.16   $ 0.49   $ 0.46  
AVERAGE SHARES                            
Basic   16,960     16,949     16,931     16,880     16,875     16,947     16,857  
Diluted   16,996     16,971     16,946     16,923     16,909     16,973     16,886  


CAPITAL CITY BANK GROUP, INC.                            
ALLOWANCE FOR CREDIT LOSSES ("ACL")                        
AND CREDIT QUALITY                            
Unaudited                            
                             
    2022     2021     September 30,
(Dollars in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2022     2021  
ACL - HELD FOR INVESTMENT LOANS                            
Balance at Beginning of Period $ 21,281   $ 20,756   $ 21,606   $ 21,500   $ 22,175   $ 21,606   $ 23,816  
Provision for Credit Losses   1,931     1,670     (79 )   200     (546 )   3,522     (3,042 )
Net Charge-Offs (Recoveries)   702     1,145     771     94     129     2,618     (726 )
Balance at End of Period $ 22,510   $ 21,281   $ 20,756   $ 21,606   $ 21,500   $ 22,510   $ 21,500  
As a % of Loans HFI   0.96 %   0.96 %   1.05 %   1.12 %   1.11 %   0.96 %   1.11 %
As a % of Nonperforming Loans   934.53 %   677.57 %   760.83 %   499.93 %   710.39 %   934.53 %   710.39 %
ACL - UNFUNDED COMMITMENTS                            
Balance at Beginning of Period   2,853   $ 2,976   $ 2,897   $ 3,117   $ 2,587   $ 2,897   $ 1,644  
Provision for Credit Losses   159     (123 )   79     (220 )   530     115     1,473  
Balance at End of Period(1)   3,012     2,853     2,976     2,897     3,117     3,012     3,117  
ACL - DEBT SECURITIES                            
Provision for Credit Losses $ 9   $ (5 ) $ -   $ 20   $ 16   $ 4   $ 16  
CHARGE-OFFS                            
Commercial, Financial and Agricultural $ 2   $ 1,104   $ 73   $ 101   $ 37   $ 1,179   $ 138  
Real Estate - Construction   -     -     -     -     -     -     -  
Real Estate - Commercial   1     -     266     -     405     267     405  
Real Estate - Residential   -     -     -     20     17     -     88  
Real Estate - Home Equity   -     -     33     9     15     33     94  
Consumer   770     533     622     254     221     1,925     1,015  
Overdrafts   989     660     780     678     1,093     2,429     2,025  
Total Charge-Offs $ 1,762   $ 2,297   $ 1,774   $ 1,062   $ 1,788   $ 5,833   $ 3,765  
RECOVERIES                            
Commercial, Financial and Agricultural $ 58   $ 59   $ 165   $ 148   $ 66   $ 282   $ 305  
Real Estate - Construction   2     -     8     -     10     10     10  
Real Estate - Commercial   8     56     29     25     169     93     840  
Real Estate - Residential   44     115     27     33     401     186     720  
Real Estate - Home Equity   22     67     58     173     46     147     240  
Consumer   260     453     183     214     334     896     977  
Overdrafts   666     402     533     375     633     1,601     1,399  
Total Recoveries $ 1,060   $ 1,152   $ 1,003   $ 968   $ 1,659   $ 3,215   $ 4,491  
NET CHARGE-OFFS (RECOVERIES) $ 702   $ 1,145   $ 771   $ 94   $ 129   $ 2,618   $ (726 )
Net Charge-Offs as a % of Average Loans HFI(2)   0.12 %   0.22 %   0.16 %   0.02 %   0.03 %   0.17 %   (0.05 )%
CREDIT QUALITY                            
Nonaccruing Loans $ 2,409   $ 3,141   $ 2,728   $ 4,322   $ 3,026          
Other Real Estate Owned   13     90     17     17     192          
Total Nonperforming Assets ("NPAs") $ 2,422   $ 3,231   $ 2,745   $ 4,339   $ 3,218          
                             
Past Due Loans 30-89 Days $ 6,263   $ 3,554   $ 3,120   $ 3,600   $ 3,360          
Past Due Loans 90 Days or More   -     -     -     -     -          
Classified Loans   20,988     19,620     22,348     17,912     16,310          
Performing Troubled Debt Restructurings $ 6,261   $ 6,728   $ 7,304   $ 7,643   $ 7,919          
                             
Nonperforming Loans as a % of Loans HFI   0.10 %   0.14 %   0.14 %   0.22 %   0.16 %        
NPAs as a % of Loans HFI and Other Real Estate   0.10 %   0.15 %   0.14 %   0.22 %   0.17 %        
NPAs as a % of Total Assets   0.06 %   0.07 %   0.06 %   0.10 %   0.08 %        
                             
(1) Recorded in other liabilities                            
(2) Annualized                            


CAPITAL CITY BANK GROUP, INC.                                                                              
AVERAGE BALANCE AND INTEREST RATES                                                                              
Unaudited                                                                                                    
                                                                                                     
    Third Quarter 2022     Second Quarter 2022     First Quarter 2022     Fourth Quarter 2021     Third Quarter 2021       Sep 2022 YTD     Sep 2021 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 Held for Sale $ 55,164   $ 486   4.82 % $ 52,860   $ 711   4.44 % $ 43,004   $ 397   3.19 % $ 62,809     522   3.29 % $ 67,753   $ 497   2.91 %   $ 50,387   $ 1,594   4.23 % $ 83,558   $ 2,033   3.24 %
Loans Held for Investment(1)   2,264,075     27,354   4.76     2,084,679     23,433   4.53     1,963,578     21,811   4.52     1,948,324     22,296   4.54     1,974,132     25,458   5.12       2,105,211     72,598   4.61     2,018,168     72,036   4.76  
                                                                                                     
Investment Securities                                                                                                    
Taxable Investment Securities   1,117,789     4,359   1.55     1,142,269     3,834   1.34     1,056,736     2,889   1.10     987,700     2,493   1.00     904,962     2,333   1.03       1,105,822     11,082   1.34     708,606     6,232   1.17  
Tax-Exempt Investment Securities(1)   2,939     17   2.30     2,488     10   1.73     2,409     10   1.60     3,380     17   2.07     4,332     25   2.31       2,614     37   1.90     3,904     73   2.49  
                                                                                                     
Total Investment Securities   1,120,728     4,376   1.55     1,144,757     3,844   1.34     1,059,145     2,899   1.10     991,080     2,510   1.01     909,294     2,358   1.03       1,108,436     11,119   1.34     712,510     6,305   1.18  
                                                                                                     
Federal Funds Sold and Interest Bearing Deposits   569,984     3,231   2.25     691,925     1,408   0.82     873,097     409   0.19     789,100     300   0.15     741,944     285   0.15       710,559     5,048   0.95     791,466     698   0.12  
                                                                                                     
Total Earning Assets   4,009,951   $ 35,447   3.51 %   3,974,221   $ 29,396   2.97 %   3,938,824   $ 25,516   2.63 %   3,791,313   $ 25,628   2.68 %   3,693,123   $ 28,598   3.07 %     3,974,593   $ 90,359   3.04 %   3,605,702   $ 81,072   3.01 %
                                                                                                     
Cash and Due From Banks   79,527               79,730               74,253               73,752               72,773                 77,856               71,956            
Allowance for Credit Losses   (21,509 )             (20,984 )             (21,655 )             (22,127 )             (22,817 )               (21,382 )             (23,241 )          
Other Assets   289,709               288,421               275,353               284,999               283,534                 284,546               281,162            
                                                                                                     
Total Assets $ 4,357,678             $ 4,321,388             $ 4,266,775             $ 4,127,937             $ 4,026,613               $ 4,315,613             $ 3,935,579            
                                                                                                     
LIABILITIES:                                                                                                    
Interest Bearing Deposits                                                                                                    
NOW Accounts $ 1,016,475   $ 868   0.34 % $ 1,033,190   $ 120   0.05 % $ 1,079,906   $ 86   0.03 % $ 963,778   $ 72   0.03 % $ 945,788   $ 72   0.03 %   $ 1,042,958   $ 1,074   0.14 % $ 965,839   $ 222   0.03 %
Money Market Accounts   288,758     71   0.10     286,210     36   0.05     285,406     33   0.05     289,335     34   0.05     282,860     34   0.05       286,804     140   0.07     274,990     100   0.05  
Savings Accounts   643,640     80   0.05     628,472     77   0.05     599,359     72   0.05     573,563     71   0.05     551,383     68   0.05       623,986     229   0.05     524,710     192   0.05  
Time Deposits   94,073     33   0.14     95,132     33   0.14     97,054     33   0.14     101,037     36   0.14     102,765     36   0.14       95,408     99   0.14     102,619     112   0.15  
Total Interest Bearing Deposits   2,042,946     1,052   0.20 %   2,043,004     266   0.05 %   2,061,725     224   0.04 %   1,927,713     213   0.04 %   1,882,796     210   0.04 %     2,049,156     1,542   0.10 %   1,868,158     626   0.04 %
                                                                                                     
Short-Term Borrowings   46,679     536   4.56 %   31,782     343   4.33 %   32,353     192   2.40 %   46,355     307   2.63 %   49,773     317   2.53 %     36,991     1,071   3.87 %   55,923     1,053   2.52 %
Subordinated Notes Payable   52,887     443   3.28     52,887     370   2.76     52,887     317   2.40     52,887     306   2.26     52,887     307   2.27       52,887     1,130   2.82     52,887     922   2.30  
Other Long-Term Borrowings   580     6   4.74     722     8   4.54     833     9   4.49     1,414     12   3.50     1,652     14   3.37       710     23   4.58     2,046     51   3.29  
                                                                                                     
Total Interest Bearing Liabilities   2,143,092   $ 2,037   0.38 %   2,128,395   $ 987   0.19 %   2,147,798   $ 742   0.14 %   2,028,369   $ 838   0.16 %   1,987,108   $ 848   0.17 %     2,139,744   $ 3,766   0.24 %   1,979,014   $ 2,652   0.18 %
                                                                                                     
Noninterest Bearing Deposits   1,726,918               1,722,325               1,652,337               1,621,432               1,564,892                 1,700,800               1,490,787            
Other Liabilities   98,501               87,207               72,166               114,657               112,707                 86,055               110,526            
                                                                                                     
Total Liabilities   3,968,511               3,937,927               3,872,301               3,764,458               3,664,707                 3,926,599               3,580,327            
Temporary Equity   9,862               10,096               10,518               13,339               20,446                 10,156               22,920            
                                                                                                     
SHAREOWNERS' EQUITY:   379,305               373,365               383,956               350,140               341,460                 378,858               332,332            
                                                                                                     
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,357,678             $ 4,321,388             $ 4,266,775             $ 4,127,937             $ 4,026,613               $ 4,315,613             $ 3,935,579            
                                                                                                     
Interest Rate Spread     $ 33,410   3.13 %     $ 28,409   2.78 %     $ 24,774   2.49 %     $ 24,790   2.52 %     $ 27,750   2.91 %       $ 86,593   2.80 %     $ 78,420   2.83 %
                                                                                                     
Interest Income and Rate Earned(1)       35,447   3.51         29,396   2.97         25,516   2.63         25,628   2.68         28,598   3.07           90,359   3.04         81,072   3.01  
Interest Expense and Rate Paid(2)       2,037   0.20         987   0.10         742   0.08         838   0.09         848   0.09           3,766   0.13         2,652   0.10  
                                                                                                     
Net Interest Margin     $ 33,410   3.31 %     $ 28,409   2.87 %     $ 24,774   2.55 %     $ 24,790   2.60 %     $ 27,750   2.98 %       $ 86,593   2.91 %     $ 78,420   2.91 %
                                                                                                     
(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