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

TALLAHASSEE, Fla., Jan. 24, 2023 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $11.7 million, or $0.68 per diluted share, for the fourth quarter of 2022 compared to net income of $11.3 million, or $0.67 per diluted share, for the third quarter of 2022, and $6.4 million, or $0.38 per diluted share, for the fourth quarter of 2021.

For the full year of 2022, net income attributable to common shareowners totaled $40.1 million, or $2.36 per diluted share, compared to net income of $33.4 million, or $1.98 per diluted share, for the same period of 2021.

QUARTER HIGHLIGHTS (4th Quarter 2022 versus 3rd Quarter 2022)

  • Continued strong growth in net interest income of 14% - net interest margin percentage grew 45 basis points to 3.76% - deposit cost well controlled at 20 basis points (total deposits) and 35 basis points (interest bearing deposits)
  • Loan growth of $179 million, or 7.6% (end of period) and $175 million, or 7.7% (average)
  • Continued strong credit quality metrics – higher credit loss provision primarily driven by loan growth
  • Noninterest income decreased $1.9 million, or 8.5%, primarily due to lower mortgage banking revenues at CCHL – strong adjustable rate portfolio production by CCHL contributed to loan growth for the quarter
  • Noninterest expense included a pension settlement charge of $1.8 million, or $0.08 per share
  • Tangible book value per share increased $1.19, or 7.2%, primarily due to strong earnings and a favorable re-measurement adjustment for pension plan

Full Year 2022 HIGHLIGHTS

  • Strong growth in net interest income of 21% reflected improved earning asset mix and strength of deposit franchise
  • Loan growth of $594 million, or 30.7% (end of period) and $189 million, or 9.4% (year-to-date average)
  • Average Deposits grew $356 million, or 10.5%
  • CCHL contribution decreased $0.24 per share due to slower secondary market loan sales, but was more than offset by strong adjustable rate production for our loan portfolio, and higher wealth and deposit fees
  • Noninterest expense included pension settlement charges totaling $2.3 million or $0.11 per share
  • Tangible book value per share increased $0.54, or 3.2%, primarily due to strong earnings and a favorable re-measurement adjustment for pension plan, partially offset by higher unrealized investment security losses

“Capital City finished out the year with another solid quarter highlighted by continued net interest margin expansion and nice tangible book value growth,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “I am proud of our associates who produced another record year of earnings. For the quarter and year, we realized strong loan growth, stable deposit growth, maintained good control of our deposit cost, and credit quality was strong. Still, we remain vigilant in the face of economic uncertainty. As we begin 2023, I am confident in our positioning, markets and strategic initiatives. Thank you to our associates for their tireless efforts serving our clients with excellence and to our shareowners for their continued support.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2022 totaled $38.2 million, compared to $33.4 million for the third quarter of 2022, and $24.8 million for the fourth quarter of 2021. For the full year of 2022, tax-equivalent net interest income totaled $124.8 million compared to $103.2 million for the same period of 2021. Compared to the third quarter of 2022, the increase primarily reflected strong loan growth and higher interest rates across a majority of our earning assets. Compared to both prior year periods, the increase reflected strong loan growth, higher interest rates, and growth in the investment portfolio.

Our net interest margin for the fourth quarter of 2022 was 3.76%, an increase of 45 basis points over the third quarter of 2022 and 116 basis points over the fourth quarter of 2021, both driven by higher interest rates and an overall improved earning asset mix. For the fourth quarter of 2022, our cost of funds was 31 basis points, an increase of 11 basis points over the third quarter of 2022 and 22 basis points over the fourth quarter of 2021. Our cost of interest bearing deposits was 35 basis points, 20 basis points, and 4 basis points for the same aforementioned periods. For the month of December 2022, our net interest margin was 3.86%. Compared to the full year of 2021, the net interest margin increased by 30 basis points to 3.13% 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 Paycheck Protection Program fee income.

Provision for Credit Losses

We recorded a provision for credit losses of $3.5 million for the fourth quarter of 2022 compared to $2.1 million in the third quarter of 2022 and no provision for the fourth quarter of 2021. For the full year of 2022, the provision was $7.2 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 and weaker projected economic conditions, primarily a higher rate of unemployment. 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 fourth quarter of 2022 totaled $21.0 million compared to $22.9 million for the third quarter of 2022 and $24.7 million for the fourth quarter of 2021. The $1.9 million decrease from the third quarter of 2022 was attributable to lower mortgage banking revenues of $1.6 million, wealth management fees of $0.3 million, deposit fees of $0.4 million, and bank card fees of $0.1 million, partially offset by higher other income of $0.5 million. The decrease in deposit fees was partially attributable to three less processing days in the fourth quarter. Compared to the fourth quarter of 2021, the $3.7 million decrease was attributable to lower mortgage banking revenues of $4.3 million, wealth management fees of $0.1 million, and bank card fees of $0.1 million, partially offset by higher other income of $0.6 million and deposit fees of $0.2 million.

For the full year of 2022, noninterest income totaled $94.6 million compared to $107.5 million for the same period of 2021 and reflected lower mortgage banking revenues of $21.8 million, partially offset by higher wealth management fees of $4.4 million, deposit fees of $3.2 million, other income of $1.2 million, and bank card fees of $0.1 million. Lower mortgage banking revenues at Capital City Home Loans (“CCHL”) 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 were 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). Throughout 2022, strong best efforts origination volume allowed us to book a steady flow of adjustable rate residential loans in our portfolio which contributed to loan growth and earnings. In addition, continued stability in our construction/permanent loan program partially offset the slowdown in secondary market originations. For 2022, CCHL realized a $0.2 million net loss ($0.01 per diluted share) versus $3.9 million net income ($0.23 per diluted share) in 2021.

Noninterest expense for the fourth quarter of 2022 totaled $42.3 million compared to $39.8 million for the third quarter of 2022 and $40.2 million for the fourth quarter of 2021. The $2.5 million increase over the third quarter of 2022 was primarily attributable to higher other expense of $1.6 million and compensation expense of $0.8 million. Higher pension plan settlement expense of $1.7 million drove the increase in other expense. The increase in compensation expense was primarily due to higher variable/performance-based compensation of $0.3 million and lower realized loan cost of $0.3 million (credit offset to salary expense). Compared to the fourth quarter of 2021, the $2.1 million increase reflected higher other expense of $1.0 million, compensation expense of $0.8 million, and occupancy expense of $0.3 million. The increase in other expense reflected higher expense for legal, travel/entertainment, FDIC insurance fees, mortgage servicing right amortization, and loan servicing costs. The higher level of compensation expense was due to higher base salary expense reflective of annual merit raises and staffing additions related to new market expansion during 2022 and stock based compensation expense related to improved company performance for 2022.

For the full year 2022, noninterest expense totaled $161.8 million compared to $162.5 million for the same period of 2021 and reflected lower compensation expense of $0.9 million and other expense of $0.4 million, partially offset by higher occupancy expense of $0.6 million. The reduction in compensation expense was primarily due to lower variable/performance-based compensation of $7.7 million and base salaries of $1.3 million at CCHL, partially offset by higher compensation at Capital City Bank, including variable/performance-based compensation totaling $2.5 million, base salaries (merit and new market staffing additions) of $3.1 million, lower realized loan cost of $1.4 million (credit offset to salary expense), associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million and stock compensation expense of $0.7 million. The decrease in other expense was primarily due to a decrease in pension related costs, including $4.9 million for the non-service related component and $0.8 million for pension plan settlement expense, partially offset by higher expense for other real estate expense of $1.2 million, travel/entertainment and advertising costs totaling $1.3 million (return to pre-pandemic levels and market expansion), other losses of $0.9 million (primarily debit card and check fraud), mortgage servicing right amortization of $0.6 million, VISA Class B share swap conversion ratio payments of $0.4 million, FDIC insurance fees of $0.3 million, and other miscellaneous costs for training, hiring, and variable expenses related to loan production. Gains from the sale of two banking offices in 2021 drove the increase in other real estate expense. The increase in occupancy expense is related to lease expense for four new banking offices added in 2022 and various software purchases, including network security and end of life upgrades.

Income Taxes

We realized income tax expense of $2.6 million (effective rate of 19.6%) for the fourth quarter of 2022 compared to $3.1 million (effective rate of 21.4%) for the third quarter of 2022 and $2.0 million (effective rate of 22.2%) for the fourth quarter of 2021. The decrease in the effective tax rate for the fourth quarter of 2022 was due to a favorable $0.4 million discrete tax item related to our SERP plan. For the full year of 2022, we realized income tax expense of $10.1 million (effective rate of 20.1%) compared to $9.8 million (effective rate of 19.9%) for the same period of 2021. Absent discrete items, we expect our annual effective tax rate to approximate 21%-22% in 2023.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.033 billion for the fourth quarter of 2022, an increase of $22.8 million, or 0.6%, over the third quarter of 2022, and an increase of $241.4 million, or 6.4%, 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 $469.4 million in the fourth quarter of 2022 compared to $570.0 million in the third 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 $175.3 million, or 7.7%, over the third quarter of 2022 and $491.1 million, or 25.2%, over the fourth quarter of 2021. Period end loans increased $179.0 million, or 7.6%, over the third quarter of 2022 and $593.7 million, or 30.7%, over the fourth quarter of 2021. The growth in 2022 was broad based with increases realized in all loan categories, more significantly, in the residential real estate, construction, and commercial real estate categories.

Allowance for Credit Losses

At December 31, 2022, the allowance for credit losses for HFI loans totaled $24.7 million compared to $22.5 million at September 30, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 12. Incremental allowance related to loan growth, a higher projected rate of unemployment and its effect on rates of default, and slower prepayment speeds (due to higher interest rates) were all contributing factors driving the increase in the allowance during 2022. At December 31, 2022, the allowance represented 0.98% of HFI loans compared to 0.96% at September 30, 2022, and 1.12% at December 31, 2021.

Credit Quality

Overall credit quality remains strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $2.7 million at December 31, 2022 compared to $2.4 million at September 30, 2022 and $4.3 million at December 31, 2021. At December 31, 2022, nonperforming assets as a percent of total assets equaled 0.06%, compared to 0.06% at September 30, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $2.2 million at December 31, 2022, a $0.2 million decrease from September 30, 2022 and a $2.1 million decrease from December 31, 2021. Further, classified loans totaled $19.3 million at December 31, 2022, a $1.6 million decrease from September 30, 2022 and a $1.4 million increase over December 31, 2021.

Funding (Deposits/Debt)

Average total deposits were $3.803 billion for the fourth quarter of 2022, an increase of $33.2 million, or 0.9%, over the third quarter of 2022 and $253.9 million, or 7.2%, over the fourth quarter of 2021. Compared to the third quarter of 2022, the increase reflected higher NOW account balances, primarily due to a seasonal increase in our public fund deposits. Compared to the fourth quarter of 2021, we have had strong growth in our noninterest bearing, NOW, and savings account balances. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment.

Capital

Shareowners’ equity was $394.0 million at December 31, 2022 compared to $373.2 million at September 30, 2022 and $383.2 million at December 31, 2021. For the full year 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $40.1 million, a $3.1 million increase in the fair value of the interest rate swap related to subordinated debt, stock compensation accretion of $1.3 million, net adjustments totaling $1.6 million related to transactions under our stock compensation plans, and an $8.7 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $11.2 million ($0.66 per share) and a $32.8 million increase in the unrealized loss on investment securities.

At December 31, 2022, our total risk-based capital ratio was 15.52% compared to 15.75% at September 30, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 12.64%, 12.83%, and 13.86%, respectively, on these dates. Our leverage ratio was 9.06%, 8.91%, and 8.95%, respectively, on these dates. Further, our tangible common equity ratio was 6.79% at December 31, 2022 compared to 6.61% and 6.95% at September 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 December 31, 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 $4.5 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 58 banking offices and 89 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 words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “vision,” “goal,” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our actual results to differ: our ability to successfully manage credit risk, interest rate risk, liquidity risk, and other risks inherent to our industry; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary and fiscal policies; the effects of security breaches and computer viruses that may affect our computer systems; the accuracy of our financial statement estimates and assumptions; fraud related to debit card products; changes in accounting principles, policies, practices, or guidelines; the frequency and magnitude of foreclosure on our loans; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; the strength of the U.S. economy and the local economies where we conduct operations; our ability to declare and pay dividends, the payment of which is subject to our capital requirements; changes in the stock market and other capital and real estate markets; structural changes in the markets for origination, sale and servicing of residential mortgages; uncertainty in the pricing of residential mortgage loans that we sell, as well as competition for the mortgage servicing rights related to these loans and related interest rate risk or price risk resulting from retaining mortgage servicing rights and the potential effects of higher interest rates on our loan origination volumes; the effect of corporate restructuring, acquisitions or dispositions, including the actual restructuring and other related charges and the failure to achieve the expected gains, revenue growth or expense savings from such corporate restructuring, acquisitions or dispositions; the effects of natural disasters, harsh weather conditions (including hurricanes), widespread health emergencies (including pandemics, such as the COVID-19 pandemic), military conflict, terrorism, civil unrest or other geopolitical events; our ability to comply with the extensive laws and regulations to which we are subject, including the laws for each jurisdiction where we operate; the willingness of clients to accept third-party products and services rather than our products and services and vice versa; increased competition and its effect on pricing; technological changes; the outcomes of litigation or regulatory proceedings; negative publicity and the impact on our reputation; changes in consumer spending and saving habits; growth and profitability of our noninterest income; the limited trading activity of our common stock; the concentration of ownership of our common stock; anti-takeover provisions under federal and state law as well as our Articles of Incorporation and our Bylaws; other risks described from time to time in our filings with the Securities and Exchange Commission; 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) Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
Shareowners' Equity (GAAP)   $ 394,016   $ 373,165   $ 371,675   $ 372,145   $ 383,166  
Less: Goodwill and Other Intangibles (GAAP)     93,093     93,133     93,173     93,213     93,253  
Tangible Shareowners' Equity (non-GAAP) A   300,923     280,032     278,502     278,932     289,913  
Total Assets (GAAP)     4,525,958     4,332,671     4,354,297     4,310,045     4,263,849  
Less: Goodwill and Other Intangibles (GAAP)     93,093     93,133     93,173     93,213     93,253  
Tangible Assets (non-GAAP) B $ 4,432,865   $ 4,239,538   $ 4,261,124   $ 4,216,832   $ 4,170,596  
Tangible Common Equity Ratio (non-GAAP) A/B   6.79 %   6.61 %   6.54 %   6.61 %   6.95 %
Actual Diluted Shares Outstanding (GAAP) C   17,039,401     16,998,177     16,981,614     16,962,362     16,935,389  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 17.66   $ 16.47   $ 16.40   $ 16.44   $ 17.12  


CAPITAL CITY BANK GROUP, INC.                      
EARNINGS HIGHLIGHTS                      
Unaudited                      
                       
    Three Months Ended   Twelve Months Ended  
(Dollars in thousands, except per share data)   Dec 31, 2022   Sep 30, 2022   Dec 31, 2021   Dec 31, 2022   Dec 31, 2021  
EARNINGS                      
Net Income Attributable to Common Shareowners $ 11,664 $ 11,315 $ 6,372 $ 40,147 $ 33,396    
Diluted Net Income Per Share $ 0.68 $ 0.67 $ 0.38 $ 2.36 $ 1.98    
PERFORMANCE                      
Return on Average Assets   1.06 % 1.03 % 0.61 % 0.93 % 0.84   %
Return on Average Equity   12.16   11.83   7.22   10.58   9.92    
Net Interest Margin   3.76   3.31   2.60   3.13   2.83    
Noninterest Income as % of Operating Revenue   35.50   40.76   49.96   43.19   51.11    
Efficiency Ratio   71.47 % 70.66 % 81.29 % 73.76 % 77.11   %
CAPITAL ADEQUACY                      
Tier 1 Capital   14.53 % 14.80 % 16.14 % 14.53 % 16.14   %
Total Capital   15.52   15.75   17.15   15.52   17.15    
Leverage   9.06   8.91   8.95   9.06   8.95    
Common Equity Tier 1   12.64   12.83   13.86   12.64   13.86    
Tangible Common Equity (1)   6.79   6.61   6.95   6.79   6.95    
Equity to Assets   8.71 % 8.61 % 8.99 % 8.71 % 8.99   %
ASSET QUALITY                      
Allowance as % of Non-Performing Loans   1,076.89 % 934.53 % 499.93 % 1,076.89 % 499.93   %
Allowance as a % of Loans HFI   0.98   0.96   1.12   0.98   1.12    
Net Charge-Offs as % of Average Loans HFI   0.21   0.12   0.02   0.18   (0.03 )  
Nonperforming Assets as % of Loans HFI and OREO   0.11   0.10   0.22   0.11   0.22    
Nonperforming Assets as % of Total Assets   0.06 % 0.06 % 0.10 % 0.06 % 0.10   %
STOCK PERFORMANCE                      
High $ 36.23 $ 33.93 $ 29.00 $ 36.23 $ 29.00    
Low   31.14   27.41   24.77   24.43   21.42    
Close $ 32.50 $ 31.11 $ 26.40 $ 32.50 $ 26.40    
Average Daily Trading Volume   31,894   30,546   29,900   27,987   29,919    
                       
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5.        
                       


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
  2022     2021  
(Dollars in thousands) Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter
ASSETS                    
Cash and Due From Banks $ 72,114   $ 72,686   $ 91,209   $ 77,963   $ 65,313  
Funds Sold and Interest Bearing Deposits   528,536     497,679     603,315     790,465     970,041  
Total Cash and Cash Equivalents   600,650     570,365     694,524     868,428     1,035,354  
                     
Investment Securities Available for Sale   413,294     416,745     601,405     624,361     654,611  
Investment Securities Held to Maturity   660,744     676,178     528,258     518,678     339,601  
Other Equity Securities   10     1,349     900     855     861  
Total Investment Securities   1,074,048     1,094,272     1,130,563     1,143,894     995,073  
                     
Loans Held for Sale   54,635     50,304     48,708     50,815     52,532  
                     
Loans Held for Investment ("HFI"):                    
Commercial, Financial, & Agricultural   247,362     246,304     247,902     230,213     223,086  
Real Estate - Construction   234,519     237,718     225,664     174,293     174,394  
Real Estate - Commercial   782,557     715,870     699,093     669,110     663,550  
Real Estate - Residential   721,759     573,963     478,121     368,020     346,756  
Real Estate - Home Equity   208,120     202,512     194,658     188,174     187,821  
Consumer   324,450     347,949     359,906     347,785     321,511  
Other Loans   5,346     20,822     6,854     6,692     13,265  
Overdrafts   1,067     1,047     1,455     1,222     1,082  
Total Loans Held for Investment   2,525,180     2,346,185     2,213,653     1,985,509     1,931,465  
Allowance for Credit Losses   (24,736 )   (22,510 )   (21,281 )   (20,756 )   (21,606 )
Loans Held for Investment, Net   2,500,444     2,323,675     2,192,372     1,964,753     1,909,859  
                     
Premises and Equipment, Net   82,138     81,736     82,932     82,518     83,412  
Goodwill and Other Intangibles   93,093     93,133     93,173     93,213     93,253  
Other Real Estate Owned   431     13     90     17     17  
Other Assets   120,519     119,173     111,935     106,407     94,349  
Total Other Assets   296,181     294,055     288,130     282,155     271,031  
Total Assets $ 4,525,958   $ 4,332,671   $ 4,354,297   $ 4,310,045   $ 4,263,849  
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,653,620   $ 1,737,046   $ 1,724,671   $ 1,704,329   $ 1,668,912  
NOW Accounts   1,290,494     990,021     1,036,757     1,062,498     1,070,154  
Money Market Accounts   267,383     292,932     289,337     288,877     274,611  
Savings Accounts   637,374     646,526     639,594     614,599     599,811  
Certificates of Deposit   90,446     92,853     95,899     95,204     99,374  
Total Deposits   3,939,317     3,759,378     3,786,258     3,765,507     3,712,862  
                     
Short-Term Borrowings   56,793     52,271     39,463     30,865     34,557  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   513     562     612     806     884  
Other Liabilities   73,675     84,657     93,319     77,323     67,735  
Total Liabilities   4,123,185     3,949,755     3,972,539     3,927,388     3,868,925  
                     
Temporary Equity   8,757     9,751     10,083     10,512     11,758  
SHAREOWNERS' EQUITY                    
Common Stock   170     170     170     169     169  
Additional Paid-In Capital   37,331     36,234     35,738     35,188     34,423  
Retained Earnings   393,744     384,964     376,532     370,531     364,788  
Accumulated Other Comprehensive Loss, Net of Tax   (37,229 )   (48,203 )   (40,765 )   (33,743 )   (16,214 )
Total Shareowners' Equity   394,016     373,165     371,675     372,145     383,166  
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,525,958   $ 4,332,671   $ 4,354,297   $ 4,310,045   $ 4,263,849  
OTHER BALANCE SHEET DATA                    
Earning Assets $ 4,182,399   $ 3,988,440   $ 3,996,238   $ 3,970,684   $ 3,949,111  
Interest Bearing Liabilities   2,395,890     2,128,052     2,154,549     2,145,736     2,132,278  
Book Value Per Diluted Share $ 23.12   $ 21.95   $ 21.89   $ 21.94   $ 22.63  
Tangible Book Value Per Diluted Share(1)   17.66     16.47     16.40     16.44     17.12  
Actual Basic Shares Outstanding   16,987     16,962     16,959     16,948     16,892  
Actual Diluted Shares Outstanding   17,039     16,998     16,982     16,962     16,935  
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5.


                             
CAPITAL CITY BANK GROUP, INC.                            
CONSOLIDATED STATEMENT OF OPERATIONS                      
Unaudited                            
                             
    2022     2021     December 31,
(Dollars in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   2022   2021  
INTEREST INCOME                            
Loans, including Fees $ 31,916 $ 27,761 $ 24,072   $ 22,133   $ 22,744   $ 105,882 $ 96,561  
Investment Securities   4,847   4,372   3,840     2,896     2,505     15,955   8,792  
Federal Funds Sold and Interest Bearing Deposits   4,463   3,231   1,408     409     300     9,511   998  
Total Interest Income   41,226   35,364   29,320     25,438     25,549     131,348   106,351  
INTEREST EXPENSE                            
Deposits   1,902   1,052   266     224     213     3,444   839  
Short-Term Borrowings   690   536   343     192     307     1,761   1,360  
Subordinated Notes Payable   522   443   370     317     306     1,652   1,228  
Other Long-Term Borrowings   8   6   8     9     12     31   63  
Total Interest Expense   3,122   2,037   987     742     838     6,888   3,490  
Net Interest Income   38,104   33,327   28,333     24,696     24,711     124,460   102,861  
Provision for Credit Losses   3,521   2,099   1,542     -     -     7,162   (1,553 )
Net Interest Income after Provision for Credit Losses   34,583   31,228   26,791     24,696     24,711     117,298   104,414  
NONINTEREST INCOME                            
Deposit Fees   5,536   5,947   5,447     5,191     5,300     22,121   18,882  
Bank Card Fees   3,744   3,860   4,034     3,763     3,872     15,401   15,274  
Wealth Management Fees   3,649   3,937   4,403     6,070     3,706     18,059   13,693  
Mortgage Banking Revenues   5,497   7,116   9,065     8,946     9,800     30,624   52,425  
Other   2,546   2,074   1,954     1,848     1,994     8,422   7,271  
Total Noninterest Income   20,972   22,934   24,903     25,818     24,672     94,627   107,545  
NONINTEREST EXPENSE                            
Compensation   25,565   24,738   25,383     24,856     24,783     100,542   101,470  
Occupancy, Net   6,253   6,153   6,075     6,093     5,960     24,574   23,932  
Other   10,469   8,919   9,040     8,284     9,464     36,712   37,106  
Total Noninterest Expense   42,287   39,810   40,498     39,233     40,207     161,828   162,508  
OPERATING PROFIT   13,268   14,352   11,196     11,281     9,176     50,097   49,451  
Income Tax Expense   2,599   3,074   2,177     2,235     2,040     10,085   9,835  
Net Income   10,669   11,278   9,019     9,046     7,136     40,012   39,616  
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest   995   37   (306 )   (591 )   (764 )   135   (6,220 )
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$ 11,664 $ 11,315 $ 8,713   $ 8,455   $ 6,372   $ 40,147 $ 33,396  
PER COMMON SHARE                            
Basic Net Income $ 0.69 $ 0.67 $ 0.51   $ 0.50   $ 0.38   $ 2.37 $ 1.98  
Diluted Net Income   0.68   0.67   0.51     0.50     0.38     2.36   1.98  
Cash Dividend $ 0.17 $ 0.17 $ 0.16   $ 0.16   $ 0.16   $ 0.66 $ 0.62  
AVERAGE SHARES                            
Basic   16,963   16,960   16,949     16,931     16,880     16,951   16,863  
Diluted   17,016   16,996   16,971     16,946     16,923     16,985   16,893  


CAPITAL CITY BANK GROUP, INC.                            
ALLOWANCE FOR CREDIT LOSSES ("ACL")                        
AND CREDIT QUALITY                            
Unaudited                            
                             
    2022     2021     December 31,
(Dollars in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   2022     2021  
ACL - HELD FOR INVESTMENT LOANS                            
Balance at Beginning of Period $ 22,510   $ 21,281   $ 20,756   $ 21,606   $ 21,500   $ 21,606   $ 23,816  
Provision for Credit Losses   3,543     1,931     1,670     (79)     200     7,065     (2,842)  
Net Charge-Offs (Recoveries)   1,317     702     1,145     771     94     3,935     (632)  
Balance at End of Period $ 24,736   $ 22,510   $ 21,281   $ 20,756   $ 21,606   $ 24,736   $ 21,606  
As a % of Loans HFI   0.98%     0.96%     0.96%     1.05%     1.12%     0.98%     1.12%  
As a % of Nonperforming Loans   1,076.89%     934.53%     677.57%     760.83%     499.93%     1,076.89%     499.93%  
ACL - UNFUNDED COMMITMENTS                            
Balance at Beginning of Period   3,012   $ 2,853   $ 2,976   $ 2,897   $ 3,117   $ 2,897   $ 1,644  
Provision for Credit Losses   (23)     159     (123)     79     (220)     92     1,253  
Balance at End of Period(1)   2,989     3,012     2,853     2,976     2,897     2,989     2,897  
ACL - DEBT SECURITIES                            
Provision for Credit Losses $ 1   $ 9   $ (5)   $ -   $ 20   $ 5   $ 36  
CHARGE-OFFS                            
Commercial, Financial and Agricultural $ 129   $ 2   $ 1,104   $ 73   $ 101   $ 1,308   $ 239  
Real Estate - Construction   -     -     -     -     -     -     -  
Real Estate - Commercial   88     1     -     266     -     355     405  
Real Estate - Residential   -     -     -     -     20     -     108  
Real Estate - Home Equity   160     -     -     33     9     193     103  
Consumer   976     770     533     622     254     2,901     1,269  
Overdrafts   720     989     660     780     678     3,149     2,703  
Total Charge-Offs $ 2,073   $ 1,762   $ 2,297   $ 1,774   $ 1,062   $ 7,906   $ 4,827  
RECOVERIES                            
Commercial, Financial and Agricultural $ 25   $ 58   $ 59   $ 165   $ 148   $ 307   $ 453  
Real Estate - Construction   -     2     -     8     -     10     10  
Real Estate - Commercial   13     8     56     29     25     106     865  
Real Estate - Residential   98     44     115     27     33     284     753  
Real Estate - Home Equity   36     22     67     58     173     183     413  
Consumer   175     260     453     183     214     1,071     1,191  
Overdrafts   409     666     402     533     375     2,010     1,774  
Total Recoveries $ 756   $ 1,060   $ 1,152   $ 1,003   $ 968   $ 3,971   $ 5,459  
NET CHARGE-OFFS (RECOVERIES) $ 1,317   $ 702   $ 1,145   $ 771   $ 94   $ 3,935   $ (632)  
Net Charge-Offs as a % of Average Loans HFI(2)   0.21%     0.12%     0.22%     0.16%     0.02%     0.18%     (0.03)%  
CREDIT QUALITY                            
Nonaccruing Loans $ 2,297   $ 2,409   $ 3,141   $ 2,728   $ 4,322          
Other Real Estate Owned   431     13     90     17     17          
Total Nonperforming Assets ("NPAs") $ 2,728   $ 2,422   $ 3,231   $ 2,745   $ 4,339          
                             
Past Due Loans 30-89 Days $ 7,829   $ 6,263   $ 3,554   $ 3,120   $ 3,600          
Past Due Loans 90 Days or More   -     -     -     -     -          
Classified Loans   19,342     20,988     19,620     22,348     17,912          
Performing Troubled Debt Restructurings $ 5,913   $ 6,261   $ 6,728   $ 7,304   $ 7,643          
                             
Nonperforming Loans as a % of Loans HFI   0.09%     0.10%     0.14%     0.14%     0.22%          
NPAs as a % of Loans HFI and Other Real Estate   0.11%     0.10%     0.15%     0.14%     0.22%          
NPAs as a % of Total Assets   0.06%     0.06%     0.07%     0.06%     0.10%          
                             
(1) Recorded in other liabilities                            
(2) Annualized                            


CAPITAL CITY BANK GROUP, INC.                                                                                        
AVERAGE BALANCE AND INTEREST RATES                                                                                        
Unaudited                                                                                                    
                                                                                                     
    Fourth Quarter 2022     Third Quarter 2022     Second Quarter 2022     First Quarter 2022     Fourth Quarter 2021       Dec 2022 YTD     Dec 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 $ 42,910   $ 581   5.38 % $ 55,164   $ 486   4.82 % $ 52,860   $ 711   4.44 % $ 43,004     397   3.19 % $ 62,809   $ 522   3.29 %   $ 48,502   $ 2,175   4.49 % $ 78,328   $ 2,555   3.24 %
Loans Held for Investment(1)   2,439,379     31,418   5.11     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       2,189,440     104,016   4.75     2,000,563     94,332   4.76  
                                                                                                     
Investment Securities                                                                                                    
Taxable Investment Securities   1,078,265     4,835   1.78     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       1,098,876     15,917   1.45     778,953     8,724   1.12  
Tax-Exempt Investment Securities(1)   2,827     17   2.36     2,939     17   2.30     2,488     10   1.73     2,409     10   1.60     3,380     17   2.07       2,668     54   2.03     3,772     91   2.39  
                                                                                                     
Total Investment Securities   1,081,092     4,852   1.78     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       1,101,544     15,971   1.45     782,725     8,815   1.12  
                                                                                                     
Federal Funds Sold and Interest Bearing Deposits   469,352     4,463   3.77     569,984     3,231   2.25     691,925     1,408   0.82     873,097     409   0.19     789,100     300   0.15       649,762     9,511   1.46     790,870     998   0.13  
                                                                                                     
Total Earning Assets   4,032,733   $ 41,314   4.07 %   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 %     3,989,248   $ 131,673   3.30 %   3,652,486   $ 106,700   2.92 %
                                                                                                     
Cash and Due From Banks   74,178               79,527               79,730               74,253               73,752                 76,929               72,409            
Allowance for Credit Losses   (22,596 )             (21,509 )             (20,984 )             (21,655 )             (22,127 )               (21,688 )             (22,960 )          
Other Assets   297,510               289,709               288,421               275,353               284,999                 287,813               282,129            
                                                                                                     
Total Assets $ 4,381,825             $ 4,357,678             $ 4,321,388             $ 4,266,775             $ 4,127,937               $ 4,332,302             $ 3,984,064            
                                                                                                     
LIABILITIES:                                                                                                    
Interest Bearing Deposits                                                                                                    
NOW Accounts $ 1,133,733   $ 1,725   0.60 % $ 1,016,475   $ 868   0.34 % $ 1,033,190   $ 120   0.05 % $ 1,079,906   $ 86   0.03 % $ 963,778   $ 72   0.03 %   $ 1,065,838   $ 2,799   0.26 % $ 965,320   $ 294   0.03 %
Money Market Accounts   273,328     63   0.09     288,758     71   0.10     286,210     36   0.05     285,406     33   0.05     289,335     34   0.05       283,407     203   0.07     278,606     134   0.05  
Savings Accounts   641,153     80   0.05     643,640     80   0.05     628,472     77   0.05     599,359     72   0.05     573,563     71   0.05       628,313     309   0.05     537,023     263   0.05  
Time Deposits   92,385     34   0.15     94,073     33   0.14     95,132     33   0.14     97,054     33   0.14     101,037     36   0.14       94,646     133   0.14     102,220     148   0.14  
Total Interest Bearing Deposits   2,140,599     1,902   0.35 %   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 %     2,072,204     3,444   0.17 %   1,883,169     839   0.04 %
                                                                                                     
Short-Term Borrowings   50,844     690   5.38 %   46,679     536   4.56 %   31,782     343   4.33 %   32,353     192   2.40 %   46,355     307   2.63 %     40,483     1,761   4.35 %   53,511     1,360   2.54 %
Subordinated Notes Payable   52,887     522   3.86     52,887     443   3.28     52,887     370   2.76     52,887     317   2.40     52,887     306   2.26       52,887     1,652   3.08     52,887     1,228   2.29  
Other Long-Term Borrowings   530     8   4.80     580     6   4.74     722     8   4.54     833     9   4.49     1,414     12   3.50       665     31   4.62     1,887     63   3.33  
                                                                                                     
Total Interest Bearing Liabilities   2,244,860   $ 3,122   0.55 %   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 %     2,166,239   $ 6,888   0.32 %   1,991,454   $ 3,490   0.18 %
                                                                                                     
Noninterest Bearing Deposits   1,662,443               1,726,918               1,722,325               1,652,337               1,621,432                 1,691,132               1,523,717            
Other Liabilities   84,585               98,501               87,207               72,166               114,657                 85,684               111,567            
                                                                                                     
Total Liabilities   3,991,888               3,968,511               3,937,927               3,872,301               3,764,458                 3,943,055               3,626,738            
Temporary Equity   9,367               9,862               10,096               10,518               13,339                 9,957               20,505            
                                                                                                     
SHAREOWNERS' EQUITY:   380,570               379,305               373,365               383,956               350,140                 379,290               336,821            
                                                                                                     
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,381,825             $ 4,357,678             $ 4,321,388             $ 4,266,775             $ 4,127,937               $ 4,332,302             $ 3,984,064            
                                                                                                     
Interest Rate Spread     $ 38,192   3.52 %     $ 33,410   3.13 %     $ 28,409   2.78 %     $ 24,774   2.49 %     $ 24,790   2.52 %       $ 124,785   2.98 %     $ 103,210   2.75 %
                                                                                                     
Interest Income and Rate Earned(1)       41,314   4.07         35,447   3.51         29,396   2.97         25,516   2.63         25,628   2.68           131,673   3.30         106,700   2.92  
Interest Expense and Rate Paid(2)       3,122   0.31         2,037   0.20         987   0.10         742   0.08         838   0.09           6,888   0.17         3,490   0.10  
                                                                                                     
Net Interest Margin     $ 38,192   3.76 %     $ 33,410   3.31 %     $ 28,409   2.87 %     $ 24,774   2.55 %     $ 24,790   2.60 %       $ 124,785   3.13 %     $ 103,210   2.83 %
                                                                                                     
(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:
Jep Larkin
Executive Vice President and Chief Financial Officer
850.402. 8450


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Source: Capital City Bank Group