Capital City Bank Group, Inc. Reports First Quarter 2023 Results

TALLAHASSEE, Fla., April 24, 2023 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $15.0 million, or $0.88 per diluted share, for the first quarter of 2023 compared to $11.7 million, or $0.68 per diluted share, for the fourth quarter of 2022, and $8.5 million, or $0.50 per diluted share, for the first quarter of 2022.

QUARTER HIGHLIGHTS (1st Quarter 2023 versus 4th Quarter 2022)

  • Strong growth in net interest income of 6% - net interest margin percentage grew 28 basis points to 4.04% - deposit interest expense was well controlled at 26 basis points (total deposits) and 46 basis points (interest bearing deposits)
  • Loan growth of $143 million, or 5.9% (average) and $112 million, or 4.4% (end of period)
  • Average quarterly deposit growth of $14 million, or 0.4%, and a decline of $115 million, or 2.9%, in period end balance, which reflected a normal seasonal reduction of $88 million in public fund balances
  • Continued strong credit quality metrics – allowance coverage ratio increased to 1.01%
  • Noninterest income increased $1.3 million, or 6.1%, due to higher mortgage banking revenues at Capital City Home Loans (“CCHL”)
  • Noninterest expense decreased $1.8 million, or 4.3%, and reflected no pension settlement expense for the quarter compared to $1.8 million for the prior quarter – expenses (excluding pension settlement expense) were favorably impacted by a $1.8 million gain from the sale of a banking office that was offset by higher payroll taxes (annual re-set), performance-based compensation, and the addition of two new offices during the first quarter
  • Tangible book value per share increased $1.00, or 5.7%, primarily due to strong earnings and a favorable valuation adjustment for available for sale securities

“The strength and flexibility of our balance sheet – particularly the diversity and granularity of our core deposit franchise – was evident during a volatile quarter for the industry,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “Continued margin expansion and loan growth were the primary drivers of our strong performance, which resulted in tangible book value per share growth of 5.7%. While there remains uncertainty around the possibility of a near-term recession or economic slowing, I feel good about our positioning and optimistic about our full-year performance.” 

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the first quarter of 2023 totaled $40.5 million, compared to $38.2 million for the fourth quarter of 2022, and $24.8 million for the first quarter of 2022. Compared to both prior periods, the increase reflected strong loan growth and higher interest rates across a majority of our earning assets, partially offset by higher deposit costs.  

Our net interest margin for the first quarter of 2023 was 4.04%, an increase of 28 basis points over the fourth quarter of 2022 and 149 basis points over the first quarter of 2022, both driven by higher interest rates and an overall improved earning asset mix. For the first quarter of 2023, our cost of funds was 35 basis points, an increase of four basis points over the fourth quarter of 2022 and 27 basis points over the first quarter of 2022. Our cost of interest-bearing deposits was 46 basis points, 35 basis points, and 4 basis points, respectively, for the same periods. Our total cost of deposits (including noninterest bearing accounts) was 26 basis points, 20 basis points, and 2 basis points, respectively, for the same periods.        

Provision for Credit Losses

We recorded a provision for credit losses of $3.1 million for the first quarter of 2023 compared to $3.5 million for the fourth quarter of 2022 and no provision for the first quarter of 2022. The decrease in the provision compared to the fourth quarter of 2022 was primarily attributable to a lower level of loan growth. The credit loss provision for the first quarter of 2022 generally reflected lower required reserves needed post-pandemic. We discuss the allowance for credit losses further below. 

Noninterest Income and Noninterest Expense

Noninterest income for the first quarter of 2023 totaled $22.2 million compared to $21.0 million for the fourth quarter of 2022 and $25.8 million for the first quarter of 2022.   The $1.2 million increase over the fourth quarter of 2022 was primarily attributable to higher mortgage banking revenues at CCHL of $1.5 million partially offset by lower deposit fees $0.3 million. The increase in mortgage banking revenues reflected a higher level of rate locks and gain on sale margin.   The decrease in deposit fees was partially attributable to two less processing days in the first quarter. Compared to the first quarter of 2022, the $3.6 million decrease reflected lower wealth management fees of $2.1 million and mortgage banking revenues of $1.9 million, partially offset by higher other income of $0.5 million. The decrease in wealth management fees was due to lower insurance commission revenues which reflected higher than normal revenues in the first quarter of 2022 related to the closing of several large insurance policies. The decline in mortgage banking revenues was attributable to a lower level of rate locks and gain on sale margin. Additional information on our mortgage banking operation is provided in our first quarter investor presentation. The increase in other income was primarily due to higher loan servicing income and miscellaneous income.   

Noninterest expense for the first quarter of 2023 totaled $40.5 million compared to $42.3 million for the fourth quarter of 2022 and $39.2 million for the first quarter of 2022. Compared to the fourth quarter of 2022, the $1.8 million decrease reflected lower other expense of $2.4 million that was partially offset by an increase in occupancy expense of $0.5 million and compensation expense of $0.1 million. The reduction in other expense reflected lower other real estate expense of $1.6 million which was due to a $1.8 million gain from the sale of a banking office. Further, pension expense (non-service-related component) for the first quarter of 2023 totaled $0.2 million compared to $1.1 million for the fourth quarter of 2022 which included a $1.8 million pension settlement charge. The increase in occupancy expense reflected higher expenses related to three recently opened full-service offices and the re-location of one office.   The slight increase in compensation expense reflected an increase in salary expense of $0.5 million due to higher payroll taxes (annual re-set) that was partially offset by a decrease in associate benefit expense of $0.4 million due to lower pension plan service cost.   Compared to the first quarter of 2022, the $1.3 million increase reflected increases in compensation expense of $0.8 million and occupancy expense of $0.7 million that were partially off by a decrease in other expense of $0.2 million. The increase in compensation expense reflected an increase of $1.0 million in salary expense that was partially offset by a $0.2 million decrease in associate benefit expense. The addition of banking offices and staffing in new markets drove the variance in salary and occupancy expenses. The decrease in associate benefit expense was primarily due to a decrease in pension service cost of $0.7 million that was partially offset by an increase in stock-based compensation expense of $0.4 million.

Income Taxes

We realized income tax expense of $4.1 million (effective rate of 21.7%) for the first quarter of 2023 compared to $2.6 million (effective rate of 19.6%) for the fourth quarter of 2022 and $2.2 million (effective rate of 19.8%) for the first quarter of 2022. A discrete tax item of $0.4 million related our SERP plan favorably impacted the effective tax rate for the fourth quarter of 2022. Absent discrete items, we expect our annual effective tax rate to approximate 21%-22% in 2023. The increase in the effective tax rate for 2023 reflects a lower level of pre-tax income from CCHL in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.063 billion for the first quarter of 2023, an increase of $30.0 million, or 0.7%, over the fourth quarter of 2022, and an increase of $123.9 million, or 3.1%, over the first quarter of 2022. 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.

Average loans held for investment (“HFI”) increased $143.0 million, or 5.9%, over the fourth quarter of 2022 and $618.8 million, or 31.5%, over the first quarter of 2022. Period end loans increased $111.7 million, or 4.4%, over the fourth quarter of 2022 and $651.4 million, or 32.8%, over the first quarter of 2022.   Compared to the fourth quarter of 2022, a majority of the increase was realized in the residential real estate category, and to a lesser extent, the construction and commercial real estate mortgage categories. Compared to the first quarter of 2022, loan growth was broad based, with increases realized in all categories except consumer loans.      

Allowance for Credit Losses

At March 31, 2023, the allowance for credit losses for HFI loans totaled $26.5 million compared to $24.7 million at December 31, 2022 and $20.8 million at March 31, 2022. Activity within the allowance is provided on Page 9. The increase in the allowance was driven primarily by loan growth. At March 31, 2023, the allowance represented 1.01% of HFI loans compared to 0.98% at December 31, 2022, and 1.05% at March 31, 2022.

Credit Quality

Overall credit quality remains stable. Nonperforming assets (nonaccrual loans and other real estate) totaled $4.6 million at March 31, 2023 compared to $2.7 million at December 31, 2022 and $2.7 million at March 31, 2022.   At March 31, 2023, the increase was primarily due to the addition of one large business loan relationship totaling $1.8 million to nonaccrual status – it is in the process of collection and is adequately secured and reserved for. At March 31, 2023, nonperforming assets as a percent of total assets equaled 0.10%, compared to 0.06% at December 31, 2022 and 0.06% at March 31, 2022.   Nonaccrual loans totaled $4.6 million at March 31, 2023, a $2.3 million increase over December 31, 2022 and a $1.9 million increase over March 31, 2022.   Further, classified loans totaled $12.2 million at March 31, 2023, a $7.2 million decrease from December 31, 2022 and a $10.2 million decrease from March 31, 2022.   

Deposits

Average total deposits were $3.817 billion for the first quarter of 2023, an increase of $14.3 million, or 0.4%, over the fourth quarter of 2022 and $103.3 million, or 2.8%, over the first quarter of 2022.  Compared to the fourth quarter of 2022, the increase reflected higher NOW account balances, primarily due to a seasonal increase in our public fund deposits that occurred late in the fourth quarter of 2022.  Compared to the first quarter of 2022, we experienced strong growth in our NOW accounts, and to a lesser degree, our savings accounts.

Period end total deposits declined $115.4 million from the fourth quarter of 2022, and reflected lower balances in noninterest bearing accounts, NOW accounts, and savings accounts, partially offset by slight growth in money market accounts and certificates of deposit. The $52.2 million decline in noninterest bearing accounts was largely due to the migration of two large commercial clients to an interest-bearing NOW account, in addition to clients seeking a higher yielding investment account at Capital City Investments (approximately $30 million, predominantly higher balance clients). The $47.8 million decline in the NOW account balance was largely driven by an anticipated seasonal decline in public fund balances of $66 million, partially offset by the previously mentioned migration of two clients from noninterest bearing accounts. The $20.1 million decline in the savings account balance was primarily attributable to clients seeking higher yielding investment products outside the Bank. The $4.5 million increase in the money market account balance occurred also due to some migration from noninterest bearing accounts, in addition to growth in our new markets which offered a promotional rate. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment. Additional information on the profile of our deposit base is provided in a supplement (Exhibit 99.2) to this release.

Liquidity

The Bank maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $361.0 million in the first quarter of 2023 compared to $469.4 million in the fourth quarter of 2022. The declining overnight funds position reflected growth in average loans.

At March 31, 2023, we had the ability to generate approximately $1.428 billion (excludes overnight funds position of $303 million) in additional liquidity through various sources including various federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and through brokered deposits.  

We also view our investment portfolio as a liquidity source and have the option to pledge securities in our portfolio as collateral for borrowings or deposits, and/or to sell selected securities.  Our portfolio consists of debt issued by the U.S. Treasury, U.S. governmental agencies, municipal governments, and corporate entities.  At March 31, 2023, the weighted-average maturity and duration of our portfolio were 3.34 years and 2.99 years, respectively, and the available-for-sale portfolio had a net unrealized pre-tax loss of $35.0 million.

Additional information on our liquidity and investment portfolio is included in a supplement (Exhibit 99.2) to this release.

Capital

Shareowners’ equity was $411.2 million at March 31, 2023 compared to $394.0 million at December 31, 2022 and $372.1 million at March 31, 2022.   For the first three months of 2023, shareowners’ equity was positively impacted by net income attributable to common shareowners of $15.0 million, a $5.6 million decrease in the unrealized loss on investment securities, the issuance of stock of $1.8 million, and stock compensation accretion of $0.5 million.   Shareowners’ equity was reduced by common stock dividends of $3.1 million ($0.18 per share), the repurchase of stock of $0.8 million (25,000 shares), net adjustments totaling $1.2 million related to transactions under our stock compensation plans, and a $0.6 million decrease in the fair value of the interest rate swap related to subordinated debt.

At March 31, 2023, our total risk-based capital ratio was 15.53% compared to 15.52% at December 31, 2022 and 16.98% at March 31, 2022. Our common equity tier 1 capital ratio was 12.68%, 12.64%, and 13.77%, respectively, on these dates. Our leverage ratio was 9.28%, 9.06%, and 8.78%, respectively, on these dates. At March 31, 2023, all 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 7.37% at March 31, 2023 compared to 6.79% and 6.61% at December 31, 2022 and March 31, 2022, respectively. If our unrealized HTM securities losses of $29.5 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 6.69%.

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 $4.4 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 101 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; adverse developments in the financial services industry generally, such as the recent bank failures and any related impact on depositor behavior; the effects of changes in the level of checking or savings account deposits and the competition for deposits on our funding costs, net interest margin and ability to replace maturing deposits and advances, as necessary; the effects of actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions; changes in monetary and fiscal policies of the U.S. Government; inflation, interest rate, market and monetary fluctuations; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; the accuracy of our financial statement estimates and assumptions, including the estimates used for our allowance for credit losses, deferred tax asset valuation and pension plan; changes in our liquidity position; changes in accounting principles, policies, practices or guidelines; the frequency and magnitude of foreclosure of our loans; the effects of our lack of a diversified loan portfolio, including the risks of loan segments, geographic and industry concentrations; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; our ability to declare and pay dividends, the payment of which is subject to our capital requirements; changes in the securities 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, 2022, 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
Unaudited

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) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022
Shareowners' Equity (GAAP)   $ 411,240   $ 394,016   $ 373,165   $ 371,675   $ 372,145  
Less: Goodwill and Other Intangibles (GAAP)     93,053     93,093     93,133     93,173     93,213  
Tangible Shareowners' Equity (non-GAAP) A   318,187     300,923     280,032     278,502     278,932  
Total Assets (GAAP)     4,409,742     4,525,958     4,332,671     4,354,297     4,310,045  
Less: Goodwill and Other Intangibles (GAAP)     93,053     93,093     93,133     93,173     93,213  
Tangible Assets (non-GAAP) B $ 4,316,689   $ 4,432,865   $ 4,239,538   $ 4,261,124   $ 4,216,832  
Tangible Common Equity Ratio (non-GAAP) A/B   7.37 %   6.79 %   6.61 %   6.54 %   6.61 %
Actual Diluted Shares Outstanding (GAAP) C   17,049,913     17,039,401     16,998,177     16,981,614     16,962,362  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 18.66   $ 17.66   $ 16.47   $ 16.40   $ 16.44  


CAPITAL CITY BANK GROUP, INC.              
EARNINGS HIGHLIGHTS              
Unaudited              
               
    Three Months Ended  
(Dollars in thousands, except per share data)   Mar 31, 2023   Dec 31, 2022   Mar 31, 2022  
EARNINGS              
Net Income Attributable to Common Shareowners $ 14,954 $ 11,664 $ 8,455  
Diluted Net Income Per Share $ 0.88 $ 0.68 $ 0.50  
PERFORMANCE              
Return on Average Assets   1.37 % 1.06 % 0.80 %
Return on Average Equity   15.01   12.16   8.93  
Net Interest Margin   4.04   3.76   2.55  
Noninterest Income as % of Operating Revenue   35.52   35.50   51.11  
Efficiency Ratio   64.48 % 71.47 % 77.55 %
CAPITAL ADEQUACY              
Tier 1 Capital   14.51 % 14.53 % 15.98 %
Total Capital   15.53   15.52   16.98  
Leverage   9.28   9.06   8.78  
Common Equity Tier 1   12.68   12.64   13.77  
Tangible Common Equity(1)   7.37   6.79   6.61  
Equity to Assets   9.33 % 8.71 % 8.63 %
ASSET QUALITY              
Allowance as % of Non-Performing Loans   577.63 % 1,076.89 % 760.83 %
Allowance as a % of Loans HFI   1.01   0.98   1.05  
Net Charge-Offs as % of Average Loans HFI   0.24   0.21   0.16  
Nonperforming Assets as % of Loans HFI and OREO   0.17   0.11   0.14  
Nonperforming Assets as % of Total Assets   0.10 % 0.06 % 0.06 %
STOCK PERFORMANCE              
High $ 36.86 $ 36.23 $ 28.88  
Low   28.18   31.14   25.96  
Close $ 29.31 $ 32.50 $ 26.36  
Average Daily Trading Volume   41,737   31,894   24,019  
               
(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                    
                     
  2023     2022  
(Dollars in thousands) First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
ASSETS                    
Cash and Due From Banks $ 84,549   $ 72,114   $ 72,686   $ 91,209   $ 77,963  
Funds Sold and Interest Bearing Deposits   303,403     528,536     497,679     603,315     790,465  
Total Cash and Cash Equivalents   387,952     600,650     570,365     694,524     868,428  
                     
Investment Securities Available for Sale   402,943     413,294     416,745     601,405     624,361  
Investment Securities Held to Maturity   651,755     660,744     676,178     528,258     518,678  
Other Equity Securities   1,883     10     1,349     900     855  
Total Investment Securities   1,056,581     1,074,048     1,094,272     1,130,563     1,143,894  
                     
Loans Held for Sale   55,118     54,635     50,304     48,708     50,815  
                     
Loans Held for Investment ("HFI"):                    
Commercial, Financial, & Agricultural   236,263     247,362     246,304     247,902     230,213  
Real Estate - Construction   253,903     234,519     237,718     225,664     174,293  
Real Estate - Commercial   798,438     782,557     715,870     699,093     669,110  
Real Estate - Residential   827,124     721,759     573,963     478,121     368,020  
Real Estate - Home Equity   207,241     208,120     202,512     194,658     188,174  
Consumer   305,324     324,450     347,949     359,906     347,785  
Other Loans   7,660     5,346     20,822     6,854     6,692  
Overdrafts   931     1,067     1,047     1,455     1,222  
Total Loans Held for Investment   2,636,884     2,525,180     2,346,185     2,213,653     1,985,509  
Allowance for Credit Losses   (26,507 )   (24,736 )   (22,510 )   (21,281 )   (20,756 )
Loans Held for Investment, Net   2,610,377     2,500,444     2,323,675     2,192,372     1,964,753  
                     
Premises and Equipment, Net   82,055     82,138     81,736     82,932     82,518  
Goodwill and Other Intangibles   93,053     93,093     93,133     93,173     93,213  
Other Real Estate Owned   13     431     13     90     17  
Other Assets   124,593     120,519     119,173     111,935     106,407  
Total Other Assets   299,714     296,181     294,055     288,130     282,155  
Total Assets $ 4,409,742   $ 4,525,958   $ 4,332,671   $ 4,354,297   $ 4,310,045  
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,601,388   $ 1,653,620   $ 1,737,046   $ 1,724,671   $ 1,704,329  
NOW Accounts   1,242,721     1,290,494     990,021     1,036,757     1,062,498  
Money Market Accounts   271,880     267,383     292,932     289,337     288,877  
Savings Accounts   617,310     637,374     646,526     639,594     614,599  
Certificates of Deposit   90,621     90,446     92,853     95,899     95,204  
Total Deposits   3,823,920     3,939,317     3,759,378     3,786,258     3,765,507  
                     
Short-Term Borrowings   26,632     56,793     52,271     39,463     30,865  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   463     513     562     612     806  
Other Liabilities   85,878     73,675     84,657     93,319     77,323  
Total Liabilities   3,989,780     4,123,185     3,949,755     3,972,539     3,927,388  
                     
Temporary Equity   8,722     8,757     9,751     10,083     10,512  
SHAREOWNERS' EQUITY                    
Common Stock   170     170     170     170     169  
Additional Paid-In Capital   37,512     37,331     36,234     35,738     35,188  
Retained Earnings   405,634     393,744     384,964     376,532     370,531  
Accumulated Other Comprehensive Loss, Net of Tax   (32,076 )   (37,229 )   (48,203 )   (40,765 )   (33,743 )
Total Shareowners' Equity   411,240     394,016     373,165     371,675     372,145  
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,409,742   $ 4,525,958   $ 4,332,671   $ 4,354,297   $ 4,310,045  
OTHER BALANCE SHEET DATA                    
Earning Assets $ 4,051,987   $ 4,182,399   $ 3,988,440   $ 3,996,238   $ 3,970,684  
Interest Bearing Liabilities   2,302,514     2,395,890     2,128,052     2,154,549     2,145,736  
Book Value Per Diluted Share $ 24.12   $ 23.12   $ 21.95   $ 21.89   $ 21.94  
Tangible Book Value Per Diluted Share(1)   18.66     17.66     16.47     16.40     16.44  
Actual Basic Shares Outstanding   17,022     16,987     16,962     16,959     16,948  
Actual Diluted Shares Outstanding   17,050     17,039     16,998     16,982     16,962  
(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                    
                     
    2023   2022  
(Dollars in thousands, except per share data)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
INTEREST INCOME                    
Loans, including Fees $ 34,880 $ 31,916 $ 27,761 $ 24,072   $ 22,133  
Investment Securities   4,924   4,847   4,372   3,840     2,896  
Federal Funds Sold and Interest Bearing Deposits   4,111   4,463   3,231   1,408     409  
Total Interest Income   43,915   41,226   35,364   29,320     25,438  
INTEREST EXPENSE                    
Deposits   2,488   1,902   1,052   266     224  
Short-Term Borrowings   461   690   536   343     192  
Subordinated Notes Payable   571   522   443   370     317  
Other Long-Term Borrowings   6   8   6   8     9  
Total Interest Expense   3,526   3,122   2,037   987     742  
Net Interest Income   40,389   38,104   33,327   28,333     24,696  
Provision for Credit Losses   3,130   3,521   2,099   1,542     -  
Net Interest Income after Provision for Credit Losses   37,259   34,583   31,228   26,791     24,696  
NONINTEREST INCOME                    
Deposit Fees   5,239   5,536   5,947   5,447     5,191  
Bank Card Fees   3,726   3,744   3,860   4,034     3,763  
Wealth Management Fees   3,928   3,649   3,937   4,403     6,070  
Mortgage Banking Revenues   6,995   5,497   7,116   9,065     8,946  
Other   2,360   2,546   2,074   1,954     1,848  
Total Noninterest Income   22,248   20,972   22,934   24,903     25,818  
NONINTEREST EXPENSE                    
Compensation   25,636   25,565   24,738   25,383     24,856  
Occupancy, Net   6,762   6,253   6,153   6,075     6,093  
Other   8,057   10,469   8,919   9,040     8,284  
Total Noninterest Expense   40,455   42,287   39,810   40,498     39,233  
OPERATING PROFIT   19,052   13,268   14,352   11,196     11,281  
Income Tax Expense   4,133   2,599   3,074   2,177     2,235  
Net Income   14,919   10,669   11,278   9,019     9,046  
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest   35   995   37   (306 )   (591 )
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$ 14,954 $ 11,664 $ 11,315 $ 8,713   $ 8,455  
PER COMMON SHARE                    
Basic Net Income $ 0.88 $ 0.69 $ 0.67 $ 0.51   $ 0.50  
Diluted Net Income   0.88   0.68   0.67   0.51     0.50  
Cash Dividend $ 0.18 $ 0.17 $ 0.17 $ 0.16   $ 0.16  
AVERAGE SHARES                    
Basic   17,016   16,963   16,960   16,949     16,931  
Diluted   17,045   17,016   16,996   16,971     16,946  


CAPITAL CITY BANK GROUP, INC.                    
ALLOWANCE FOR CREDIT LOSSES ("ACL")                
AND CREDIT QUALITY                    
Unaudited                    
                     
    2023     2022  
(Dollars in thousands, except per share data)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
ACL - HELD FOR INVESTMENT LOANS                    
Balance at Beginning of Period $ 24,736   $ 22,510   $ 21,281   $ 20,756   $ 21,606  
Provision for Credit Losses   3,291     3,543     1,931     1,670     (79 )
Net Charge-Offs (Recoveries)   1,520     1,317     702     1,145     771  
Balance at End of Period $ 26,507   $ 24,736   $ 22,510   $ 21,281   $ 20,756  
As a % of Loans HFI   1.01 %   0.98 %   0.96 %   0.96 %   1.05 %
As a % of Nonperforming Loans   577.63 %   1,076.89 %   934.53 %   677.57 %   760.83 %
ACL - UNFUNDED COMMITMENTS                    
Balance at Beginning of Period   2,989   $ 3,012   $ 2,853   $ 2,976   $ 2,897  
Provision for Credit Losses   (156 )   (23 )   159     (123 )   79  
Balance at End of Period(1)   2,833     2,989     3,012     2,853     2,976  
ACL - DEBT SECURITIES                    
Provision for Credit Losses $ (5 ) $ 1   $ 9   $ (5 ) $ -  
CHARGE-OFFS                    
Commercial, Financial and Agricultural $ 164   $ 129   $ 2   $ 1,104   $ 73  
Real Estate - Commercial   120     88     1     -     266  
Real Estate - Home Equity   -     160     -     -     33  
Consumer   1,732     976     770     533     622  
Overdrafts   634     720     989     660     780  
Total Charge-Offs $ 2,650   $ 2,073   $ 1,762   $ 2,297   $ 1,774  
RECOVERIES                    
Commercial, Financial and Agricultural $ 95   $ 25   $ 58   $ 59   $ 165  
Real Estate - Construction   1     -     2     -     8  
Real Estate - Commercial   8     13     8     56     29  
Real Estate - Residential   57     98     44     115     27  
Real Estate - Home Equity   25     36     22     67     58  
Consumer   571     175     260     453     183  
Overdrafts   373     409     666     402     533  
Total Recoveries $ 1,130   $ 756   $ 1,060   $ 1,152   $ 1,003  
NET CHARGE-OFFS (RECOVERIES) $ 1,520   $ 1,317   $ 702   $ 1,145   $ 771  
Net Charge-Offs as a % of Average Loans HFI(2)   0.24 %   0.21 %   0.12 %   0.22 %   0.16 %
CREDIT QUALITY                    
Nonaccruing Loans $ 4,589   $ 2,297   $ 2,409   $ 3,141   $ 2,728  
Other Real Estate Owned   13     431     13     90     17  
Total Nonperforming Assets ("NPAs") $ 4,602   $ 2,728   $ 2,422   $ 3,231   $ 2,745  
                     
Past Due Loans 30-89 Days $ 5,061   $ 7,829   $ 6,263   $ 3,554   $ 3,120  
Past Due Loans 90 Days or More   -     -     -     -     -  
Classified Loans   12,179     19,342     20,988     19,620     22,348  
                     
Nonperforming Loans as a % of Loans HFI   0.17 %   0.09 %   0.10 %   0.14 %   0.14 %
NPAs as a % of Loans HFI and Other Real Estate   0.17 %   0.11 %   0.10 %   0.15 %   0.14 %
NPAs as a % of Total Assets   0.10 %   0.06 %   0.06 %   0.07 %   0.06 %
                     
(1) Recorded in other liabilities                    
(2) Annualized                    


CAPITAL CITY BANK GROUP, INC.                                                            
AVERAGE BALANCE AND INTEREST RATES                                                            
Unaudited                                                                        
                                                                         
    First Quarter 2023     Fourth Quarter 2022     Third Quarter 2022     Second Quarter 2022     First Quarter 2022    
(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
   
ASSETS:                                                                        
Loans Held for Sale $ 55,110   $ 644   4.74 % $ 42,910   $ 581   5.38 % $ 55,164   $ 486   4.82 % $ 52,860     711   4.44 % $ 43,004   $ 397   3.19 %  
Loans Held for Investment(1)   2,582,395     34,331   5.39     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    
                                                                         
Investment Securities                                                                        
Taxable Investment Securities   1,061,372     4,912   1.86     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    
Tax-Exempt Investment Securities(1)   2,840     17   2.36     2,827     17   2.36     2,939     17   2.30     2,488     10   1.73     2,409     10   1.60    
                                                                         
Total Investment Securities   1,064,212     4,929   1.86     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    
                                                                         
Federal Funds Sold and Interest Bearing Deposits   360,971     4,111   4.62     469,352     4,463   3.77     569,984     3,231   2.25     691,925     1,408   0.82     873,097     409   0.19    
                                                                         
Total Earning Assets   4,062,688   $ 44,015   4.39 %   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 %  
                                                                         
Cash and Due From Banks   74,639               74,178               79,527               79,730               74,253              
Allowance for Credit Losses   (25,637 )             (22,596 )             (21,509 )             (20,984 )             (21,655 )            
Other Assets   300,175               297,510               289,709               288,421               275,353              
                                                                         
Total Assets $ 4,411,865             $ 4,381,825             $ 4,357,678             $ 4,321,388             $ 4,266,775              
                                                                         
LIABILITIES:                                                                        
Interest Bearing Deposits                                                                        
NOW Accounts $ 1,228,928   $ 2,152   0.71 % $ 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 %  
Money Market Accounts   267,573     208   0.31     273,328     63   0.09     288,758     71   0.10     286,210     36   0.05     285,406     33   0.05    
Savings Accounts   629,388     76   0.05     641,153     80   0.05     643,640     80   0.05     628,472     77   0.05     599,359     72   0.05    
Time Deposits   89,675     52   0.24     92,385     34   0.15     94,073     33   0.14     95,132     33   0.14     97,054     33   0.14    
Total Interest Bearing Deposits   2,215,564     2,488   0.46 %   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 %  
                                                                         
Short-Term Borrowings   47,109     461   3.97 %   50,844     690   5.38 %   46,679     536   4.56 %   31,782     343   4.33 %   32,353     192   2.40 %  
Subordinated Notes Payable   52,887     571   4.32     52,887     522   3.86     52,887     443   3.28     52,887     370   2.76     52,887     317   2.40    
Other Long-Term Borrowings   480     6   4.80     530     8   4.80     580     6   4.74     722     8   4.54     833     9   4.49    
                                                                         
Total Interest Bearing Liabilities   2,316,040   $ 3,526   0.62 %   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 %  
                                                                         
Noninterest Bearing Deposits   1,601,750               1,662,443               1,726,918               1,722,325               1,652,337              
Other Liabilities   81,206               84,585               98,501               87,207               72,166              
                                                                         
Total Liabilities   3,998,996               3,991,888               3,968,511               3,937,927               3,872,301              
Temporary Equity   8,802               9,367               9,862               10,096               10,518              
                                                                         
SHAREOWNERS' EQUITY:   404,067               380,570               379,305               373,365               383,956              
                                                                         
Total Liabilities, Temporary Equity and Shareowners' Equity $ 4,411,865             $ 4,381,825             $ 4,357,678             $ 4,321,388             $ 4,266,775              
                                                                         
Interest Rate Spread     $ 40,489   3.77 %     $ 38,192   3.52 %     $ 33,410   3.13 %     $ 28,409   2.78 %     $ 24,774   2.49 %  
                                                                         
Interest Income and Rate Earned(1)       44,015   4.39         41,314   4.07         35,447   3.51         29,396   2.97         25,516   2.63    
Interest Expense and Rate Paid(2)       3,526   0.35         3,122   0.31         2,037   0.20         987   0.10         742   0.08    
                                                                         
Net Interest Margin     $ 40,489   4.04 %     $ 38,192   3.76 %     $ 33,410   3.31 %     $ 28,409   2.87 %     $ 24,774   2.55 %  
                                                                         
(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

Photos accompanying this announcement are available at:

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https://www.globenewswire.com/NewsRoom/AttachmentNg/9c482b4a-94ca-4ecf-8c46-560f2e77353f

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Deposit Franchise

Capital City Bank Group has a granular and diversified deposit base.
Liquidity

Strong balance sheet flexibility.
Investments

High quality, short duration portfolio.
Capital

Strong capital base.
Source: Capital City Bank Group