Capital City Bank Group, Inc. Reports Second Quarter 2011 Results
TALLAHASSEE, Fla., July 26, 2011 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2011 totaling $2.1 million, or $0.12 per diluted share, compared to $1.3 million, or $0.08 per diluted share for the first quarter of 2011 ("linked quarter"), and $0.7 million, or $0.04 per diluted share, for the second quarter of 2010. For the first six months of 2011, the Company reported net income of $3.5 million, or $0.20 per diluted share, compared to a net loss of $2.7 million, or $0.16 per diluted share for the same period in 2010.
The increase in earnings over the linked quarter reflects higher net interest income of $0.4 million, lower loan loss provision of $0.6 million, and a reduction in noninterest expense of $2.2 million, partially offset by a decline in noninterest income of $1.9 million and higher income tax expense of $0.5 million. Compared to the second quarter of 2010, a $3.6 million decline in noninterest expense partially offset by a $1.2 million reduction in operating revenues and higher income tax expense of $1.0 million drove the improvement in earnings.
The increase in earnings for the first half of 2011 is attributable to a lower loan loss provision of $6.7 million, reduction in noninterest expense of $3.5 million, and higher noninterest income of $2.1 million, partially offset by lower net interest income of $2.0 million and higher income tax expense of $4.1 million.
2011 performance reflects the sale of our Visa Class B shares of stock during the first quarter which resulted in a $2.6 million net gain ($3.2 million pre-tax included in noninterest income and a swap liability of $0.6 million included in noninterest expense).
"Although we are still facing a challenging operating environment, I am pleased with our progress," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. "Profit in the second quarter of $2.1 million, or $0.12 per share, represents our fifth consecutive quarter of profitability. Highlights from the quarter include lower nonperforming assets, declining credit costs, a strong net interest margin and lower operating expenses. While the economy remains sluggish and loan growth continues to be a challenge, I am pleased with our second quarter performance and believe we have momentum as we enter the latter half of 2011."
The Return on Average Assets was 0.33% and the Return on Average Equity was 3.28% for the second quarter of 2011. These metrics were 0.20% and 2.03% for the first quarter of 2011, and 0.11% and 1.11% for the second quarter of 2010, respectively.
For the first half of 2011, the Return on Average Assets was 0.26% and the Return on Average Equity was 2.66% compared to -0.20% and -2.07%, respectively, for the first half of 2010.
Discussion of Financial Condition
Average earning assets were $2.259 billion for the second quarter of 2011, a decrease of $19.7 million, or 0.9% from the linked quarter and an increase of $40.9 million, or 1.8%, from the fourth quarter of 2010. The lower level of earning assets over the linked quarter was a result of a decline in the loan portfolio of $26.0 million, partially offset by higher short-term investments of $6.2 million. Compared to the fourth quarter of 2010, average overnight funds were higher by $76.4 million, the investment portfolio increased $43.1 million and loans declined $78.6 million, partially attributable to the resolution of problem loans during the first six months.
Average loans have declined throughout the portfolio, driven primarily by a reduction in the commercial real estate, residential and construction loan categories. The loan portfolio continues to be impacted by weak loan demand attributable to the lack of consumer confidence and a sluggish economy. In addition to lower production, normal amortization and payoffs, the resolution of problem loans (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned ("OREO") category), contributed to the overall decline. During the second quarter, problem loan resolutions accounted for $20.8 million or 76% of the net reduction in total loans of $27.2 million from the linked quarter. Problem loan resolutions accounted for $36.2 million or 51% of the net reduction in loans of $71.1 million from the fourth quarter of 2010(1).
Nonperforming assets (including nonaccrual loans, restructured loans ("TDRs"), and OREO) totaled $145.7 million at the end of the second quarter of 2011, a decrease of $7.7 million from the first quarter of 2011 and an increase of $0.4 million over the fourth quarter of 2010. Nonaccrual loans decreased $12.9 million to $61.1 million from the linked quarter primarily due to the migration of loans to the OREO category. A slowdown in new additions to the nonaccrual category also contributed to the improvement. Compared to the fourth quarter of 2010, nonaccrual loans declined by $4.6 million reflecting the movement of loans to the OREO category and, to a lesser extent, migration to the TDR category. TDRs totaled $23.6 million at the end of the second quarter, a $0.4 million decrease from the linked quarter and a $1.9 million increase over the fourth quarter of 2010. The balance of OREO totaled $61.0 million at the end of the second quarter, a $5.7 million increase over the linked quarter and $3.1 million over the fourth quarter of 2010, which reflects our efforts in working problem loans through the foreclosure process. Overall, a slower pace of loan defaults, momentum in working loans through the collection cycle, and progress in our property disposition efforts has contributed to the overall improvement in our nonperforming asset portfolio. Through the first six months of 2011, we sold OREO properties totaling $17.7 million, which compares to $18.0 million for the full year 2010. Nonperforming assets represented 5.60% of total assets at June 30, 2011 compared to 5.76% at March 31, 2011 and 5.54% at December 31, 2010.
Average total deposits were $2.107 billion for the second quarter, a decrease of $18.1 million, or 0.9%, from the linked quarter and $8.6 million, or 0.4%, from the fourth quarter of 2010. Deposits decreased in both periods driven primarily by a reduction in certificates of deposit. Additionally, a decrease resulting from existing clients moving from our Guaranteed Now Account product to repurchase agreements occurred late in the fourth quarter of 2010 as further discussed below. Public funds balances increased as anticipated from the fourth quarter of 2010, but have declined from the first quarter level, which reflects the seasonality within this deposit category. Savings and money market accounts experienced a slight increase in both periods, partially offsetting the above mentioned decline.
As a result of changes in the FDIC's Temporary Liquidity Guarantee Program, our government guaranteed NOW product was discontinued during the fourth quarter. As of December 31, 2010, approximately $95 million in balances from this product remained in the NOW category, $95 million migrated to the noninterest bearing DDA category, and $60 million moved into repurchase agreements.
We continue to pursue prudent pricing discipline to manage the mix of our deposits. Therefore, we are not attempting to compete with higher rate paying competitors for deposits.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $249.1 million during the second quarter of 2011 compared to an average overnight funds sold position of $238.1 million in the linked quarter and $164.9 million in the fourth quarter of 2010. The higher balance when compared to the linked quarter primarily reflects a decline in the loan portfolio, partially offset by the decrease in deposits mentioned above and lower levels of short-term borrowings. The favorable variance as compared to the fourth quarter of 2010 is primarily attributable to an increase in repurchase agreements and a net reduction in loans, partially offset by a decline in deposits and the deployment of funds to the investment portfolio.
Equity capital was $260.5 million as of June 30, 2011, compared to $259.3 million as of March 31, 2011 and $259.0 million as of December 31, 2010. Our leverage ratio was 9.95%, 9.74%, and 10.10%, respectively, for these periods. Further, our risk-adjusted capital ratio of 15.19% at June 30, 2011 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At June 30, 2011, our tangible common equity ratio was 6.96%, compared to 6.73% at March 31, 2011 and 6.82% at December 31, 2010.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2011 was $23.7 million compared to $23.3 million for the first quarter of 2010 and $24.7 million for the second quarter of 2010. For the first six months of 2011, tax equivalent net interest income totaled $47.0 million compared to $49.2 million in 2010.
The increase of $0.4 million in tax equivalent net interest income on a linked quarter basis was due to lower cost of funds and one additional calendar day. Lower interest expense reflects a reduction in deposit rates, primarily in certificates of deposit. Interest income on earning assets was higher as a result of the one additional calendar day. Additionally, net interest income was impacted by favorable net interest adjustments on nonaccrual loans (i.e. quarter over quarter improvement in the level of interest income reversals), which offset lower interest income attributable to a reduction in loans outstanding and unfavorable asset repricing.
The decrease in tax equivalent net interest income of $1.0 million and $2.2 million, for the three and six month periods ended June 30, 2011, respectively, as compared to the same periods in 2010, resulted from a reduction in loans outstanding, lower earning assets yields reflecting unfavorable asset repricing and lower loan fees, partially offset by a reduction in interest expense and favorable net interest adjustments as noted above.
The net interest margin in the second quarter of 2011 was 4.21%, an increase of 7 basis points over the linked quarter and a decline of 6 basis points from the second quarter of 2010. Year over year, for the six month period, the margin declined 7 basis points to 4.17%. The increase in the margin when compared to the linked quarter reflects a 3 basis point reduction in the cost of funds, and an improvement in the yield on earning assets of 4 basis points. The higher yield on earning assets was primarily attributable to an increase in the loan yield resulting from the favorable interest income adjustments mentioned above, while the lower cost of funds resulted from a reduction in the rates on certificates of deposit, which were significantly reduced in all markets. The 7 basis point decline in the margin for the six months of 2011 is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a favorable variance in our average cost of funds.
The provision for loan losses for the second quarter of 2011 was $3.5 million compared to $4.1 million in the first quarter of 2011 and $3.6 million for the second quarter of 2010. The reduction in the loan loss provision for both periods primarily reflects a reduction in the level of impaired loans and required reserves. For the first six months of 2011, the loan loss provision totaled $7.7 million compared to $14.4 million for the same period in 2010, also reflective of lower impaired loan reserves as well as a decline in general reserves, primarily due to a reduction in the level of internally classified loans and lower loss rates. Net charge-offs for the second quarter of 2011 totaled $6.3 million, or 1.49%, of average loans compared to $5.7 million, or 1.33% for the first quarter of 2011 and $6.4 million, or 1.39% in the second quarter of 2010. For the first half of 2011, net charge-offs totaled $12.0 million, or 1.41%, of average loans compared to $19.9 million, or 2.16% for the same period of 2010. At quarter-end, the allowance for loan losses of $31.1 million was 1.84% of outstanding loans (net of overdrafts) and provided coverage of 37% of nonperforming loans compared to 1.98% and 35%, respectively, at March 31, 2011, and 2.01% and 41%, respectively, at December 31, 2010.
Noninterest income for the second quarter of 2011 totaled $14.4 million, a decrease of $1.9 million, or 11.5% from the first quarter of 2011 and $0.2 million, or 1.5% from the second quarter of 2010. The unfavorable variance compared to the linked quarter reflects the sale of our Class B shares of Visa stock during the first quarter of 2011, which resulted in a $3.2 million pre-tax gain (reflected in other income), as well as a $0.2 million reduction in data processing fees. Favorable variances for deposit fees, retail brokerage fees, and gains from the sale of OREO partially offset the aforementioned unfavorable variances. For the first six months of 2011, noninterest income totaled $30.8 million, an increase of $2.1 million over the same period of 2010 driven by the Visa gain, partially offset by lower deposit and merchant fees. The decline in deposit fees reflects a lower level of overdraft fees due to reduced activity as well as the implementation of new rules under Regulation E. The reduction in merchant fees reflects the transfer of our merchant processing business to another processor, which was completed in August 2010. The decline in our merchant fees is substantially offset by a reduction in processing costs, which are reflected as interchange fees in noninterest expense.
Noninterest expense for the second quarter of 2011 totaled $31.2 million, a decrease of $2.2 million from the first quarter of 2011 and $3.5 million from the second quarter of 2010. The decline over the linked quarter reflects lower expense for compensation of $0.6 million, FDIC insurance of $0.3 million, intangible amortization of $0.2 million, OREO expenses of $0.6 million, and miscellaneous expense of $0.3 million. Compensation expense declined due to a reduction in performance compensation and lower unemployment taxes. The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure. Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions. The lower level of OREO expense primarily reflects a reduction in the level of losses recognized on the sale of OREO. Recognition of a $0.6 million swap liability associated with the sale of our Visa shares during the first quarter of 2011 drove the favorable variance in miscellaneous expense. For the first six months of 2011, noninterest expense totaled $64.5 million, a $3.5 million decline from the same period of 2010 attributable to lower professional fees of $0.3 million, advertising expense of $0.3 million, FDIC insurance of $0.7 million, intangible amortization expense of $1.0 million, and interchange fees of $0.9 million. Professional fees declined due to lower consulting fees and appraisal fees for OREO properties. The reduction in advertising fees reflects a lower level of activity as well as improved efficiencies gained from restructuring of the direct mail campaigns for our free checking products. The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure. Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions. Lower interchange fees are attributable to the sale of our merchant processing business as noted above in our discussion of noninterest income.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. ("The Company") (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 70 banking offices and 79 ATMs 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 the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: legislative or regulatory changes, including the Dodd-Frank Act; the strength of the U.S. economy and the local economies where the Company conducts operations; the accuracy of the Company's financial statement estimates and assumptions, including the estimate for the Company's loan loss provision; the frequency and magnitude of foreclosure of the Company's loans; continued depression of the market value of the Company that could result in an impairment of goodwill; restrictions on our operations, including the inability to pay dividends without our regulators' consent; the effects of the health and soundness of other financial institutions, including the FDIC's need to increase Deposit Insurance Fund assessments; our ability to declare and pay dividends; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; 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; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; the Company's ability to integrate acquisitions; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and the Company's other filings with the SEC, which are available at the SEC's internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.
(1) The problem loan resolutions and reductions in portfolio balances stated in this paragraph are based on "as of" balances, not averages.
EARNINGS HIGHLIGHTS
Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2011 Mar 31, 2011 Jun 30, 2010 Jun 30, 2011 Jun 30, 2010
EARNINGS
Net Income (Loss) $ 2,145 $ 1,310 $ 731 $ 3,455 $ (2,732)
Net Income (Loss) Per Common Share $ 0.12 $ 0.08 $ 0.04 $ 0.20 $ (0.16)
PERFORMANCE
Return on Average Equity 3.28% 2.03% 1.11% 2.66% -2.07%
Return on Average Assets 0.33% 0.20% 0.11% 0.26% -0.20%
Net Interest Margin 4.21% 4.14% 4.26% 4.17% 4.24%
Noninterest Income as % of Operating Revenue 38.13% 41.54% 37.58% 39.87% 37.18%
Efficiency Ratio 81.41% 83.30% 86.06% 82.37% 85.54%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 13.83% 13.46% 12.78% 13.83% 12.78%
Total Capital Ratio 15.19% 14.82% 14.14% 15.19% 14.14%
Tangible Common Equity Ratio 6.96% 6.73% 6.80% 6.96% 6.80%
Leverage Ratio 9.95% 9.74% 9.58% 9.95% 9.58%
Equity to Assets 10.02% 9.74% 9.87% 10.02% 9.87%
ASSET QUALITY
Allowance as % of Non-Performing Loans 36.71% 34.57% 37.80% 36.71% 37.80%
Allowance as a % of Loans 1.84% 1.98% 2.11% 1.84% 2.11%
Net Charge-Offs as % of Average Loans 1.49% 1.33% 1.39% 1.41% 2.16%
Nonperforming Assets as % of Loans and ORE 8.33% 8.66% 8.01% 8.33% 8.01%
Nonperforming Assets as % of Total Assets 5.60% 5.76% 5.65% 5.60% 5.65%
STOCK PERFORMANCE
High $ 13.12 $ 13.80 $ 18.25 $ 13.80 $ 18.25
Low $ 9.94 $ 11.87 $ 12.36 $ 9.94 $ 11.57
Close $ 10.26 $ 12.68 $ 12.38 $ 10.26 $ 12.38
Average Daily Trading Volume 29,716 21,740 46,507 25,696 36,917
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Six Months Ended
June 30
(Dollars in thousands, except per share data) 2011
Second Quarter 2011
First Quarter 2010
Fourth Quarter 2010
Third Quarter 2010
Second Quarter 2011 2010
INTEREST INCOME
Interest and Fees on Loans $ 24,305 $ 23,947 $ 25,656 $ 26,418 $ 26,644 $ 48,252 $ 53,636
Investment Securities 1,017 1,071 1,080 1,014 1,114 2,088 2,104
Funds Sold 145 171 95 144 176 316 348
Total Interest Income 25,467 25,189 26,831 27,576 27,934 50,656 56,088
INTEREST EXPENSE
Deposits 1,083 1,258 1,524 1,820 2,363 2,341 5,301
Short-Term Borrowings 110 111 99 31 12 221 29
Subordinated Notes Payable 343 340 342 376 639 683 1,290
Other Long-Term Borrowings 492 494 508 565 551 986 1,077
Total Interest Expense 2,028 2,203 2,473 2,792 3,565 4,231 7,697
Net Interest Income 23,439 22,986 24,358 24,784 24,369 46,425 48,391
Provision for Loan Losses 3,545 4,133 3,783 5,668 3,633 7,678 14,373
Net Interest Income after Provision for Loan Losses 19,894 18,853 20,575 19,116 20,736 38,747 34,018
NONINTEREST INCOME
Service Charges on Deposit Accounts 6,309 5,983 6,434 6,399 7,039 12,292 13,667
Data Processing Fees 764 974 880 911 919 1,738 1,819
Asset Management Fees 1,080 1,080 1,095 1,040 1,080 2,160 2,100
Retail Brokerage Fees 939 729 738 671 846 1,668 1,411
Gain on Sale of Investment Securities -- -- -- 3 -- -- 5
Mortgage Banking Fees 568 617 1,027 772 641 1,185 1,149
Interchange Fees (1) 1,443 1,360 1,285 1,291 1,289 2,803 2,501
ATM/Debit Card Fees (1) 1,115 1,136 1,051 1,036 1,073 2,251 2,036
Other 2,230 4,455 2,225 1,326 1,787 6,685 3,953
Total Noninterest Income 14,448 16,334 14,735 13,449 14,674 30,782 28,641
NONINTEREST EXPENSE
Salaries and Associate Benefits 16,000 16,577 15,389 15,003 15,584 32,577 32,363
Occupancy, Net 2,447 2,396 2,406 2,611 2,585 4,843 4,993
Furniture and Equipment 2,117 2,226 2,268 2,288 2,192 4,343 4,373
Intangible Amortization 107 353 553 709 710 460 1,420
Other Real Estate 3,033 3,677 4,709 3,306 4,082 6,710 6,907
Other 7,463 8,102 8,215 8,446 9,476 15,565 17,957
Total Noninterest Expense 31,167 33,331 33,540 32,363 34,629 64,498 68,013
OPERATING PROFIT(LOSS) 3,175 1,856 1,770 202 781 5,031 (5,354)
Provision for Income Taxes 1,030 546 (148) (199) 50 1,576 (2,622)
NET INCOME(LOSS) $ 2,145 $ 1,310 $ 1,918 $ 401 $ 731 $ 3,455 $ (2,732)
PER SHARE DATA
Basic Earnings $ 0.12 $ 0.08 $ 0.12 $ 0.02 $ 0.04 $ 0.20 $ (0.16)
Diluted Earnings $ 0.12 $ 0.08 $ 0.12 $ 0.02 $ 0.04 $ 0.20 $ (0.16)
Cash Dividends 0.100 0.100 0.100 0.100 0.100 0.200 0.290
AVERAGE SHARES
Basic 17,127 17,122 17,095 17,087 17,063 17,124 17,060
Diluted 17,139 17,130 17,096 17,088 17,074 17,135 17,071
(1) Together referred to as "Bank Card Fees"
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
(Dollars in thousands, except per share data) 2011
Second Quarter 2011
First Quarter 2010
Fourth Quarter 2010
Third Quarter 2010
Second Quarter
ASSETS
Cash and Due From Banks $ 71,554 $ 52,000 $ 35,410 $ 48,701 $ 52,380
Funds Sold and Interest Bearing Deposits 223,183 271,375 200,783 193,415 250,508
Total Cash and Cash Equivalents 294,737 323,375 236,193 242,116 302,888
Investment Securities, Available-for-Sale 304,313 311,356 309,731 231,303 218,785
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 149,830 153,960 157,394 156,049 161,268
Real Estate - Construction 30,867 35,614 43,239 45,346 56,910
Real Estate - Commercial 660,058 668,583 671,702 680,639 676,516
Real Estate - Residential 395,126 404,204 420,604 448,704 450,997
Real Estate - Home Equity 248,228 248,745 251,565 250,795 247,726
Consumer 194,624 196,205 200,727 207,207 215,723
Other Loans 5,987 5,098 9,937 9,828 9,498
Overdrafts 2,882 2,385 3,503 2,669 3,144
Total Loans, Net of Unearned Interest 1,687,602 1,714,794 1,758,671 1,801,237 1,821,782
Allowance for Loan Losses (31,080) (33,873) (35,436) (37,720) (38,442)
Loans, Net 1,656,522 1,680,921 1,723,235 1,763,517 1,783,340
Premises and Equipment, Net 112,576 113,918 115,356 115,689 116,802
Intangible Assets 85,699 85,806 86,159 86,712 87,421
Other Real Estate Owned 61,016 55,364 57,937 51,208 48,110
Other Assets 84,395 91,754 93,442 89,451 93,398
Total Other Assets 343,686 346,842 352,894 343,060 345,731
Total Assets $ 2,599,258 $ 2,662,494 $ 2,622,053 $ 2,579,996 $ 2,650,744
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 568,813 $ 540,184 $ 546,257 $ 479,887 $ 460,168
NOW Accounts 764,480 818,512 770,149 830,297 891,636
Money Market Accounts 283,230 288,224 275,416 282,848 303,369
Regular Savings Accounts 153,403 150,051 139,888 135,143 132,174
Certificates of Deposit 331,085 350,076 372,266 393,268 412,964
Total Deposits 2,101,011 2,147,047 2,103,976 2,121,443 2,200,311
Short-Term Borrowings 65,237 86,650 92,928 38,138 21,376
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 49,196 50,050 50,101 46,456 55,605
Other Liabilities 60,383 56,582 53,142 50,383 48,885
Total Liabilities 2,338,714 2,403,216 2,363,034 2,319,307 2,389,064
SHAREOWNERS' EQUITY
Common Stock 171 171 171 171 171
Additional Paid-In Capital 37,724 37,548 36,920 36,864 36,633
Retained Earnings 237,709 237,276 237,679 237,471 238,779
Accumulated Other Comprehensive Loss, Net of Tax (15,060) (15,717) (15,751) (13,817) (13,903)
Total Shareowners' Equity 260,544 259,278 259,019 260,689 261,680
Total Liabilities and Shareowners' Equity $ 2,599,258 $ 2,662,494 $ 2,622,053 $ 2,579,996 $ 2,650,744
OTHER BALANCE SHEET DATA
Earning Assets $ 2,215,098 $ 2,297,525 $ 2,269,185 $ 2,225,955 $ 2,291,075
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 378 437 742 1,248 1,910
Other 510 558 606 653 700
Interest Bearing Liabilities 1,709,518 1,806,450 1,763,635 1,789,037 1,880,011
Book Value Per Diluted Share $ 15.20 $ 15.13 $ 15.15 $ 15.25 $ 15.32
Tangible Book Value Per Diluted Share 10.21 10.13 10.11 10.18 10.21
Actual Basic Shares Outstanding 17,127 17,127 17,100 17,095 17,067
Actual Diluted Shares Outstanding 17,139 17,136 17,101 17,096 17,078
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2011 2011 2010 2010 2010
(Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 33,873 $ 35,436 $ 37,720 $ 38,442 $ 41,199
Provision for Loan Losses 3,545 4,133 3,783 5,668 3,633
Transfer of Unfunded Reserve to Other Liability -- -- -- -- --
Net Charge-Offs 6,338 5,696 6,067 6,390 6,390
Balance at End of Period $ 31,080 $ 33,873 $ 35,436 $ 37,720 $ 38,442
As a % of Loans 1.84% 1.98% 2.01% 2.10% 2.11%
As a % of Nonperforming Loans 36.71% 34.57% 40.57% 39.94% 37.80%
As a % of Nonperforming Assets 21.34% 22.09% 24.39% 25.90% 25.66%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 301 $ 721 $ 629 $ 242 $ 405
Real Estate - Construction 14 -- 234 701 1,220
Real Estate - Commercial 2,808 430 1,469 1,741 920
Real Estate - Residential 3,315 4,445 3,629 3,175 4,725
Consumer 606 620 582 1,057 360
Total Charge-Offs $ 7,044 $ 6,216 $ 6,543 $ 6,916 $ 7,630
RECOVERIES
Commercial, Financial and Agricultural $ 43 $ 63 $ 48 $ 65 $ 181
Real Estate - Construction 5 9 -- -- 8
Real Estate - Commercial 115 12 55 6 43
Real Estate - Residential 170 96 7 181 638
Consumer 373 340 366 274 370
Total Recoveries $ 706 $ 520 $ 476 $ 526 $ 1,240
NET CHARGE-OFFS $ 6,338 $ 5,696 $ 6,067 $ 6,390 $ 6,390
Net Charge-Offs as a % of Average Loans(1) 1.49% 1.33% 1.35% 1.40% 1.39%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 61,076 $ 73,954 $ 65,700 $ 74,168 $ 74,504
Restructured Loans 23,582 24,028 21,649 20,267 27,200
Total Nonperforming Loans 84,658 97,982 87,349 94,435 101,704
Other Real Estate 61,016 55,364 57,937 51,208 48,110
Total Nonperforming Assets $ 145,674 $ 153,346 $ 145,286 $ 145,643 $ 149,814
Past Due Loans 30-89 Days $ 18,103 $ 19,391 $ 24,193 $ 24,904 $ 21,192
Past Due Loans 90 Days or More $ 271 $ -- $ 159 $ -- $ --
Nonperforming Loans as a % of Loans 5.02% 5.71% 4.97% 5.24% 5.58%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.33% 8.66% 8.00% 7.86% 8.01%
Nonperforming Assets as a % of Capital(2) 49.95% 52.31% 49.34% 48.81% 49.92%
Nonperforming Assets as a % of Total Assets 5.60% 5.76% 5.54% 5.65% 5.65%
(1) Annualized
(2) Capital includes allowance for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Second Quarter 2011 First Quarter 2011 Fourth Quarter 2010
(Dollars in thousands) Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,704,348 24,465 5.76% $ 1,730,330 24,101 5.65% $ 1,782,916 25,799 5.74%
Investment Securities
Taxable Investment Securities 244,487 825 1.35% 231,153 851 1.48% 178,926 799 1.78%
Tax-Exempt Investment Securities 60,963 297 1.95% 74,226 337 1.81% 83,469 434 2.08%
Total Investment Securities 305,450 1,122 1.47% 305,379 1,188 1.56% 262,395 1,233 1.87%
Funds Sold 249,133 145 0.23% 242,893 171 0.28% 172,738 95 0.24%
Total Earning Assets 2,258,931 $ 25,732 4.57% 2,278,602 $ 25,460 4.53% 2,218,049 $ 27,127 4.85%
Cash and Due From Banks 47,465 50,942 51,030
Allowance for Loan Losses (32,993) (34,822) (37,713)
Other Assets 344,884 348,295 345,427
Total Assets $ 2,618,287 $ 2,643,017 $ 2,576,793
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 782,698 $ 259 0.13% $ 786,939 $ 261 0.13% $ 837,625 $ 296 0.14%
Money Market Accounts 284,411 136 0.19% 278,562 131 0.19% 282,887 134 0.19%
Savings Accounts 152,599 16 0.04% 144,623 18 0.05% 136,276 16 0.05%
Time Deposits 338,723 672 0.80% 360,575 848 0.95% 382,870 1,078 1.12%
Total Interest Bearing Deposits 1,558,431 1,083 0.28% 1,570,699 1,258 0.32% 1,639,658 1,524 0.37%
Short-Term Borrowings 76,754 110 0.58% 87,267 111 0.52% 34,706 99 1.14%
Subordinated Notes Payable 62,887 343 2.16% 62,887 340 2.16% 62,887 342 2.13%
Other Long-Term Borrowings 49,650 492 3.97% 50,345 494 3.98% 50,097 508 4.02%
Total Interest Bearing Liabilities 1,747,722 $ 2,028 0.47% 1,771,198 $ 2,203 0.50% 1,787,348 $ 2,473 0.55%
Noninterest Bearing Deposits 548,870 554,680 476,209
Other Liabilities 59,324 55,536 50,614
Total Liabilities 2,355,916 2,381,414 2,314,171
SHAREOWNERS' EQUITY: $ 262,371 $ 261,603 $ 262,622
Total Liabilities and Shareowners' Equity $ 2,618,287 $ 2,643,017 $ 2,576,793
Interest Rate Spread $ 23,704 4.10% $ 23,257 4.03% $ 24,654 4.30%
Interest Income and Rate Earned(1) $ 25,732 4.57% $ 25,460 4.53% $ 27,127 4.85%
Interest Expense and Rate Paid(2) 2,028 0.36% 2,203 0.39% 2,473 0.44%
Net Interest Margin $ 23,704 4.21% $ 23,257 4.14% $ 24,654 4.41%
Third Quarter 2010 Second Quarter 2010
(Dollars in thousands) Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,807,483 26,568 5.83% $ 1,841,379 26,795 5.84%
Investment Securities
Taxable Investment Securities 124,625 674 2.15% 128,268 708 2.21%
Tax-Exempt Investment Securities 88,656 521 2.35% 92,140 624 2.71%
Total Investment Securities 213,281 1,195 2.23% 220,408 1,332 2.42%
Funds Sold 252,434 144 0.22% 267,578 176 0.26%
Total Earning Assets 2,273,198 $ 27,907 4.87% 2,329,365 $ 28,303 4.87%
Cash and Due From Banks 50,942 50,739
Allowance for Loan Losses (39,584) (41,074)
Other Assets 342,202 339,458
Total Assets $ 2,626,758 $ 2,678,488
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 871,158 $ 326 0.15% $ 879,329 $ 400 0.18%
Money Market Accounts 293,424 145 0.20% 333,976 331 0.40%
Savings Accounts 133,690 17 0.05% 131,333 17 0.05%
Time Deposits 402,880 1,332 1.31% 430,571 1,615 1.50%
Total Interest Bearing Deposits 1,701,152 1,820 0.42% 1,775,209 2,363 0.53%
Short-Term Borrowings 23,388 31 0.54% 22,694 12 0.20%
Subordinated Notes Payable 62,887 376 2.34% 62,887 639 4.02%
Other Long-Term Borrowings 54,258 565 4.13% 52,704 551 4.20%
Total Interest Bearing Liabilities 1,841,685 $ 2,792 0.60% 1,913,494 $ 3,565 0.75%
Noninterest Bearing Deposits 471,013 458,969
Other Liabilities 50,318 42,152
Total Liabilities 2,363,016 2,414,615
SHAREOWNERS' EQUITY: $ 263,742 $ 263,873
Total Liabilities and Shareowners' Equity $ 2,626,758 $ 2,678,488
Interest Rate Spread $ 25,115 4.27% $ 24,738 4.12%
Interest Income and Rate Earned(1) $ 27,907 4.87% $ 28,303 4.87%
Interest Expense and Rate Paid(2) 2,792 0.49% 3,565 0.61%
Net Interest Margin $ 25,115 4.38% $ 24,738 4.26%
June 2011 YTD June 2010 YTD
(Dollars in thousands) Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,717,267 48,566 5.76% $ 1,863,749 53,975 5.84%
Investment Securities
Taxable Investment Securities 237,857 1,676 1.41% 99,954 1,208 2.42%
Tax-Exempt Investment Securities 67,558 634 1.88% 94,713 1,377 2.91%
Total Investment Securities 305,415 2,310 1.52% 194,667 2,585 2.66%
Funds Sold 246,030 316 0.23% 285,331 348 0.24%
Total Earning Assets 2,268,712 $ 51,192 4.55% 2,343,747 $ 56,908 4.90%
Cash and Due From Banks 49,194 52,795
Allowance for Loan Losses (33,903) (42,820)
Other Assets 346,581 334,677
Total Assets $ 2,630,584 $ 2,688,399
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 784,806 $ 520 0.13% $ 873,200 $ 784 0.18%
Money Market Accounts 281,503 267 0.19% 353,958 1,020 0.58%
Savings Accounts 148,633 34 0.05% 128,856 32 0.05%
Time Deposits 349,589 1,520 0.88% 434,321 3,465 1.61%
Total Interest Bearing Deposits 1,564,531 2,341 0.30% 1,790,335 5,301 0.60%
Short-Term Borrowings 81,982 221 0.54% 26,662 29 0.21%
Subordinated Notes Payable 62,887 683 2.16% 62,887 1,290 4.08%
Other Long-Term Borrowings 49,995 986 3.98% 51,350 1,077 4.23%
Total Interest Bearing Liabilities 1,759,395 $ 4,231 0.48% 1,931,234 $ 7,697 0.80%
Noninterest Bearing Deposits 551,759 451,094
Other Liabilities 57,440 39,870
Total Liabilities 2,368,594 2,422,198
SHAREOWNERS' EQUITY: $ 261,990 $ 266,201
Total Liabilities and Shareowners' Equity $ 2,630,584 $ 2,688,399
Interest Rate Spread $ 46,961 4.07% $ 49,211 4.10%
Interest Income and Rate Earned(1) $ 51,192 4.55% $ 56,908 4.90%
Interest Expense and Rate Paid(2) 4,231 0.38% 7,697 0.66%
Net Interest Margin $ 46,961 4.17% $ 49,211 4.24%
(1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.
(2) Rate calculated based on average earning assets.
CONTACT: J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820
Source: Capital City Bank Group, Inc.
Released July 26, 2011