Capital City Bank Group, Inc. Reports First Quarter 2011 Results
TALLAHASSEE, Fla., April 25, 2011 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.3 million, or $0.08 per diluted share for the first quarter of 2011 compared to net income of $1.9 million, or $0.12 per diluted share in the fourth quarter of 2010 ("linked quarter") and a net loss of $3.5 million, or $0.20 per diluted share for the first quarter of 2010.
Compared to the fourth quarter of 2010, net income reflects lower net interest income of $1.4 million, an increase in the loan loss provision of $0.3 million, and higher income tax expense of $0.7 million, partially offset by higher noninterest income of $1.6 million, and lower noninterest expense of $0.2 million. During the first quarter of 2011, we sold all of our Visa Class B shares of stock, which resulted in a $3.2 million pre-tax gain reflected in noninterest income and a swap liability of $0.6 million reflected in noninterest expense.
The increase in net income over the first quarter of 2010 was driven by a lower loan loss provision of $6.6 million and higher noninterest income of $2.4 million, partially offset by a reduction in net interest income of $1.0 million and higher income tax expense of $3.2 million.
"Given the current state of our economy, I am pleased to report Capital City earned a profit during the first quarter, but weak loan demand, historically low interest rates and general economic conditions within our markets continue to put pressure on earnings," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. Although our nonperforming assets remain elevated, many credit metrics are showing improved trends. As expected, total credit costs remain elevated as we work loans through the collection cycle and dispose of OREO properties, both of which gained momentum during the quarter. We operate from a position of strength with strong liquidity and capital base; and we continue to focus on core deposits as we believe this is the foundation of our long-term franchise value. While we believe the worst is behind us, early on we suggested the road to recovery would be choppy and this is now playing out as we continue to experience volatility in our quarter to quarter performance."
The Return on Average Assets was 0.20% and the Return on Average Equity was 2.03% for the first quarter of 2011, compared to 0.30% and 2.90%, respectively for the fourth quarter of 2010, and -0.52% and -5.23%, respectively for the comparable quarter in 2010.
Discussion of Financial Condition
Average earning assets were $2.279 billion for the first quarter of 2011, an increase of $60.6 million, or 2.7% from the fourth quarter of 2010, and a decline of $79.7 million, or 3.4%, from the first quarter of 2010. The higher level of earning assets over the linked quarter was funded by growth in both deposits and short-term borrowings. Quarter over quarter, average overnight funds grew by $70.2 million, the investment portfolio grew $43.0 million and loans declined $52.6 million, partially attributable to the resolution of problem loans during the quarter.
As compared to the first quarter of 2010, earning assets declined $79.7 million. A $123.4 million reduction in deposits, partially offset by a $56.6 million increase in short-term borrowings drove the overall reduction in earning assets. The increase in short-term borrowings is attributable to the expiration of our Guarantee NOW Account ("GNA") program and clients shifting deposits from the GNA to retail repurchase agreements, which is explained in greater detail below. Average loans and overnight funds declined $156.0 million and $60.4 million, respectively, while investment securities increased $136.7 million. Average loans have declined throughout the portfolio, driven primarily by reduction in the commercial real estate 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 has the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned category. During the first quarter, problem loan resolutions accounted for $15.3 million, or 35% of a net reduction in total loans of $43.9 million, and on a year over year basis, problem loan resolutions accounted for $70.4 million, or 51% of the net reduction of $136.8 million1.
Nonperforming assets (including nonaccrual loans, restructured loans ("TDRs"), and other real estate owned ("OREO")) totaled $153.3 million at the end of the first quarter of 2011, an increase of $8.1 million over the fourth quarter of 2010 and a reduction of $0.3 million from the first quarter of 2010. Compared to the linked quarter, nonaccrual loans increased $8.3 million due to a higher level of defaults within our problem loan pool, a significant portion of which was related to one borrowing relationship totaling $6.0 million. TDRs totaled $24.0 million at the end of the first quarter, a $2.4 million increase over the linked quarter. The balance of OREO decreased $2.6 million from the linked quarter reflective of an increased pace of property dispositions. Compared to the first quarter of 2010, the slight decline in nonperforming assets reflects a $2.4 million reduction in the nonaccrual loan balance and a $6.8 million decline in TDRs, partially offset by an $8.9 million increase in the OREO balance. Nonperforming assets represented 5.76% of total assets at March 31, 2011 compared to 5.54% at December 31, 2010 and 5.66% at March 31, 2010.
Average total deposits were $2.125 billion for the first quarter, an increase of $9.5 million, or 0.5%, from the fourth quarter of 2010 and a decrease of $123.4 million, or 5.5%, from the first quarter of 2010. Deposit levels improved slightly from the linked quarter primarily as a result of growth in public funds, partially offset by declines in certificates of deposit and existing clients moving from our GNA product to repurchase agreements. Public funds balances have increased as anticipated from the linked quarter reflecting seasonality within this deposit category. Pursuant to 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. The decrease from the first quarter of 2010 reflects a reduction in money market accounts (primarily promotional deposits), deposits transferring from GNA to repurchase agreements and lower certificates of deposit balances, partially offset by higher public funds.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $238.1 million during the first quarter of 2011 compared to an average net overnight funds sold position of $164.9 million in the prior quarter and an average overnight funds sold position of $297.0 million in the first quarter of 2010. The higher balance when compared to the linked quarter primarily reflects the increase in deposits mentioned above, growth in short-term borrowings and declines in the loan portfolio, partially offset by a higher level of investment securities. The unfavorable variance as compared to first quarter of 2010 is primarily attributable to declines in deposits and the deployment of funds to the investment portfolio, partially offset by a net reduction in loans.
Equity capital was $259.3 million as of March 31, 2011, compared to $259.0 million as of December 31, 2010 and $262.0 million as of March 31, 2010. Our leverage ratio was 9.74%, 10.10%, and 9.64%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.82% at March 31, 2011 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines and reflects an improvement of 23 basis points over the linked quarter. At March 31, 2011, our tangible common equity ratio was 6.73%, compared to 6.82% at December 31, 2010 and 6.62% at March 31, 2010.
Discussion of Operating Results
Tax equivalent net interest income for the first quarter of 2011 was $23.3 million compared to $24.6 million for the fourth quarter of 2010 and $24.5 million for the first quarter of 2010.
The decrease of $1.3 million in tax equivalent net interest income as compared to the linked quarter was due to two less calendar days; a reduction in loan income attributable to declining loan balances and continued unfavorable asset repricing. This was partially offset by lower interest expense and a slight decrease in foregone interest on nonaccrual loans. Lower interest expense reflects a reduction in deposit rates primarily in certificates of deposit. With the exception of calendar days, the explanation for the $1.2 million decline from the prior year quarter essentially mirrors the explanation for the linked quarter.
The net interest margin in the first quarter of 2011 was 4.14%, a decrease of 27 basis points over the linked quarter and a decline of 7 basis points from the first quarter of 2010. The decrease in the margin when compared to both periods was a reduction in the earning asset yield attributable to a shift in the mix of earning assets and continued unfavorable asset repricing. Partially offsetting the unfavorable variances was a reduction in the cost of funds, primarily the average rate paid on certificates of deposit.
The provision for loan losses for the first quarter of 2011 was $4.1 million compared to $3.8 million in the fourth quarter of 2010 and $10.7 million for the first quarter of 2010. The increase in the loan loss provision compared to the linked quarter primarily reflects reserves for newly identified impaired loans. A reduction in general reserves had a favorable impact on the loan loss provision and reflects a decline in our classified loan balance, partially due to loan upgrades during the quarter, a lower historical loss ratio and a reduction in past dues. Compared to the first quarter of 2010, a reduction in impaired loans was the primary factor driving the decline in the loan loss provision. Net charge-offs for the first quarter of 2011 totaled $5.7 million, or 1.33%, of average loans compared to $6.1 million, or 1.35% for the fourth quarter of 2010 and $13.5 million, or 2.91% in the first quarter of 2010. At quarter-end, the allowance for loan losses of $33.9 million was 1.98% of outstanding loans (net of overdrafts) and provided coverage of 35% of nonperforming loans compared to 2.01% and 41%, respectively, at December 31, 2010, and 2.23% and 38%, respectively, at March 31, 2010.
Noninterest income for the first quarter of 2011 totaled $16.3 million, an increase of $1.6 million, or 10.9% over the fourth quarter of 2010 and $2.4 million, or 16.9% over the first quarter of 2010. The increase for both periods was due to a $3.2 million gain (reflected in other income) from the sale of all the Class B shares of Visa stock that were obtained from the initial public offering of Visa, Inc. Compared to the linked quarter, a lower level of deposit fees of $0.5 million and mortgage banking fees of $0.4 million partially offset the gain realized from the sale of Visa stock. The decline in deposit fees reflects a two-day calendar variance and a seasonal variance in the use of our overdraft product. Mortgage banking fees declined primarily due to lower new loan production reflective of a slowdown in new home purchase activity in our Tallahassee market. Additionally, gains from the sale of OREO properties and miscellaneous recoveries, both of which are reflected as other income, also declined from the linked quarter by $0.3 million and $0.4 million, respectively. Compared to the first quarter of 2010, noninterest income increased $2.4 million reflecting the $3.2 million gain on the sale of Visa shares, a $0.3 million increase in bank card fees, and higher retail brokerage fees of $0.2 million, partially offset by a $0.6 million decline in deposit fees and a $0.7 million decline in merchant fees which is included in other income. The decline in deposit fees compared to the first quarter of 2010 reflects a lower level of overdraft fees due to reduced activity reflective of current economic conditions, a higher level of consumer awareness that has both impacted consumer and business spending habits, as well as the implementation of new rules under Regulation E, which regulate our ability to post one-time debit card/ATM transactions for clients who have not opted in to our overdraft protection service. The reduction in merchant fees reflects the migration of our last remaining merchant to another processor – the decline in these revenues are substantially offset by a reduction in processing costs, which are reflected as interchange fees in noninterest expense.
Noninterest expense for the first quarter of 2011 totaled $33.3 million, a decrease of $0.2 million, or 0.62%, from the fourth quarter of 2010 and $0.1 million, or 0.16%, from the first quarter of 2010. The decline compared to the linked quarter was primarily due to a reduction in other expense of $1.1 million and intangible amortization expense of $0.2 million, partially offset by higher salary/benefit expense of $1.2 million. Other expense declined due to lower OREO expense of $1.0 million, advertising expense of $0.4 million, professional fees of $0.3 million, and a decline in other losses of $0.6 million. Unfavorable variances related to the recognition of a $0.6 million swap liability related to the sale of our Visa stock and the prior quarter reversal of our $0.8 million Visa litigation reserve partially offset the aforementioned reductions. Lower carrying costs of $0.5 million and valuation adjustments/losses of $0.5 million were the primary reason for the decline in OREO expense. A lower level of advertising and public relations activity drove the decline in advertising expense. Professional fees were lower primarily due to nonrecurring expenses in the fourth quarter of 2010 for consulting engagements. Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions. The increase in salary/benefit expense was due to higher incentive expense (cash and stock), the resetting of payroll/unemployment taxes and pension expense. Incentive expense increased due to the resetting to par of several performance incentive programs. The increase in pension expense reflects utilization of a lower discount rate in 2011 reflective of lower long-term bond interest rates. Compared to the first quarter of 2010, the slight decrease in noninterest expense was attributable to lower salary/benefit expense of $0.2 million and intangible amortization of $0.4 million, partially offset by an unfavorable variance of $0.5 million in other expense. The unfavorable variance for other expense was due to higher OREO expense of $0.8 million and recognition of a $0.6 million swap liability, partially offset by a decline in interchange fees of $0.6 million and professional fees of $0.2 million.
Income tax expense for the first quarter of 2011 totaled $0.5 million, an increase of $0.7 million over the fourth quarter of 2010, and $3.2 million over the first quarter of 2010. A higher level of book operating profit at our bank subsidiary due to the gain on sale of Visa stock drove the higher level of tax expense compared to both periods. Reversal of a tax contingency during the fourth quarter of 2010 also contributed to the variance.
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 $2.7 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.
1The 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
(Dollars in thousands, except per share data) Mar 31, 2011 Dec 31, 2010 Mar 31, 2010
EARNINGS
Net Income(Loss) $1,310 $1,918 $(3,463)
Net Income(Loss) Per Common Share $0.08 $0.12 $(0.20)
PERFORMANCE
Return on Average Equity 2.03% 2.90% -5.23%
Return on Average Assets 0.20% 0.30% -0.52%
Net Interest Margin 4.14% 4.41% 4.21%
Noninterest Income as % of Operating Revenue 41.54% 37.69% 36.77%
Efficiency Ratio 83.30% 83.75% 85.00%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 13.46% 13.24% 12.81%
Total Capital Ratio 14.82% 14.59% 14.16%
Tangible Capital Ratio 6.73% 6.82% 6.62%
Leverage Ratio 9.74% 10.10% 9.64%
Equity to Assets 9.74% 9.88% 9.65%
ASSET QUALITY
Allowance as % of Non-Performing Loans 34.57% 40.57% 38.42%
Allowance as a % of Loans 1.98% 2.01% 2.23%
Net Charge-Offs as % of Average Loans 1.33% 1.35% 2.91%
Nonperforming Assets as % of Loans and ORE 8.66% 8.00% 8.10%
Nonperforming Assets as % of Total Assets 5.76% 5.54% 5.66%
STOCK PERFORMANCE
High $13.80 $14.19 $14.61
Low $11.87 $11.56 $11.57
Close $12.68 $12.60 $14.25
Average Daily Trading Volume 21,740 21,385 26,854
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
(Dollars in thousands, except per share data) 2011
First Quarter 2010
Fourth Quarter 2010
Third Quarter 2010
Second Quarter 2010
First Quarter
INTEREST INCOME
Interest and Fees on Loans $23,947 $25,656 $26,418 $26,644 $26,992
Investment Securities 1,071 1,080 1,014 1,114 990
Funds Sold 171 95 144 176 172
Total Interest Income 25,189 26,831 27,576 27,934 28,154
INTEREST EXPENSE
Deposits 1,258 1,524 1,820 2,363 2,938
Short-Term Borrowings 111 99 31 12 17
Subordinated Notes Payable 340 342 376 639 651
Other Long-Term Borrowings 494 508 565 551 526
Total Interest Expense 2,203 2,473 2,792 3,565 4,132
Net Interest Income 22,986 24,358 24,784 24,369 24,022
Provision for Loan Losses 4,133 3,783 5,668 3,633 10,740
Net Interest Income after Provision for Loan Losses 18,853 20,575 19,116 20,736 13,282
NONINTEREST INCOME
Service Charges on Deposit Accounts 5,983 6,434 6,399 7,039 6,628
Data Processing Fees 974 880 911 919 900
Asset Management Fees 1,080 1,095 1,040 1,080 1,020
Retail Brokerage Fees 729 738 671 846 565
Gain on Sale of Investment Securities -- -- 3 -- 5
Mortgage Banking Fees 617 1,027 772 641 508
Interchange Fees (1) 1,360 1,285 1,291 1,289 1,212
ATM/Debit Card Fees (1) 1,136 1,051 1,036 1,073 963
Other 4,455 2,225 1,326 1,787 2,166
Total Noninterest Income 16,334 14,735 13,449 14,674 13,967
NONINTEREST EXPENSE
Salaries and Associate Benefits 16,577 15,389 15,003 15,584 16,779
Occupancy, Net 2,396 2,406 2,611 2,585 2,408
Furniture and Equipment 2,226 2,268 2,288 2,192 2,181
Intangible Amortization 353 553 709 710 710
Other 11,779 12,924 11,752 13,558 11,306
Total Noninterest Expense 33,331 33,540 32,363 34,629 33,384
OPERATING PROFIT(LOSS) 1,856 1,770 202 781 (6,135)
Provision for Income Taxes 546 (148) (199) 50 (2,672)
NET INCOME(LOSS) $1,310 $1,918 $401 $731 $(3,463)
PER SHARE DATA
Basic Earnings $0.08 $0.12 $0.02 $0.04 $(0.20)
Diluted Earnings $0.08 $0.12 $0.02 $0.04 $(0.20)
Cash Dividends 0.100 0.100 0.100 0.100 0.190
AVERAGE SHARES
Basic 17,122 17,095 17,087 17,063 17,057
Diluted 17,130 17,096 17,088 17,074 17,070
(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
First Quarter 2010
Fourth Quarter 2010
Third Quarter 2010
Second Quarter 2010
First Quarter
ASSETS
Cash and Due From Banks $ 52,000 $ 35,410 $ 48,701 $ 52,380 $ 52,615
Funds Sold and Interest Bearing Deposits 271,375 200,783 193,415 250,508 293,413
Total Cash and Cash Equivalents 323,375 236,193 242,116 302,888 346,028
Investment Securities, Available-for-Sale 311,356 309,731 231,303 218,785 217,606
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 153,960 157,394 156,049 161,268 169,766
Real Estate - Construction 35,614 43,239 45,346 56,910 79,145
Real Estate - Commercial 668,583 671,702 680,639 676,516 729,011
Real Estate - Residential 404,204 420,604 448,704 450,997 394,132
Real Estate - Home Equity 248,745 251,565 250,795 247,726 245,185
Consumer 196,205 200,727 207,207 215,723 224,793
Other Loans 5,098 9,937 9,828 9,498 6,888
Overdrafts 2,385 3,503 2,669 3,144 2,701
Total Loans, Net of Unearned Interest 1,714,794 1,758,671 1,801,237 1,821,782 1,851,621
Allowance for Loan Losses (33,873) (35,436) (37,720) (38,442) (41,198)
Loans, Net 1,680,921 1,723,235 1,763,517 1,783,340 1,810,423
Premises and Equipment, Net 113,918 115,356 115,689 116,802 117,055
Intangible Assets 85,806 86,159 86,712 87,421 88,131
Other Real Estate Owned 55,364 57,937 51,208 48,110 46,444
Other Assets 91,754 93,442 89,451 93,398 89,416
Total Other Assets 346,842 352,894 343,060 345,731 341,046
Total Assets $ 2,662,494 $ 2,622,053 $ 2,579,996 $ 2,650,744 $ 2,715,103
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 540,184 $ 546,257 $ 479,887 $ 460,168 $ 446,855
NOW Accounts 818,512 770,149 830,297 891,636 890,570
Money Market Accounts 288,224 275,416 282,848 303,369 376,091
Regular Savings Accounts 150,051 139,888 135,143 132,174 130,936
Certificates of Deposit 350,076 372,266 393,268 412,964 438,488
Total Deposits 2,147,047 2,103,976 2,121,443 2,200,311 2,282,940
Short-Term Borrowings 86,650 92,928 38,138 21,376 18,900
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 50,050 50,101 46,456 55,605 50,679
Other Liabilities 56,582 53,142 50,383 48,885 37,738
Total Liabilities 2,403,216 2,363,034 2,319,307 2,389,064 2,453,144
SHAREOWNERS' EQUITY
Common Stock 171 171 171 171 171
Additional Paid-In Capital 37,548 36,920 36,864 36,633 36,816
Retained Earnings 237,276 237,679 237,471 238,779 239,755
Accumulated Other Comprehensive Loss, Net of Tax (15,717) (15,751) (13,817) (13,903) (14,783)
Total Shareowners' Equity 259,278 259,019 260,689 261,680 261,959
Total Liabilities and Shareowners' Equity $ 2,662,494 $ 2,622,053 $ 2,579,996 $ 2,650,744 $ 2,715,103
OTHER BALANCE SHEET DATA
Earning Assets $ 2,297,525 $ 2,269,185 $ 2,225,955 $ 2,291,075 $ 2,362,640
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 437 742 1,248 1,910 2,572
Other 558 606 653 700 748
Interest Bearing Liabilities 1,806,450 1,763,635 1,789,037 1,880,011 1,968,551
Book Value Per Diluted Share $ 15.13 $ 15.15 $ 15.25 $ 15.32 $ 15.34
Tangible Book Value Per Diluted Share 10.13 10.11 10.18 10.21 10.18
Actual Basic Shares Outstanding 17,127 17,100 17,095 17,067 17,063
Actual Diluted Shares Outstanding 17,136 17,101 17,096 17,078 17,076
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2011 2010 2010 2010 2010
(Dollars in thousands) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 35,436 $ 37,720 $ 38,442 $ 41,199 $ 43,999
Provision for Loan Losses 4,133 3,783 5,668 3,633 10,740
Net Charge-Offs 5,696 6,067 6,390 6,390 13,540
Balance at End of Period $ 33,873 $ 35,436 $ 37,720 $ 38,442 $ 41,199
As a % of Loans 1.98% 2.01% 2.10% 2.11% 2.23%
As a % of Nonperforming Loans 34.57% 40.57% 39.94% 37.80% 38.42%
As a % of Nonperforming Assets 22.09% 24.39% 25.90% 25.66% 26.81%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 721 $ 629 $ 242 $ 405 $ 842
Real Estate - Construction -- 234 701 1,220 3,722
Real Estate - Commercial 430 1,469 1,741 920 4,631
Real Estate - Residential 4,445 3,629 3,175 4,725 3,727
Consumer 620 582 1,057 360 1,507
Total Charge-Offs $ 6,216 $ 6,543 $ 6,916 $ 7,630 $ 14,429
RECOVERIES
Commercial, Financial and Agricultural $ 63 $ 48 $ 65 $ 181 $ 77
Real Estate - Construction 9 -- -- 8 --
Real Estate - Commercial 12 55 6 43 157
Real Estate - Residential 96 7 181 638 114
Consumer 340 366 274 370 541
Total Recoveries $ 520 $ 476 $ 526 $ 1,240 $ 889
NET CHARGE-OFFS $ 5,696 $ 6,067 $ 6,390 $ 6,390 $ 13,540
Net Charge-Offs as a % of Average Loans(1) 1.33% 1.35% 1.40% 1.39% 2.91%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 73,954 $ 65,700 $ 74,168 $ 74,504 $ 76,382
Restructured Loans 24,028 21,649 20,267 27,200 30,843
Total Nonperforming Loans 97,982 87,349 94,435 101,704 107,225
Other Real Estate 55,364 57,937 51,208 48,110 46,444
Total Nonperforming Assets $ 153,346 $ 145,286 $ 145,643 $ 149,814 $ 153,669
Past Due Loans 30-89 Days $ 19,391 $ 24,193 $ 24,904 $ 21,192 $ 18,768
Past Due Loans 90 Days or More $ -- $ 159 $ -- $ -- $ --
Nonperforming Loans as a % of Loans 5.71% 4.97% 5.24% 5.58% 5.79%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.66% 8.00% 7.86% 8.01% 8.10%
Nonperforming Assets as a % of Capital(2) 52.31% 49.34% 48.81% 49.92% 50.69%
Nonperforming Assets as a % of Total Assets 5.76% 5.54% 5.65% 5.65% 5.66%
(1) Annualized
(2) Capital includes allowance for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
First Quarter 2011 Fourth Quarter 2010 Third 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 $1,730,330 24,101 5.65% $1,782,916 25,799 5.74% $1,807,483 26,568 5.83%
Investment Securities
Taxable Investment Securities 231,153 851 1.48% 178,926 799 1.78% 124,625 674 2.15%
Tax-Exempt Investment Securities 74,226 337 1.81% 83,469 434 2.08% 88,656 521 2.35%
Total Investment Securities 305,379 1,188 1.56% 262,395 1,233 1.87% 213,281 1,195 2.23%
Funds Sold 242,893 171 0.28% 172,738 95 0.24% 252,434 144 0.22%
Total Earning Assets 2,278,602 $25,460 4.53% 2,218,049 $27,127 4.85% 2,273,198 $27,907 4.87%
Cash and Due From Banks 50,942 51,030 50,942
Allowance for Loan Losses (34,822) (37,713) (39,584)
Other Assets 348,295 345,427 342,202
Total Assets $2,643,017 $2,576,793 $2,626,758
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $786,939 $261 0.13% $837,625 $296 0.14% $871,158 $326 0.15%
Money Market Accounts 278,562 131 0.19% 282,887 134 0.19% 293,424 145 0.20%
Savings Accounts 144,623 18 0.05% 136,276 16 0.05% 133,690 17 0.05%
Time Deposits 360,575 848 0.95% 382,870 1,078 1.12% 402,880 1,332 1.31%
Total Interest Bearing Deposits 1,570,699 1,258 0.32% 1,639,658 1,524 0.37% 1,701,152 1,820 0.42%
Short-Term Borrowings 87,267 111 0.52% 34,706 99 1.14% 23,388 31 0.54%
Subordinated Notes Payable 62,887 340 2.16% 62,887 342 2.13% 62,887 376 2.34%
Other Long-Term Borrowings 50,345 494 3.98% 50,097 508 4.02% 54,258 565 4.13%
Total Interest Bearing Liabilities 1,771,198 $2,203 0.50% 1,787,348 $2,473 0.55% 1,841,685 $2,792 0.60%
Noninterest Bearing Deposits 554,680 476,209 471,013
Other Liabilities 55,536 50,614 50,318
Total Liabilities 2,381,414 2,314,171 2,363,016
SHAREOWNERS' EQUITY: $261,603 $262,622 $263,742
Total Liabilities and Shareowners' Equity $2,643,017 $2,576,793 $2,626,758
Interest Rate Spread $23,257 4.03% $24,654 4.30% $25,115 4.27%
Interest Income and Rate Earned(1) $25,460 4.53% $27,127 4.85% $27,907 4.87%
Interest Expense and Rate Paid(2) 2,203 0.39% 2,473 0.44% 2,792 0.49%
Net Interest Margin $23,257 4.14% $24,654 4.41% $25,115 4.38%
(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.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Second Quarter 2010 First Quarter 2010
(Dollars in thousands) Average
Balance Interest Average
Rate Average
Balance Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest $1,841,379 26,795 5.84% $1,886,367 27,180 5.84%
Investment Securities
Taxable Investment Securities 128,268 708 2.21% 71,325 500 2.81%
Tax-Exempt Investment Securities 92,140 624 2.71% 97,316 753 3.10%
Total Investment Securities 220,408 1,332 2.42% 168,641 1,253 2.98%
Funds Sold 267,578 176 0.26% 303,280 172 0.23%
Total Earning Assets 2,329,365 $28,303 4.87% 2,358,288 $28,605 4.92%
Cash and Due From Banks 50,739 54,873
Allowance for Loan Losses (41,074) (44,584)
Other Assets 339,458 329,842
Total Assets $2,678,488 $2,698,419
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $879,329 $400 0.18% $867,004 $384 0.18%
Money Market Accounts 333,976 331 0.40% 374,161 689 0.75%
Savings Accounts 131,333 17 0.05% 126,352 15 0.05%
Time Deposits 430,571 1,615 1.50% 438,112 1,850 1.71%
Total Interest Bearing Deposits 1,775,209 2,363 0.53% 1,805,629 2,938 0.66%
Short-Term Borrowings 22,694 12 0.20% 30,673 17 0.22%
Subordinated Notes Payable 62,887 639 4.02% 62,887 651 4.14%
Other Long-Term Borrowings 52,704 551 4.20% 49,981 526 4.27%
Total Interest Bearing Liabilities 1,913,494 $3,565 0.75% 1,949,170 $4,132 0.86%
Noninterest Bearing Deposits 458,969 443,131
Other Liabilities 42,152 37,563
Total Liabilities 2,414,615 2,429,864
SHAREOWNERS' EQUITY: $263,873 $268,555
Total Liabilities and Shareowners' Equity $2,678,488 $2,698,419
Interest Rate Spread $24,738 4.12% $24,473 4.06%
Interest Income and Rate Earned(1) $28,303 4.87% $28,605 4.92%
Interest Expense and Rate Paid(2) 3,565 0.61% 4,132 0.71%
Net Interest Margin $24,738 4.26% $24,473 4.21%
(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 April 25, 2011