x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF
1934
|
CAPITAL
CITY BANK GROUP, INC.
|
(Exact
name of registrant as specified in its
charter)
|
Florida
|
59-2273542
|
|
(State
or other jurisdiction of incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
217
North Monroe Street, Tallahassee, Florida
|
32301
|
|
(Address
of principal executive office)
|
(Zip
Code)
|
(850) 671-0300
|
(Registrant's telephone number, including area
code)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
PART
I - Financial Information
|
Page
|
|||
Item
1.
|
4
|
|||
Item
2.
|
14
|
|||
Item
3.
|
26
|
|||
Item
4.
|
28
|
|||
PART
II - Other Information
|
||||
Item
1.
|
28
|
|||
Item
1.A.
|
28
|
|||
Item
2.
|
28
|
|||
Item
3.
|
28
|
|||
Item
4.
|
28
|
|||
Item
5.
|
28
|
|||
Item
6.
|
28
|
|||
Signatures
|
29
|
Ÿ
|
our
ability to integrate the business and operations of companies and
banks
that we have acquired, and those we may acquire in the
future;
|
Ÿ
|
strength
of the United States economy in general and the strength of the
local
economies in which we conduct
operations;
|
Ÿ
|
effects
of harsh weather conditions, including
hurricanes;
|
Ÿ
|
inflation,
interest rate, market and monetary fluctuations;
|
Ÿ
|
effect
of changes in the stock market and other capital
markets;
|
Ÿ
|
legislative
or regulatory changes;
|
Ÿ
|
willingness
of customers to accept third-party products and services for our
products
and services and vice versa;
|
Ÿ
|
changes
in the securities and real estate
markets;
|
Ÿ
|
increased
competition and its effect on
pricing;
|
Ÿ
|
technological
changes;
|
Ÿ
|
changes
in monetary and fiscal policies of the U.S.
government;
|
Ÿ
|
changes
in consumer spending and savings
habits;
|
Ÿ
|
growth
and profitability of our noninterest
income;
|
Ÿ
|
changes
in accounting principles, policies, practices or
guidelines;
|
Ÿ
|
other
risks described from time to time in filings with the Securities
and
Exchange Commission; and
|
Ÿ
|
our
ability to manage the risks involved in the
foregoing.
|
PART
I.
|
FINANCIAL
INFORMATION
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
(Dollars
in Thousands, Except Per Share Data)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
INTEREST
INCOME
|
|||||||||||||
Interest
and Fees on Loans
|
$
|
40,260
|
$
|
35,331
|
$
|
116,570
|
$
|
96,278
|
|||||
Investment
Securities:
|
|||||||||||||
U.S.
Treasury
|
132
|
89
|
310
|
347
|
|||||||||
U.S.
Govt. Agencies and Corporations
|
929
|
788
|
2,672
|
2,442
|
|||||||||
States
and Political Subdivisions
|
650
|
416
|
1,672
|
1,132
|
|||||||||
Other
Securities
|
203
|
144
|
606
|
436
|
|||||||||
Funds
Sold
|
338
|
121
|
1,463
|
638
|
|||||||||
Total
Interest Income
|
42,512
|
36,889
|
123,293
|
101,273
|
|||||||||
INTEREST
EXPENSE
|
|||||||||||||
Deposits
|
9,985
|
5,480
|
26,423
|
14,407
|
|||||||||
Short-Term
Borrowings
|
753
|
691
|
2,352
|
1,875
|
|||||||||
Subordinated
Notes Payable
|
936
|
931
|
2,789
|
2,039
|
|||||||||
Other
Long-Term Borrowings
|
615
|
783
|
2,189
|
2,272
|
|||||||||
Total
Interest Expense
|
12,289
|
7,885
|
33,753
|
20,593
|
|||||||||
NET
INTEREST INCOME
|
30,223
|
29,004
|
89,540
|
80,680
|
|||||||||
Provision
for Loan Losses
|
711
|
376
|
1,499
|
1,174
|
|||||||||
Net
Interest Income After Provision For Loan Losses
|
29,512
|
28,628
|
88,041
|
79,506
|
|||||||||
NONINTEREST
INCOME
|
|||||||||||||
Service
Charges on Deposit Accounts
|
6,450
|
5,635
|
18,226
|
15,018
|
|||||||||
Data
Processing
|
673
|
660
|
2,014
|
1,917
|
|||||||||
Asset
Management Fees
|
1,215
|
1,050
|
3,420
|
3,175
|
|||||||||
Securities
Transactions
|
0
|
9
|
(4
|
)
|
9
|
||||||||
Mortgage
Banking Revenues
|
824
|
1,317
|
2,448
|
3,116
|
|||||||||
Other
|
4,982
|
4,452
|
15,089
|
12,989
|
|||||||||
Total
Noninterest Income
|
14,144
|
13,123
|
41,193
|
36,224
|
|||||||||
NONINTEREST
EXPENSE
|
|||||||||||||
Salaries
and Associate Benefits
|
15,277
|
14,046
|
45,912
|
39,793
|
|||||||||
Occupancy,
Net
|
2,354
|
2,119
|
6,935
|
6,091
|
|||||||||
Furniture
and Equipment
|
2,492
|
2,285
|
7,652
|
6,589
|
|||||||||
Intangible
Amortization
|
1,536
|
1,430
|
4,601
|
3,922
|
|||||||||
Merger
Expense
|
-
|
180
|
-
|
414
|
|||||||||
Other
|
8,763
|
8,549
|
26,484
|
23,663
|
|||||||||
Total
Noninterest Expense
|
30,422
|
28,609
|
91,584
|
80,472
|
|||||||||
INCOME
BEFORE INCOME TAXES
|
13,234
|
13,142
|
37,650
|
35,258
|
|||||||||
Income
Taxes
|
4,554
|
4,565
|
13,234
|
12,436
|
|||||||||
NET
INCOME
|
$
|
8,680
|
$
|
8,577
|
$
|
24,416
|
$
|
22,822
|
|||||
Basic
Net Income Per Share
|
$
|
.47
|
$
|
.46
|
$
|
1.31
|
$
|
1.26
|
|||||
Diluted
Net Income Per Share
|
$
|
.47
|
$
|
.46
|
$
|
1.31
|
$
|
1.26
|
|||||
Average
Basic Shares Outstanding
|
18,529,926
|
18,623,037
|
18,604,488
|
18,142,502
|
|||||||||
Average
Diluted Shares Outstanding
|
18,564,932
|
18,648,504
|
18,627,167
|
18,156,764
|
(Dollars
In Thousands, Except Share Data)
|
September
30, 2006
|
December
31, 2005
|
|||||
ASSETS
|
|||||||
Cash
and Due From Banks
|
$
|
100,781
|
$
|
105,195
|
|||
Funds
Sold and Interest Bearing Deposits
|
35,631
|
61,164
|
|||||
Total
Cash and Cash Equivalents
|
136,412
|
166,359
|
|||||
Investment
Securities, Available-for-Sale
|
190,617
|
171,019
|
|||||
Loans,
Net of Unearned Interest
|
2,009,459
|
2,067,494
|
|||||
Allowance
for Loan Losses
|
(17,311
|
)
|
(17,410
|
)
|
|||
Loans,
Net
|
1,992,148
|
2,050,084
|
|||||
Premises
and Equipment, Net
|
84,915
|
73,818
|
|||||
Goodwill
|
84,810
|
84,829
|
|||||
Other
Intangible Assets
|
21,076
|
25,622
|
|||||
Other
Assets
|
48,895
|
53,731
|
|||||
Total
Assets
|
$
|
2,558,873
|
$
|
2,625,462
|
|||
LIABILITIES
|
|||||||
Deposits:
|
|||||||
Noninterest
Bearing Deposits
|
$
|
506,331
|
$
|
559,492
|
|||
Interest
Bearing Deposits
|
1,542,908
|
1,519,854
|
|||||
Total
Deposits
|
2,049,239
|
2,079,346
|
|||||
Short-Term
Borrowings
|
54,171
|
82,973
|
|||||
Subordinated
Notes Payable
|
62,887
|
62,887
|
|||||
Other
Long-Term Borrowings
|
43,701
|
69,630
|
|||||
Other
Liabilities
|
29,833
|
24,850
|
|||||
Total
Liabilities
|
2,239,831
|
2,319,686
|
|||||
SHAREOWNERS'
EQUITY
|
|||||||
Preferred
Stock, $.01 par value, 3,000,000 shares authorized;
no
shares outstanding
|
-
|
-
|
|||||
Common
Stock, $.01 par value, 90,000,000 shares authorized; 18,532,104
and
18,631,706 shares issued and outstanding at September 30, 2006
and
December 31, 2005, respectively
|
185
|
186
|
|||||
Additional
Paid-In Capital
|
80,938
|
83,304
|
|||||
Retained
Earnings
|
238,870
|
223,532
|
|||||
Accumulated
Other Comprehensive Loss, Net of Tax
|
(951
|
)
|
(1,246
|
)
|
|||
Total
Shareowners' Equity
|
319,042
|
305,776
|
|||||
Total
Liabilities and Shareowners' Equity
|
$
|
2,558,873
|
$
|
2,625,462
|
Common
Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Loss, Net of Taxes
|
Total
|
||||||||||||
Balance,
December 31, 2005
|
$
|
186
|
$
|
83,304
|
$
|
223,532
|
$
|
(1,246
|
)
|
$
|
305,776
|
|||||
Comprehensive
Income:
|
||||||||||||||||
Net
Income
|
-
|
-
|
24,416
|
-
|
||||||||||||
Net
Change in Unrealized Loss
On
Available-for-Sale Securities
|
-
|
-
|
-
|
295
|
||||||||||||
Total
Comprehensive Income
|
-
|
-
|
-
|
-
|
24,711
|
|||||||||||
Cash
Dividends ($.4875 per share)
|
-
|
-
|
(9,078
|
)
|
-
|
(9,078
|
)
|
|||||||||
Stock
Performance Plan Compensation
|
-
|
1,504
|
-
|
-
|
1,504
|
|||||||||||
Issuance
of Common Stock
|
1
|
969
|
-
|
-
|
970
|
|||||||||||
Repurchase
of Common Stock
|
(2
|
)
|
(4,839
|
)
|
-
|
-
|
(4,841
|
)
|
||||||||
Balance,
September 30, 2006
|
$
|
185
|
$
|
80,938
|
$
|
238,870
|
$
|
(951
|
)
|
$
|
319,042
|
(Dollars
in Thousands)
|
2006
|
2005
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
Income
|
$
|
24,416
|
$
|
22,822
|
|||
Adjustments
to Reconcile Net Income to
Cash
Provided by Operating Activities:
|
|||||||
Provision
for Loan Losses
|
1,499
|
1,174
|
|||||
Depreciation
|
5,251
|
4,324
|
|||||
Net
Securities Amortization
|
480
|
1,133
|
|||||
Amortization
of Intangible Assets
|
4,601
|
3,922
|
|||||
Loss
(Gain) on Sale of Investment Securities
|
4
|
(9
|
)
|
||||
Origination
of Loans Held-for-Sale
|
(144,719
|
)
|
(167,172
|
)
|
|||
Proceeds
From Sales of Loans Held-for-Sale
|
148,330
|
170,667
|
|||||
Net
Gain From Sales of Loans Held-for-Sale
|
(2,448
|
)
|
(3,116
|
)
|
|||
Non-Cash
Compensation
|
1,504
|
1,083
|
|||||
Deferred
Income Taxes
|
3,704
|
1,450
|
|||||
Net
Decrease (Increase) in Other Assets
|
4,225
|
(3,447
|
)
|
||||
Net
Increase in Other Liabilities
|
2,359
|
10,974
|
|||||
Net
Cash Provided By Operating Activities
|
49,206
|
43,805
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Securities
Available-for-Sale:
|
|||||||
Purchases
|
(95,807
|
)
|
(78,748
|
)
|
|||
Sales
|
283
|
35,142
|
|||||
Payments,
Maturities, and Calls
|
75,872
|
94,723
|
|||||
Net
Decrease (Increase) in Loans
|
54,636
|
(107,237
|
)
|
||||
Net
Cash Acquired in Acquisition
|
-
|
37,412
|
|||||
Purchase
of Premises & Equipment
|
(16,634
|
)
|
(13,264
|
)
|
|||
Proceeds
From Sales of Premises & Equipment
|
286
|
175
|
|||||
Net
Cash
Provided By (Used In) Investing Activities
|
18,636
|
(31,797
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Net
Decrease
in Deposits
|
(30,108
|
)
|
(70,983
|
)
|
|||
Net
Decrease in Short-Term Borrowings
|
(42,271
|
)
|
(88,311
|
)
|
|||
Proceeds
from Subordinated Note Payable
|
-
|
31,959
|
|||||
Increase
in Other Long-Term Borrowings
|
3,250
|
88,116
|
|||||
Repayment
of Other Long-Term Borrowings
|
(15,711
|
)
|
-
|
||||
Dividends
Paid
|
(9,078
|
)
|
(8,371
|
)
|
|||
Repurchase
of Common Stock
|
(4,841
|
)
|
-
|
||||
Issuance
of Common Stock
|
969
|
785
|
|||||
Net
Cash Used In Financing Activities
|
(97,790
|
)
|
(46,805
|
)
|
|||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
(29,948
|
)
|
(35,316
|
)
|
|||
Cash
and Cash Equivalents at Beginning of Period
|
166,359
|
161,545
|
|||||
Cash
and Cash Equivalents at End of Period
|
$
|
136,412
|
$
|
126,229
|
|||
Supplemental
Disclosure:
|
|||||||
Interest
Paid on Deposits
|
$
|
26,051
|
$
|
13,685
|
|||
Interest
Paid on Debt
|
7,523
|
6,034
|
|||||
Taxes
Paid
|
11,530
|
11,129
|
|||||
Loans
Transferred to Other Real Estate
|
638
|
2,391
|
|||||
Issuance
of Common Stock as Non-Cash Compensation
|
1,504
|
339
|
|||||
Transfer
of Current Portion of Long-Term Borrowings
to
Short-Term Borrowings
|
13,061
|
42,649
|
September
30, 2006
|
|||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
|||||||||
U.S.
Treasury
|
$
|
12,083
|
$
|
29
|
$
|
33
|
$
|
12,079
|
|||||
U.S.
Government Agencies and Corporations
|
60,043
|
47
|
669
|
59,421
|
|||||||||
States
and Political Subdivisions
|
83,007
|
19
|
485
|
82,541
|
|||||||||
Mortgage-Backed
Securities
|
24,358
|
31
|
461
|
23,928
|
|||||||||
Other
Securities(1)
|
12,648
|
-
|
-
|
12,648
|
|||||||||
Total
Investment Securities
|
$
|
192,139
|
$
|
126
|
$
|
1,648
|
$
|
190,617
|
December
31, 2005
|
|||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
|||||||||
U.S.
Treasury
|
$
|
9,065
|
$
|
-
|
$
|
50
|
$
|
9,015
|
|||||
U.S.
Government Agencies and Corporations
|
75,233
|
-
|
1,017
|
74,216
|
|||||||||
States
and Political Subdivisions
|
53,611
|
44
|
512
|
53,143
|
|||||||||
Mortgage-Backed
Securities
|
20,948
|
35
|
452
|
20,531
|
|||||||||
Other
Securities(1)
|
14,114
|
-
|
-
|
14,114
|
|||||||||
Total
Investment Securities
|
$
|
172,971
|
$
|
79
|
$
|
2,031
|
$
|
171,019
|
(1)
|
FHLB
and FRB stock recorded at cost.
|
(Dollars
in Thousands)
|
September
30, 2006
|
December
31, 2005
|
|||||
Commercial,
Financial and Agricultural
|
$
|
218,442
|
$
|
218,434
|
|||
Real
Estate-Construction
|
183,237
|
160,914
|
|||||
Real
Estate-Commercial
|
647,302
|
718,741
|
|||||
Real
Estate-Residential
|
539,828
|
553,124
|
|||||
Real
Estate-Home Equity
|
174,577
|
165,337
|
|||||
Real
Estate-Loans Held-for-Sale
|
3,780
|
4,875
|
|||||
Consumer
|
242,293
|
246,069
|
|||||
Loans,
Net of Unearned Interest
|
$
|
2,009,459
|
$
|
2,067,494
|
(Dollars
in Thousands)
|
2006
|
2005
|
|||||
Balance,
Beginning of Period
|
$
|
17,410
|
$
|
16,037
|
|||
Acquired
Reserves
|
-
|
1,385
|
|||||
Provision
for Loan Losses
|
1,499
|
1,174
|
|||||
Recoveries
on Loans Previously Charged-Off
|
1,309
|
1,361
|
|||||
Loans
Charged-Off
|
(2,907
|
)
|
(2,533
|
)
|
|||
Balance,
End of Period
|
$
|
17,311
|
$
|
17,424
|
|
September
30, 2006
|
December
31, 2005
|
|||||||||||
Impaired
Loans:
|
|||||||||||||
With
Related Valuation Allowance
|
$
|
5,554
|
$
|
2,143
|
$
|
5,612
|
$
|
2,915
|
|||||
Without
Related Valuation Allowance
|
3,455
|
-
|
1,658
|
-
|
September
30, 2006
|
December
31, 2005
|
||||||||||||
(Dollars
in Thousands)
|
Gross
Amount
|
Accumulated
Amortization
|
Gross
Amount
|
Accumulated
Amortization
|
|||||||||
Core
Deposit Intangibles
|
$
|
47,176
|
$
|
27,544
|
$
|
47,176
|
$
|
23,312
|
|||||
Goodwill
|
88,596
|
3,786
|
88,615
|
3,786
|
|||||||||
Customer
Relationship Intangible
|
1,867
|
449
|
1,867
|
305
|
|||||||||
Non-Compete
Agreement
|
539
|
513
|
483
|
287
|
|||||||||
Total
Intangible Assets
|
$
|
138,178
|
$
|
32,292
|
$
|
138,141
|
$
|
27,690
|
(Dollars
in Thousands)
|
September
30, 2006
|
December
31, 2005
|
|||||
NOW
Accounts
|
$
|
533,549
|
$
|
520,878
|
|||
Money
Market Accounts
|
387,906
|
331,094
|
|||||
Savings
Deposits
|
129,884
|
144,296
|
|||||
Other
Time Deposits
|
491,569
|
523,586
|
|||||
Total
Interest Bearing Deposits
|
$
|
1,542,908
|
$
|
1,519,854
|
Options
|
Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Term
|
Aggregate
Intrinsic Value
|
|||||||||
Outstanding
at January 1, 2006
|
60,384
|
$
|
32.79
|
8.3
|
$
|
88,161
|
|||||||
Granted
|
-
|
-
|
-
|
-
|
|||||||||
Exercised
|
-
|
-
|
-
|
-
|
|||||||||
Forfeited
or expired
|
-
|
-
|
-
|
-
|
|||||||||
Outstanding
at September 30, 2006
|
60,384
|
$
|
32.79
|
7.8
|
$
|
-
|
|||||||
Exercisable
at September 30, 2006
|
35,977
|
$
|
32.79
|
7.8
|
$
|
-
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
Dividend
yield
|
1.95
|
%
|
1.9
|
%
|
|||
Expected
volatility
|
23.5
|
%
|
28.0
|
%
|
|||
Risk-free
interest rate
|
4.5
|
%
|
2.6
|
%
|
|||
Expected
life (in years)
|
0.5
|
0.5
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
(Dollars
in Thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Discount
Rate
|
5.75
|
%
|
6.00
|
%
|
5.75
|
%
|
6.00
|
%
|
|||||
Long-Term
Rate of Return on Assets
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
|||||
Service
Cost
|
$
|
1,250
|
$
|
1,183
|
$
|
3,750
|
$
|
3,263
|
|||||
Interest
Cost
|
875
|
838
|
2,625
|
2,438
|
|||||||||
Expected
Return on Plan Assets
|
(975
|
)
|
(782
|
)
|
(2,925
|
)
|
(2,378
|
)
|
|||||
Prior
Service Cost Amortization
|
50
|
55
|
150
|
165
|
|||||||||
Net
Loss Amortization
|
375
|
400
|
1,125
|
990
|
|||||||||
Net
Periodic Benefit Cost
|
$
|
1,575
|
$
|
1,694
|
$
|
4,725
|
$
|
4,478
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
(Dollars
in Thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Discount
Rate
|
5.75
|
%
|
6.00
|
%
|
5.75
|
%
|
6.00
|
%
|
|||||
Long-Term
Rate Of Return On Assets
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Service
Cost
|
$
|
30
|
$
|
35
|
$
|
90
|
$
|
105
|
|||||
Interest
Cost
|
56
|
54
|
168
|
162
|
|||||||||
Expected
Return On Plan Assets
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Prior
Service Cost Amortization
|
15
|
15
|
45
|
45
|
|||||||||
Net
Loss Amortization
|
19
|
21
|
57
|
63
|
|||||||||
Net
Periodic Benefit Cost
|
$
|
120
|
$
|
125
|
$
|
360
|
$
|
375
|
(Dollars
in Millions)
|
Amount
|
|||
Commitments
to Extend Credit(1)
|
$
|
443.3
|
||
Standby
Letters of Credit
|
$
|
17.8
|
2006
|
2005
|
2004
|
|||||||||||||||||||||||
(Dollars
in Thousands, Except Per Share Data)
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
First
|
Fourth
|
|||||||||||||||||
Summary
of Operations:
|
|||||||||||||||||||||||||
Interest
Income
|
$
|
42,512
|
$
|
41,369
|
$
|
39,412
|
$
|
38,780
|
$
|
36,889
|
$
|
33,910
|
$
|
30,474
|
$
|
29,930
|
|||||||||
Interest
Expense
|
12,289
|
11,182
|
10,282
|
9,470
|
7,885
|
6,788
|
5,920
|
5,634
|
|||||||||||||||||
Net
Interest Income
|
30,223
|
30,187
|
29,130
|
29,310
|
29,004
|
27,122
|
24,554
|
24,296
|
|||||||||||||||||
Provision
for Loan Losses
|
711
|
121
|
667
|
1,333
|
376
|
388
|
410
|
300
|
|||||||||||||||||
Net
Interest Income After
Provision
for Loan Losses
|
29,512
|
30,066
|
28,463
|
27,977
|
28,628
|
26,734
|
24,144
|
23,996
|
|||||||||||||||||
Gain
on Sale of Credit Card Portfolios
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
324
|
|||||||||||||||||
Noninterest
Income
|
14,144
|
14,003
|
13,045
|
12,974
|
13,123
|
12,041
|
11,060
|
11,596
|
|||||||||||||||||
Conversion/Merger
Expense
|
-
|
-
|
-
|
24
|
180
|
234
|
-
|
436
|
|||||||||||||||||
Noninterest
Expense
|
30,422
|
31,070
|
30,092
|
29,318
|
28,429
|
26,362
|
25,267
|
24,481
|
|||||||||||||||||
Income
Before Provision for Income Taxes
|
13,234
|
12,999
|
11,416
|
11,609
|
13,142
|
12,179
|
9,937
|
10,999
|
|||||||||||||||||
Provision
for Income Taxes
|
4,554
|
4,684
|
3,995
|
4,150
|
4,565
|
4,311
|
3,560
|
3,737
|
|||||||||||||||||
Net
Income
|
$
|
8,680
|
$
|
8,315
|
$
|
7,421
|
$
|
7,459
|
$
|
8,577
|
$
|
7,868
|
$
|
6,377
|
$
|
7,262
|
|||||||||
Net
Interest Income (FTE)
|
$
|
30,745
|
$
|
30,591
|
$
|
29,461
|
$
|
29,652
|
$
|
29,329
|
$
|
27,396
|
$
|
24,835
|
$
|
24,619
|
|||||||||
|
|||||||||||||||||||||||||
Per
Common Share:
|
|||||||||||||||||||||||||
Net
Income Basic
|
$
|
.47
|
$
|
.44
|
$
|
.40
|
$
|
.40
|
$
|
.46
|
$
|
.44
|
$
|
.36
|
$
|
.40
|
|||||||||
Net
Income Diluted
|
.47
|
.44
|
.40
|
.40
|
.46
|
.44
|
.36
|
.40
|
|||||||||||||||||
Dividends
Declared
|
.163
|
.163
|
.163
|
.163
|
.152
|
.152
|
.152
|
.152
|
|||||||||||||||||
Diluted
Book Value
|
17.18
|
16.81
|
16.65
|
16.39
|
16.17
|
15.87
|
14.69
|
14.51
|
|||||||||||||||||
Market
Price:
|
|||||||||||||||||||||||||
High
|
33.25
|
35.39
|
37.97
|
39.33
|
38.72
|
33.46
|
33.60
|
36.78
|
|||||||||||||||||
Low
|
29.87
|
29.51
|
33.79
|
33.21
|
31.78
|
28.02
|
29.30
|
30.17
|
|||||||||||||||||
Close
|
31.10
|
30.20
|
35.55
|
34.29
|
37.71
|
32.32
|
32.41
|
33.44
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Selected
Average
|
|||||||||||||||||||||||||
Balances:
|
|||||||||||||||||||||||||
Loans
|
$
|
2,025,112
|
$
|
2,040,656
|
$
|
2,048,642
|
$
|
2,062,775
|
$
|
2,046,968
|
$
|
1,932,637
|
$
|
1,827,327
|
$
|
1,779,736
|
|||||||||
Earning
Assets
|
2,241,158
|
2,278,817
|
2,275,667
|
2,279,010
|
2,250,902
|
2,170,483
|
2,047,049
|
2,066,111
|
|||||||||||||||||
Assets
|
2,560,155
|
2,603,090
|
2,604,458
|
2,607,597
|
2,569,524
|
2,458,788
|
2,306,807
|
2,322,870
|
|||||||||||||||||
Deposits
|
2,023,523
|
2,047,755
|
2,040,248
|
2,027,017
|
2,013,427
|
1,932,144
|
1,847,378
|
1,853,588
|
|||||||||||||||||
Shareowners’
Equity
|
318,041
|
315,794
|
311,461
|
306,208
|
300,931
|
278,107
|
260,946
|
248,773
|
|||||||||||||||||
Common
Equivalent Average Shares:
|
|||||||||||||||||||||||||
Basic
|
18,530
|
18,633
|
18,652
|
18,624
|
18,623
|
18,094
|
17,700
|
17,444
|
|||||||||||||||||
Diluted
|
18,565
|
18,653
|
18,665
|
18,654
|
18,649
|
18,102
|
17,708
|
17,451
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Ratios:
|
|||||||||||||||||||||||||
ROA
|
1.35
|
%
|
1.28
|
%
|
1.16
|
%
|
1.14
|
%
|
1.32
|
%
|
1.28
|
%
|
1.12
|
%
|
1.24
|
%
|
|||||||||
ROE
|
10.83
|
%
|
10.56
|
%
|
9.66
|
%
|
9.67
|
%
|
11.31
|
%
|
11.35
|
%
|
9.91
|
%
|
11.61
|
%
|
|||||||||
Net
Interest Margin (FTE)
|
5.45
|
%
|
5.38
|
%
|
5.25
|
%
|
5.16
|
%
|
5.17
|
%
|
5.07
|
%
|
4.92
|
%
|
4.75
|
%
|
|||||||||
Efficiency
Ratio
|
64.35
|
%
|
66.23
|
%
|
67.20
|
%
|
65.22
|
%
|
63.60
|
%
|
63.56
|
%
|
67.06
|
%
|
63.85
|
%
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Nine
Months Ended September 30
|
|||||||
2006
|
2005
|
||||||
Efficiency
ratio
|
69.39
|
%
|
68.32
|
%
|
|||
Effect
of intangible amortization and one-time merger expenses
|
(3.49
|
)%
|
(3.68
|
)%
|
|||
Operating
efficiency ratio
|
65.90
|
%
|
64.64
|
%
|
Nine
Months Ended September 30
|
|||||||
2006
|
2005
|
||||||
Net
noninterest expense as a percent of average assets
|
2.60
|
%
|
2.42
|
%
|
|||
Effect
of intangible amortization and one-time merger expenses
|
(0.24
|
)%
|
(0.24
|
)%
|
|||
Operating
net noninterest expense as a percent of average assets
|
2.36
|
%
|
2.18
|
%
|
Ÿ
|
Earnings
of $8.7 million, up 1.2% and $24.4 million, up 7.0% for the three
and nine
months ended September 30, 2006 as compared to the same periods
in 2005.
|
Ÿ
|
Growth
in earnings was attributable to improvement in operating revenues
of 5.3%
and 11.8% for the three and nine month periods, respectively, driven
primarily by higher net interest income and noninterest
income.
|
Ÿ
|
Taxable
equivalent net interest income grew 4.8% and 11.3% for the three
and nine
month periods, respectively, due to an improved net interest
margin.
|
Ÿ
|
Net
interest margin percentage improved 28 basis points and 31 basis
points
for the three and nine month periods, respectively, driven by favorable
re-pricing spread and higher yield on new loan production.
|
Ÿ
|
Noninterest
income grew 7.8% and 13.7% for the three and nine month periods,
respectively, due primarily to higher deposit fees, asset management
fees,
retail brokerage fees, and card processing
fees.
|
Ÿ
|
Continued
strong credit quality as reflected by a nonperforming asset ratio
of .34%
and an annualized net charge-off ratio of .13% for the third quarter
of
2006 compared to .08% for the same period in 2005. At quarter-end
the
allowance for loan losses was .86% of outstanding loans and provided
coverage of 269% of nonperforming loans compared to .85% and 343%,
respectively, for the same period in 2005.
|
Ÿ
|
We
remain well-capitalized with a risk based capital ratio of
14.72%.
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
(Dollars
in Thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Interest
Income
|
$
|
42,512
|
$
|
36,889
|
$
|
123,293
|
$
|
101,273
|
|||||
Taxable
Equivalent Adjustment(1)
|
522
|
325
|
1,256
|
879
|
|||||||||
Interest
Income (FTE)
|
43,034
|
37,214
|
124,549
|
102,152
|
|||||||||
Interest
Expense
|
(12,289
|
)
|
(7,885
|
)
|
(33,753
|
)
|
(20,593
|
)
|
|||||
Net
Interest Income (FTE)
|
30,745
|
29,329
|
90,796
|
81,559
|
|||||||||
Provision
for Loan Losses
|
(711
|
)
|
(376
|
)
|
(1,499
|
)
|
(1,174
|
)
|
|||||
Taxable
Equivalent Adjustment
|
(522
|
)
|
(325
|
)
|
(1,256
|
)
|
(879
|
)
|
|||||
Net
Interest Income After Provision
|
29,512
|
28,628
|
88,041
|
79,506
|
|||||||||
Noninterest
Income
|
14,144
|
13,123
|
41,193
|
36,224
|
|||||||||
Merger
Expense
|
-
|
(180
|
)
|
-
|
(414
|
)
|
|||||||
Noninterest
Expense
|
(30,422
|
)
|
(28,429
|
)
|
(91,584
|
)
|
(80,058
|
)
|
|||||
Income
Before Income Taxes
|
13,234
|
13,142
|
37,650
|
35,258
|
|||||||||
Income
Taxes
|
(4,554
|
)
|
(4,565
|
)
|
(13,234
|
)
|
(12,436
|
)
|
|||||
Net
Income
|
$
|
8,680
|
$
|
8,577
|
$
|
24,416
|
$
|
22,822
|
|||||
Percent
Change
|
1.20
|
%
|
(20.72
|
)%
|
6.98
|
%
|
3.22
|
%
|
|||||
Return
on Average Assets(2)
|
1.35
|
%
|
1.32
|
%
|
1.26
|
%
|
1.25
|
%
|
|||||
Return
on Average Equity(2)
|
10.83
|
%
|
11.31
|
%
|
10.36
|
%
|
10.89
|
%
|
(1)
|
Computed
using a statutory tax rate of 35%
|
(2)
|
Annualized
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
(Dollars
in Thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
CHARGE-OFFS
|
|||||||||||||
Commercial,
Financial and Agricultural
|
$
|
294
|
$
|
151
|
$
|
760
|
$
|
541
|
|||||
Real
Estate - Construction
|
-
|
-
|
-
|
-
|
|||||||||
Real
Estate - Commercial
|
-
|
4
|
291
|
10
|
|||||||||
Real
Estate - Residential
|
81
|
115
|
127
|
177
|
|||||||||
Consumer
|
690
|
551
|
1,729
|
1,805
|
|||||||||
Total
Charge-offs
|
1,065
|
821
|
2,907
|
2,533
|
|||||||||
RECOVERIES
|
|||||||||||||
Commercial,
Financial and Agricultural
|
43
|
43
|
168
|
150
|
|||||||||
Real
Estate - Construction
|
-
|
-
|
-
|
-
|
|||||||||
Real
Estate - Commercial
|
4
|
1
|
9
|
1
|
|||||||||
Real
Estate - Residential
|
2
|
20
|
11
|
36
|
|||||||||
Consumer
|
352
|
354
|
1,121
|
1,174
|
|||||||||
Total
Recoveries
|
401
|
418
|
1,309
|
1,361
|
|||||||||
Net
Charge-offs
|
$
|
664
|
$
|
403
|
$
|
1,598
|
$
|
1,172
|
|||||
Net
Charge-offs (Annualized) as a
|