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.
|
15
|
|||
Item
3.
|
27
|
|||
Item
4.
|
29
|
|||
PART
II - Other Information
|
||||
Item
1.
|
29
|
|||
Item
1.A.
|
29
|
|||
Item
2.
|
29
|
|||
Item
3.
|
30
|
|||
Item
4.
|
30
|
|||
Item
5.
|
30
|
|||
Item
6.
|
30
|
|||
Signatures
|
31
|
§ |
our
ability to integrate the business and operations of companies and
banks
that we have acquired, and those we may acquire in the
future;
|
§ |
our
need and our ability to incur additional debt or equity
financing;
|
§ |
the
strength of the United States economy in general and the strength
of the
local economies in which we conduct operations;
|
§ |
the
accuracy of our financial statement estimates and assumptions;
|
§ |
the
effects of harsh weather conditions, including
hurricanes;
|
§ |
inflation,
interest rate, market and monetary fluctuations;
|
§ |
the
effects of our lack of a diversified loan portfolio, including the
risks
of geographic and industry
concentrations;
|
§ |
the
frequency and magnitude of foreclosure of our
loans;
|
§ |
effect
of changes in the stock market and other capital markets;
|
§ |
legislative
or regulatory changes;
|
§ |
our
ability to comply with the extensive laws and regulations to which
we are
subject;
|
§ |
the
willingness of clients to accept third-party products and services
rather
than our products and services and vice
versa;
|
§ |
changes
in the securities and real estate markets;
|
§ |
increased
competition and its effect on
pricing;
|
§ |
technological
changes;
|
§ |
changes
in monetary and fiscal policies of the U.S.
Government;
|
§ |
the
effects of security breaches and computer viruses that may affect
our
computer systems;
|
§ |
changes
in consumer spending and saving habits;
|
§ |
growth
and profitability of our noninterest income;
|
§ |
changes
in accounting principles, policies, practices or
guidelines;
|
§ |
the
limited trading activity of our common
stock;
|
§ |
the
concentration of ownership of our common
stock;
|
§ |
anti-takeover
provisions under federal and state law as well as our Articles of
Incorporation and our bylaws;
|
§ |
other
risks described from time to time in our filings with the Securities
and
Exchange Commission; and
|
§ |
our
ability to manage the risks involved in the foregoing.
|
PART
I.
|
FINANCIAL
INFORMATION
|
CONSOLIDATED
FINANCIAL STATEMENTS
(unaudited)
|
(Dollars
in Thousands, Except Per Share Data)
|
2007
|
2006
|
||||
INTEREST
INCOME
|
||||||
Interest
and Fees on Loans
|
$
|
39,053
|
$
|
37,343
|
||
Investment
Securities:
|
||||||
U.S.
Treasury
|
141
|
79
|
||||
U.S.
Govt. Agencies and Corporations
|
939
|
814
|
||||
States
and Political Subdivisions
|
676
|
439
|
||||
Other
Securities
|
184
|
198
|
||||
Funds
Sold
|
521
|
539
|
||||
Total
Interest Income
|
41,514
|
39,412
|
||||
INTEREST
EXPENSE
|
||||||
Deposits
|
11,000
|
7,722
|
||||
Short-Term
Borrowings
|
761
|
824
|
||||
Subordinated
Notes Payable
|
926
|
926
|
||||
Other
Long-Term Borrowings
|
502
|
810
|
||||
Total
Interest Expense
|
13,189
|
10,282
|
||||
NET
INTEREST INCOME
|
28,325
|
29,130
|
||||
Provision
for Loan Losses
|
1,237
|
667
|
||||
Net
Interest Income After Provision For Loan Losses
|
27,088
|
28,463
|
||||
NONINTEREST
INCOME
|
||||||
Service
Charges on Deposit Accounts
|
6,045
|
5,680
|
||||
Data
Processing
|
715
|
637
|
||||
Asset
Management Fees
|
1,225
|
1,050
|
||||
Securities
Transactions
|
7
|
-
|
||||
Mortgage
Banking Revenues
|
679
|
721
|
||||
Other
|
5,291
|
4,957
|
||||
Total
Noninterest Income
|
13,962
|
13,045
|
||||
NONINTEREST
EXPENSE
|
||||||
Salaries
and Associate Benefits
|
15,719
|
15,430
|
||||
Occupancy,
Net
|
2,236
|
2,223
|
||||
Furniture
and Equipment
|
2,349
|
2,500
|
||||
Intangible
Amortization
|
1,459
|
1,530
|
||||
Other
|
8,799
|
8,409
|
||||
Total
Noninterest Expense
|
30,562
|
30,092
|
||||
INCOME
BEFORE INCOME TAXES
|
10,488
|
11,416
|
||||
Income
Taxes
|
3,531
|
3,995
|
||||
NET
INCOME
|
$
|
6,957
|
$
|
7,421
|
||
Basic
Net Income Per Share
|
$
|
0.38
|
$
|
0.40
|
||
Diluted
Net Income Per Share
|
$
|
0.38
|
$
|
0.40
|
||
Average
Basic Shares Outstanding
|
18,408,726
|
18,651,746
|
||||
Average
Diluted Shares Outstanding
|
18,419,616
|
18,665,136
|
(Dollars
In Thousands, Except Share Data)
|
March
31, 2007
|
December
31, 2006
|
||||
ASSETS
|
||||||
Cash
and Due From Banks
|
$
|
92,233
|
$
|
98,769
|
||
Funds
Sold and Interest Bearing Deposits
|
93,832
|
78,795
|
||||
Total
Cash and Cash Equivalents
|
186,065
|
177,564
|
||||
Investment
Securities, Available-for-Sale
|
191,446
|
191,894
|
||||
Loans,
Net of Unearned Interest
|
1,965,841
|
1,999,721
|
||||
Allowance
for Loan Losses
|
(17,108
|
)
|
(17,217
|
)
|
||
Loans,
Net
|
1,948,733
|
1,982,504
|
||||
Premises
and Equipment, Net
|
88,812
|
86,538
|
||||
Goodwill
|
84,811
|
84,811
|
||||
Other
Intangible Assets
|
18,133
|
19,591
|
||||
Other
Assets
|
60,117
|
55,008
|
||||
Total
Assets
|
$
|
2,578,117
|
$
|
2,597,910
|
||
LIABILITIES
|
||||||
Deposits:
|
||||||
Noninterest
Bearing Deposits
|
$
|
467,875
|
$
|
490,014
|
||
Interest
Bearing Deposits
|
1,574,187
|
1,591,640
|
||||
Total
Deposits
|
2,042,062
|
2,081,654
|
||||
Short-Term
Borrowings
|
77,936
|
65,023
|
||||
Subordinated
Notes Payable
|
62,887
|
62,887
|
||||
Other
Long-Term Borrowings
|
42,879
|
43,083
|
||||
Other
Liabilities
|
41,841
|
29,493
|
||||
Total
Liabilities
|
2,267,605
|
2,282,140
|
||||
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; 18,286,561 and
18,518,398 shares issued and outstanding at March 31, 2007 and December
31, 2006, respectively
|
183
|
185
|
||||
Additional
Paid-In Capital
|
71,366
|
80,654
|
||||
Retained
Earnings
|
246,959
|
243,242
|
||||
Accumulated
Other Comprehensive Loss, Net of Tax
|
(7,996
|
)
|
(8,311
|
)
|
||
Total
Shareowners' Equity
|
310,512
|
315,770
|
||||
Total
Liabilities and Shareowners' Equity
|
$
|
2,578,117
|
$
|
2,597,910
|
(Dollars
in Thousands, Except Per Share Data)
|
Common
Stock
|
Additional
Paid-In Capital
|
Retained
Earnings
|
Accumulated
Other Comprehensive Loss, Net of Taxes
|
Total
|
||||||||||
Balance,
December 31, 2006
|
$
|
185
|
$
|
80,654
|
$
|
243,242
|
$
|
(8,311
|
)
|
$
|
315,770
|
||||
Comprehensive
Income:
|
|||||||||||||||
Net
Income
|
-
|
-
|
6,957
|
-
|
|||||||||||
Net
Change in Unrealized Gain
On
Available-for-Sale Securities
|
-
|
-
|
-
|
315
|
|||||||||||
Total
Comprehensive Income
|
-
|
-
|
-
|
-
|
7,272
|
||||||||||
Cash
Dividends ($.1750 per share)
|
-
|
-
|
(3,240
|
)
|
-
|
(3,240
|
)
|
||||||||
Stock
Performance Plan Compensation
|
-
|
63
|
-
|
-
|
63
|
||||||||||
Issuance
of Common Stock
|
1
|
432
|
-
|
-
|
433
|
||||||||||
Repurchase
of Common Stock
|
(3
|
)
|
(9,783
|
)
|
-
|
-
|
(9,786
|
)
|
|||||||
Balance,
March 31, 2007
|
$
|
183
|
$
|
71,366
|
$
|
246,959
|
$
|
(7,996
|
)
|
$
|
310,512
|
(Dollars
in Thousands)
|
2007
|
2006
|
||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||
Net
Income
|
$
|
6,957
|
$
|
7,421
|
||
Adjustments
to Reconcile Net Income to
Cash
Provided by Operating Activities:
|
||||||
Provision
for Loan Losses
|
1,237
|
667
|
||||
Depreciation
|
1,534
|
1,657
|
||||
Net
Securities Amortization
|
92
|
220
|
||||
Amortization
of Intangible Assets
|
1,459
|
1,530
|
||||
Gain
on Sale of Investment Securities
|
(7
|
)
|
-
|
|||
Origination
of Loans Held-for-Sale
|
(43,084
|
)
|
(40,260
|
)
|
||
Proceeds
From Sales of Loans Held-for-Sale
|
42,374
|
42,705
|
||||
Net
Gain From Sales of Loans Held-for-Sale
|
(679
|
)
|
(721
|
)
|
||
Non-Cash
Compensation
|
63
|
442
|
||||
Deferred
Income Taxes
|
1,152
|
2,722
|
||||
Net
Increase in Other Assets
|
(4,297
|
)
|
(2,019
|
)
|
||
Net
Increase in Other Liabilities
|
11,084
|
6,627
|
||||
Net
Cash Provided By Operating Activities
|
17,885
|
20,991
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||
Securities
Available-for-Sale:
|
||||||
Purchases
|
(10,715
|
)
|
(41,170
|
)
|
||
Payments,
Maturities, and Calls
|
11,552
|
31,024
|
||||
Net
Decrease in Loans
|
33,060
|
9,828
|
||||
Purchase
of Premises & Equipment
|
(4,102
|
)
|
(4,558
|
)
|
||
Proceeds
From Sales of Premises & Equipment
|
294
|
26
|
||||
Net
Cash
Provided By (Used In) Investing Activities
|
30,089
|
(4,850
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||
Net
(Decrease)
Increase in Deposits
|
(39,593
|
)
|
29,810
|
|||
Net
Increase in Short-Term Borrowings
|
12,921
|
2,711
|
||||
Increase
in Other Long-Term Borrowings
|
1,700
|
3,250
|
||||
Repayment
of Other Long-Term Borrowings
|
(1,911
|
)
|
(694
|
)
|
||
Dividends
Paid
|
(3,240
|
)
|
(3,033
|
)
|
||
Repurchase
of Common Stock
|
(9,783
|
)
|
-
|
|||
Issuance
of Common Stock
|
433
|
546
|
||||
Net
Cash (Used In) Provided By Financing Activities
|
(39,473
|
)
|
32,590
|
|||
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
8,501
|
48,731
|
||||
Cash
and Cash Equivalents at Beginning of Period
|
177,564
|
166,359
|
||||
Cash
and Cash Equivalents at End of Period
|
$
|
186,065
|
$
|
215,090
|
||
Supplemental
Disclosure:
|
||||||
Interest
Paid on Deposits
|
$
|
11,112
|
$
|
7,612
|
||
Interest
Paid on Debt
|
$
|
2,199
|
$
|
2,558
|
||
Taxes
Paid
|
$
|
3,229
|
$
|
27
|
||
Loans
Transferred to Other Real Estate
|
$
|
863
|
$
|
488
|
||
Issuance
of Common Stock as Non-Cash Compensation
|
$
|
1,158
|
$
|
644
|
||
Transfer
of Current Portion of Long-Term Borrowings
to
Short-Term Borrowings
|
-
|
$
|
3,000
|
March
31, 2007
|
||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
||||||||
U.S.
Treasury
|
$
|
12,114
|
$
|
20
|
$
|
32
|
$
|
12,102
|
||||
U.S.
Government Agencies and Corporations
|
59,189
|
76
|
421
|
58,844
|
||||||||
States
and Political Subdivisions
|
83,553
|
16
|
329
|
83,240
|
||||||||
Mortgage-Backed
Securities
|
24,548
|
59
|
301
|
24,306
|
||||||||
Other
Securities(1)
|
12,905
|
49
|
-
|
12,954
|
||||||||
Total
Investment Securities
|
$
|
192,309
|
$
|
220
|
$
|
1,083
|
$
|
191,446
|
December
31, 2006
|
||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
||||||||
U.S.
Treasury
|
$
|
12,098
|
$
|
16
|
$
|
49
|
$
|
12,065
|
||||
U.S.
Government Agencies and Corporations
|
61,619
|
37
|
593
|
61,063
|
||||||||
States
and Political Subdivisions
|
83,621
|
16
|
415
|
83,222
|
||||||||
Mortgage-Backed
Securities
|
23,244
|
23
|
371
|
22,896
|
||||||||
Other
Securities(1)
|
12,648
|
-
|
-
|
12,648
|
||||||||
Total
Investment Securities
|
$
|
193,230
|
$
|
92
|
$
|
1,428
|
$
|
191,894
|
(1)
|
FHLB
and FRB stock recorded at
cost.
|
(Dollars
in Thousands)
|
March
31, 2007
|
December
31, 2006
|
||||
Commercial,
Financial and Agricultural
|
$
|
205,048
|
$
|
229,327
|
||
Real
Estate-Construction
|
180,549
|
179,072
|
||||
Real
Estate-Commercial
|
643,272
|
643,885
|
||||
Real
Estate-Residential
|
517,637
|
531,968
|
||||
Real
Estate-Home Equity
|
172,283
|
173,597
|
||||
Real
Estate-Loans Held-for-Sale
|
6,302
|
4,170
|
||||
Consumer
|
240,750
|
237,702
|
||||
Loans,
Net of Unearned Interest
|
$
|
1,965,841
|
$
|
1,999,721
|
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Balance,
Beginning of Period
|
$
|
17,217
|
$
|
17,410
|
||
Provision
for Loan Losses
|
1,237
|
667
|
||||
Recoveries
on Loans Previously Charged-Off
|
476
|
428
|
||||
Loans
Charged-Off
|
(1,822
|
)
|
(1,226
|
)
|
||
Balance,
End of Period
|
$
|
17,108
|
$
|
17,279
|
|
March
31, 2007
|
December
31, 2006
|
||||||||||
(Dollars
in Thousands)
|
Balance
|
Valuation
Allowance
|
Balance
|
Valuation
Allowance
|
||||||||
Impaired
Loans:
|
||||||||||||
With
Related Valuation Allowance
|
$
|
6,439
|
$
|
2,644
|
$
|
6,085
|
$
|
2,255
|
||||
Without
Related Valuation Allowance
|
3,940
|
-
|
4,574
|
-
|
March
31, 2007
|
December
31, 2006
|
|||||||||||
(Dollars
in Thousands)
|
Gross
Amount
|
Accumulated
Amortization
|
Gross
Amount
|
Accumulated
Amortization
|
||||||||
Core
Deposit Intangibles
|
$
|
47,176
|
$
|
30,366
|
$
|
47,176
|
$
|
28,955
|
||||
Goodwill
|
84,811
|
-
|
84,811
|
-
|
||||||||
Customer
Relationship Intangible
|
1,867
|
544
|
1,867
|
497
|
||||||||
Total
Intangible Assets
|
$
|
133,854
|
$
|
30,910
|
$
|
133,854
|
$
|
29,452
|
(Dollars
in Thousands)
|
March
31, 2007
|
December
31, 2006
|
||||
NOW
Accounts
|
$
|
575,740
|
$
|
599,433
|
||
Money
Market Accounts
|
396,150
|
384,568
|
||||
Savings
Deposits
|
124,970
|
125,500
|
||||
Other
Time Deposits
|
477,327
|
482,139
|
||||
Total
Interest Bearing Deposits
|
$
|
1,574,187
|
$
|
1,591,640
|
Three
Months Ended March 31,
|
||||||
(Dollars
in Thousands)
|
|
2007
|
|
2006
|
||
Current:
|
|
|
|
|
||
Federal
|
|
$
|
4,054
|
|
$
|
4,125
|
State
|
|
|
462
|
|
|
402
|
Deferred:
|
|
|
|
|
|
|
Federal
|
|
|
(844)
|
|
(456)
|
|
State
|
|
|
(141)
|
|
|
(76)
|
Total
|
|
$
|
3,531
|
|
$
|
3,995
|
Effective
Tax Rate
|
33.7%
|
35.1%
|
Options
|
Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Term
|
Aggregate
Intrinsic Value
|
||||||||
Outstanding
at January 1, 2007
|
60,384
|
$
|
32.79
|
8.3
|
$
|
151,355
|
||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||
Forfeited
or expired
|
-
|
-
|
-
|
-
|
||||||||
Outstanding
at March 31, 2007
|
60,384
|
$
|
32.79
|
6.2
|
$
|
30,587
|
||||||
Exercisable
at March 31, 2007
|
47,720
|
$
|
32.79
|
6.2
|
$
|
22,862
|
Three
Months Ended March 31,
|
|||||||
2007
|
2006
|
||||||
Dividend
yield
|
2.0
|
%
|
1.8
|
%
|
|||
Expected
volatility
|
24.0
|
%
|
25.0
|
%
|
|||
Risk-free
interest rate
|
4.9
|
%
|
4.0
|
%
|
|||
Expected
life (in years)
|
0.5
|
0.5
|
Three
Months Ended
March
31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Discount
Rate
|
6.00
|
%
|
5.75
|
%
|
||
Long-Term
Rate of Return on Assets
|
8.00
|
%
|
8.00
|
%
|
||
Service
Cost
|
$
|
1,350
|
$
|
1,250
|
||
Interest
Cost
|
1,025
|
875
|
||||
Expected
Return on Plan Assets
|
(1,300
|
)
|
(975
|
)
|
||
Prior
Service Cost Amortization
|
100
|
50
|
||||
Net
Loss Amortization
|
250
|
375
|
||||
Net
Periodic Benefit Cost
|
$
|
1,425
|
$
|
1,575
|
Three
Months Ended
March
31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Discount
Rate
|
6.00
|
%
|
5.75
|
%
|
||
Long-Term
Rate Of Return On Assets
|
N/A
|
N/A
|
||||
Service
Cost
|
$
|
25
|
$
|
30
|
||
Interest
Cost
|
63
|
56
|
||||
Expected
Return On Plan Assets
|
N/A
|
N/A
|
||||
Prior
Service Cost Amortization
|
3
|
15
|
||||
Net
Loss Amortization
|
18
|
19
|
||||
Net
Periodic Benefit Cost
|
$
|
109
|
$
|
120
|
(Dollars
in Millions)
|
Amount
|
||
Commitments
to Extend Credit(1)
|
$
|
407.4
|
|
Standby
Letters of Credit
|
$
|
18.5
|
2007
|
2006
|
2005
|
||||||||||||||||||||||
(Dollars
in Thousands, Except Per Share Data)
|
First
|
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
||||||||||||||||
Summary
of Operations:
|
||||||||||||||||||||||||
Interest
Income
|
$
|
41,514
|
$
|
42,600
|
$
|
42,512
|
$
|
41,369
|
$
|
39,412
|
$
|
38,780
|
$
|
36,889
|
$
|
33,910
|
||||||||
Interest
Expense
|
13,189
|
13,003
|
12,289
|
11,182
|
10,282
|
9,470
|
7,885
|
6,788
|
||||||||||||||||
Net
Interest Income
|
28,325
|
29,597
|
30,223
|
30,187
|
29,130
|
29,310
|
29,004
|
27,122
|
||||||||||||||||
Provision
for Loan Losses
|
1,237
|
460
|
711
|
121
|
667
|
1,333
|
376
|
388
|
||||||||||||||||
Net
Interest Income After
Provision
for Loan Losses
|
27,088
|
29,137
|
29,512
|
30,066
|
28,463
|
27,977
|
28,628
|
26,734
|
||||||||||||||||
Noninterest
Income
|
13,962
|
14,385
|
14,144
|
14,003
|
13,045
|
12,974
|
13,123
|
12,041
|
||||||||||||||||
Merger
Expense
|
-
|
-
|
-
|
-
|
-
|
24
|
180
|
234
|
||||||||||||||||
Noninterest
Expense
|
30,562
|
29,984
|
30,422
|
31,070
|
30,092
|
29,318
|
28,429
|
26,362
|
||||||||||||||||
Income
Before Provision for Income Taxes
|
10,488
|
13,538
|
13,234
|
12,999
|
11,416
|
11,609
|
13,142
|
12,179
|
||||||||||||||||
Provision
for Income Taxes
|
3,531
|
4,688
|
4,554
|
4,684
|
3,995
|
4,150
|
4,565
|
4,311
|
||||||||||||||||
Net
Income
|
$
|
6,957
|
$
|
8,850
|
$
|
8,680
|
$
|
8,315
|
$
|
7,421
|
$
|
7,459
|
$
|
8,577
|
$
|
7,868
|
||||||||
Net
Interest Income (FTE)
|
$
|
28,898
|
$
|
30,152
|
$
|
30,745
|
$
|
30,591
|
$
|
29,461
|
$
|
29,652
|
$
|
29,329
|
$
|
27,396
|
||||||||
|
||||||||||||||||||||||||
Per
Common Share:
|
||||||||||||||||||||||||
Net
Income Basic
|
$
|
.38
|
$
|
.48
|
$
|
.47
|
$
|
.44
|
$
|
.40
|
$
|
.40
|
$
|
.46
|
$
|
.44
|
||||||||
Net
Income Diluted
|
.38
|
.48
|
.47
|
.44
|
.40
|
.40
|
.46
|
.44
|
||||||||||||||||
Dividends
Declared
|
.175
|
.175
|
.163
|
.163
|
.163
|
.163
|
.152
|
.152
|
||||||||||||||||
Diluted
Book Value
|
16.97
|
17.01
|
17.18
|
16.81
|
16.65
|
16.39
|
16.17
|
15.87
|
||||||||||||||||
Market
Price:
|
||||||||||||||||||||||||
High
|
35.91
|
35.98
|
33.25
|
35.39
|
37.97
|
39.33
|
38.72
|
33.46
|
||||||||||||||||
Low
|
29.79
|
30.14
|
29.87
|
29.51
|
33.79
|
33.21
|
31.78
|
28.02
|
||||||||||||||||
Close
|
33.30
|
35.30
|
31.10
|
30.20
|
35.55
|
34.29
|
37.71
|
32.32
|
||||||||||||||||
|
||||||||||||||||||||||||
Selected
Average
|
||||||||||||||||||||||||
Balances:
|
||||||||||||||||||||||||
Loans
|
$
|
1,980,224
|
$
|
2,003,719
|
$
|
2,025,112
|
$
|
2,040,656
|
$
|
2,048,642
|
$
|
2,062,775
|
$
|
2,046,968
|
$
|
1,932,637
|
||||||||
Earning
Assets
|
2,211,560
|
2,238,066
|
2,241,158
|
2,278,817
|
2,275,667
|
2,279,010
|
2,250,902
|
2,170,483
|
||||||||||||||||
Assets
|
2,530,790
|
2,557,357
|
2,560,155
|
2,603,090
|
2,604,458
|
2,607,597
|
2,569,524
|
2,458,788
|
||||||||||||||||
Deposits
|
2,003,726
|
2,028,453
|
2,023,523
|
2,047,755
|
2,040,248
|
2,027,017
|
2,013,427
|
1,932,144
|
||||||||||||||||
Shareowners’
Equity
|
316,484
|
323,903
|
318,041
|
315,794
|
311,461
|
306,208
|
300,931
|
278,107
|
||||||||||||||||
Common
Equivalent Average Shares:
|
||||||||||||||||||||||||
Basic
|
18,409
|
18,525
|
18,530
|
18,633
|
18,652
|
18,624
|
18,623
|
18,094
|
||||||||||||||||
Diluted
|
18,420
|
18,569
|
18,565
|
18,653
|
18,665
|
18,654
|
18,649
|
18,102
|
||||||||||||||||
|
||||||||||||||||||||||||
Ratios:
|
||||||||||||||||||||||||
ROA
|
1.11
|
%
|
1.37
|
%
|
1.35
|
%
|
1.28
|
%
|
1.16
|
%
|
1.14
|
%
|
1.32
|
%
|
1.28
|
%
|
||||||||
ROE
|
8.91
|
%
|
10.84
|
%
|
10.83
|
%
|
10.56
|
%
|
9.66
|
%
|
9.67
|
%
|
11.31
|
%
|
11.35
|
%
|
||||||||
Net
Interest Margin (FTE)
|
5.29
|
%
|
5.35
|
%
|
5.45
|
%
|
5.38
|
%
|
5.25
|
%
|
5.16
|
%
|
5.17
|
%
|
5.07
|
%
|
||||||||
Efficiency
Ratio
|
67.90
|
%
|
63.99
|
%
|
64.35
|
%
|
66.23
|
%
|
67.20
|
%
|
65.22
|
%
|
63.60
|
%
|
63.56
|
%
|
(1)
|
All
share and per share data have been adjusted to reflect the 5-for-4
stock
split effective July 1,
2005.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three
Months Ended March 31,
|
|||||||
2007
|
2006
|
||||||
Efficiency
ratio
|
71.31
|
%
|
70.80
|
%
|
|||
Effect
of intangible amortization expense
|
(3.41
|
)%
|
(3.60
|
)%
|
|||
Operating
efficiency ratio
|
67.90
|
%
|
67.20
|
%
|
Three
Months Ended March 31,
|
|||||||
2007
|
2006
|
||||||
Net
noninterest expense as a percent of average assets
|
2.66
|
%
|
2.65
|
%
|
|||
Effect
of intangible amortization expense
|
(0.23
|
)%
|
(0.23
|
)%
|
|||
Operating
net noninterest expense as a percent of average assets
|
2.43
|
%
|
2.42
|
%
|
· |
Quarterly
earnings totaled $7.0 million, or $0.38 per diluted share, decreases
of
6.3%
and 5.0%, respectively, from the first quarter of 2006.
|
· |
Earnings
for the quarter were negatively impacted by margin compression and
a
higher loan loss provision, but benefited from strong growth in
noninterest income and good control of operating expenses.
|
· |
Tax
equivalent net interest income declined 1.9% as a result of a 2.8%
reduction in average earning
assets.
|
· |
Strong
growth of 7.0% was realized in noninterest income, which more than
offset
the decline in net interest income.
|
· |
Noninterest
expense increased only 1.6% due to implementation of expense control
strategies.
|
· |
Slight
decline in credit quality as reflected by a higher loan loss provision
for
the quarter. Allowance for loan losses continues to be adequately
funded
at .87% of total loans and 208% of non-performing
loans.
|
· |
Well-capitalized
with a risk based capital ratio of
14.83%.
|
Three
Months Ended March 31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Interest
Income
|
$
|
41,514
|
$
|
39,412
|
||
Taxable
Equivalent Adjustment(1)
|
573
|
331
|
||||
Interest
Income (FTE)
|
42,087
|
39,743
|
||||
Interest
Expense
|
13,189
|
10,282
|
||||
Net
Interest Income (FTE)
|
28,898
|
29,461
|
||||
Provision
for Loan Losses
|
1,237
|
667
|
||||
Taxable
Equivalent Adjustment
|
573
|
331
|
||||
Net
Interest Income After Provision
|
27,088
|
28,463
|
||||
Noninterest
Income
|
13,962
|
13,045
|
||||
Noninterest
Expense
|
30,562
|
30,092
|
||||
Income
Before Income Taxes
|
10,488
|
11,416
|
||||
Income
Taxes
|
3,531
|
3,995
|
||||
Net
Income
|
$
|
6,957
|
$
|
7,421
|
||
Return
on Average Assets(2)
|
1.11
|
%
|
1.16
|
%
|
||
Return
on Average Equity(2)
|
8.91
|
%
|
9.66
|
%
|
(1)
|
Computed
using a statutory tax rate of
35%
|
(2)
|
Annualized
|
Three
Months Ended March 31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
CHARGE-OFFS
|
||||||
Commercial,
Financial and Agricultural
|
$
|
560
|
$
|
322
|
||
Real
Estate - Construction
|
108
|
-
|
||||
Real
Estate - Commercial
|
326
|
291
|
||||
Real
Estate - Residential
|
67
|
22
|
||||
Consumer
|
761
|
591
|
||||
Total
Charge-offs
|
1,822
|
1,226
|
||||
RECOVERIES
|
||||||
Commercial,
Financial and Agricultural
|
36
|
62
|
||||
Real
Estate - Construction
|
-
|
-
|
||||
Real
Estate - Commercial
|
5
|
3
|
||||
Real
Estate - Residential
|
3
|
7
|
||||
Consumer
|
432
|
356
|
||||
Total
Recoveries
|
476
|
428
|
||||
Net
Charge-offs
|
$
|
1,346
|
$
|
798
|
||
Net
Charge-offs (Annualized) as a
|
||||||
Percent
of Average Loans Outstanding,
|
||||||
Net
of Unearned Interest
|
.28
|
%
|
.16
|
%
|
Three
Months Ended March 31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Noninterest
Income:
|
||||||
Service
Charges on Deposit Accounts
|
$
|
6,045
|
$
|
5,680
|
||
Data
Processing
|
715
|
637
|
||||
Asset
Management Fees
|
1,225
|
1,050
|
||||
Retail
Brokerage Fees
|
462
|
483
|
||||
Gain
on Sale of Investment Securities
|
7
|
-
|
||||
Mortgage
Banking Revenues
|
679
|
721
|
||||
Merchant
Service Fees
|
1,936
|
1,725
|
||||
Interchange
Fees
|
910
|
675
|
||||
ATM/Debit
Card Fees
|
641
|
599
|
||||
Other
|
1,342
|
1,475
|
||||
Total
Noninterest Income
|
$
|
13,962
|
$
|
13,045
|
Three
Months Ended March 31,
|
||||||
(Dollars
in Thousands)
|
2007
|
2006
|
||||
Noninterest
Expense:
|
|
|||||
Salaries
|
$
|
12,343
|
$
|
11,715
|
||
Associate
Benefits
|
3,376
|
3,715
|
||||
Total
Compensation
|
15,719
|
15,430
|
||||
Premises
|
2,236
|
2,223
|
||||
Equipment
|
2,349
|
2,500
|
||||
Total
Occupancy
|
4,585
|
4,723
|
||||
Legal
Fees
|
507
|
517
|
||||
Professional
Fees
|
992
|
754
|
||||
Processing
Services
|
382
|
434
|
||||
Advertising
|
864
|
999
|
||||
Travel
and Entertainment
|
345
|
386
|
||||
Printing
and Supplies
|
514
|
607
|
||||
Telephone
|
547
|
622
|
||||
Postage
|
340
|
281
|
||||
Intangible
Amortization
|
1,459
|
1,530
|
||||
Interchange
Fees
|
1,668
|
1,494
|
||||
Courier
Service
|
277
|
330
|
||||
Miscellaneous
|
2,363
|
1,985
|
||||
Total
Other
|
10,258
|
9,939
|
||||
Total
Noninterest Expense
|
$
|
30,562
|
$
|
30,092
|
Payments
Due By Period
|
|||||||||||||||
(Dollars
in Thousands)
|
1
Year or Less
|
1
- 3 Years
|
4
- 5 Years
|
After
5 Years
|
Total
|
||||||||||
Federal
Home Loan Bank Advances
|
$
|
12,018
|
$
|
17,243
|
$
|
5,547
|
$
|
17,431
|
$
|
52,239
|
|||||
Subordinated
Notes Payable
|
-
|
-
|
-
|
62,887
|
62,887
|
||||||||||
Operating
Lease Obligations
|
1,101
|
2,636
|
2,071
|
6,071
|
11,879
|
||||||||||
Total
Contractual Cash Obligations
|
$
|
13,119
|
$
|
19,879
|
$
|
7,618
|
$
|
86,389
|
$
|
127,005
|
(Taxable
Equivalent Basis - Dollars in Thousands)
|
Three
Months Ended March 31,
|
||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||
ASSETS
|
|||||||||||||||||||
Loans,
Net of Unearned Interest(1)(2)
|
$
|
1,980,224
|
$
|
39,264
|
8.04
|
%
|
$
|
2,048,642
|
$
|
37,439
|
7.41
|
%
|
|||||||
Taxable
Investment Securities
|
108,377
|
1,263
|
4.67
|
%
|
118,055
|
1,091
|
3.70
|
%
|
|||||||||||
Tax-Exempt
Investment Securities(2)
|
82,627
|
1,039
|
5.03
|
%
|
59,368
|
674
|
4.54
|
%
|
|||||||||||
Funds
Sold
|
40,332
|
521
|
5.17
|
%
|