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)
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(I.R.S.
Employer Identification No.)
|
217
North Monroe Street, Tallahassee, Florida
|
32301
|
|
(Address
of principal executive office)
|
(Zip
Code)
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(850)
402-7000
|
(Registrant's
telephone number, including area
code)
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
(Do
not check if smaller reporting company)
|
PART
I – Financial Information
|
Page
|
||
Item
1.
|
|||
Consolidated
Statements of Financial Condition – June 30, 2009 and December 31,
2008
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4
|
||
Consolidated
Statements of Income – Three and Six Months Ended June 30, 2009 and
2008
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5
|
||
Consolidated
Statement of Changes in Shareowners’ Equity – Six Months Ended June 30,
2009
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6
|
||
Consolidated
Statements of Cash Flow – Six Months Ended June 30, 2009 and
2008
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7
|
||
Notes
to Consolidated Financial Statements
|
8
|
||
Item
2.
|
16
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||
Item
3.
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29
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||
Item
4.
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29
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||
PART
II – Other Information
|
|||
Item
1.
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29
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||
Item
1A.
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29
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||
Item
2.
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29
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||
Item
3.
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29
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||
Item
4.
|
29
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||
Item
5.
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29
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||
Item
6.
|
30
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||
31
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|||
Exhibit Index |
32
|
§
|
the
frequency and magnitude of foreclosure of our
loans;
|
§
|
the
adequacy of collateral underlying collateralized loans and our ability to
resell the collateral if we foreclose on the
loans;
|
§
|
the
effects of our lack of a diversified loan portfolio, including the risks
of geographic and industry
concentrations;
|
§
|
the
accuracy of our financial statement estimates and assumptions, including
the estimate for our loan loss
provision;
|
§
|
the
extent to which our nonperforming loans increase or decrease as a
percentage of our total loan
portfolio;
|
§
|
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
effects of harsh weather conditions, including
hurricanes;
|
§
|
inflation,
interest rate, market and monetary
fluctuations;
|
§
|
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.
|
NOTE 1
- SIGNIFICANT
ACCOUNTING POLICIES
|
NOTE
2 - INVESTMENT SECURITIES
|
June
30, 2009
|
||||||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
||||||||||||
U.S.
Treasury
|
$
|
27,899
|
$
|
297
|
$
|
-
|
$
|
28,196
|
||||||||
U.S.
Government Agencies
|
5,597
|
61
|
-
|
5,658
|
||||||||||||
States
and Political Subdivisions
|
105,925
|
1,420
|
68
|
107,277
|
||||||||||||
Residential
Mortgage-Backed Securities
|
39,493
|
677
|
18
|
40,152
|
||||||||||||
Other
Securities(1)
|
12,719
|
-
|
-
|
12,719
|
||||||||||||
Total
Investment Securities
|
$
|
191,633
|
$
|
2,455
|
$
|
86
|
$
|
194,002
|
December
31, 2008
|
||||||||||||||||
(Dollars
in Thousands)
|
Amortized
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Market
Value
|
||||||||||||
U.S.
Treasury
|
$
|
29,094
|
$
|
577
|
$
|
-
|
$
|
29,671
|
||||||||
U.S.
Government Agencies
|
7,091
|
180
|
-
|
7,271
|
||||||||||||
States
and Political Subdivisions
|
100,370
|
1,224
|
32
|
101,562
|
||||||||||||
Residential
Mortgage-Backed Securities
|
39,860
|
332
|
116
|
40,076
|
||||||||||||
Other
Securities(1)
|
12,882
|
107
|
-
|
12,989
|
||||||||||||
Total
Investment Securities
|
$
|
189,297
|
$
|
2,420
|
$
|
148
|
$
|
191,569
|
(1)
|
Includes Federal Home Loan
Bank and Federal Reserve Bank stock recorded at cost of $6.9 million and
$4.8 million, respectively, at June 30, 2009, and $7.0 million and $4.8
million, respectively, at December 31, 2008. Also, balance includes a bank
preferred
stock issue
recorded at $1.0 million and $1.1 million at June 30, 2009 and December
31, 2008,
respectively.
|
(Dollars
in Thousands)
|
Amortized
Cost
|
Market
Value
|
||||||
Due
in one year or less
|
$
|
80,324
|
$
|
81,143
|
||||
Due
after one through five years
|
96,207
|
97,682
|
||||||
Due
after five through ten years
|
1,833
|
1,847
|
||||||
Due
over ten years
|
1,550
|
1,611
|
||||||
No
Maturity
|
11,719
|
11,719
|
||||||
Total
Investment Securities
|
$
|
191,633
|
$
|
194,002
|
(Dollars
in Thousands)
|
June
30, 2009
|
December
31, 2008
|
||||||
Commercial,
Financial and Agricultural
|
$
|
201,589
|
$
|
206,230
|
||||
Real
Estate-Construction
|
153,507
|
141,973
|
||||||
Real
Estate-Commercial
|
686,420
|
656,959
|
||||||
Real
Estate-Residential(1)
|
448,216
|
481,034
|
||||||
Real
Estate-Home Equity
|
235,473
|
218,500
|
||||||
Real
Estate-Loans Held-for-Sale
|
7,369
|
3,204
|
||||||
Consumer
|
244,489
|
249,897
|
||||||
Loans,
Net of Unearned Interest
|
$
|
1,977,063
|
$
|
1,957,797
|
(1)
|
Includes
loans in process with outstanding balances of $8.4 million and $13.9
million for June 30, 2009 and December 31, 2008,
respectively.
|
(Dollars
in Thousands)
|
2009
|
2008
|
||||||
Balance,
Beginning of Period
|
$
|
37,004
|
$
|
18,066
|
||||
Provision
for Loan Losses
|
16,836
|
9,574
|
||||||
Recoveries
on Loans Previously Charged-Off
|
1,604
|
1,287
|
||||||
Loans
Charged-Off
|
(13,662
|
)
|
(6,409
|
)
|
||||
Balance,
End of Period
|
$
|
41,782
|
$
|
22,518
|
June
30, 2009
|
December
31, 2008
|
|||||||||||||||
(Dollars
in Thousands)
|
Balance
|
Valuation
Allowance
|
Balance
|
Valuation
Allowance
|
||||||||||||
Impaired
Loans:
|
||||||||||||||||
With
Related Valuation Allowance
|
$
|
99,646
|
$
|
18,483
|
$
|
68,705
|
$
|
15,901
|
||||||||
Without
Related Valuation Allowance
|
26,656
|
-
|
37,723
|
-
|
NOTE
5 - INTANGIBLE ASSETS
|
June
30, 2009
|
December
31, 2008
|
|||||||||||||||
(Dollars
in Thousands)
|
Gross
Amount
|
Accumulated
Amortization
|
Gross
Amount
|
Accumulated
Amortization
|
||||||||||||
Core
Deposit Intangibles
|
$
|
47,176
|
$
|
42,017
|
$
|
47,176
|
$
|
40,092
|
||||||||
Goodwill
|
84,811
|
-
|
84,811
|
-
|
||||||||||||
Customer
Relationship Intangible
|
1,867
|
975
|
1,867
|
879
|
||||||||||||
Total
Intangible Assets
|
$
|
133,854
|
$
|
42,992
|
$
|
133,854
|
$
|
40,971
|
(Dollars
in Thousands)
|
June
30, 2009
|
December
31, 2008
|
||||||
NOW
Accounts
|
$
|
733,526
|
$
|
758,976
|
||||
Money
Market Accounts
|
300,683
|
324,646
|
||||||
Savings
Deposits
|
123,257
|
115,261
|
||||||
Other
Time Deposits
|
424,339
|
373,595
|
||||||
Total
Interest Bearing Deposits
|
$
|
1,581,805
|
$
|
1,572,478
|
NOTE
7 - STOCK-BASED COMPENSATION
|
Options
|
Shares
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Term
|
Aggregate
Intrinsic Value
|
||||||||||||
Outstanding
at January 1, 2009
|
60,384 | $ | 32.79 | 5.9 | $ | - | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Forfeited
or expired
|
- | - | - | - | ||||||||||||
Outstanding
at June 30, 2009
|
60,384 | $ | 32.79 | 5.4 | $ | - | ||||||||||
Exercisable
at June 30, 2009
|
60,384 | $ | 32.79 | 5.4 | $ | - |
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
(Dollars
in Thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Discount
Rate
|
6.00
|
%
|
6.25
|
%
|
6.00
|
%
|
6.25
|
%
|
||||||||
Long-Term
Rate of Return on Assets
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
8.00
|
%
|
||||||||
Service
Cost
|
$
|
1,525
|
$
|
1,279
|
$
|
3,050
|
$
|
2,558
|
||||||||
Interest
Cost
|
1,200
|
1,063
|
2,400
|
2,126
|
||||||||||||
Expected
Return on Plan Assets
|
(1,275
|
)
|
(1,253
|
)
|
(2,550
|
)
|
(2,506
|
)
|
||||||||
Prior
Service Cost Amortization
|
125
|
75
|
250
|
151
|
||||||||||||
Net
Loss Amortization
|
750
|
280
|
1,500
|
561
|
||||||||||||
Net
Periodic Benefit Cost
|
$
|
2,325
|
$
|
1,444
|
$
|
4,650
|
$
|
2,890
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
(Dollars
in Thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Discount
Rate
|
6.00
|
%
|
6.25
|
%
|
6.00
|
%
|
6.25
|
%
|
||||||||
Service
Cost
|
$
|
5
|
$
|
22
|
$
|
10
|
$
|
44
|
||||||||
Interest
Cost
|
74
|
56
|
148
|
111
|
||||||||||||
Prior
Service Cost Amortization
|
45
|
2
|
90
|
4
|
||||||||||||
Net
Loss Amortization
|
(5)
|
1
|
(11)
|
3
|
||||||||||||
Net
Periodic Benefit Cost
|
$
|
119
|
$
|
81
|
$
|
237
|
$
|
162
|
NOTE
9 - COMMITMENTS AND
CONTINGENCIES
|
(Dollars
in Millions)
|
Amount
|
|||
Commitments
to Extend Credit(1)
|
$
|
393
|
||
Standby
Letters of Credit
|
$
|
17
|
(1)
|
Commitments include unfunded
loans, revolving lines of credit, and other unused
commitments.
|
(Dollars
in Thousands)
|
Level
1 Inputs
|
Level
2 Inputs
|
Level
3 Inputs(1)
|
Total
Fair
Value
|
||||||||||||
Securities
Available for Sale
|
$ | 33,670 | $ | 147,613 | $ | 1,000 | $ | 182,283 |
(1)
|
Reflects
one bank preferred stock issue of $1.0 million whose fair value has been
determined based on an internal valuation
model.
|
June
30, 2009
|
December
31, 2008
|
|||||||||||||||
(Dollars
in Thousands)
|
Carrying
Value
|
Estimated
Fair
Value
|
Carrying
Value
|
Estimated
Fair
Value
|
||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash
|
$
|
92,394
|
$
|
92,394
|
$
|
88,143
|
$
|
88,143
|
||||||||
Short-Term Investments
|
2,016
|
2,016
|
6,806
|
6,806
|
||||||||||||
Investment
Securities
|
194,002
|
194,002
|
191,569
|
191,569
|
||||||||||||
Loans,
Net of Allowance for Loan Losses
|
1,935,281
|
1,931,278
|
1,920,793
|
1,915,887
|
||||||||||||
Total
Financial Assets
|
$
|
2,223,693
|
$
|
2,219,690
|
$
|
2,207,311
|
$
|
2,202,405
|
||||||||
Financial
Liabilities:
|
||||||||||||||||
Deposits
|
$
|
2,005,930
|
$
|
1,945,804
|
$
|
1,992,174
|
$
|
1,960,361
|
||||||||
Short-Term
Borrowings
|
73,989
|
73,239
|
62,044
|
61,799
|
||||||||||||
Subordinated
Notes Payable
|
62,887
|
60,984
|
62,887
|
63,637
|
||||||||||||
Long-Term
Borrowings
|
52,354
|
55,939
|
51,470
|
57,457
|
||||||||||||
Total
Financial Liabilities
|
$
|
2,195,160
|
$
|
2,135,966
|
$
|
2,168,575
|
$
|
2,143,254
|
2009
|
2008
|
2007
|
||||||||||||||||||||||||||||||
(Dollars
in Thousands, Except Per Share Data)
|
Second
|
First
|
Fourth
|
Third(1)
|
Second
|
First
|
Fourth
|
Third
|
||||||||||||||||||||||||
Summary
of Operations:
|
||||||||||||||||||||||||||||||||
Interest
Income
|
$ | 31,180 | $ | 31,053 | $ | 33,229 | $ | 34,654 | $ | 36,260 | $ | 38,723 | $ | 40,786 | $ | 41,299 | ||||||||||||||||
Interest
Expense
|
4,085 | 4,058 | 5,482 | 7,469 | 8,785 | 12,264 | 13,241 | 13,389 | ||||||||||||||||||||||||
Net
Interest Income
|
27,095 | 26,995 | 27,747 | 27,185 | 27,475 | 26,459 | 27,545 | 27,910 | ||||||||||||||||||||||||
Provision
for Loan Losses
|
8,426 | 8,410 | 12,497 | 10,425 | 5,432 | 4,142 | 1,699 | 1,552 | ||||||||||||||||||||||||
Net
Interest Income After
Provision
for Loan Losses
|
18,669 | 18,585 | 15,250 | 16,760 | 22,043 | 22,317 | 25,846 | 26,358 | ||||||||||||||||||||||||
Noninterest
Income
|
14,634 | 14,042 | 13,311 | 20,212 | 15,718 | 17,799 | 15,823 | 14,431 | ||||||||||||||||||||||||
Noninterest
Expense
|
32,930 | 32,257 | 31,002 | 29,916 | 30,756 | 29,798 | 31,614 | 29,919 | ||||||||||||||||||||||||
Income
Before Provision for Income Taxes
|
373 | 370 | (2,441 | ) | 7,056 | 7,005 | 10,318 | 10,055 | 10,870 | |||||||||||||||||||||||
Provision
for Income Taxes
|
(401 | ) | (280 | ) | (738 | ) | 2,218 | 2,195 | 3,038 | 2,391 | 3,699 | |||||||||||||||||||||
Net
Income
|
$ | 774 | $ | 650 | $ | (1,703 | ) | $ | 4,838 | $ | 4,810 | $ | 7,280 | $ | 7,664 | $ | 7,171 | |||||||||||||||
Net
Interest Income (FTE)
|
$ | 27,679 | $ | 27,578 | $ | 28,387 | $ | 27,802 | $ | 28,081 | $ | 27,078 | $ | 28,196 | $ | 28,517 | ||||||||||||||||
Per
Common Share:
|
||||||||||||||||||||||||||||||||
Net
Income Basic
|
$ | 0.04 | $ | 0.04 | $ | (0.10 | ) | $ | 0.29 | $ | 0.28 | $ | 0.42 | $ | 0.44 | $ | 0.41 | |||||||||||||||
Net
Income Diluted
|
0.04 | 0.04 | (0.10 | ) | 0.29 | 0.28 | 0.42 | 0.44 | 0.41 | |||||||||||||||||||||||
Dividends
Declared
|
0.190 | 0.190 | 0.190 | 0.185 | 0.185 | 0.185 | < |