Capital City Bank Group, Inc.
Reports Fourth Quarter and Full Year 2011 Results

TALLAHASSEE, Fla. (January 27, 2012) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $0.5 million, or $0.03 per diluted share, for the fourth quarter of 2011, compared to net income of $2.0 million, or $0.12 per diluted share for the third quarter of 2011 and net income of $1.9 million, or $0.12 per diluted share, for the fourth quarter of 2010.  For the full year 2011, CCBG reported net income of $4.9 million, or $0.29 per diluted share compared to a net loss of $0.4 million, or $0.02 per diluted share in 2010.

Compared to the third quarter of 2011, earnings reflect lower operating revenues of $1.0 million, a $3.9 million increase in the loan loss provision and higher noninterest expense of $0.5 million, partially offset by lower income taxes of $2.9 million.  Compared to the fourth quarter of 2010, the reduction in earnings was due to lower operating revenues of $2.8 million and a $3.8 million increase in the loan loss provision, partially offset by a $2.4 million reduction in noninterest expense and a higher income tax benefit of $1.8 million.

For the full year 2011, the improvement in earnings was due to a $7.7 million reduction in noninterest expense and a lower loan loss provision of $4.8 million, partially offset by a $3.6 million decline in operating revenues and higher income taxes of $3.6 million.  2011 performance also reflects the sale of our Visa Class B shares of stock during the first quarter which resulted in a $2.6 million net gain ($3.2 million pre-tax included in noninterest income and a swap liability of $0.6 million included in noninterest expense).

“Given the economic environment, we are proud of our accomplishments during 2011,” said William G. Smith, Jr., Chairman, President and CEO.  “Year over year we earned $0.29 per share versus a loss of $0.02 per share in 2010, our sales of OREO exceeded the combined sales of the prior two years and gross additions to our problem loan pool continued their downward trend. While the fourth quarter results were disappointing, they were consistent with our prior comments that our performance would be uneven as we work through this economic cycle.  It remains a tough operating environment and there is work left to be done, but as the economy recovers, I believe we have the experience and capability to return Capital City to its historical performance levels,” said Smith.

The Return on Average Assets was -0.08% and the Return on Average Equity was -0.80% for the fourth quarter of 2011.  These metrics were 0.31% and 2.97% for the third quarter of 2011, and 0.30% and 2.90% for the fourth quarter of 2010, respectively.

For the full year 2011, the Return on Average Assets was 0.19% and the Return on Average Equity was 1.86% compared to -0.02% and -0.16%, respectively, for the full year of 2010.

Discussion of Financial Condition
 
Average earning assets were $2.146 billion for the fourth quarter of 2011, a decrease of $56.5 million, or 2.6% from the third quarter of 2011, and a decline of $71.6 million, or 3.2%, from the fourth quarter of 2010.  The decrease in both periods is attributable to a reduction in the level of deposits (primarily seasonal in nature) and the resolution of problem loans as they were charged off or transferred to the other real estate category (“OREO”).  Period over period, average deposits declined $28.9 million and $82.9 million, respectively, and average loans declined (a portion of which is attributable to problem loan resolution) by $21.0 million and $136.2 million, respectively.   
 
Loan balances continue to decline throughout the portfolio, driven primarily by a reduction in the commercial real estate, residential and commercial loan categories.  The loan portfolio has been impacted by weak loan demand attributable to the lack of consumer confidence and a sluggish economy.  In addition to lower production, normal amortization and payoffs, the resolution of problem loans (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to the OREO category) also contributed to the overall decline.  During the fourth quarter of 2011, loan charge-offs and loans transferred to OREO accounted for $13.1 million, or 45%, of the net reduction in total loans of $29.0 million from the third quarter of 2011.  Compared to the fourth quarter of 2010, this accounted for $63.6 million, or 49%, of the net reduction in loans of $130.0 million1.
 
 

 
 
1 The reductions in loan portfolio balances stated in this paragraph are based on “as of” balances, not averages.
 

Average total deposits were $2.033 billion for the fourth quarter of 2011, a decrease of $28.9 million, or 1.4%, from the third quarter of 2011 and a decrease of $82.9 million, or 3.9%, from the fourth quarter of 2010.  The decrease in deposits in both periods was driven primarily by a reduction in certificates of deposit.  Additionally, a decrease resulting from existing clients moving from our Guaranteed Now Account (“GNA”) product to repurchase agreements occurred late in the fourth quarter of 2010 as further discussed below.  Noninterest bearing demand and savings accounts increased in both periods, partially offsetting the above mentioned declines in GNA and certificates of deposit.
 
Pursuant to changes in the FDIC's Temporary Liquidity Guarantee Program, our government guaranteed NOW product was discontinued during the fourth quarter of 2010.  Approximately $95 million in balances for this product remained in the NOW category, $95 million migrated to the noninterest bearing DDA category, and $60 million in balances moved to repurchase agreements as of the end of December 2010.   

We continue to pursue prudent pricing discipline to manage the mix of our deposits.  Therefore, we are not attempting to compete with higher rate paying competitors for deposits.  We continue to experience a favorable shift in the mix of our deposits as higher cost certificates of deposit balances are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts.    

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $191.8 million during the fourth quarter of 2011 compared to an average net overnight funds sold position of $231.7 million in the prior quarter and an average overnight funds sold position of $172.7 million in the fourth quarter of 2010.  The lower balance when compared to the third quarter of 2011 reflects declining deposits (public funds and certificates of deposit) and lower levels of short-term borrowings, partially offset by a decrease in the loan portfolio.  The higher balance as compared to the fourth quarter of 2010 is primarily attributable to a net reduction in loans and an increase in repurchase agreements, partially offset by a decline in deposits, borrowings and the deployment of funds to the investment portfolio. 

Nonperforming assets (including nonaccrual loans, troubled debt restructurings (“TDR’s”) and OREO) totaled $158.3 million at year-end 2011, an increase of $15.3 million from the third quarter of 2011 and $13.0 million from year-end 2010.  The increase in nonperforming assets compared to both periods was driven by a higher level of nonaccrual loans added during the fourth quarter of 2011 generally reflective of the prolonged economic recovery in our markets and its impact on our borrowers.  Nonaccrual loans totaled $75.0 million at the end of the fourth quarter of 2011, an increase of $21.6 million from the third quarter of 2011 and $9.3 million from the fourth quarter of 2010.  Nonaccrual loan inflow during the fourth quarter of 2011 was primarily comprised of loans secured by residential 1-4 family real estate, commercial real estate, and farm property.  Five relationships constituted $16.9 million of the $21.6 million increase.  TDR’s totaled $20.6 million at the end of the fourth quarter of 2011, a decrease of $7.8 million from the third quarter of 2011 and a decrease of $1.0 million from the fourth quarter of 2010.  OREO balances totaled $62.6 million at year-end 2011 compared to $61.2 million at the end of the third quarter of 2011 and $57.9 million at year-end 2010.  Nonperforming assets represented 5.99% of total assets at December 31, 2011, compared to 5.67% at September 30, 2011 and 5.54% at December 31, 2010.

Equity capital was $251.9 million as of December 31, 2011, compared to $260.9 million as of September 30, 2011 and $259.0 million as of December 31, 2010.  Our leverage ratio was 10.02%, 10.20%, and 10.10%, respectively, for these periods.  Further, our risk-adjusted capital ratio of 15.32% at December 31, 2011 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines.  At December 31, 2011, our tangible common equity ratio was 6.51%, compared to 7.19% at September 30, 2011 and 6.82% at December 31, 2010.  The tangible common equity ratio was impacted by an $8.0 million unfavorable variance in the pension component of our other comprehensive income.  This unfavorable variance was driven by a reduction in our pension plan’s discount rate due to a decline in market rates, and a lower than anticipated return on plan assets.
 
 
 
 
 
Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2011 was $22.6 million compared to $23.3 million for the third quarter of 2011 and $24.6 million for the fourth quarter of 2010.  For the full year 2011, tax equivalent net interest income totaled $92.8 million compared to $99.0 million in 2010.

The decrease of $0.7 million in tax equivalent net interest income compared to the third quarter of 2011 was due to a reduction in loan income attributable to declining loan balances, an increase in foregone interest on nonaccrual loans and continued unfavorable asset repricing, partially offset by lower interest expense.  The lower interest expense reflects the reduction in deposit rates enacted late in the third quarter of 2011.  The rate change affected all interest bearing deposit categories with the exception of savings.  

The decrease in tax equivalent net interest income of $2.0 million and $6.2 million, for the three and twelve month periods ended December 31, 2011, respectively, as compared to the same periods in 2010, resulted from an unfavorable change in earning asset mix and yield, partially offset by a reduction in interest expense and a lower level of foregone interest on nonaccrual loans.

The decline in loans, coupled with the low rate environment continues to put pressure on our net interest income.  Lowering our cost of funds, to the extent we can, and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and repricing. 

The net interest margin for the fourth quarter of 2011 was 4.17%, a decrease of 3 basis points from the third quarter of 2011 and a decline of 24 basis points from the fourth quarter of 2010.  For the full year 2011, the margin declined by 14 basis points to 4.18%.  The decrease in the margin for all comparable periods is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds.
 
The provision for loan losses for the fourth quarter of 2011 was $7.6 million compared to $3.7 million in the third quarter of 2011 and $3.8 million for the fourth quarter of 2010.  For the full year 2011, the loan loss provision totaled $19.0 million compared to $23.8 million for 2010.  Compared to the third quarter of 2011, the increase in the provision was driven by a higher level of general reserves reflective of an increase in the level of internally classified loans, delinquent loans and higher loan loss factors.  While the level of impaired loans increased quarter over quarter, our impaired loan reserves declined reflective of charge-offs realized on loans migrating to OREO status and lower specific reserves needed for loans added to impaired status during the quarter.  For the full year 2011, the lower loan loss provision was primarily due to lower specific reserves required for newly identified impaired loans.  Net charge-offs for the fourth quarter of 2011 totaled $6.2 million, or 1.50% of average loans, compared to $5.1 million, or 1.22%, in the third quarter of 2011, and $6.1 million, or 1.35%, in the fourth quarter of 2010.  For 2011, our net charge-offs totaled $23.4 million, or 1.39% of average loans, compared to $32.4 million, or 1.77%, for 2010.  A $6.0 million reduction in construction loan charge-offs drove the year over year decline in net charge-offs.  Over the last four years, we have recorded a cumulative loan loss provision totaling $115.3 million, or 6.0% of beginning loans and have recognized cumulative net charge-offs of $102.0 million, or 5.3%.  At year-end 2011, the allowance for loan losses of $31.0 million was 1.91% of outstanding loans (net of overdrafts) and provided coverage of 32% of nonperforming loans compared to 1.79% and 36%, respectively, at the end of the third quarter of 2011, and 2.01% and 41%, respectively, at year-end 2010.

Noninterest income for the fourth quarter of 2011 totaled $13.9 million, a decrease of $0.3 million, or 2.2%, from the third quarter of 2011 and a decrease of $0.9 million, or 5.8%, from the fourth quarter of 2010.  Lower deposit fees of $0.1 million, bank card fees of $0.1 million and other income of $0.3 million, partially offset by higher mortgage banking fees of $0.2 million, drove the decline over the third quarter of 2011.  The unfavorable variance compared to the fourth quarter of 2010 was primarily due to lower data processing fees of $0.1 million, mortgage banking fees of $0.2 million and other income of $0.9 million, partially offset by higher deposit fees of $0.1 million and bank card fees of $0.2 million.  For the full year 2011, noninterest income totaled $58.8 million, an increase of $2.0 million over 2010 driven by a $2.2 million increase in other income.  The increase in other income reflects a $3.2 million pre-tax gain from the sale of our Class B shares of Visa stock during the first quarter of 2011 that was partially offset by lower merchant fees of $1.1 million.  Higher retail brokerage fees of $0.4 million and bank card fees of $0.9 million also contributed to the year over year increase, but were partially offset by lower deposit fees of $1.0 million.  Year over year, the aforementioned reduction in merchant fees reflects the transfer of our merchant processing business to another processor, which was completed in August 2010.  
 
 
 
 
 
 
 
This decline is substantially offset by a reduction in processing costs, which is reflected as interchange fees in noninterest expense.  The higher level of brokerage fees reflects increased client investment activity.  Bank card fees increased due to an increase in new deposit accounts as well as higher card utilization.  The reduction in deposit fees reflects a lower level of overdraft fees due to reduced activity as well as the implementation of new rules under Regulation E.

Noninterest expense for the fourth quarter of 2011 totaled $31.1 million, an increase of $0.5 million over the third quarter of 2011 and a decrease of $2.4 million from the fourth quarter of 2010.  The increase from the third quarter was primarily due to higher OREO expense of $0.9 million and other expense of $0.4 million, partially offset by lower salary/associate benefit expense of $0.5 million and occupancy expense of $0.2 million.  Lower OREO expense of $1.3 million, intangible amortization of $0.4 million, and other expense of $0.3 million drove the favorable variance compared to the fourth quarter of 2010.

For the full year 2011, noninterest expense totaled $126.2 million, a $7.7 million decline from 2010, which was primarily attributable to lower expense for OREO of $2.2 million, intangible amortization of $2.0 million, and other expense of $3.5 million.  The lower level of OREO expense reflects both a reduction in valuation adjustments and property carrying costs.  Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions.  The reduction in other expense primarily reflects a reduction in FDIC insurance expense of $1.8 million, interchange fees of $1.0 million, professional fees of $0.5 million, and advertising expense of $0.4 million.  The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure.  Lower interchange fees are attributable to the sale of our merchant processing business as noted above in our discussion of noninterest income.  Professional fees declined due to higher consulting fees paid in 2010 related to the review of our vendor contracts.  The reduction in advertising fees primarily reflects efficiencies gained in the promotion of our free checking products.

We realized a tax benefit of $1.8 million in the fourth quarter of 2011 compared to income tax expense of $1.0 million for the third quarter of 2011 and a tax benefit of $0.1 million for the fourth quarter of 2010.  For the full year 2011, we realized income tax expense of $0.6 million compared to a tax benefit of $3.0 million for 2010.  The increase in the tax provision year over year reflects higher operating profits, a lower level of tax exempt income and the resolution of certain tax contingencies.

Regulatory Matters

Our bank regulators recently concluded a regular safety and soundness examination.  As of today, our regulators have not issued their report, but have indicated that they will not require an adjustment to our allowance for loan losses.  The regulators have discussed with us a range of outcomes from continuing the existing board resolutions we adopted in February 2010 (the “Existing Board Resolutions”) to entering into a Memorandum of Understanding (“MOU”).  An MOU would be an informal action that is not published or publicly available and that is used when circumstances warrant a milder form of action than a formal supervisory action, such as a formal written agreement or order.  We have had discussions with our bank regulators concerning their findings, but we do not know their requirements at this time.  Those requirements, once finalized, may be more restrictive than those currently contained in the Existing Board Resolutions.  In particular, any new board resolutions or MOU could limit our ability to pay dividends to our shareowners, require us to suspend dividend payments to holders of our trust preferred securities, and take various other actions to improve our asset quality and preserve our capital position.  As with our Existing Board Resolutions, we expect that our management and board of directors will be required to focus considerable time and attention on taking corrective actions to comply with the terms of any new board resolutions or MOU.

As disclosed in a press release issued on December 14, 2011, we suspended the payment of quarterly dividends on our common stock.  We believe that, given our inability to fully earn our dividend in 2011, it was, and continues to be, prudent to preserve our capital at least until the economic conditions in Florida and Georgia improve.  We remain committed to resuming dividend payments as soon as conditions warrant, and subject to any limitations from our regulators. 



 
 
 


About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (“Company”) (NASDAQ: CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services.  The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 70 banking offices and 79 ATMs in Florida, Georgia and Alabama.  For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially.  The following factors, among others, could cause the Company’s actual results to differ: legislative or regulatory changes, including the Dodd-Frank Act; the strength of the U.S. economy and the local economies where the Company conducts operations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the frequency and magnitude of foreclosure of the Company’s loans; continued depression of the market value of the Company that could result in an impairment of goodwill; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; the effects of the health and soundness of other financial institutions, including the FDIC’s need to increase Deposit Insurance Fund assessments; 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, including the impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; 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.


 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
EARNINGS HIGHLIGHTS
                              
Unaudited
                              
                               
   
Three Months Ended
    
Twelve Months Ended
  
(Dollars in thousands, except per share data)
  
Dec 31, 2011
    
Sep 30, 2011
    
Dec 31, 2010
    
Dec 31, 2011
    
Dec 31, 2010
  
                               
EARNINGS
                              
Net Income (Loss)
   $ (535 )   $ 1,977     $ 1,918     $ 4,897     $ (413 )
Net Income (Loss) Per Common Share
   $ (0.03 )   $ 0.12     $ 0.12     $ 0.29     $ (0.02 )
PERFORMANCE
                                        
Return on Average Equity
     (0.80 %)     2.97 %     2.90 %     1.86 %     (0.16 %)
Return on Average Assets
     (0.08 %)     0.31 %     0.30 %     0.19 %     (0.02 %)
Net Interest Margin
     4.17 %     4.20 %     4.41 %     4.18 %     4.32 %
Noninterest Income as % of Operating Revenue
     38.34 %     38.14 %     37.69 %     39.13 %     36.81 %
Efficiency Ratio
     85.08 %     81.40 %     83.75 %     82.79 %     84.23 %
CAPITAL ADEQUACY
                                        
Tier 1 Capital Ratio
     13.96 %     14.05 %     13.14 %     13.96 %     13.14 %
Total Capital Ratio
     15.32 %     15.41 %     14.50 %     15.32 %     14.50 %
Tangible Common Equity Ratio
     6.51 %     7.19 %     6.82 %     6.51 %     6.82 %
Leverage Ratio
     10.26 %     10.20 %     10.10 %     10.26 %     10.10 %
Equity to Assets
     9.54 %     10.34 %     9.88 %     9.54 %     9.88 %
ASSET QUALITY
                                        
Allowance as % of Non-Performing Loans
     32.44 %     36.26 %     40.57 %     32.05 %     40.57 %
Allowance as a % of Loans
     1.91 %     1.79 %     2.01 %     1.91 %     2.01 %
Net Charge-Offs as % of Average Loans
     1.50 %     1.22 %     1.35 %     1.39 %     1.77 %
Nonperforming Assets as % of Loans and ORE
     9.36 %     8.32 %     8.00 %     9.43 %     8.00 %
Nonperforming Assets as % of Total Assets
     5.99 %     5.67 %     5.54 %     6.04 %     5.54 %
STOCK PERFORMANCE
                                        
High
   $ 11.11     $ 11.18     $ 14.19     $ 13.80     $ 18.25  
Low
   $ 9.43     $ 9.81     $ 11.56     $ 9.43     $ 10.76  
Close
   $ 9.55     $ 10.38     $ 12.60     $ 9.55     $ 12.60  
Average Daily Trading Volume
   $ 33,026     $ 43,483     $ 21,385     $ 32,096     $ 31,174  




 
 
 

CAPITAL CITY BANK GROUP, INC.
                                      
CONSOLIDATED STATEMENT OF OPERATIONS
                                      
Unaudited
                                          
                                           
                                 
Twelve Months Ended
  
   
2011
  
2010
    
December 31,
  
(Dollars in thousands, except per share data)
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
    
2011
    
2010
  
                                           
INTEREST INCOME
                                          
Interest and Fees on Loans
   $ 22,915     $ 23,777     $ 24,305     $ 23,947     $ 25,656     $ 94,944     $ 105,710  
Investment Securities
     902       978       1,017       1,071       1,080       3,968       4,198  
Funds Sold
     95       136       145       171       95       547       587  
Total Interest Income
     23,912       24,891       25,467       25,189       26,831       99,459       110,495  
                                                         
INTEREST EXPENSE
                                                        
Deposits
     699       907       1,083       1,258       1,524       3,947       8,645  
Short-Term Borrowings
     6       78       110       111       99       305       159  
Subordinated Notes Payable
     358       339       343       340       342       1,380       2,008  
Other Long-Term Borrowings
     452       467       492       494       508       1,905       2,150  
Total Interest Expense
     1,515       1,791       2,028       2,203       2,473       7,537       12,962  
Net Interest Income
     22,397       23,100       23,439       22,986       24,358       91,922       97,533  
Provision for Loan Losses
     7,600       3,718       3,545       4,133       3,783       18,996       23,824  
Net Interest Income after Provision for Loan Losses
     14,797       19,382       19,894       18,853       20,575       72,926       73,709  
                                                         
NONINTEREST INCOME
                                                        
Service Charges on Deposit Accounts
     6,530       6,629       6,309       5,983       6,434       25,451       26,500  
Data Processing Fees
     743       749       764       974       880       3,230       3,610  
Asset Management Fees
     1,124       1,080       1,080       1,080       1,095       4,364       4,235  
Retail Brokerage Fees
     776       807       939       729       738       3,251       2,820  
Gain on Sale of Investment Securities
     -       -       -       -       -       -       8  
Mortgage Banking Fees
     845       645       568       617       1,027       2,675       2,948  
Interchange Fees (1)
     1,399       1,420       1,443       1,360       1,285       5,622       5,077  
ATM/Debit Card Fees (1)
     1,098       1,170       1,115       1,136       1,051       4,519       4,123  
Other
     1,358       1,693       2,230       4,455       2,225       9,736       7,504  
Total Noninterest Income
     13,873       14,193       14,448       16,334       14,735       58,848       56,825  
                                                         
NONINTEREST EXPENSE
                                                        
Salaries and Associate Benefits
     15,260       15,805       16,000       16,577       15,389       63,642       62,755  
Occupancy, Net
     2,284       2,495       2,447       2,396       2,406       9,622       10,010  
Furniture and Equipment
     2,097       2,118       2,117       2,226       2,268       8,558       8,929  
Intangible Amortization
     107       108       107       353       553       675       2,682  
Other Real Estate
     3,425       2,542       3,033       3,677       4,709       12,677       14,922  
Other
     7,930       7,579       7,463       8,102       8,215       31,074       34,618  
Total Noninterest Expense
     31,103       30,647       31,167       33,331       33,540       126,248       133,916  
                                                         
OPERATING PROFIT (LOSS)
     (2,433 )     2,928       3,175       1,856       1,770       5,526       (3,382 )
Provision for Income Taxes
     (1,898 )     951       1,030       546       (148 )     629       (2,969 )
NET INCOME (LOSS)
   $ (535 )   $ 1,977     $ 2,145     $ 1,310     $ 1,918     $ 4,897     $ (413 )
                                                         
PER SHARE DATA
                                                        
Basic Earnings
   $ (0.03 )   $ 0.12     $ 0.12     $ 0.08     $ 0.12     $ 0.29     $ (0.02 )
Diluted Earnings
   $ (0.03 )   $ 0.12     $ 0.12     $ 0.08     $ 0.12     $ 0.29     $ (0.02 )
Cash Dividends
     0.000       0.100       0.100       0.100       0.100       0.300       0.490  
AVERAGE SHARES
                                                        
Basic
     17,157       17,152       17,127       17,122       17,095       17,140       17,076  
Diluted
     17,157       17,167       17,139       17,130       17,096       17,140       17,077  
                                                         
(1) Together referred to as "Bank Card Fees"
                                                  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                    
Unaudited
                              
                               
   
2011
    
2010
  
(Dollars in thousands)
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
ASSETS
                              
Cash and Due From Banks
   $ 54,953     $ 53,027     $ 71,554     $ 52,000     $ 35,410  
Funds Sold and Interest Bearing Deposits
     330,361       193,387       223,183       271,375       200,783  
Total Cash and Cash Equivalents
     385,314       246,414       294,737       323,375       236,193  
                                         
Investment Securities, Available-for-Sale
     307,149       306,038       304,313       311,356       309,731  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     130,879       142,511       149,830       153,960       157,394  
Real Estate - Construction
     26,367       31,991       30,867       35,614       43,239  
Real Estate - Commercial
     639,140       644,128       660,058       668,583       671,702  
Real Estate - Residential
     386,877       388,686       395,126       404,204       420,604  
Real Estate - Home Equity
     244,263       245,438       248,228       248,745       251,565  
Consumer
     186,216       188,933       194,624       196,205       200,727  
Other Loans
     12,495       13,720       5,987       5,098       9,937  
Overdrafts
     2,446       2,292       2,882       2,385       3,503  
Total Loans, Net of Unearned Interest
     1,628,683       1,657,699       1,687,602       1,714,794       1,758,671  
Allowance for Loan Losses
     (31,035 )     (29,658 )     (31,080 )     (33,873 )     (35,436 )
Loans, Net
     1,597,648       1,628,041       1,656,522       1,680,921       1,723,235  
                                         
Premises and Equipment, Net
     110,991       111,471       112,576       113,918       115,356  
Intangible Assets
     85,483       85,591       85,699       85,806       86,159  
Other Real Estate Owned
     62,600       61,196       61,016       55,364       57,937  
Other Assets
     92,127       85,221       84,395       91,754       93,442  
Total Other Assets
     351,201       343,479       343,686       346,842       352,894  
                                         
Total Assets
     2,641,312       2,523,972       2,599,258       2,662,494       2,622,053  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
     618,317       584,628       568,813       540,184       546,257  
NOW Accounts
     828,990       708,066       764,480       818,512       770,149  
Money Market Accounts
     276,910       280,001       283,230       288,224       275,416  
Regular Savings Accounts
     158,462       154,136       153,403       150,051       139,888  
Certificates of Deposit
     289,840       316,968       331,085       350,076       372,266  
Total Deposits
     2,172,519       2,043,798       2,101,011       2,147,047       2,103,976  
                                         
Short-Term Borrowings
     43,372       47,508       65,237       86,650       92,928  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     44,606       45,389       49,196       50,050       50,101  
Other Liabilities
     65,986       63,465       60,383       56,582       53,142  
                                         
Total Liabilities
     2,389,370       2,263,047       2,338,714       2,403,216       2,363,034  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     172       172       171       171       171  
Additional Paid-In Capital
     37,838       38,074       37,724       37,548       36,920  
Retained Earnings
     237,461       237,969       237,709       237,276       237,679  
Accumulated Other Comprehensive Loss, Net of Tax
     (23,529 )     (15,290 )     (15,060 )     (15,717 )     (15,751 )
                                         
Total Shareowners' Equity
     251,942       260,925       260,544       259,278       259,019  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,641,312     $ 2,523,972     $ 2,599,258     $ 2,662,494     $ 2,622,053  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,266,193     $ 2,157,124     $ 2,215,098     $ 2,297,525     $ 2,269,185  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Core Deposits
     258       318       378       437       742  
Other
     414       462       510       558       606  
Interest Bearing Liabilities
     1,705,066       1,614,954       1,709,518       1,806,450       1,763,635  
                                         
Book Value Per Diluted Share
   $ 14.68     $ 15.20     $ 15.20     $ 15.13     $ 15.15  
Tangible Book Value Per Diluted Share
     9.70       10.21       10.21       10.13       10.11  
                                         
Actual Basic Shares Outstanding
     17,160       17,157       17,127       17,127       17,100  
Actual Diluted Shares Outstanding
     17,161       17,172       17,139       17,136       17,101  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
                               
   
2011
    
2011
    
2011
    
2011
    
2010
  
(Dollars in thousands, except per share data)
  
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $ 29,658     $ 31,080     $ 33,873     $ 35,436     $ 37,720  
Provision for Loan Losses
     7,600       3,718       3,545       4,133       3,783  
Net Charge-Offs
   $ 6,223     $ 5,140     $ 6,338     $ 5,696     $ 6,067  
                                         
Balance at End of Period
     31,035       29,658       31,080       33,873       35,436  
As a % of Loans
     1.91 %     1.79 %     1.84 %     1.98 %     2.01 %
As a % of Nonperforming Loans
     32.05 %     36.26 %     36.71 %     34.57 %     40.57 %
As a % of Nonperforming Assets
     19.46 %     20.74 %     21.34 %     22.09 %     24.39 %
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $ 634     $ 186     $ 301     $ 721     $ 629  
Real Estate - Construction
     25       75       14       -       234  
Real Estate - Commercial
     2,443       1,031       2,808       430       1,469  
Real Estate - Residential
     2,960       3,867       3,315       4,445       3,629  
Consumer
     879       832       606       620       582  
                                         
Total Charge-Offs
   $ 6,941     $ 5,991     $ 7,044     $ 6,216     $ 6,543  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $ 242     $ 33     $ 43     $ 63     $ 48  
Real Estate - Construction
     -       -       5       9       -  
Real Estate - Commercial
     87       37       115       12       55  
Real Estate - Residential
     47       379       170       96       7  
Consumer
     342       402       373       340       366  
                                         
Total Recoveries
   $ 718     $ 851     $ 706     $ 520     $ 476  
                                         
NET CHARGE-OFFS
   $ 6,223     $ 5,140     $ 6,338     $ 5,696     $ 6,067  
                                         
Net Charge-Offs as a % of Average Loans(1)
     1.50 %     1.22 %     1.49 %     1.33 %     1.35 %
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $ 75,023     $ 53,396     $ 61,076     $ 73,954     $ 65,700  
Troubled Debt Restructurings ("TDR's")
     20,644       28,404       23,582       24,028       21,649  
Total Nonperforming Loans
     95,667       81,800       84,658       97,982       87,349  
Other Real Estate
     62,600       61,196       61,016       55,364       57,937  
Total Nonperforming Assets
   $ 158,267     $ 142,996     $ 145,674     $ 153,346     $ 145,286  
                                         
Past Due Loans 30-89 Days
   $ 19,425     $ 17,053     $ 18,103     $ 19,391     $ 24,193  
Past Due Loans 90 Days or More
   $ 224     $ 26     $ 271     $ -     $ 159  
                                         
Nonperforming Loans as a % of Loans
     5.87 %     4.93 %     5.02 %     5.71 %     4.97 %
Nonperforming Assets as a % of
                                        
Loans and Other Real Estate
     9.36 %     8.32 %     8.33 %     8.66 %     8.00 %
Nonperforming Assets as a % of Capital(2)
     55.93 %     49.21 %     49.95 %     52.31 %     49.34 %
Nonperforming Assets as a % of Total Assets
     5.99 %     5.67 %     5.60 %     5.76 %     5.54 %
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses.
                                  



 
 
 

 
AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                      
Unaudited
                                                                                                  
                                                                                                   
                                                                                                   
   
Fourth Quarter 2011
    
Third Quarter 2011
  
Second Quarter 2011
    
First Quarter 2011
      Fourth Quarter 2010      December 2011 YTD     December 2010 YTD
 Dollars in thousands)
    Average
Balance
  
 
Interest
    Average
Rate
      Average
Balance
  
 
Interest 
  
Average
Rate
    Average
Balance
  
 
Interest 
  
 Average
Rate
      Average
Balance
  
 
Interest
    Average
Rate
      Average
Balance
  
 
Interest
    Average
Rate
      Average
Balance
  
 
Interest
    Average
Rate
      Average
Balance
  
 
Interest
    Average
Rate
  
ASSETS:
                                                                                                  
Loans, Net of Unearned Interest
 
$
        
 1,646,715
  
      
 23,032
  
 
5.55
 
%
 
$
         
1,667,720
 
$
    
23,922
  
 
5.69
 
%
 
$
       
  1,704,348
 
$
   
 24,465
  
 
5.76
 
%
 
$
       
  1,730,330
 
$
   
 24,101
  
 
5.65
 
%
 
$
       
  1,782,916
 
$
    
25,799
  
 
5.74
 
%
 
$
        
1,686,995
 
$
    
95,520
  
 
5.66
 
%
 
$
  
1,829,193
 
$
    
 106,342
  
 
5.81
 
%
                                                                                                   
Investment Securities
                                                                                              
Taxable Investment Securities
  
            
 
248,217
  
          
 
  816
  
 
 
1.31
 
 
%
  
            
 
248,138
  
     
 
    828
  
 
 
1.32
 
 
%
  
         
 
   244,487
  
      
 
   825
  
 
 
1.35
 
 
%
  
         
 
   231,153
  
        
 
 851
  
 
 
1.48
 
 
%
  
           
 
 178,926
  
       
 
  799
  
 
 
1.78
 
 
%
  
        
 
   243,059
  
     
 
 3,320
  
 
 
1.38
 
 
%
  
    
 
 126,078
  
       
 
  2,681
  
 
 
2.12
 
 
%
Tax-Exempt Investment Securities
  
 
 
59,647
  
 
 
131
  
 
 
0.88
 
 
%
  
 
 
55,388
  
 
 
231
  
 
 
1.67
 
 
%
  
 
 
60,963
  
 
 
297
  
 
 
1.95
 
 
%
  
 
 
74,226
  
 
 
337
  
 
 
1.81
 
 
%
  
 
 
83,469
  
 
 
434
  
 
 
2.08
 
 
%
  
 
 
62,497
  
 
 
996
  
 
 
1.59
 
 
%
  
 
 
90,352
  
 
 
2,332
  
 
 
2.58
 
 
%
                                                                                                   
Total Investment Securities
  
            
307,864
 
        
    947
  
 
1.22
 
%
  
       
     303,526
 
      
1,059
  
 
1.39
 
%
  
          
  305,450
 
     
 1,122
  
 
1.47
 
%
  
       
     305,379
 
   
   1,188
  
 
1.56
 
%
  
           
 262,395
 
    
  1,233
  
 
1.87
 
%
  
          
 305,556
 
      
4,316
  
 
1.41
 
%
  
     
216,430
 
       
  5,013
  
 
2.31
 
%
                                                                                                   
Funds Sold
  
191,884
  
96
  
0.20
%
  
231,681
  
136
  
0.23
%
  
249,133
  
145
  
0.23
%
  
242,893
  
171
  
0.28
%
  
172,738
  
95
  
0.24
%
  
228,766
  
548
  
0.24
%
  
248,659
  
587
  
0.23
%
                                                                                                   
Total Earning Assets
  
       
  2,146,463
 
$
 
24,075
  
 
4.45
 
%
  
         
2,202,927
 
$
 
25,117
  
 
4.52
 
%
  
       
  2,258,931
 
$
 
25,732
  
 
4.57
 
%
  
      
   2,278,602
 
$
 
25,460
  
 
4.53
 
%
  
        
 2,218,049
 
$
 
27,127
  
 
4.85
 
%
  
      
  2,221,317
 
$
 
100,384
  
 
4.52
 
%
  
 
 2,294,282
 
$
 
111,942
  
 
4.88
 
%
                                                                                                   
Cash and Due From Banks
  
          
    49,666
            
          
    47,252
            
      
        47,465
            
       
       50,942
            
             
 51,030
            
           
  48,823
            
     
  51,883
          
Allowance for Loan Losses
  
           
 (29,550)
            
          
  (30,969)
            
          
  (32,993)
            
         
   (34,822)
            
           
 (37,713)
            
        
   (32,066)
            
   
   (40,717)
          
Other Assets
  
343,336
            
344,041
            
344,884
            
348,295
            
345,427
            
345,123
            
339,283
          
                                                                                                   
Total Assets
$
2,509,915
          
$
2,563,251
          
$
2,618,287
          
$
2,643,017
          
$
2,576,793
          
$
2,583,197
          
$
2,644,731
          
                                                                                                   
LIABILITIES:
                                                                                                  
Interest Bearing Deposits
                                                                                                  
NOW Accounts
$
            700,005
$
            148
  
0.08
%
$
            726,652
$
         222
  
0.12
%
$
            782,698
$
         259
  
0.13
%
$
            786,939
$
         261
  
0.13
%
$
            837,625
$
         296
  
0.14
%
$
           748,774
$
         890
  
0.12
%
$
     863,719
$
         1,406
  
0.16
%
Money Market Accounts
  
            
283,677
  
             
 75
  
 
0.11
 
%
  
          
  282,378
  
     
      95
  
 
0.13
 
%
  
          
  284,411
  
         
136
  
 
0.19
 
%
  
           
 278,562
  
       
  131
  
 
0.19
 
%
  
            
282,887
  
      
   134
  
 
0.19
 
%
  
          
 282,271
  
     
    437
  
 
0.15
 
%
  
     
320,786
  
        
 1,299
  
 
0.41
 
%
Savings Accounts
  
            156,088
  
              20
  
0.05
%
  
            153,748
  
           19
  
0.05
%
  
            152,599
  
           16
  
0.04
%
  
            144,623
  
           18
  
0.05
%
  
            136,276
  
           16
  
0.05
%
  
           151,801
  
           73
  
0.05
%
  
     131,945
  
              65
  
0.05
%
Time Deposits
  
299,487
  
456
  
0.60
%
  
324,951
  
571
  
0.70
%
  
338,723
  
672
  
0.80
%
  
360,575
  
848
  
0.95
%
  
382,870
  
1,078
  
1.12
%
  
330,750
  
2,547
  
0.77
%
  
413,428
  
5,875
  
1.42
%
Total Interest Bearing Deposits
  
         
1,439,257
 
         
   699
  
 
0.19
 
%
  
         
1,487,729
 
         
907
  
 
0.24
 
%
  
         
1,558,431
 
      
1,083
  
 
0.28
 
%
  
         
1,570,699
 
     
 1,258
  
 
0.32
 
%
  
      
   1,639,658
 
      
1,524
  
 
0.37
 
%
  
       
 1,513,596
 
  
    3,947
  
 
0.26
 
%
  
  
1,729,878
 
        
 8,645
  
 
0.05
 
%
                                                                                                   
Short-Term Borrowings
  
              
44,573
  
         
       6
  
 
0.05
 
%
  
         
     64,160
  
       
    78
 
 
 
0.48
 
%
  
         
     76,754
  
  
       110
  
 
0.58
 
%
  
       
       87,267
  
       
  111
  
 
0.52
%
  
           
   34,706
  
        
   99
  
 
1.14
 
%
  
        
     68,061
  
    
     305
  
 
0.45
 
%
  
       
27,864
  
            
159
  
 
0.57
 
%
Subordinated Notes Payable
  
             
 62,887
  
         
   358
  
 
2.23
 
%
  
          
    62,887
  
    
     339
  
 
2.11
 
%
  
         
     62,887
  
   
      343
  
 
2.16
 
%
  
           
   62,887
  
    
     340
  
 
2.16
%
  
           
   62,887
  
       
  342
  
 
2.13
 
%
  
            
 62,887
  
    
  1,380
  
 
2.16
 
%
  
     
  62,887
  
        
 2,008
  
 
3.15
 
%
Other Long-Term Borrowings
  
 
45,007
  
 
452
  
 
3.99
 
%
  
 
46,435
  
 
467
  
 
3.99
 
%
  
 
49,650
  
 
492
  
 
3.97
 
%
  
 
50,345
  
 
494
  
 
3.98
%
  
 
50,097
  
 
508
  
 
4.02
 
%
  
 
47,841
  
 
1,905
  
 
3.98
 
%
  
 
51,767
  
 
2,150
  
 
4.15
 
%
                                                                                                   
Total Interest Bearing Liabilities
  
        
 1,591,724
 
$
 
1,515
  
 
0.38
 
%
  
         
1,661,211
 
$
 
1,791
  
 
0.43
 
%
  
         
1,747,722
 
$
 
2,028
  
 
0.47
 
%
  
         
1,771,198
$
 
2,203
  
 
0.50
 
%
  
         
1,787,348
 
$
 
2,473
  
 
0.55
 
%
  
        
1,692,385
 
$
 
7,537
  
 
0.45
 
%
  
 
 1,872,396
 
$
 
12,962
  
 
0.69
 
%
                                                                                                   
Noninterest Bearing Deposits
            
593,718
            
            
574,184
            
            
548,870
            
           
 554,680
            
            
476,209
            
           
567,987
            
  
   462,445
          
Other Liabilities
  
60,197
            
63,954
            
59,324
            
55,536
            
50,614
            
59,777
            
45,211
          
                                                                                                   
Total Liabilities
  
2,245,639
            
2,299,349
            
2,355,916
            
2,381,414
            
2,314,171
            
2,320,149
            
2,380,052
          
                                                                                                   
SHAREOWNERS' EQUITY:
 
$
 
264,276
          
 
$
 
263,902
          
 
$
 
262,371
          
 
$
 
261,603
          
 
$
 
262,622
          
 
$
 
263,048
          
 
$
 
264,679
          
                                                                                                   
Total Liabilities and Shareowners' Equity
 
 
$
 
 
2,509,915
          
 
 
$
 
 
2,563,251
          
 
 
$
 
 
2,618,287
          
 
 
$
 
 
2,643,017
          
 
 
$
 
 
2,576,793
          
 
 
$
 
 
2,583,197
          
 
 
$
 
 
2,644,731
          
                                                                                                   
Interest Rate Spread
    
 
$
 
22,560
  
 
4.07
 
%
    
 
$
 
23,326
  
 
4.09
 
%
    
 
$
 
23,704
  
 
4.10
 
%
    
 
$
 
23,257
  
 
4.03
 
%
  
 
$
 
24,654
  
 
4.30
 
%
 
 
 
$
 
92,847
  
 
4.07
 
%
    
 
$
 
98,980
  
 
4.19
 
%
                                                                                                   
Interest Income and Rate Earned(1)
  
24,075
  
4.45
%
      
25,117
  
4.52
%
      
25,732
  
4.57
%
      
25,460
  
4.53
%
    
27,127
  
4.85
%
100,384
  
4.52
%
      
111,942
  
4.88
%
Interest Expense and Rate Paid(2)
  
1,515
  
0.28
%
      
1,791
  
0.32
%
      
2,028
  
0.36
%
      
2,203
  
0.39
%
      
2,473
  
0.44
%
      
7,537
  
0.34
%
      
12,962
  
0.56
%
                                                                                                   
Net Interest Margin
    
 
$
 
22,560
  
 
4.17
 
%
    
 
$
 
23,326
  
 
4.20
 
%
    
 
$
 
23,704
  
 
4.21
 
%
    
 
$
 
23,257
  
 
4.14
 
%
  
 
$
 
24,654
  
 
4.41
 
%
 
$
 
92,847
  
 
4.18
 
%
    
 
$
 
98,980
  
 
4.32
 
%
                                                                                                   
                                                                                                   
(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.