Capital City Bank Group, Inc.
Reports Second Quarter 2012 Results

TALLAHASSEE, Fla. (July 24, 2012) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $1.7 million, or $0.10 per diluted share, compared to a net loss of $1.2 million, or $0.07 per diluted share for the first quarter of 2012, and net income of $2.1 million, or $0.12 per diluted share, for the second quarter of 2011.  For the first six months of 2012, the Company reported a net loss of $2.9 million, or $0.17 per diluted share, compared to net income of $3.5 million, or $0.20 per diluted share for the same period in 2011.

Compared to the first quarter of 2012, performance reflects lower operating revenues of $0.3 million and a higher loan loss provision of $0.9 million, partially offset by lower noninterest expense of $0.3 million and income taxes of $0.4 million.

Compared to the second quarter of 2011, the reduction in earnings was due to lower operating revenues of $2.9 million, a higher loan loss provision of $2.2 million, and an increase in noninterest expense of $1.1 million, partially offset by lower income taxes of $2.4 million.

The decrease in earnings for the first half of 2012 is attributable to lower operating revenues of $7.0 million, a higher loan loss provision of $2.9 million, and an increase in noninterest expense of $0.3 million, partially offset by lower income taxes of $3.8 million.  Earnings for the first half of 2011 reflect the sale of our Visa Class B shares of stock which resulted in a net pre-tax gain of $2.6 million ($3.2 million pre-tax gain included in noninterest income and recognition of a $0.6 million swap liability included in noninterest expense).
 
“Although there are some noted improvements, the north Florida and south Georgia economies, which are heavily dependent on real estate markets, continue to present a difficult operating environment,” said William G. Smith, Jr., Chairman, President and CEO.  “While weak loan demand puts pressure on our net interest margin, our pre-tax, pre-credit cost earnings were comparable to the first quarter as we continue to trim expenses.  On the credit quality front, we continue to experience a lighter volume of loans moving to nonperforming status while sales of other real estate remain active.  Our office network will always be an important distribution channel for Capital City, but our clients are changing the way they wish to transact business with us and, as a result, we are adjusting our strategies to meet our clients’ needs.  We recently announced the closure of four offices, which not only reflects the changing habits of our clients, but supports our overall efforts to improve efficiency.  While disappointed with the second quarter loss, our management team is working diligently to capitalize on market opportunities and to allocate resources to those aspects of our business that will return Capital City to its historical earnings level.”

The Return on Average Assets was -0.26% and the Return on Average Equity was -2.75% for the second quarter of 2012.  These metrics were -0.18% and -1.84% for the first quarter of 2012, and 0.33% and 3.28% for the second quarter of 2011, respectively.

For the first half of 2012, the Return on Average Assets was -0.22% and the Return on Average Equity was -2.29% compared to 0.26% and 2.66%, respectively, for the first half of 2011.

Discussion of Financial Condition

Average earning assets were $2.263 billion for the second quarter of 2012, a decrease of $5.5 million, or 0.2%, from the first quarter of 2012, and an increase of $116.4 million, or 5.4%, over the fourth quarter of 2011.  As compared to the linked quarter, the decline in average earning assets attributable to problem loan resolutions and lower deposits was partially offset by an increase in short-term borrowings and other liabilities.  The shift in the mix of earning assets continued as the loan and investment portfolio declined when compared to the prior quarter.  The increase compared to the fourth quarter of 2011 primarily reflects the higher level of deposits resulting from the seasonal influx of public funds.
 
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $411.4 million during the second quarter of 2012 compared to an average net overnight funds sold position of $373.0 million in the linked quarter and an average overnight funds sold position of $191.8 million in the fourth quarter of 2011.  The higher balance when compared to both periods reflects a decrease in the loan and investment portfolios.  Higher public fund balances was also a significant contributor to the increase when compared to the fourth quarter of 2011.

When compared to the first quarter of 2012 and the fourth quarter of 2011, average loans declined (a portion of which is attributable to problem loan resolution) by $25.7 million and $75.9 million, respectively.  Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential categories.  Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production.  New loan production continues to be impacted by weak loan demand attributable to the trend toward consumers and businesses deleveraging, the lack of consumer confidence, and a persistently sluggish economy. 

Several new lending programs were introduced during the first half of 2012 to mitigate the impact that consumer and business deleveraging is having on our portfolio.  These programs, which are primarily used in our business and commercial real estate lending areas, have had a positive impact as the rate of decline has slowed during the quarter.

The resolution of problem loans (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to other real estate “OREO”) also contributed to the overall decline.  During the second quarter of 2012, loan charge-offs and loans transferred to OREO accounted for $15.9 million, or 70%, of the net reduction in total loans of $22.6 million from the first quarter of 2012.  Compared to the fourth quarter of 2011, loan resolution accounted for $25.3 million, or 35%, of the net reduction in loans of $72.4 million1.

Nonperforming assets (nonaccrual loans and OREO) totaled $132.8 million at the end of the second quarter of 2012 compared to $136.8 million at the end of the first quarter of 2012 and $137.6 million at the end of the fourth quarter of 2011.  Nonaccrual loans totaled $74.8 million, a decrease of $3.9 million from the first quarter of 2012 and $0.3 million from the fourth quarter of 2011, reflective of loan charge-offs and the migration of loans to OREO, which outpaced gross additions.   Gross additions declined for the second straight quarter and represented the lowest quarterly amount thus far in this cycle.  The balance of OREO totaled $58.1 million at the end of the second quarter, comparable to the prior quarter and a $4.5 million decrease from the fourth quarter of 2011.  We continue to experience progress in our efforts to dispose of OREO by selling properties totaling $13.1 million during the first half of the year.  Nonperforming assets represented 5.02% of total assets at June 30, 2012 compared to 5.14% at March 31, 2012 and 5.21% at December 31, 2011.

Average total deposits were $2.136 billion for the second quarter of 2012, a decrease of $25.7 million, or 1.2%, from the linked quarter and higher by $102.7 million, or 5.1%, from the fourth quarter of 2011.  The decrease in deposits when compared to the linked quarter resulted from lower public funds, certificates of deposit and noninterest bearing accounts, partially offset by growth in regular savings and money market accounts.  Compared to the fourth quarter of 2011, the increase was driven primarily by higher public fund balances, savings and noninterest bearing deposits.  This was partially offset by a reduction of certificates of deposit.  Although public funds are seasonal in nature, they continue to represent a large component of our deposit mix.

Our mix of deposits continues to change as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts.  Prudent pricing discipline will continue to be the key to managing our mix of deposits.  Therefore, we do not attempt to compete with higher rate paying competitors for deposits.
 
 
 
1 The reductions in loan portfolio balances stated in this paragraph are based on “as of” balances, not averages.

 
 
 
During the second half of 2012, we may realize some attrition in noninterest bearing deposit balances due to the unlimited government guarantee on noninterest bearing accounts, which if not extended, is set to expire at year-end.  Our average noninterest bearing deposits are approximately 27.9% of our total deposits.
 
Borrowings increased by $23.3 million when compared to the first quarter of 2012 and were higher by $20.3 million when compared to the fourth quarter of 2011, as a result of higher balances in repurchase agreements, partially offset by payments on FHLB advances.
 
Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2012 was $21.2 million compared to $21.8 million for the first quarter of 2012 and $23.7 million for the second quarter of 2011.  The decrease in tax equivalent net interest income compared to the prior periods was due to a reduction in loan income primarily attributable to declining loan balances and continued unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans.  The lower interest expense is primarily attributable to certificates of deposit and reflects both lower balances and favorable repricing.  For the six months ended June 30, 2012, tax equivalent net interest income totaled $43.1 million compared to $47.0 million for the same period of 2011.

The decline in the loan portfolio, coupled with the low rate environment continues to put pressure on our net interest income.  The loan portfolio yield is declining as the average rate on the production is lower and the existing portfolio reprices.  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, although the impact is expected to be minimal. 

The net interest margin for the second quarter of 2012 was 3.77%, a decrease of 10 basis points from the first quarter of 2012 and a decline of 44 basis points from the second quarter of 2011.  Year-to-date net interest margin of 3.82% declined 35 basis points from the comparable period in 2011.  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 second quarter of 2012 was $5.7 million compared to $4.8 million in the first quarter of 2012 and $3.5 million for the second quarter of 2011.  The increase over both periods was driven by higher loan loss experience and the associated impact on our general reserve needs.  For the first six months of 2012, the loan loss provision totaled $10.5 million compared to $7.7 million for the same period in 2011 with the increase primarily attributable to an increase in impaired loans.  Net charge-offs for the second quarter of 2012 totaled $7.0 million, or 1.80%, of average loans (annualized) compared to $4.6 million, or 1.16%, for the first quarter of 2012 and $6.3 million, or 1.49%, in the second quarter of 2011.  For the first half of 2012, net charge-offs totaled $11.6 million, or 1.48%, of average loans (annualized) compared to $12.0 million, or 1.41%, for the same period of 2011.  At quarter-end, the allowance for loan losses of $29.9 million was 1.93% of outstanding loans (net of overdrafts) and provided coverage of 40% of nonperforming loans compared to 1.98% and 40%, respectively, at March 31, 2012, and 1.91% and 41%, respectively, at December 31, 2011.
 
Noninterest income for the second quarter of 2012 totaled $13.9 million, an increase of $0.3 million, or 2.4%, over the first quarter of 2012 and a decrease of $0.5 million, or 3.8%, from the second quarter of 2011.  The increase over the first quarter of 2012 was driven primarily by higher retail brokerage fees of $0.1 million and an increase in other income of $0.2 million, primarily due to gains from the sale of OREO properties.  Compared to the second quarter of 2011, the decrease primarily reflects a reduction in other income due to a lower level of gains realized from the sale of OREO properties.  For the first six months of 2012, noninterest income totaled $27.5 million, a decrease of $3.3 million from the same period of 2011 attributable to the Visa gain realized in the first quarter of 2011.  Higher deposit fees, mortgage banking fees, and bank card fees partially offset by lower data processing fees and a reduction in gains from the sale of OREO properties also contributed to the variance.  The increase in deposit fees reflects a lower level of overdraft charge-offs.  Increased loan production drove the higher level of mortgage banking fees reflecting increased home purchase activity in our markets.  The increase in bank card fees was attributable to an increase in active cards and higher card utilization.  Data processing fees declined due to a reduction in the number of banks that we process for as two of our user banks were acquired and discontinued service in early 2011.
 
Noninterest expense for the second quarter of 2012 totaled $32.3 million, a decrease of $0.3 million, or 0.9%, from the first quarter of 2012 and an increase of $1.1 million, or 3.6%, over the second quarter of 2011.  The decrease compared to the first quarter of 2012 reflects a reduction in salaries/associate benefit expense of $0.7 million partially offset by higher other expense of $0.4 million.  The decrease in salaries/associate benefits was due to a decline in unemployment taxes and pension plan expense.  Higher advertising expense and severance costs related to the closing of four banking offices and outsourcing of our items processing function drove the variance in other expense.  The increase compared to the second quarter of 2011 was primarily attributable to a higher expense for OREO and an increase in other expense.  The increase in OREO expense reflects a higher level of valuation adjustments for our OREO portfolio and the increase in other expense was due to higher professional fees and the aforementioned severance costs.  For the first six months of 2012, noninterest expense totaled $64.9 million, an increase of $0.4 million, or 0.6%, over the same period of 2011 primarily attributable to higher expense for salaries/associate benefits of $0.4 million and OREO of $0.3 million, partially offset by lower occupancy expense of $0.3 million.  The variance in salaries/associate benefit expense reflects higher expense for our pension plan partially offset by lower performance compensation.  Utilization of a lower discount rate in 2012 due to lower long-term bond interest rates drove the increase in pension expense.  Higher carrying costs drove the increase in OREO expense.  Occupancy expense declined due to lower building maintenance costs.

 
 
 
About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (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 74 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: the Company’s need and our ability to incur additional debt or equity financing; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; continued depression of the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company’s loans; 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, 2011, 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
    
Six Months Ended
  
(Dollars in thousands, except per share data)
  
Jun 30, 2012
    
Mar 31, 2012
    
Jun 30, 2011
    
Jun 30, 2012
    
Jun 30, 2011
  
                               
EARNINGS
                              
Net (Loss) Income
   $ (1,726 )   $ (1,162 )   $ 2,145     $ (2,888 )   $ 3,455  
Net (Loss) Income Per Common Share
   $ (0.10 )   $ (0.07 )   $ 0.12     $ (0.17 )   $ 0.20  
PERFORMANCE
                                        
Return on Average Equity
     -2.75 %     -1.84 %     3.28 %     -2.29 %     2.66 %
Return on Average Assets
     -0.26 %     -0.18 %     0.33 %     -0.22 %     0.26 %
Net Interest Margin
     3.77 %     3.87 %     4.21 %     3.82 %     4.17 %
Noninterest Income as % of Operating Revenue
     39.88 %     38.64 %     38.13 %     39.26 %     39.87 %
Efficiency Ratio
     90.88 %     91.73 %     81.41 %     91.31 %     82.37 %
CAPITAL ADEQUACY
                                        
Tier 1 Capital Ratio
     14.17 %     14.17 %     13.83 %     14.17 %     13.83 %
Total Capital Ratio
     15.54 %     15.54 %     15.19 %     15.54 %     15.19 %
Tangible Common Equity Ratio
     6.40 %     6.42 %     6.96 %     6.40 %     6.96 %
Leverage Ratio
     9.60 %     9.71 %     9.95 %     9.60 %     9.95 %
Equity to Assets
     9.41 %     9.43 %     10.02 %     9.41 %     10.02 %
ASSET QUALITY
                                        
Allowance as % of Non-Performing Loans
     40.03 %     39.65 %     50.89 %     40.03 %     50.89 %
Allowance as a % of Loans
     1.93 %     1.98 %     1.84 %     1.93 %     1.84 %
Net Charge-Offs as % of Average Loans
     1.80 %     1.16 %     1.49 %     1.48 %     1.41 %
Nonperforming Assets as % of Loans and ORE
     8.23 %     8.36 %     6.98 %     8.23 %     6.98 %
Nonperforming Assets as % of Total Assets
     5.02 %     5.14 %     4.70 %     5.02 %     4.70 %
STOCK PERFORMANCE
                                        
High
   $ 8.73     $ 9.91     $ 13.12     $ 9.91     $ 13.80  
Low
     6.35       7.32       9.94       6.35       9.94  
Close
     7.37       7.45       10.26       7.37       10.26  
Average Daily Trading Volume
   $ 37,926     $ 24,751     $ 29,716     $ 31,391     $ 25,696  
                                         

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                          
Unaudited
                              
                               
                               
   
2012
    
2011
  
(Dollars in thousands)
  
Second Quarter
    
First Quarter
    
Fourth Quarter
    
Third Quarter
    
Second Quarter
  
ASSETS
                              
Cash and Due From Banks
   $ 57,477     $ 50,567     $ 54,953     $ 53,027     $ 71,554  
Funds Sold and Interest Bearing Deposits
     434,814       418,678       330,361       193,387       223,183  
Total Cash and Cash Equivalents
     492,291       469,245       385,314       246,414       294,737  
                                         
Investment Securities, Available-for-Sale
     280,753       284,490       307,149       306,038       304,313  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     136,736       132,119       130,879       142,511       149,830  
Real Estate - Construction
     46,803       34,554       26,367       31,991       30,867  
Real Estate - Commercial
     605,819       624,528       639,140       644,128       660,058  
Real Estate - Residential
     353,198       364,123       386,877       388,686       395,126  
Real Estate - Home Equity
     242,929       240,800       244,263       245,438       248,228  
Consumer
     162,899       174,132       186,216       188,933       194,624  
Other Loans
     5,638       6,555       12,495       13,720       5,987  
Overdrafts
     2,214       2,073       2,446       2,292       2,882  
Total Loans, Net of Unearned Interest
     1,556,236       1,578,884       1,628,683       1,657,699       1,687,602  
Allowance for Loan Losses
     (29,929 )     (31,217 )     (31,035 )     (29,658 )     (31,080 )
Loans, Net
     1,526,307       1,547,667       1,597,648       1,628,041       1,656,522  
                                         
Premises and Equipment, Net
     110,302       111,408       110,991       111,471       112,576  
Intangible Assets
     85,269       85,376       85,484       85,591       85,699  
Other Real Estate Owned
     58,059       58,100       62,600       61,196       61,016  
Other Assets
     92,869       103,992       92,126       85,221       84,395  
Total Other Assets
     346,499       358,876       351,201       343,479       343,686  
                                         
Total Assets
   $ 2,645,850     $ 2,660,278     $ 2,641,312     $ 2,523,972     $ 2,599,258  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 623,130     $ 605,774     $ 618,317     $ 584,628     $ 568,813  
NOW Accounts
     789,103       845,149       828,990       708,066       764,480  
Money Market Accounts
     288,352       283,224       276,910       280,001       283,230  
Regular Savings Accounts
     178,388       172,262       158,462       154,136       153,403  
Certificates of Deposit
     271,413       279,295       289,840       316,968       331,085  
Total Deposits
     2,150,386       2,185,704       2,172,519       2,043,798       2,101,011  
                                         
Short-Term Borrowings
     69,449       42,188       43,372       47,508       65,237  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     38,846       42,826       44,606       45,389       49,196  
Other Liabilities
     75,260       75,876       65,986       63,465       60,383  
                                         
Total Liabilities
     2,396,828       2,409,481       2,389,370       2,263,047       2,338,714  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     172       172       172       172       171  
Additional Paid-In Capital
     38,260       38,101       37,838       38,074       37,724  
Retained Earnings
     234,573       236,299       237,461       237,969       237,709  
Accumulated Other Comprehensive Loss, Net of Tax
     (23,983 )     (23,775 )     (23,529 )     (15,290 )     (15,060 )
                                         
Total Shareowners' Equity
     249,022       250,797       251,942       260,925       260,544  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,645,850     $ 2,660,278     $ 2,641,312     $ 2,523,972       2,599,258  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,271,803     $ 2,282,053     $ 2,266,193     $ 2,157,124     $ 2,215,098  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Core Deposits
     139       198       258       318       378  
Other
     319       367       415       462       510  
Interest Bearing Liabilities
     1,698,438       1,727,831       1,705,066       1,614,954       1,709,518  
                                         
Book Value Per Diluted Share
   $ 14.48     $ 14.60     $ 14.68     $ 15.20     $ 15.20  
Tangible Book Value Per Diluted Share
     9.52       9.63       9.70       10.21       10.21  
                                         
Actual Basic Shares Outstanding
     17,198       17,182       17,160       17,157       17,127  
Actual Diluted Shares Outstanding
     17,198       17,182       17,161       17,172       17,139  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                            
CONSOLIDATED STATEMENT OF OPERATIONS
                    
Unaudited
                            
                             
                       
Six Months Ended
   
2012
  
2011
  
2012
  
2011
(Dollars in thousands, except per share data)
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
Second Quarter
Second Quarter
                             
INTEREST INCOME
                            
Interest and Fees on Loans
$
21,359
$
22,005
$
22,915
$
23,777
$
24,305
$
43,364
$
48,252
Investment Securities
  
834
  
900
  
902
  
978
  
1,017
  
1,734
  
2,088
Funds Sold
  
244
  
225
  
95
  
136
  
145
  
469
  
316
Total Interest Income
  
22,437
  
23,130
  
23,912
  
24,891
  
25,467
  
45,567
  
50,656
                             
INTEREST EXPENSE
                            
Deposits
  
556
  
643
  
699
  
907
  
1,083
  
1,199
  
2,341
Short-Term Borrowings
  
48
  
8
  
6
  
78
  
110
  
56
  
221
Subordinated Notes Payable
  
372
  
382
  
358
  
339
  
343
  
754
  
683
Other Long-Term Borrowings
  
396
  
436
  
452
  
467
  
492
  
832
  
986
Total Interest Expense
  
1,372
  
1,469
  
1,515
  
1,791
  
2,028
  
2,841
  
4,231
Net Interest Income
  
21,065
  
21,661
  
22,397
  
23,100
  
23,439
  
42,726
  
46,425
Provision for Loan Losses
  
5,743
  
4,793
  
7,600
  
3,718
  
3,545
  
10,536
  
7,678
Net Interest Income after Provision for Loan Losses
15,322
  
16,868
  
14,797
  
19,382
  
19,894
  
32,190
  
38,747
                             
NONINTEREST INCOME
                            
Service Charges on Deposit Accounts
6,313
  
6,309
  
6,530
  
6,629
  
6,309
  
12,622
  
12,292
Data Processing Fees
  
680
  
675
  
743
  
749
  
764
  
1,355
  
1,738
Asset Management Fees
  
1,020
  
1,015
  
1,124
  
1,080
  
1,080
  
2,035
  
2,160
Retail Brokerage Fees
  
884
  
758
  
776
  
807
  
939
  
1,642
  
1,668
Gain on Sale of Investment Securities
 -
  
 -
  
 -
  
 -
  
 -
  
 -
  
 -
Mortgage Banking Fees
  
864
  
848
  
845
  
645
  
568
  
1,712
  
1,185
Interchange Fees (1)
  
1,580
  
1,526
  
1,399
  
1,420
  
1,443
  
3,106
  
2,803
ATM/Debit Card Fees (1)
  
1,204
  
1,245
  
1,098
  
1,170
  
1,115
  
2,449
  
2,251
Other
  
1,361
  
1,210
  
1,358
  
1,693
  
2,230
  
2,571
  
6,685
Total Noninterest Income
  
13,906
  
13,586
 
13,873
  
14,193
  
14,448
 
27,492
  
30,782
                     
 
      
NONINTEREST EXPENSE
                            
Salaries and Associate Benefits
16,117
  
16,843
  
15,260
  
15,805
  
16,000
  
32,960
  
32,577
Occupancy, Net
  
2,276
  
2,266
  
2,284
  
2,495
  
2,447
  
4,542
  
4,843
Furniture and Equipment
  
2,245
  
2,201
  
2,097
  
2,118
  
2,117
  
4,446
  
4,343
Intangible Amortization
  
107
  
108
  
107
  
108
  
107
  
215
  
460
Other Real Estate
  
3,460
  
3,513
  
3,425
  
2,542
  
3,033
  
6,973
  
6,710
Other
  
8,088
  
7,666
  
7,930
  
7,579
  
7,463
  
15,754
  
15,565
Total Noninterest Expense
  
32,293
  
32,597
  
31,103
  
30,647
  
31,167
  
64,890
  
64,498
                             
OPERATING (LOSS) PROFIT
  
(3,065)
  
(2,143)
  
(2,433)
  
2,928
  
3,175
  
(5,208)
  
5,031
Income Tax (Benefit) Expense
  
(1,339)
  
(981)
  
(1,898)
  
951
  
1,030
  
(2,320)
  
1,576
NET (LOSS) INCOME
$
(1,726)
$
(1,162)
$
(535)
$
1,977
$
2,145
$
(2,888)
$
3,455
                             
PER SHARE DATA
                            
Basic (Loss) Income
$
(0.10)
$
(0.07)
$
(0.03)
$
0.12
$
0.12
$
(0.17)
$
0.20
Diluted (Loss) Income
$
(0.10)
$
(0.07)
$
(0.03)
$
0.12
$
0.12
$
(0.17)
$
0.20
Cash Dividends
  
0.000
  
0.000
  
0.000
  
0.100
  
0.100
  
0.000
  
0.200
AVERAGE SHARES
                            
Basic
  
17,192
  
17,181
  
17,157
  
17,152
  
17,127
  
17,187
  
17,124
Diluted
  
17,192
  
17,181
  
17,157
  
17,167
  
17,139
  
17,187
  
17,135
                             
                             
(1)   Together referred to as "Bank Card Fees"
                    

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
                               
   
2012
    
2012
    
2011
    
2011
    
2011
  
(Dollars in thousands, except per share data)
  
Second Quarter
    
First Quarter
    
Fourth Quarter
    
Third Quarter
    
Second Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $ 31,217     $ 31,035     $ 29,658     $ 31,080     $ 33,873  
Provision for Loan Losses
     5,743       4,793       7,600       3,718       3,545  
Net Charge-Offs
     7,031       4,611       6,223       5,140       6,338  
Balance at End of Period
   $ 29,929     $ 31,217     $ 31,035     $ 29,658     $ 31,080  
As a % of Loans
     1.93 %     1.98 %     1.91 %     1.79 %     1.84 %
As a % of Nonperforming Loans
     40.03 %     39.65 %     41.37 %     55.54 %     50.89 %
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $ 57     $ 268     $ 634     $ 186     $ 301  
Real Estate - Construction
     275       -       25       75       14  
Real Estate - Commercial
     3,519       1,532       2,443       1,031       2,808  
Real Estate - Residential
     3,894       1,967       2,755       3,287       2,371  
Real Estate - Home Equity
     425       892       205       580       944  
Consumer
     550       732       879       832       606  
Total Charge-Offs
   $ 8,720     $ 5,391     $ 6,941     $ 5,991     $ 7,044  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $ 83     $ 67     $ 242     $ 33     $ 43  
Real Estate - Construction
     27       -       -       -       5  
Real Estate - Commercial
     42       138       87       37       115  
Real Estate - Residential
     969       163       34       271       113  
Real Estate - Home Equity
     116       18       13       108       57  
Consumer
     452       394       342       402       373  
Total Recoveries
   $ 1,689     $ 780     $ 718     $ 851     $ 706  
                                         
NET CHARGE-OFFS
   $ 7,031     $ 4,611     $ 6,223     $ 5,140     $ 6,338  
                                         
Net Charge-Offs as a % of Average Loans(1)
     1.80 %     1.16 %     1.50 %     1.22 %     1.49 %
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $ 74,770     $ 78,726     $ 75,023     $ 53,396     $ 61,076  
Other Real Estate
     58,059       58,100       62,600       61,196       61,016  
Total Nonperforming Assets
   $ 132,829     $ 136,826     $ 137,623     $ 114,592     $ 122,092  
                                         
Past Due Loans 30-89 Days
   $ 16,695     $ 9,193     $ 19,425     $ 17,053     $ 18,103  
Past Due Loans 90 Days or More
     -       25       224       26       271  
Performing Troubled Debt Restructuring's
   $ 38,734     $ 37,373       37,675     $ 28,404     $ 23,582  
                                         
Nonperforming Loans as a % of Loans
     4.80 %     4.99 %     4.61 %     3.22 %     3.62 %
Nonperforming Assets as a % of
                                        
   Loans and Other Real Estate
     8.23 %     8.36 %     8.14 %     6.67 %     6.98 %
Nonperforming Assets as a % of Capital(2)
     47.62 %     48.52 %     48.63 %     39.44 %     41.87 %
Nonperforming Assets as a % of Total Assets
     5.02 %     5.14 %     5.21 %     4.54 %     4.70 %
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses.
                                  
                                         
                                         
                                         

 
 
 


AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                                                    
Unaudited
                                                                                                                                          
                                                                                                                                           
                                                                                                                                           
   
Second Quarter 2012
    
First Quarter 2012
    
Fourth Quarter 2011
    
Third Quarter 2011
    
Second Quarter 2011
    
June 2012 YTD
    
June 2011 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
   $ 1,570,827       21,456       5.49 %   $ 1,596,480       22,121       5.57 %   $ 1,646,715       23,032       5.55 %   $ 1,667,720     $ 23,922       5.69 %   $ 1,704,348     $ 24,465       5.76 %   $ 1,583,654           $ 43,577       5.53 %   $ 1,717,267           $ 48,566       5.76 %
                                                                                                                                                                                     
Investment Securities
                                                                                                                                                                                    
Taxable Investment Securities
     216,952       730       1.35       242,481       794       1.31       248,217       816       1.31       248,138       828       1.32       244,487       825       1.35       229,716             1,524       1.35       237,857             1,676       1.41  
Tax-Exempt Investment Securities
     63,715       161       1.01       56,313       162       1.15       59,647       131       0.88       55,388       231       1.67       60,963       297       1.95       60,014             323       1.08       67,558             634       1.88  
                                                                                                                                                                                     
Total Investment Securities
     280,667       891       1.27       298,794       956       1.28       307,864       947       1.22       303,526       1,059       1.39       305,450       1,122       1.47       289,730    
 
       1,847       1.28       305,415    
 
       2,310       1.52  
                                                                                                                                                                                     
Funds Sold
     411,353       244       0.24       373,033       225       0.24       191,884       96       0.20       231,681       136       0.23       249,133       145       0.23       392,193             469       0.24       246,030             316       0.25  
                                                                                                                                                                                     
Total Earning Assets
     2,262,847     $ 22,591       4.01 %     2,268,307     $ 23,302       4.13 %     2,146,463     $ 24,075       4.45 %     2,202,927     $ 25,117       4.52 %     2,258,931     $ 25,732       4.57 %     2,265,577           $ 45,893       4.07 %     2,268,712           $ 51,192       4.55 %
                                                                                                                                                                                     
Cash and Due From Banks
     47,711                       49,427                       49,666                       47,252                       47,465                       48,569                             49,194                        
Allowance for Loan Losses
     (31,599 )                     (31,382 )                     (29,550 )                     (30,969 )                     (32,993 )                     (31,491 )                           (33,903 )                      
Other Assets
     345,458                       350,555                       343,336                       344,041                       344,884                       348,007                             346,581                        
                                                                                                                                                                                     
Total Assets
   $ 2,624,417                     $ 2,636,907                     $ 2,509,915                     $ 2,563,251                     $ 2,618,287                     $ 2,630,662                           $ 2,630,584                        
                                                                                                                                                                                     
LIABILITIES:
                                                                                                                                                                                    
Interest Bearing Deposits
                                                                                                                                                                                    
NOW Accounts
   $ 809,172     $ 167       0.08 %   $ 823,406     $ 192       0.09 %   $ 700,005     $ 148       0.08 %   $ 726,652     $ 222       0.12 %   $ 782,698     $ 259       0.13 %   $ 816,289           $ 359       0.09 %   $ 784,806           $ 520       0.13 %
Money Market Accounts
     280,371       63       0.09       277,558       75       0.11       283,677       75       0.11       282,378       95       0.13       284,411       136       0.19       278,964             137       0.10       281,503             267       0.19  
Savings Accounts
     174,923       21       0.05       165,603       20       0.05       156,088       20       0.05       153,748       19       0.05       152,599       16       0.04       170,263             42       0.05       148,633             34       0.05  
Time Deposits
     274,497       305       0.45       284,129       356       0.50       299,487       456       0.60       324,951       571       0.70       338,723       672       0.80       279,314             661       0.48       349,589             1,520       0.88  
Total Interest Bearing Deposits
     1,538,963       556       0.15 %     1,550,696       643       0.17 %     1,439,257       699       0.19 %     1,487,729       907       0.24 %     1,558,431       1,083       0.28 %     1,544,830               1,199       0.16 %     1,564,531               2,341       0.30 %
                                                                                                                                                                                         
Short-Term Borrowings
     57,983       48       0.33 %     45,645       8       0.07 %     44,573       6       0.05 %     64,160       78       0.48 %     76,754       110       0.58 %     51,814               56       0.22 %     81,982               221       0.54 %
Subordinated Notes Payable
     62,887       372       2.34       62,887       382       2.40       62,887       358       2.23       62,887       339       2.11       62,887       343       2.16       62,887               754       2.37       62,887               683       2.16  
Other Long-Term Borrowings
     40,617       396       3.92       44,286       436       3.96       45,007       452       3.99       46,435       467       3.99       49,650       492       3.97       42,451               832       3.94       49,995               986       3.98  
                                                                                                                                                                                         
Total Interest Bearing Liabilities
     1,700,450     $ 1,372       0.32 %     1,703,514     $ 1,469       0.35 %     1,591,724     $ 1,515       0.38 %     1,661,211     $ 1,791       0.43 %     1,747,722     $ 2,028       0.47 %     1,701,982             $ 2,841       0.34 %     1,759,395             $ 4,231       0.48 %
                                                                                                                                                                                         
Noninterest Bearing Deposits
     596,690                       610,692                       593,718                       574,184                       548,870                       603,691                               551,759                          
Other Liabilities
     74,633                       68,254                       60,197                       63,954                       59,324                       71,444                               57,440                          
                                                                                                                                                                                         
Total Liabilities
     2,371,773                       2,382,460                       2,245,639                       2,299,349                       2,355,916                       2,377,117                               2,368,594                          
                                                                                                                                                                                         
SHAREOWNERS' EQUITY:
     252,644                       254,447                       264,276                       263,902                       262,371                       253,545                               261,990                          
                                                                                                                                                                                         
Total Liabilities and Shareowners' Equity
   $ 2,624,417                     $ 2,636,907                     $ 2,509,915                     $ 2,563,251                     $ 2,618,287                     $ 2,630,662                             $ 2,630,584                          
                                                                                                                                                                                         
Interest Rate Spread
           $ 21,219       3.69 %           $ 21,833       3.78 %           $ 22,560       4.07 %           $ 23,326       4.09 %           $ 23,704       4.10 %                   $ 43,052       3.73 %                   $ 46,961       4.07 %
                                                                                                                                                                                         
Interest Income and Rate Earned(1)
       22,591       4.01               23,302       4.13               24,075       4.45               25,117       4.52               25,732       4.57                       45,893       4.07                       51,192       4.55  
Interest Expense and Rate Paid(2)
       1,372       0.24               1,469       0.26               1,515       0.28               1,791       0.32               2,028       0.36                       2,841       0.25                       4,231       0.38  
                                                                                                                                                                                         
Net Interest Margin
           $ 21,219       3.77 %           $ 21,833       3.87 %           $ 22,560       4.17 %           $ 23,326       4.20 %           $ 23,704       4.21 %                   $ 43,052       3.82 %                   $ 46,961       4.17 %
                                                                                                                                                                                         
                                                                                                                                                                                         
(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.