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

TALLAHASSEE, Fla. (October 23, 2012) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $1.1 million, or $0.07 per diluted share, for the third quarter of 2012, compared to a net loss of $1.7 million, or $0.10 per diluted share, for the second quarter of 2012, and net income of $2.0 million, or $0.12 per diluted share, for the third quarter of 2011.  For the first nine months of 2012, the Company reported a net loss of $1.8 million, or $0.10 per diluted share, compared to net income of $5.4 million, or $0.32 per diluted share, for the same period in 2011.

Compared to the second quarter of 2012, the increase in earnings reflects a lower loan loss provision of $2.9 million, and a $2.1 million decline in noninterest expense, partially offset by lower operating revenues (net interest income plus noninterest income) of $0.4 million and higher income taxes of $1.8 million.

Compared to the third quarter of 2011, the reduction in earnings was due to lower operating revenues of $2.7 million partially offset by a $0.9 million decrease in the loan loss provision, a $0.4 million reduction in noninterest expense, and lower income taxes of $0.5 million.

The decrease in earnings for the nine month period ended September 30, 2012 is attributable to lower operating revenues of $9.7 million, and a higher loan loss provision of $2.0 million, partially offset by lower noninterest expense of $0.1 million and income taxes of $4.4 million.  Earnings in 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).

“While the economy remains challenging, our pre-tax, pre-credit cost operating income improved as we continued to trim expenses,” said William G. Smith, Jr., Chairman, President and CEO.  “Credit quality remains a top priority and continues to improve.   Nonperforming assets declined as did our past due loans and net charge-offs; and our retail strategy for the disposition of problem assets continues to produce results, which we believe are in the best interest of our shareowners.  A modest level of loss in newly identified problem loans coupled with less severe valuation adjustments on our other real estate owned properties have contributed to lower credit costs and improved profitability.  As we have stated all along, we don’t expect the path forward to be linear and anticipate quarterly performance will continue to be choppy, but when viewed on an annual basis, we are clearly making progress and are optimistic about the future,” said Smith.

The Return on Average Assets was 0.17% and the Return on Average Equity was 1.77% for the third quarter of 2012.  These metrics were -0.26% and -2.75% for the second quarter of 2012, and 0.31% and 2.97% for the third quarter of 2011, respectively.

For the first nine months of 2012, the Return on Average Assets was -0.09% and the Return on Average Equity was -0.93% compared to 0.28% and 2.77%, respectively, for the same period in 2011.

Discussion of Financial Condition

Average earning assets were $2.209 billion for the third quarter of 2012, a decrease of $53.7 million, or 2.4%, from the second quarter of 2012, and an increase of $62.7 million, or 2.9%, over the fourth quarter of 2011.  As compared to the second quarter of 2012, the decline in average earning assets is attributable to a lower level of overnight funds resulting from a decline in deposits and the resolution of problem loans.  The shift in the mix of earning assets continued as the loan portfolio declined when compared to the prior quarter.  The increase in average earning assets 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 $386.0 million during the third quarter of 2012 compared to an average net overnight funds sold position of $411.3 million in the second quarter of 2012 and an average overnight funds sold position of $191.8 million in the fourth quarter of 2011.  The lower balance when compared to the second quarter of 2012 reflects lower levels of public fund deposits partially offset by a decrease in the loan portfolio.  The higher balances when compared to the fourth quarter of 2011 reflect higher levels of public funds and savings accounts, in addition to lower balances in the loan and investment portfolios.
 
 
 
 
 
When compared to the second quarter of 2012 and the fourth quarter of 2011, average loans declined by $29.6 million and $105.5 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. 
 
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 owned “OREO”) also contributed to the overall decline.  During the third quarter of 2012, loan charge-offs and loans transferred to OREO accounted for $6.0 million, or 26%, of the net reduction in total loans of $22.9 million from the second quarter of 2012.  Compared to the fourth quarter of 2011, loan resolution accounted for $31.3 million, or 33%, of the net reduction in loans of $95.4 million1.

Nonperforming assets (nonaccrual loans and OREO) totaled $127.2 million at the end of the third quarter of 2012 compared to $132.8 million at the end of the second quarter of 2012 and $137.6 million at the end of the fourth quarter of 2011.  Nonaccrual loans totaled $74.1 million, a decrease of $0.7 million from the second quarter of 2012 and $0.9 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 to nonaccrual status were up slightly during the third quarter, but have slowed noticeably during the first nine months of 2012.  The balance of OREO totaled $53.2 million at the end of the third quarter, a $4.9 million decrease from the second quarter of 2012 and $9.4 million from the fourth quarter of 2011.  We continue to experience progress in our efforts to dispose of OREO by selling properties totaling $20.1 million during the first nine months of 2012.  Nonperforming assets represented 5.10% of total assets at September 30, 2012 compared to 5.02% at June 30, 2012 and 5.21% at December 31, 2011.

Average total deposits were $2.075 billion for the third quarter of 2012, a decrease of $60.2 million, or 2.8%, from the second quarter of 2012 and higher by $42.5 million, or 2.1%, from the fourth quarter of 2011.  The decrease in deposits when compared to the second quarter of 2012 resulted from lower public funds and certificates of deposit, partially offset by growth in noninterest bearing accounts, 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.  The seasonal low in public fund balances generally occurs in the fourth quarter, and these balances are anticipated to increase through the first quarter of 2013.

Our mix of deposits continues to improve 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.

During the fourth quarter 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 represented 29.2% of our total deposits during the third quarter of 2012.
 
Borrowings decreased by $0.9 million when compared to the second quarter of 2012 as a result of lower balances in repurchase agreements, and were higher by $8.1 million when compared to the fourth quarter of 2011, as a result of higher balances in repurchase agreements.

1 The reductions in loan portfolio balances stated in this paragraph are based on “as of” balances, not averages.
 
 
 
Discussion of Operating Results
 
 
Tax equivalent net interest income for the third quarter of 2012 was $21.2 million, which is comparable to the second quarter of 2012, and down from $23.3 million for the third quarter of 2011.  For the nine months ended September 30, 2012, tax equivalent net interest income totaled $64.2 million compared to $70.3 million for the same period of 2011.  Factors affecting net interest income relative to the second quarter of 2012 include a reduction in loan income attributable to declining loan balances, primarily offset by one additional calendar day and interest recoveries. When compared to the three and nine month periods of 2011, the decrease was primarily driven by declines in loan income attributable to lower portfolio balances, which was partially offset by a reduction in interest expense.  The lower interest expense is primarily attributable to certificates of deposit and reflects both lower balances and favorable repricing.

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 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 third quarter of 2012 was 3.82%, an increase of 5 basis points from the second quarter of 2012 and a decline of 38 basis points from the third quarter of 2011.  Year-to-date net interest margin of 3.81% declined 37 basis points from the comparable period in 2011.  The increase in margin compared to the linked quarter reflects a lower level of earning assets and higher interest recoveries.  The decrease in the margin compared to the third quarter of 2011 and year-to-date 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 third quarter of 2012 was $2.9 million compared to $5.7 million in the second quarter of 2012 and $3.7 million for the third quarter of 2011.  The decrease from both periods was driven by slower problem loan migration and lower net charge-offs resulting in a favorable impact on our general reserve allocation.  For the first nine months of 2012, the loan loss provision totaled $13.4 million compared to $11.4 million for the same period in 2011 with the increase primarily attributable to an increase in impaired loans.  Net charge-offs for the third quarter of 2012 totaled $2.6 million, or 0.66%, of average loans (annualized) compared to $7.0 million, or 1.80%, for the second quarter of 2012 and $5.1 million, or 1.22%, in the third quarter of 2011.  For the first nine months of 2012, net charge-offs totaled $14.2 million, or 1.21%, of average loans (annualized) compared to $17.2 million, or 1.35%, for the same period of 2011.  At quarter-end, the allowance for loan losses of $30.2 million was 1.97% of outstanding loans (net of overdrafts) and provided coverage of 41% of nonperforming loans compared to 1.93% and 40%, respectively, at June 30, 2012, and 1.91% and 41%, respectively, at December 31, 2011.

Noninterest income for the third quarter of 2012 totaled $13.6 million, a decrease of $0.3 million, or 2.4%, from the second quarter of 2012 and a decrease of $0.6 million, or 4.4%, from the third quarter of 2011.  The decrease from the second quarter of 2012 was driven primarily by lower wealth management fees (trust fees and retail brokerage fees) of $0.2 million and bank card fees of $0.2 million, partially offset by higher mortgage banking fees of $0.1 million.  Compared to the third quarter of 2011, the decrease primarily reflects a reduction in deposit fees of $0.2 million, wealth management fees of $0.2 million, data processing fees of $0.1 million, and other income of $0.5 million, partially offset by higher mortgage banking fees of $0.3 million.  For the first nine months of 2012, noninterest income totaled $41.1 million, a decrease of $3.9 million from the same period of 2011 reflective of lower data processing fees of $0.4 million, wealth management fees of $0.4 million, and other income of $4.6 million, partially offset by higher mortgage banking fees of $0.9 million and bank card fees of $0.5 million.  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.  The reduction in wealth management fees reflects a decline in trust fees reflective of a lower level of assets under management due to account distributions, and a decrease in retail brokerage fees due to lower client trading activity.  The decrease in other income was primarily attributable to the Visa gain realized in the first quarter of 2011 and a lower level of gains from the sale of OREO properties.  Increased loan origination 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.
 
 
 
 
 
 
Noninterest expense for the third quarter of 2012 totaled $30.2 million, a decrease of $2.1 million, or 6.5%, from the second quarter of 2012 and $0.4 million, or 1.5%, from the third quarter of 2011.  The decrease compared to the second quarter of 2012 reflects a reduction in salaries/associate benefit expense of $0.6 million, OREO expense of $0.8 million, and other expense of $0.7 million.  The decrease in salaries/associate benefit expense was due to lower associate salary expense reflective of lower headcount, pension plan expense, and associate insurance expense.  A decline in valuation adjustments drove the decrease in OREO expense.  Other expense declined due to lower advertising fees and professional fees, as well as one-time severance costs that were recorded in the second quarter of 2012.  Lower salaries/associate benefit expense and occupancy expense drove the decrease compared to the third quarter of 2011.

For the first nine months of 2012, noninterest expense totaled $95.1 million, a decrease of $0.1 million from the same period of 2011 attributable to lower occupancy expense of $0.5 million and intangible amortization expense of $0.2 million, partially offset by higher furniture/equipment expense of $0.2 million, OREO expense of $0.3 million, and salaries/associate benefit expense of $0.1 million.  A decrease in building maintenance/repairs and utility expense drove the decline in occupancy expense.  The reduction in intangible amortization expense reflects the full amortization of certain core deposit intangibles related to past acquisitions.  Higher software and maintenance costs for newly implemented information systems drove the increase in furniture/equipment expense.  A slightly higher level of carrying costs and valuation adjustments drove the increase in ORE expense. The slight net increase in salaries/associate benefit expense reflects higher pension plan expense that was partially offset by lower expense for associate salaries and performance compensation. Utilization of a lower discount rate in 2012 due to lower long-term bond interest rates drove the aforementioned increase in pension plan expense.

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 $2.5 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 66 full-service offices and 71 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 used for the Company’s loan loss provision and deferred tax valuation allowance; 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
          
Nine Months Ended
  
(Dollars in thousands, except per share data)
  
Sep 30, 2012
    
Jun 30, 2012
    
Sep 30, 2011
    
Sep 30, 2012
    
Sep 30, 2011
  
                               
EARNINGS
                              
Net Income (Loss)
   $ 1,121     $ (1,726 )   $ 1,977     $ (1,767 )   $ 5,432  
Net Income (Loss) Per Common Share
   $ 0.07     $ (0.10 )   $ 0.12     $ (0.10 )   $ 0.32  
PERFORMANCE
                                        
Return on Average Equity
     1.77 %     -2.75 %     2.97 %     -0.93 %     2.77 %
Return on Average Assets
     0.17 %     -0.26 %     0.31 %     -0.09 %     0.28 %
Net Interest Margin
     3.82 %     3.77 %     4.20 %     3.81 %     4.18 %
Noninterest Income as % of Operating Revenue
     39.31 %     39.88 %     38.14 %     39.28 %     39.38 %
Efficiency Ratio
     87.68 %     90.88 %     81.40 %     90.12 %     82.07 %
CAPITAL ADEQUACY
                                        
Tier 1 Capital Ratio
     14.43 %     14.17 %     14.05 %     14.43 %     14.05 %
Total Capital Ratio
     15.80 %     15.54 %     15.41 %     15.80 %     15.41 %
Tangible Common Equity Ratio
     6.86 %     6.40 %     7.19 %     6.86 %     7.19 %
Leverage Ratio
     9.83 %     9.60 %     10.20 %     9.83 %     10.20 %
Equity to Assets
     10.04 %     9.41 %     10.34 %     10.04 %     10.34 %
ASSET QUALITY
                                        
Allowance as % of Non-Performing Loans
     40.80 %     40.03 %     55.54 %     40.80 %     55.54 %
Allowance as a % of Loans
     1.97 %     1.93 %     1.79 %     1.97 %     1.79 %
Net Charge-Offs as % of Average Loans
     0.66 %     1.80 %     1.22 %     1.21 %     1.35 %
Nonperforming Assets as % of Loans and ORE
     8.02 %     8.23 %     6.67 %     8.02 %     6.67 %
Nonperforming Assets as % of Total Assets
     5.10 %     5.02 %     4.54 %     5.10 %     4.54 %
STOCK PERFORMANCE
                                        
High
   $ 10.96     $ 8.73     $ 11.18     $ 10.96     $ 13.80  
Low
     7.00       6.35       9.81       6.35       9.81  
Close
     10.64       7.37       10.38       10.64       10.38  
Average Daily Trading Volume
   $ 23,737     $ 37,926     $ 43,483     $ 28,826     $ 31,783  

 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                    
Unaudited
                              
                               
   
2012
    
2011
  
(Dollars in thousands)
  
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
    
Third Quarter
  
ASSETS
                              
Cash and Due From Banks
   $ 53,076     $ 57,477     $ 50,567     $ 54,953     $ 53,027  
Funds Sold and Interest Bearing Deposits
     314,318       434,814       418,678       330,361       193,387  
Total Cash and Cash Equivalents
     367,394       492,291       469,245       385,314       246,414  
                                         
Investment Securities, Available-for-Sale
     288,166       280,753       284,490       307,149       306,038  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     135,939       136,736       132,119       130,879       142,511  
Real Estate - Construction
     43,278       46,803       34,554       26,367       31,991  
Real Estate - Commercial
     609,671       605,819       624,528       639,140       644,128  
Real Estate - Residential
     341,044       353,198       364,123       386,877       388,686  
Real Estate - Home Equity
     239,446       242,929       240,800       244,263       245,438  
Consumer
     154,389       162,899       174,132       186,216       188,933  
Other Loans
     6,891       5,638       6,555       12,495       13,720  
Overdrafts
     2,637       2,214       2,073       2,446       2,292  
Total Loans, Net of Unearned Interest
     1,533,295       1,556,236       1,578,884       1,628,683       1,657,699  
Allowance for Loan Losses
     (30,222 )     (29,929 )     (31,217 )     (31,035 )     (29,658 )
Loans, Net
     1,503,073       1,526,307       1,547,667       1,597,648       1,628,041  
                                         
Premises and Equipment, Net
     109,003       110,302       111,408       110,991       111,471  
Intangible Assets
     85,161       85,269       85,376       85,484       85,591  
Other Real Estate Owned
     53,172       58,059       58,100       62,600       61,196  
Other Assets
     87,815       92,869       103,992       92,126       85,221  
Total Other Assets
     335,151       346,499       358,876       351,201       343,479  
                                         
Total Assets
   $ 2,493,784     $ 2,645,850     $ 2,660,278     $ 2,641,312     $ 2,523,972  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 596,660     $ 623,130     $ 605,774     $ 618,317     $ 584,628  
NOW Accounts
     703,327       789,103       845,149       828,990       708,066  
Money Market Accounts
     285,084       288,352       283,224       276,910       280,001  
Regular Savings Accounts
     181,523       178,388       172,262       158,462       154,136  
Certificates of Deposit
     254,000       271,413       279,295       289,840       316,968  
Total Deposits
     2,020,594       2,150,386       2,185,704       2,172,519       2,043,798  
                                         
Short-Term Borrowings
     42,388       69,449       42,188       43,372       47,508  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     38,126       38,846       42,826       44,606       45,389  
Other Liabilities
     79,427       75,260       75,876       65,986       63,465  
                                         
Total Liabilities
     2,243,422       2,396,828       2,409,481       2,389,370       2,263,047  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     172       172       172       172       172  
Additional Paid-In Capital
     38,493       38,260       38,101       37,838       38,074  
Retained Earnings
     235,694       234,573       236,299       237,461       237,969  
Accumulated Other Comprehensive Loss, Net of Tax
     (23,997 )     (23,983 )     (23,775 )     (23,529 )     (15,290 )
                                         
Total Shareowners' Equity
     250,362       249,022       250,797       251,942       260,925  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,493,784     $ 2,645,850     $ 2,660,278     $ 2,641,312     $ 2,523,972  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,135,779     $ 2,271,803     $ 2,282,053     $ 2,266,193     $ 2,157,124  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Core Deposits
     79       139       198       258       318  
Other
     271       319       367       415       462  
Interest Bearing Liabilities
     1,567,335       1,698,438       1,727,831       1,705,066       1,614,954  
                                         
Book Value Per Diluted Share
   $ 14.54     $ 14.48     $ 14.60     $ 14.68     $ 15.20  
Tangible Book Value Per Diluted Share
     9.59       9.52       9.63       9.70       10.21  
                                         
Actual Basic Shares Outstanding
     17,223       17,198       17,182       17,160       17,157  
Actual Diluted Shares Outstanding
     17,223       17,198       17,182       17,161       17,172  

 
 
 

CAPITAL CITY BANK GROUP, INC.
                                      
CONSOLIDATED STATEMENT OF OPERATIONS
                                
Unaudited
                                          
                                           
                                 
Nine Months Ended
  
   
2012
    
2011
    
September 30,
  
(Dollars in thousands, except per share data)
  
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
    
Third Quarter
    
2012
    
2011
  
                                           
INTEREST INCOME
                                          
Interest and Fees on Loans
   $ 21,274     $ 21,359     $ 22,005     $ 22,915     $ 23,777     $ 64,638     $ 72,029  
Investment Securities
     798       834       900       902       978       2,532       3,066  
Funds Sold
     254       244       225       95       136       723       452  
Total Interest Income
     22,326       22,437       23,130       23,912       24,891       67,893       75,547  
                                                         
INTEREST EXPENSE
                                                        
Deposits
     480       556       643       699       907       1,679       3,248  
Short-Term Borrowings
     71       48       8       6       78       127       299  
Subordinated Notes Payable
     372       372       382       358       339       1,126       1,022  
Other Long-Term Borrowings
     372       396       436       452       467       1,204       1,453  
Total Interest Expense
     1,295       1,372       1,469       1,515       1,791       4,136       6,022  
Net Interest Income
     21,031       21,065       21,661       22,397       23,100       63,757       69,525  
Provision for Loan Losses
     2,864       5,743       4,793       7,600       3,718       13,400       11,396  
Net Interest Income after Provision for Loan Losses
     18,167       15,322       16,868       14,797       19,382       50,357       58,129  
                                                         
NONINTEREST INCOME
                                                        
Service Charges on Deposit Accounts
     6,406       6,313       6,309       6,530       6,629       19,028       18,921  
Data Processing Fees
     687       680       675       743       749       2,042       2,487  
Asset Management Fees(1)
     1,020       1,020       1,015       1,124       1,080       3,055       3,240  
Retail Brokerage Fees(1)
     666       884       758       776       807       2,308       2,475  
Mortgage Banking Fees
     978       864       848       845       645       2,690       1,830  
Interchange Fees (2)
     1,619       1,580       1,526       1,399       1,420       4,725       4,223  
ATM/Debit Card Fees (2)
     997       1,204       1,245       1,098       1,170       3,446       3,421  
Other
     1,202       1,361       1,210       1,358       1,693       3,773       8,378  
Total Noninterest Income
     13,575       13,906       13,586       13,873       14,193       41,067       44,975  
                                                         
NONINTEREST EXPENSE
                                                        
Salaries and Associate Benefits
     15,510       16,117       16,843       15,260       15,805       48,470       48,382  
Occupancy, Net
     2,332       2,276       2,266       2,284       2,495       6,874       7,338  
Furniture and Equipment
     2,245       2,245       2,201       2,097       2,118       6,691       6,461  
Intangible Amortization
     108       107       108       107       108       323       568  
Other Real Estate
     2,616       3,460       3,513       3,425       2,542       9,589       9,252  
Other
     7,390       8,088       7,666       7,930       7,579       23,144       23,144  
Total Noninterest Expense
     30,201       32,293       32,597       31,103       30,647       95,091       95,145  
                                                         
OPERATING PROFIT (LOSS)
     1,541       (3,065 )     (2,143 )     (2,433 )     2,928       (3,667 )     7,959  
Income Tax Expense (Benefit)
     420       (1,339 )     (981 )     (1,898 )     951       (1,900 )     2,527  
NET INCOME (LOSS)
   $ 1,121     $ (1,726 )   $ (1,162 )   $ (535 )   $ 1,977     $ (1,767 )   $ 5,432  
                                                         
PER SHARE DATA
                                                        
Basic Income (Loss)
   $ 0.07     $ (0.10 )   $ (0.07 )   $ (0.03 )   $ 0.12     $ (0.10 )   $ 0.32  
Diluted Income (Loss)
   $ 0.07     $ (0.10 )   $ (0.07 )   $ (0.03 )   $ 0.12     $ (0.10 )   $ 0.32  
Cash Dividends
     0.000       0.000       0.000       0.000       0.100       0.000       0.300  
AVERAGE SHARES
                                                        
Basic
     17,215       17,192       17,181       17,157       17,152       17,196       17,134  
Diluted
     17,228       17,192       17,181       17,157       17,167       17,196       17,143  
                                                         
                                                         
(1) Together referred to as "Wealth Management Fees"
                                          
(2) Together referred to as "Bank Card Fees"
                                          

 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
   
2012
    
2012
    
2012
    
2011
    
2011
  
(Dollars in thousands, except per share data)
  
Third Quarter
    
Second Quarter
    
First Quarter
    
Fourth Quarter
    
Third Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $ 29,929     $ 31,217     $ 31,035     $ 29,658     $ 31,080  
Provision for Loan Losses
     2,864       5,743       4,793       7,600       3,718  
Net Charge-Offs
     2,571       7,031       4,611       6,223       5,140  
Balance at End of Period
   $ 30,222     $ 29,929     $ 31,217     $ 31,035     $ 29,658  
As a % of Loans
     1.97 %     1.93 %     1.98 %     1.91 %     1.79 %
As a % of Nonperforming Loans
     40.80 %     40.03 %     39.65 %     41.37 %     55.54 %
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $ 331     $ 57     $ 268     $ 634     $ 186  
Real Estate - Construction
     127       275       -       25       75  
Real Estate - Commercial
     512       3,519       1,532       2,443       1,031  
Real Estate - Residential
     981       3,894       1,967       2,755       3,287  
Real Estate - Home Equity
     834       425       892       205       580  
Consumer
     355       550       732       879       832  
Total Charge-Offs
   $ 3,140     $ 8,720     $ 5,391     $ 6,941     $ 5,991  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $ 53     $ 83     $ 67     $ 242     $ 33  
Real Estate - Construction
     9       27       -       -       -  
Real Estate - Commercial
     34       42       138       87       37  
Real Estate - Residential
     76       969       163       34       271  
Real Estate - Home Equity
     15       116       18       13       108  
Consumer
     382       452       394       342       402  
Total Recoveries
   $ 569     $ 1,689     $ 780     $ 718     $ 851  
                                         
NET CHARGE-OFFS
   $ 2,571     $ 7,031     $ 4,611     $ 6,223     $ 5,140  
                                         
Net Charge-Offs as a % of Average Loans(1)
     0.66 %     1.80 %     1.16 %     1.50 %     1.22 %
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $ 74,075     $ 74,770     $ 78,726     $ 75,023     $ 53,396  
Other Real Estate Owned
     53,172       58,059       58,100       62,600       61,196  
Total Nonperforming Assets
   $ 127,247     $ 132,829     $ 136,826     $ 137,623     $ 114,592  
                                         
Past Due Loans 30-89 Days
   $ 12,923     $ 16,695     $ 9,193     $ 19,425     $ 17,053  
Past Due Loans 90 Days or More
     -       -       25       224       26  
Performing Troubled Debt Restructuring's
   $ 45,973     $ 38,734     $ 37,373     $ 37,675     $ 28,404  
                                         
Nonperforming Loans as a % of Loans
     4.83 %     4.80 %     4.99 %     4.61 %     3.22 %
Nonperforming Assets as a % of
                                        
Loans and Other Real Estate
     8.02 %     8.23 %     8.36 %     8.14 %     6.67 %
Nonperforming Assets as a % of Capital(2)
     45.35 %     47.62 %     48.52 %     48.63 %     39.44 %
Nonperforming Assets as a % of Total Assets
     5.10 %     5.02 %     5.14 %     5.21 %     4.54 %
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses
                                  


 
 
 

CAPITAL CITY BANK GROUP, INC.
                                                                                              
AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                          
Unaudited
                                                                                                  
                                                                                                   
                                                                                                   
   
Third Quarter 2012
    
Second Quarter 2012
    
First Quarter 2012
    
Fourth Quarter 2011
    
Third Quarter 2011
    
Sep 2012 YTD
    
Sep 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
$
                 1,541,262
  
              21,366
  
5.51
%
$
                 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
%
$
  1,569,420
$
      64,943
  
5.53
%
$
 1,700,570
$
      72,488
  
5.70
%
                                                                                                   
Investment Securities
                                                                                                  
Taxable Investment Securities
                    214,431
  
                    691
  
1.28
    
                    216,952
  
                    730
  
1.35
    
                    242,481
  
                    794
  
1.31
    
                    248,217
  
                    816
  
1.31
    
                    248,138
  
                    828
  
1.32
    
      224,584
  
        2,215
  
1.33
    
     241,321
  
        2,504
  
1.40
  
Tax-Exempt Investment Securities
67,446
  
163
  
0.97
    
63,715
  
161
  
1.01
    
56,313
  
162
  
1.15
    
59,647
  
131
  
0.88
    
55,388
  
231
  
1.67
    
62,509
  
486
  
1.04
    
63,457
  
865
  
1.82
  
                                                                                                   
Total Investment Securities
                    281,877
#
                    854
  
1.21
    
                    280,667
 
                    891
  
1.27
    
                    298,794
 
                    956
  
1.28
    
                    307,864
 
                    947
  
1.22
    
                    303,526
 
                1,059
  
1.39
    
      287,093
#
        2,701
  
1.25
    
     304,778
 
        3,369
  
1.47
  
                                                                                                   
Funds Sold
  
386,027
  
254
  
0.26
    
411,353
  
244
  
0.24
    
373,033
  
225
  
0.24
    
191,884
  
96
  
0.20
    
231,681
  
136
  
0.23
    
390,122
  
723
  
0.25
    
241,195
  
452
  
0.25
  
                                                                                                   
Total Earning Assets
  
                 2,209,166
$
22,474
  
4.05
%
  
                 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
%
  
  2,246,635
$
68,367
  
4.06
%
  
 2,246,543
$
76,309
  
4.54
%
                                                                                                   
Cash and Due From Banks
  
                       47,207
            
                       47,711
            
                       49,427
            
                       49,666
            
                       47,252
            
        48,112
            
       48,539
          
Allowance for Loan Losses
                     (30,260)
            
                     (31,599)
            
                     (31,382)
            
                     (29,550)
            
                     (30,969)
            
      (31,077)
            
     (32,914)
          
Other Assets
  
340,126
            
345,458
            
350,555
            
343,336
            
344,041
            
345,361
            
345,725
          
                                                                                                   
Total Assets
$
2,566,239
          
$
2,624,417
          
$
2,636,907
          
$
2,509,915
          
$
2,563,251
          
$
2,609,031
          
$
2,607,893
          
                                                                                                   
LIABILITIES:
                                                                                                  
Interest Bearing Deposits
                                                                                                  
NOW Accounts
$
                    740,178
$
                    144
  
0.08
%
$
                    809,172
$
                    167
  
0.08
%
$
                    823,406
$
                    192
  
0.09
%
$
                    700,005
$
                    148
  
0.08
%
$
                    726,652
$
                    222
  
0.12
%
$
      790,733
$
           503
  
0.08
%
$
     765,209
$
           742
  
0.13
%
Money Market Accounts
  
                    287,250
  
                      60
  
0.08
    
                    280,371
  
                      63
  
0.09
    
                    277,558
  
                      75
  
0.11
    
                    283,677
  
                      75
  
0.11
    
                    282,378
  
                      95
  
0.13
    
      281,746
  
           198
  
0.09
    
     281,798
  
           362
  
0.17
  
Savings Accounts
  
                    179,445
  
                      23
  
0.05
    
                    174,923
  
                      21
  
0.05
    
                    165,603
  
                      20
  
0.05
    
                    156,088
  
                      20
  
0.05
    
                    153,748
  
                      19
  
0.05
    
      173,346
  
              64
  
0.05
    
     150,357
  
              53
  
0.05
  
Time Deposits
  
263,007
  
253
  
0.38
    
274,497
  
305
  
0.45
    
284,129
  
356
  
0.50
    
299,487
  
456
  
0.60
    
324,951
  
571
  
0.70
    
273,838
  
914
  
0.45
    
341,286
  
2,091
  
0.82
  
Total Interest Bearing Deposits
                 1,469,880
#
                    480
  
0.13
%
  
                 1,538,963
#
                    556
  
0.15
%
  
                 1,550,696
#
                    643
  
0.17
%
  
                 1,439,257
#
                    699
  
0.19
%
  
                 1,487,729
#
                    907
  
0.24
%
  
  1,519,664
#
        1,679
  
0.15
%
  
 1,538,650
#
        3,248
  
0.28
%
                                                                                                   
Short-Term Borrowings
  
                       59,184
  
                      71
  
0.48
%
  
                       57,983
  
                      48
  
0.33
%
  
                       45,645
  
                        8
  
0.07
%
  
                       44,573
  
                        6
  
0.05
%
  
                       64,160
  
                      78
  
0.48
%
  
        54,289
  
           127
  
0.31
%
  
       75,976
  
           299
  
0.53
%
Subordinated Notes Payable
                       62,887
  
                    372
  
2.31
    
                       62,887
  
                    372
  
2.34
    
                       62,887
  
                    382
  
2.40
    
                       62,887
  
                    358
  
2.23
    
                       62,887
  
                    339
  
2.11
    
        62,887
  
        1,126
  
2.35
    
       62,887
  
        1,022
  
2.14
  
Other Long-Term Borrowings
38,494
  
372
  
3.85
    
40,617
  
396
  
3.92
    
44,286
  
436
  
3.96
    
45,007
  
452
  
3.99
    
46,435
  
467
  
3.99
    
41,123
  
1,204
  
3.91
    
48,795
  
1,453
  
3.98
  
                                                                                                   
Total Interest Bearing Liabilities
                 1,630,445
$
1,295
  
0.32
%
  
                 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
%
  
  1,677,962
$
4,136
  
0.33
%
  
 1,726,308
$
6,022
  
0.47
%
                                                                                                   
Noninterest Bearing Deposits
                    605,602
            
                    596,690
            
                    610,692
            
                    593,718
            
                    574,184
            
      604,333
            
     559,316
          
Other Liabilities
  
78,446
            
74,633
            
68,254
            
60,197
            
63,954
            
73,795
            
59,635
          
                                                                                                   
Total Liabilities
  
2,314,493
            
2,371,773
            
2,382,460
            
2,245,639
            
2,299,349
            
2,356,090
            
2,345,260
          
                                                                                                   
SHAREOWNERS' EQUITY:
  
251,746
            
252,644
            
254,447
            
264,276
            
263,902
            
252,941
            
262,634
          
                                                                                                   
Total Liabilities and Shareowners' Equity
$
2,566,239
          
$
2,624,417
          
$
2,636,907
          
$
2,509,915
          
$
2,563,251
          
$
2,609,031
          
$
2,607,894
          
                                                                                                   
Interest Rate Spread
    
$
21,179
  
3.73
%
    
$
21,219
  
3.69
%
    
$
21,833
  
3.78
%
    
$
22,560
  
4.07
%
    
$
23,326
  
4.09
%
    
$
64,231
  
3.73
%
    
$
70,287
  
4.07
%
                                                                                                   
Interest Income and Rate Earned(1)
  
22,474
  
4.05
        
22,591
  
4.01
        
23,302
  
4.13
        
24,075
  
4.45
        
25,117
  
4.52
        
68,367
  
4.06
        
76,309
  
4.54
  
Interest Expense and Rate Paid(2)
  
1,295
  
0.23
        
1,372
  
0.24
        
1,469
  
0.26
        
1,515
  
0.28
        
1,791
  
0.32
        
4,136
  
0.25
        
6,022
  
0.36
  
                                                                                                   
Net Interest Margin
    
$
21,179
  
3.82
%
    
$
21,219
  
3.77
%
    
$
21,833
  
3.87
%
    
$
22,560
  
4.17
%
    
$
23,326
  
4.20
%
    
$
64,231
  
3.81
%
    
$
70,287
  
4.18
%
                                                                                                   
                                                                                                   
(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.