Capital City Bank Group, Inc.
Reports Second Quarter 2013 Results
TALLAHASSEE, Fla. (July 23, 2013) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $0.8 million, or $0.05 per diluted share for the second quarter of 2013 compared to net income of $0.8 million, or $0.05 per diluted share for the first quarter of 2013, and a net loss of $1.7 million, or $0.10 per diluted share, for the second quarter of 2012. For the first six months of 2013, the Company reported net income of $1.7 million, or $0.10 per diluted share, compared to a net loss of $2.9 million, or $0.17 per diluted share for the same period in 2012.
Compared to the first quarter of 2013, performance reflects lower noninterest expense of $0.6 million that was partially offset by a higher loan loss provision of $0.4 million, a $0.1 million decline in operating revenues, and a $0.1 million increase in income taxes.
Compared to the second quarter of 2012, the increase in earnings was due to a lower loan loss provision of $4.3 million and a $1.7 million decrease in noninterest expense, partially offset by lower operating revenues of $1.6 million and higher income taxes of $1.9 million.
The increase in earnings for the first half of 2013 versus the comparable period in 2012 is attributable to a lower loan loss provision of $8.0 million and a decrease in noninterest expense of $3.1 million, partially offset by lower operating revenues of $3.2 million and higher income taxes of $3.3 million.
“The business environment is still challenging, but there have been some notable improvements,” stated William G. Smith, Jr., chairman, president and CEO of Capital City Bank Group. “Property values are stabilizing and disposition of our other real estate owned (“OREO”) continues at a brisk pace. Recent financials suggests our clients had a better 2012 than 2011, and leading indicators such as past due loans and gross additions to our non-accrual loan portfolio are at or near their lowest levels so far in this cycle. Unemployment in our larger markets is improving, and state workers in Florida received raises for the first time in six years. In the first half of 2013, nonperforming assets (“NPAs”) are down 18% in addition to the 14% decrease we achieved in 2012, reflecting the slowdown in problem loan inflow and brisk ORE sales. We remain committed to our retail strategy for the disposition of OREO and believe it provides the best economic outcome for our shareowners. Economic uncertainty and deleveraging by consumers and businesses have adversely impacted loan growth, which continues to place pressure on our net interest margin. However, as the economy improves this trend should reverse. Although choppy, we are making steady progress, and I am encouraged about the future,” said Smith.
The Return on Average Assets was 0.13% and the Return on Average Equity was 1.35% for the second quarter of 2013. These metrics were 0.13% and 1.36% for the first quarter of 2013, and -0.26% and -2.75% for the second quarter of 2012, respectively.
For the first half of 2013, the Return on Average Assets was 0.13% and the Return on Average Equity was 1.36% compared to -0.22% and -2.29%, respectively, for the first half of 2012.
Discussion of Financial Condition
Average earning assets were $2.206 billion for the second quarter of 2013, a decrease of $34.2 million, or 1.5%, from the first quarter of 2013 and an increase of $27.7 million, or 1.4%, over the fourth quarter of 2012. The change in earning assets from the prior quarter reflects a decline in the overnight funds position resulting from a lower level of public fund deposits. The increase compared to the fourth quarter of 2012 primarily reflects the higher level of deposits resulting from an increase in the public funds. The change in both quarters reflects the seasonal fluctuation in public fund deposits as the fourth quarter generally reflects the seasonal low while the first quarter the seasonal high.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $419.0 million during the second quarter of 2013 compared to an average net overnight funds sold position of $448.4 million in the first quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012. The lower balance when compared to the first quarter of 2013 primarily reflects the decline in public funds and higher investment portfolio, partially offset by a lower level of loans. The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio and a higher level of public funds, partially offset by an increase in the investment portfolio.
Economic uncertainty and deleveraging by our clients continues to generate historically high levels of liquidity, which, given the current operating environment, are difficult to profitability deploy without taking inordinate risks. Where practical we are working to lower the level of overnight funds by adding to our investment portfolio with short-duration securities and reducing deposit balances. One strategy we are using to lower deposit balances is a fully-insured money market account which is offered by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.
When compared to the first quarter of 2013 and fourth quarter of 2012, average loans declined by $39.5 million and $61.4 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate 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 is impacted by weak loan demand attributable to the trend toward consumers and businesses deleveraging, lack of consumer confidence and a persistently sluggish economy.
Efforts to stimulate new loan growth are ongoing. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try and mitigate the significant impact that consumer and business deleveraging is having on our portfolio.
Nonperforming assets (nonaccrual loans and OREO) totaled $96.7 million at the end of the second quarter of 2013, a decrease of $7.2 million from the first quarter of 2013 and $20.9 million from the fourth quarter of 2012. Nonaccrual loans totaled $41.6 million at the end of the second quarter of 2013, a decrease of $3.8 million from the first quarter of 2013 and $22.6 million from the fourth quarter of 2012. Nonaccrual loan additions totaled $10.8 million in the second quarter of 2013 and $18.5 million for the first six months of 2013, which compares to $33.0 million in the first half of 2012. The balance of OREO totaled $55.1 million at the end of the second quarter of 2013, a decrease of $3.3 million from the first quarter of 2013 and an increase of $1.7 million over the fourth quarter of 2012. For the second quarter of 2013 we added properties totaling $4.4 million, sold properties totaling $6.6 million, and recorded valuation adjustments totaling $1.1 million. For the first six months of 2013, we have added properties totaling $17.3 million, sold properties totaling $13.4 million, and recorded valuation adjustments totaling $2.2 million. Nonperforming assets represented 3.77% of total assets at June 30, 2013 compared to 3.99% at March 31, 2013 and 4.47% at December 31, 2012.
Average total deposits were $2.068 billion for the second quarter of 2013, a decrease of $35.3 million, or 1.7%, from the first quarter of 2013 and higher by $16.5 million, or 0.8%, from the fourth quarter of 2012. The decrease in deposits when compared to the first quarter of 2013 resulted primarily from the reduction in the level of public funds and certificates of deposit. When compared to the fourth quarter of 2012, the increase was a result of higher public funds and savings accounts, partially offset by lower certificates of deposit and regular NOWs.
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.
Average borrowings decreased by $4.8 million when compared to the first quarter of 2013 as a result of payoff/amortization of FHLB advances, and increased by $4.8 million when compared to the fourth quarter of 2012, primarily a result of higher repurchase agreement balances.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2013 was $19.7 million compared to $20.1 million for the first quarter of 2013 and $21.2 million for the second quarter of 2012. 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 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 attributable to favorable repricing on FHLB advances and certificates of deposit, which reflects both lower balances and favorable repricing. For the six months ended June 30, 2013, tax equivalent net interest income totaled $39.8 million compared to $43.1 million for the same period of 2012.
Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment. Loans have declined by approximately $110 million since the second quarter of 2012. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.
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 2013 was 3.59%, a decrease of five basis points from the first quarter of 2013, and a decline of 18 basis points from the second quarter of 2012. The decrease in the margin for both 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 2013 was $1.4 million compared to $1.1 million in the first quarter of 2013 and $5.7 million for the second quarter of 2012. For the first six months of 2013, the loan loss provision totaled $2.5 million compared to $10.5 million for the same period in 2012. The increase compared to the first quarter of 2013 was primarily due to a reserve addition for one existing impaired loan. The reduction from both of the prior year periods reflects a declining trend in loan losses as well as a much slower inflow of problem loans as evidenced by a lower level of loan delinquencies, classified loans and impaired loans. Net charge-offs for the second quarter of 2013 totaled $2.0 million, or 0.54% (annualized), of average loans compared to $2.4 million, or 0.66%, for the first quarter of 2013 and $7.0 million, or 1.80%, in the second quarter of 2012. For the first half of 2013, net charge-offs totaled $4.4 million, or 0.60% (annualized), of average loans compared to $11.6 million, or 1.48%, for the same period of 2012. Lower charge-offs in our residential real estate and commercial real estate portfolios drove the decrease in loan losses comparing 2013 to 2012. Charge-offs for the first half of 2012 reflect the resolution of higher loss exposure construction and land loans. At quarter-end, the allowance for loan losses of $27.3 million was 1.89% of outstanding loans (net of overdrafts) and provided coverage of 66% of nonperforming loans compared to 1.90% and 61%, respectively, at March 31, 2013, and 1.93% and 45%, respectively, at December 31, 2012.
Noninterest income for the second quarter of 2013 totaled $13.9 million, an increase of $0.3 million, or 1.9%, over the first quarter of 2013 and a decrease of $0.1 million, or 0.4%, from the second quarter of 2012. The increase over the first quarter of 2013 was driven by higher other income of $0.2 million and bank card fees of $0.1 million. A higher level of gains from the sale of OREO properties and an increase in miscellaneous income drove the increase in other income. Bank card fees increased due to a higher level of card activity. Compared to the second quarter of 2012, the decrease was primarily due to lower deposit fees attributable to a higher level of charged-off checking accounts. For the first six months of 2013, noninterest income totaled $27.4 million, a $0.1 million decrease from the same period of 2012 reflective of lower deposit fees of $0.2 million, bank card fees of $0.1 million, and other income of $0.1 million, partially offset by higher mortgage banking fees of $0.3 million and wealth management fees of $0.1 million. The decline in deposit fees reflects a higher level of charged-off checking accounts. Bank card fees declined due to a change in transaction mix yielding a lower interchange rate. The decrease in other income reflects a lower level of gains from the sale of OREO properties. Increased client trading activity drove the improvement in wealth management fees, specifically retail brokerage fees. The increase in mortgage fees was attributable to a higher level of loans funded and a higher margin for sold loans.
Noninterest expense for the second quarter of 2013 totaled $30.6 million, a decrease of $0.6 million, or 2.0%, from the first quarter of 2013 attributable to lower OREO expense of $0.5 million and reductions in premises expense of $0.1 million and furniture/equipment expense of $0.1 million. The decrease in OREO expense was due to a reduction in losses from the sale of properties. Declines were realized in most of the premises and furniture/equipment expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. Compared to the second quarter of 2012, noninterest expense decreased by $1.7 million, or 5.3%, reflective of a decline in OREO expense of $1.0 million, a reduction in both premises and furniture expense totaling $0.4 million, and lower other expense of $0.8 million, partially offset by higher compensation expense of $0.5 million. For the first six months of 2013, noninterest expense totaled $61.8 million, a decrease of $3.1 million, or 4.8%, from the same period of 2012 attributable to lower OREO expense of $1.6 million, declines in both premises and furniture/equipment expense totaling $0.4 million, and lower other expense of $1.3 million, partially offset by higher compensation expense of $0.4 million. The reduction in OREO expense from both prior year periods was attributable to a lower level of losses from the sale of properties and lower valuation adjustments. Lower carrying costs for properties also contributed to the reduction for the six month period. Compared to both prior year periods declines were realized in most of the premises and furniture/equipment expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. Reductions in legal fees, professional fees, advertising costs, and postage costs drove the decline in other expense from both prior year periods. Severance costs recorded in the second quarter of 2012 related to the closing of banking offices and outsourcing of our items processing function also contributed to the favorable variance in other expense. Higher stock compensation expense and pension expense partially offset by lower salary expense drove the increases in compensation expense from both prior year periods.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded bank holding 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 63 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; a decrease to 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; 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 long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; 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; 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, 2012, 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, 2013 | Mar 31, 2013 | Jun 30, 2012 | Jun 30, 2013 | Jun 30, 2012 | |||||||||||||||
| EARNINGS | ||||||||||||||||||||
| Net Income (Loss) | $ | 843 | $ | 839 | $ | (1,726 | ) | $ | 1,682 | $ | (2,888 | ) | ||||||||
| Net Income (Loss) Per Common Share | $ | 0.05 | $ | 0.05 | $ | (0.10 | ) | $ | 0.10 | $ | (0.17 | ) | ||||||||
| PERFORMANCE | ||||||||||||||||||||
| Return on Average Assets | 0.13 | % | 0.13 | % | -0.26 | % | 0.13 | % | -0.22 | % | ||||||||||
| Return on Average Equity | 1.35 | % | 1.36 | % | -2.75 | % | 1.36 | % | -2.29 | % | ||||||||||
| Net Interest Margin | 3.59 | % | 3.64 | % | 3.77 | % | 3.61 | % | 3.82 | % | ||||||||||
| Noninterest Income as % of Operating Revenue | 41.68 | % | 40.62 | % | 39.88 | % | 41.15 | % | 39.26 | % | ||||||||||
| Efficiency Ratio | 91.07 | % | 92.67 | % | 91.18 | % | 91.87 | % | 91.61 | % | ||||||||||
| CAPITAL ADEQUACY | ||||||||||||||||||||
| Tier 1 Capital Ratio | 15.36 | % | 14.95 | % | 14.17 | % | 15.36 | % | 14.17 | % | ||||||||||
| Total Capital Ratio | 16.73 | % | 16.32 | % | 15.54 | % | 16.73 | % | 15.54 | % | ||||||||||
| Tangible Common Equity Ratio | 6.64 | % | 6.49 | % | 6.40 | % | 6.64 | % | 6.40 | % | ||||||||||
| Leverage Ratio | 10.07 | % | 9.81 | % | 9.60 | % | 10.07 | % | 9.60 | % | ||||||||||
| Equity to Assets | 9.73 | % | 9.54 | % | 9.41 | % | 9.73 | % | 9.41 | % | ||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Allowance as % of Non-Performing Loans | 65.66 | % | 61.17 | % | 40.03 | % | 65.66 | % | 40.03 | % | ||||||||||
| Allowance as a % of Loans | 1.89 | % | 1.90 | % | 1.93 | % | 1.89 | % | 1.93 | % | ||||||||||
| Net Charge-Offs as % of Average Loans | 0.54 | % | 0.66 | % | 1.80 | % | 0.60 | % | 1.48 | % | ||||||||||
| Nonperforming Assets as % of Loans and ORE | 6.44 | % | 6.81 | % | 8.23 | % | 6.44 | % | 8.23 | % | ||||||||||
| Nonperforming Assets as % of Total Assets | 3.77 | % | 3.99 | % | 5.02 | % | 3.77 | % | 5.02 | % | ||||||||||
| STOCK PERFORMANCE | ||||||||||||||||||||
| High | $ | 12.64 | $ | 12.54 | $ | 8.73 | $ | 12.64 | $ | 9.91 | ||||||||||
| Low | 10.12 | 10.95 | 6.35 | 10.12 | 6.35 | |||||||||||||||
| Close | 11.53 | 12.35 | 7.37 | 11.53 | 7.37 | |||||||||||||||
| Average Daily Trading Volume | $ | 16,366 | $ | 23,519 | $ | 37,926 | $ | 19,827 | $ | 31,391 | ||||||||||
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
| 2013 | 2012 | |||||||||||||||||||
| (Dollars in thousands) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and Due From Banks | $ | 67,811 | $ | 52,677 | $ | 66,238 | $ | 53,076 | $ | 57,477 | ||||||||||
| Funds Sold and Interest Bearing Deposits | 391,457 | 461,714 | 443,494 | 314,318 | 434,814 | |||||||||||||||
| Total Cash and Cash Equivalents | 459,268 | 514,391 | 509,732 | 367,394 | 492,291 | |||||||||||||||
| Investment Securities, Available-for-Sale | 350,614 | 307,502 | 296,985 | 288,166 | 280,753 | |||||||||||||||
| Loans, Net of Unearned Interest | ||||||||||||||||||||
| Commercial, Financial, & Agricultural | 126,931 | 125,905 | 139,850 | 135,939 | 136,736 | |||||||||||||||
| Real Estate - Construction | 40,726 | 42,968 | 43,740 | 43,278 | 46,803 | |||||||||||||||
| Real Estate - Commercial | 581,501 | 599,517 | 613,625 | 609,671 | 605,819 | |||||||||||||||
| Real Estate - Residential | 312,714 | 311,189 | 318,400 | 341,044 | 353,198 | |||||||||||||||
| Real Estate - Home Equity | 232,530 | 233,205 | 236,263 | 239,446 | 242,929 | |||||||||||||||
| Consumer | 142,620 | 146,043 | 150,728 | 154,389 | 162,899 | |||||||||||||||
| Other Loans | 5,904 | 5,187 | 11,547 | 6,891 | 5,638 | |||||||||||||||
| Overdrafts | 2,554 | 2,307 | 7,149 | 2,637 | 2,214 | |||||||||||||||
| Total Loans, Net of Unearned Interest | 1,445,479 | 1,466,321 | 1,521,302 | 1,533,295 | 1,556,236 | |||||||||||||||
| Allowance for Loan Losses | (27,294 | ) | (27,803 | ) | (29,167 | ) | (30,222 | ) | (29,929 | ) | ||||||||||
| Loans, Net | 1,418,185 | 1,438,518 | 1,492,135 | 1,503,073 | 1,526,307 | |||||||||||||||
| Premises and Equipment, Net | 104,743 | 105,883 | 107,092 | 109,003 | 110,302 | |||||||||||||||
| Intangible Assets | 84,937 | 84,985 | 85,053 | 85,161 | 85,269 | |||||||||||||||
| Other Real Estate Owned | 55,087 | 58,421 | 53,426 | 53,172 | 58,059 | |||||||||||||||
| Other Assets | 89,024 | 95,613 | 89,561 | 87,815 | 92,869 | |||||||||||||||
| Total Other Assets | 333,791 | 344,902 | 335,132 | 335,151 | 346,499 | |||||||||||||||
| Total Assets | $ | 2,561,858 | $ | 2,605,313 | $ | 2,633,984 | $ | 2,493,784 | $ | 2,645,850 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest Bearing Deposits | $ | 644,739 | $ | 616,017 | $ | 609,235 | $ | 596,660 | $ | 623,130 | ||||||||||
| NOW Accounts | 706,101 | 765,030 | 842,435 | 703,327 | 789,103 | |||||||||||||||
| Money Market Accounts | 287,340 | 299,118 | 267,766 | 285,084 | 288,352 | |||||||||||||||
| Regular Savings Accounts | 204,594 | 200,492 | 184,541 | 181,523 | 178,388 | |||||||||||||||
| Certificates of Deposit | 228,349 | 233,325 | 241,019 | 254,000 | 271,413 | |||||||||||||||
| Total Deposits | 2,071,123 | 2,113,982 | 2,144,996 | 2,020,594 | 2,150,386 | |||||||||||||||
| Short-Term Borrowings | 46,081 | 50,682 | 47,435 | 42,388 | 69,449 | |||||||||||||||
| Subordinated Notes Payable | 62,887 | 62,887 | 62,887 | 62,887 | 62,887 | |||||||||||||||
| Other Long-Term Borrowings | 41,251 | 41,224 | 46,859 | 38,126 | 38,846 | |||||||||||||||
| Other Liabilities | 91,227 | 87,930 | 84,918 | 79,427 | 75,260 | |||||||||||||||
| Total Liabilities | 2,312,569 | 2,356,705 | 2,387,095 | 2,243,422 | 2,396,828 | |||||||||||||||
| SHAREOWNERS' EQUITY | ||||||||||||||||||||
| Common Stock | 173 | 173 | 172 | 172 | 172 | |||||||||||||||
| Additional Paid-In Capital | 40,210 | 39,580 | 38,707 | 38,493 | 38,260 | |||||||||||||||
| Retained Earnings | 239,251 | 238,408 | 237,569 | 235,694 | 234,573 | |||||||||||||||
| Accumulated Other Comprehensive Loss, Net of Tax | (30,345 | ) | (29,553 | ) | (29,559 | ) | (23,997 | ) | (23,983 | ) | ||||||||||
| Total Shareowners' Equity | 249,289 | 248,608 | 246,889 | 250,362 | 249,022 | |||||||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,561,858 | $ | 2,605,313 | $ | 2,633,984 | $ | 2,493,784 | $ | 2,645,850 | ||||||||||
| OTHER BALANCE SHEET DATA | ||||||||||||||||||||
| Earning Assets | $ | 2,187,549 | $ | 2,235,537 | $ | 2,261,781 | $ | 2,135,779 | $ | 2,271,803 | ||||||||||
| Intangible Assets | ||||||||||||||||||||
| Goodwill | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||
| Core Deposits | — | — | 19 | 79 | 139 | |||||||||||||||
| Other | 126 | 174 | 223 | 271 | 319 | |||||||||||||||
| Interest Bearing Liabilities | 1,576,601 | 1,652,758 | 1,692,942 | 1,567,335 | 1,698,438 | |||||||||||||||
| Book Value Per Diluted Share | $ | 14.36 | $ | 14.35 | $ | 14.31 | $ | 14.54 | $ | 14.48 | ||||||||||
| Tangible Book Value Per Diluted Share | 9.47 | 9.44 | 9.38 | 9.59 | 9.52 | |||||||||||||||
| Actual Basic Shares Outstanding | 17,336 | 17,319 | 17,232 | 17,223 | 17,198 | |||||||||||||||
| Actual Diluted Shares Outstanding | 17,372 | 17,326 | 17,259 | 17,223 | 17,198 | |||||||||||||||
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
| Six Months Ended | ||||||||||||||||||||||||||||
| 2013 | 2012 | June 30, | ||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | 2013 | 2012 | |||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||
| Interest and Fees on Loans | $ | 19,709 | $ | 20,154 | $ | 20,756 | $ | 21,274 | $ | 21,359 | $ | 39,863 | $ | 43,364 | ||||||||||||||
| Investment Securities | 710 | 704 | 808 | 798 | 834 | 1,414 | 1,734 | |||||||||||||||||||||
| Funds Sold | 279 | 270 | 223 | 254 | 244 | 549 | 468 | |||||||||||||||||||||
| Total Interest Income | 20,698 | 21,128 | 21,787 | 22,326 | 22,437 | 41,826 | 45,567 | |||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||
| Deposits | 367 | 415 | 429 | 480 | 556 | 782 | 1,199 | |||||||||||||||||||||
| Short-Term Borrowings | 61 | 82 | 69 | 71 | 48 | 143 | 56 | |||||||||||||||||||||
| Subordinated Notes Payable | 342 | 339 | 351 | 372 | 372 | 681 | 754 | |||||||||||||||||||||
| Other Long-Term Borrowings | 333 | 347 | 383 | 372 | 396 | 680 | 832 | |||||||||||||||||||||
| Total Interest Expense | 1,103 | 1,183 | 1,232 | 1,295 | 1,372 | 2,286 | 2,841 | |||||||||||||||||||||
| Net Interest Income | 19,595 | 19,945 | 20,555 | 21,031 | 21,065 | 39,540 | 42,726 | |||||||||||||||||||||
| Provision for Loan Losses | 1,450 | 1,070 | 2,766 | 2,864 | 5,743 | 2,520 | 10,536 | |||||||||||||||||||||
| Net Interest Income after Provision for Loan Losses | 18,145 | 18,875 | 17,789 | 18,167 | 15,322 | 37,020 | 32,190 | |||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||
| Deposit Fees | 6,217 | 6,165 | 6,764 | 6,406 | 6,313 | 12,382 | 12,622 | |||||||||||||||||||||
| Data Processing Fees | 670 | 653 | 671 | 687 | 680 | 1,323 | 1,355 | |||||||||||||||||||||
| Wealth Management Fees | 1,901 | 1,915 | 1,818 | 1,686 | 1,904 | 3,816 | 3,677 | |||||||||||||||||||||
| Mortgage Banking Fees | 968 | 1,043 | 910 | 978 | 864 | 2,011 | 1,712 | |||||||||||||||||||||
| Bank Card Fees | 2,754 | 2,661 | 2,612 | 2,616 | 2,784 | 5,415 | 5,555 | |||||||||||||||||||||
| Other | 1,339 | 1,151 | 1,343 | 1,202 | 1,361 | 2,490 | 2,571 | |||||||||||||||||||||
| Total Noninterest Income | 13,849 | 13,588 | 14,118 | 13,575 | 13,906 | 27,437 | 27,492 | |||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
| Compensation | 16,647 | 16,739 | 15,772 | 15,510 | 16,117 | 33,386 | 32,960 | |||||||||||||||||||||
| Premises | 2,149 | 2,265 | 2,217 | 2,345 | 2,303 | 4,414 | 4,590 | |||||||||||||||||||||
| Furniture and Equipment | 2,012 | 2,153 | 2,212 | 2,245 | 2,245 | 4,165 | 4,446 | |||||||||||||||||||||
| Intangible Amortization | 48 | 68 | 108 | 108 | 107 | 116 | 215 | |||||||||||||||||||||
| Other Real Estate | 2,408 | 2,884 | 1,900 | 2,603 | 3,432 | 5,292 | 6,925 | |||||||||||||||||||||
| Other | 7,318 | 7,091 | 7,259 | 7,390 | 8,089 | 14,409 | 15,754 | |||||||||||||||||||||
| Total Noninterest Expense | 30,582 | 31,200 | 29,468 | 30,201 | 32,293 | 61,782 | 64,890 | |||||||||||||||||||||
| OPERATING PROFIT (LOSS) | 1,412 | 1,263 | 2,439 | 1,541 | (3,065 | ) | 2,675 | (5,208 | ) | |||||||||||||||||||
| Income Tax Expense (Benefit) | 569 | 424 | 564 | 420 | (1,339 | ) | 993 | (2,320 | ) | |||||||||||||||||||
| NET INCOME (LOSS) | $ | 843 | $ | 839 | $ | 1,875 | $ | 1,121 | $ | (1,726 | ) | $ | 1,682 | $ | (2,888 | ) | ||||||||||||
| PER SHARE DATA | ||||||||||||||||||||||||||||
| Basic Income (Loss) | $ | 0.05 | $ | 0.05 | $ | 0.11 | $ | 0.07 | $ | (0.10 | ) | $ | 0.10 | $ | (0.17 | ) | ||||||||||||
| Diluted Income (Loss) | $ | 0.05 | $ | 0.05 | $ | 0.11 | $ | 0.07 | $ | (0.10 | ) | $ | 0.10 | $ | (0.17 | ) | ||||||||||||
| AVERAGE SHARES | ||||||||||||||||||||||||||||
| Basic | 17,319 | 17,302 | 17,229 | 17,215 | 17,192 | 17,311 | 17,187 | |||||||||||||||||||||
| Diluted | 17,355 | 17,309 | 17,256 | 17,228 | 17,192 | 17,364 | 17,187 | |||||||||||||||||||||
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
| 2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||
| (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 | $ | 27,803 | $ | 29,167 | $ | 30,222 | $ | 29,929 | $ | 31,217 | ||||||||||
| Provision for Loan Losses | 1,450 | 1,070 | 2,766 | 2,864 | 5,743 | |||||||||||||||
| Net Charge-Offs | 1,959 | 2,434 | 3,821 | 2,571 | 7,031 | |||||||||||||||
| Balance at End of Period | $ | 27,294 | $ | 27,803 | $ | 29,167 | $ | 30,222 | $ | 29,929 | ||||||||||
| As a % of Loans | 1.89 | % | 1.90 | % | 1.93 | % | 1.97 | % | 1.93 | % | ||||||||||
| As a % of Nonperforming Loans | 65.66 | % | 61.17 | % | 45.42 | % | 40.80 | % | 40.03 | % | ||||||||||
| CHARGE-OFFS | ||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 119 | $ | 154 | $ | 166 | $ | 331 | $ | 57 | ||||||||||
| Real Estate - Construction | 110 | 610 | 227 | 127 | 275 | |||||||||||||||
| Real Estate - Commercial | 1,050 | 1,043 | 468 | 512 | 3,519 | |||||||||||||||
| Real Estate - Residential | 1,053 | 683 | 2,877 | 981 | 3,894 | |||||||||||||||
| Real Estate - Home Equity | 322 | 113 | 745 | 834 | 425 | |||||||||||||||
| Consumer | 351 | 296 | 488 | 355 | 550 | |||||||||||||||
| Total Charge-Offs | $ | 3,005 | $ | 2,899 | $ | 4,971 | $ | 3,140 | $ | 8,720 | ||||||||||
| RECOVERIES | ||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 38 | $ | 51 | $ | 87 | $ | 53 | $ | 83 | ||||||||||
| Real Estate - Construction | — | — | 7 | 9 | 27 | |||||||||||||||
| Real Estate - Commercial | 144 | 38 | 468 | 34 | 42 | |||||||||||||||
| Real Estate - Residential | 396 | 96 | 83 | 76 | 969 | |||||||||||||||
| Real Estate - Home Equity | 224 | 18 | 250 | 15 | 116 | |||||||||||||||
| Consumer | 244 | 262 | 255 | 382 | 452 | |||||||||||||||
| Total Recoveries | $ | 1,046 | $ | 465 | $ | 1,150 | $ | 569 | $ | 1,689 | ||||||||||
| NET CHARGE-OFFS | $ | 1,959 | $ | 2,434 | $ | 3,821 | $ | 2,571 | $ | 7,031 | ||||||||||
| Net Charge-Offs as a % of Average Loans(1) | 0.54 | % | 0.66 | % | 1.00 | % | 0.66 | % | 1.80 | % | ||||||||||
| RISK ELEMENT ASSETS | ||||||||||||||||||||
| Nonaccruing Loans | $ | 41,566 | $ | 45,448 | $ | 64,222 | $ | 74,075 | $ | 74,770 | ||||||||||
| Other Real Estate Owned | 55,087 | 58,421 | 53,426 | 53,172 | 58,059 | |||||||||||||||
| Total Nonperforming Assets | $ | 96,653 | $ | 103,869 | $ | 117,648 | $ | 127,247 | $ | 132,829 | ||||||||||
| Past Due Loans 30-89 Days | $ | 9,017 | $ | 9,274 | $ | 9,934 | $ | 12,923 | $ | 16,695 | ||||||||||
| Past Due Loans 90 Days or More | — | — | — | — | — | |||||||||||||||
| Performing Troubled Debt Restructuring's | $ | 52,729 | $ | 53,108 | $ | 47,474 | $ | 45,973 | $ | 38,734 | ||||||||||
| Nonperforming Loans as a % of Loans | 2.88 | % | 3.10 | % | 4.22 | % | 4.83 | % | 4.80 | % | ||||||||||
| Nonperforming Assets as a % of | ||||||||||||||||||||
| Loans and Other Real Estate | 6.44 | % | 6.81 | % | 7.47 | % | 8.02 | % | 8.23 | % | ||||||||||
| Nonperforming Assets as a % of Total Assets | 3.77 | % | 3.99 | % | 4.47 | % | 5.10 | % | 5.02 | % | ||||||||||
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
| Second Quarter 2013 | First Quarter 2013 | Fourth Quarter 2012 | Third Quarter 2012 | Second Quarter 2012 | Jun 2013 YTD | Jun 2012 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 | $ | 1,456,904 | 19,790 | 5.45 | % | $ | 1,496,432 | 20,228 | 5.48 | % | $ | 1,518,280 | 20,837 | 5.46 | % | $ | 1,541,262 | 21,366 | 5.51 | % | $ | 1,570,827 | 21,456 | 5.49 | % | $ | 1,476,559 | $ | 40,018 | 5.47 | % | $ | 1,583,654 | $ | 43,577 | 5.53 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable Investment Securities | 225,770 | 578 | 1.02 | 215,087 | 590 | 1.10 | 219,985 | 697 | 1.26 | 214,431 | 691 | 1.28 | 216,952 | 730 | 1.35 | 220,458 | 1,168 | 1.03 | 229,716 | 1,524 | 1.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax-Exempt Investment Securities | 104,981 | 200 | 0.76 | 80,946 | 174 | 0.86 | 74,647 | 172 | 0.92 | 67,446 | 163 | 0.97 | 63,715 | 161 | 1.01 | 93,030 | 374 | 0.80 | 60,014 | 323 | 1.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Investment Securities | 330,751 | 778 | 0.94 | 296,033 | 764 | 1.04 | 294,632 | 869 | 1.17 | 281,877 | 854 | 1.21 | 280,667 | 891 | 1.27 | 313,488 | 1,542 | 0.98 | 289,730 | 1,847 | 1.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Funds Sold | 419,039 | 279 | 0.27 | 448,424 | 270 | 0.24 | 366,034 | 223 | 0.24 | 386,027 | 254 | 0.26 | 411,353 | 244 | 0.24 | 433,650 | 549 | 0.26 | 392,193 | 469 | 0.24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Earning Assets | 2,206,694 | $ | 20,847 | 3.79 | % | 2,240,889 | $ | 21,262 | 3.85 | % | 2,178,946 | $ | 21,929 | 4.00 | % | 2,209,166 | $ | 22,474 | 4.05 | % | 2,262,847 | $ | 22,591 | 4.01 | % | 2,223,697 | $ | 42,109 | 3.82 | % | 2,265,577 | $ | 45,893 | 4.07 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and Due From Banks | 49,081 | 50,679 | 51,344 | 47,207 | 47,711 | 49,875 | 48,569 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for Loan Losses | (29,012 | ) | (30,467 | ) | (30,605 | ) | (30,260 | ) | (31,599 | ) | (29,735 | ) | (31,491 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Assets | 337,765 | 337,579 | 334,326 | 340,126 | 345,458 | 337,673 | 348,007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,564,528 | $ | 2,598,680 | $ | 2,534,011 | $ | 2,566,239 | $ | 2,624,417 | $ | 2,581,510 | $ | 2,630,662 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing Deposits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOW Accounts | $ | 716,459 | $ | 124 | 0.07 | % | $ | 788,660 | $ | 156 | 0.08 | % | $ | 714,682 | $ | 131 | 0.07 | % | $ | 740,178 | $ | 144 | 0.08 | % | $ | 809,172 | $ | 167 | 0.08 | % | $ | 752,360 | $ | 280 | 0.08 | % | $ | 816,289 | $ | 359 | 0.09 | % | ||||||||||||||||||||||||||||||||||||||||||
| Money Market Accounts | 289,637 | 54 | 0.07 | 282,847 | 54 | 0.08 | 275,458 | 57 | 0.08 | 287,250 | 60 | 0.08 | 280,371 | 63 | 0.09 | 286,261 | 108 | 0.08 | 278,964 | 137 | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings Accounts | 202,784 | 25 | 0.05 | 193,033 | 23 | 0.05 | 182,760 | 23 | 0.05 | 179,445 | 23 | 0.05 | 174,923 | 21 | 0.05 | 197,935 | 48 | 0.05 | 170,263 | 42 | 0.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Time Deposits | 231,134 | 164 | 0.29 | 238,441 | 181 | 0.31 | 247,679 | 218 | 0.35 | 263,007 | 253 | 0.38 | 274,497 | 305 | 0.45 | 234,768 | 346 | 0.30 | 279,314 | 661 | 0.48 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Deposits | 1,440,014 | 367 | 0.10 | % | 1,502,981 | 414 | 0.11 | % | 1,420,579 | 429 | 0.12 | % | 1,469,880 | 480 | 0.13 | % | 1,538,963 | 556 | 0.15 | % | 1,471,324 | 782 | 0.11 | % | 1,544,830 | 1,199 | 0.16 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Borrowings | 52,399 | 61 | 0.47 | % | 55,255 | 82 | 0.60 | % | 45,893 | 69 | 0.59 | % | 59,184 | 71 | 0.48 | % | 57,983 | 48 | 0.33 | % | 53,819 | 143 | 0.54 | % | 51,814 | 56 | 0.22 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subordinated Notes Payable | 62,887 | 342 | 2.15 | 62,887 | 339 | 2.15 | 62,887 | 351 | 2.19 | 62,887 | 372 | 2.31 | 62,887 | 372 | 2.34 | 62,887 | 681 | 2.15 | 62,887 | 754 | 2.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Long-Term Borrowings | 40,942 | 333 | 3.26 | 42,898 | 348 | 3.29 | 42,673 | 383 | 3.57 | 38,494 | 372 | 3.85 | 40,617 | 396 | 3.92 | 41,915 | 680 | 3.27 | 42,451 | 832 | 3.94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Liabilities | 1,596,242 | $ | 1,103 | 0.28 | % | 1,664,021 | $ | 1,183 | 0.29 | % | 1,572,032 | $ | 1,232 | 0.31 | % | 1,630,445 | $ | 1,295 | 0.32 | % | 1,700,450 | $ | 1,372 | 0.32 | % | 1,629,945 | $ | 2,286 | 0.28 | % | 1,701,982 | $ | 2,841 | 0.34 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest Bearing Deposits | 627,633 | 599,986 | 630,520 | 605,602 | 596,690 | 613,886 | 603,691 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities | 90,168 | 85,116 | 78,442 | 78,446 | 74,633 | 87,656 | 71,444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 2,314,043 | 2,349,123 | 2,280,994 | 2,314,493 | 2,371,773 | 2,331,487 | 2,377,117 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREOWNERS' EQUITY: | 250,485 | 249,557 | 253,017 | 251,746 | 252,644 | 250,023 | 253,545 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,564,528 | $ | 2,598,680 | $ | 2,534,011 | $ | 2,566,239 | $ | 2,624,417 | $ | 2,581,510 | $ | 2,630,662 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Spread | $ | 19,744 | 3.51 | % | $ | 20,079 | 3.56 | % | $ | 20,697 | 3.69 | % | $ | 21,179 | 3.73 | % | $ | 21,219 | 3.69 | % | $ | 39,823 | 3.54 | % | $ | 43,052 | 3.73 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Income and Rate Earned(1) | 20,847 | 3.79 | 21,262 | 3.85 | 21,929 | 4.00 | 22,474 | 4.05 | 22,591 | 4.01 | 42,109 | 3.82 | 45,893 | 4.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Expense and Rate Paid(2) | 1,103 | 0.20 | 1,183 | 0.21 | 1,232 | 0.22 | 1,295 | 0.23 | 1,372 | 0.24 | 2,286 | 0.21 | 2,841 | 0.25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Margin | $ | 19,744 | 3.59 | % | $ | 20,079 | 3.64 | % | $ | 20,697 | 3.78 | % | $ | 21,179 | 3.82 | % | $ | 21,219 | 3.77 | % | $ | 39,823 | 3.61 | % | $ | 43,052 | 3.82 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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.