Capital City Bank Group, Inc.
Reports Second Quarter 2014 Results
TALLAHASSEE, Fla. (July 22, 2014) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $1.5 million, or $0.08 per diluted share for the second quarter of 2014 compared to net income of $3.8 million, or $0.22 per diluted share for the first quarter of 2014, and $0.8 million, or $0.05 per diluted share, for the second quarter of 2013. For the first six months of 2014, the Company reported net income of $5.2 million, or $0.30 per diluted share, compared to net income of $1.7 million, or $0.10 per diluted share for the same period in 2013.
Compared to the first quarter of 2014, performance reflects higher noninterest income of $0.6 million and net interest income of $0.1 million that was offset by increases in noninterest expense of $0.7 million, loan loss provision of $0.2 million, and income taxes of $2.1 million.
Compared to the second quarter of 2013, the increase in earnings was due to a lower loan loss provision of $1.0 million and a $1.4 million decrease in noninterest expense, partially offset by lower net interest income of $1.1 million, noninterest income of $0.4 million, and higher income taxes of $0.2 million.
The increase in earnings for the first six months of 2014 versus the comparable period in 2013 was attributable to lower noninterest expense of $4.1 million, a lower loan loss provision of $1.7 million, and lower income taxes of $1.6 million, partially offset by lower net interest income of $2.8 million and noninterest income of $1.1 million.
“Capital City posted solid performance in the second quarter, and our year-to-date numbers are strong,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “Quarter over quarter, nonperforming assets fell 13.2% and, while it is too early to suggest the loan portfolio has stabilized, it was encouraging to report growth for the second consecutive quarter. Loan growth coupled with additions to our investment portfolio helped stabilize our net interest margin quarter over quarter. Our retail approach to disposing of ORE properties continues to produce positive results. In fact, second quarter ORE sales totaled $8.6 million – our second best quarter to date. Improving our credit quality and stabilizing our loan portfolio remain primary areas of focus in our 2014 strategy, as will continued efforts to right-size our expense base and identify new revenue opportunities. The economic outlook continues to brighten, though the pace of improvement is slow. There is still work to be done, but I am proud of our accomplishments and like our momentum coming out of the first half of 2014.”
The Return on Average Assets was 0.23% and the Return on Average Equity was 2.09% for the second quarter of 2014. These metrics were 0.59% and 5.44% for the first quarter of 2014, and 0.13% and 1.35% for the second quarter of 2013, respectively.
For the first six months of 2014, the Return on Average Assets was 0.41% and the Return on Average Equity was 3.75% compared to 0.13% and 1.36%, respectively, for the first half of 2013.
Discussion of Financial Condition
Average earning assets were $2.261 billion for the second quarter of 2014, a decrease of $7.4 million, or 0.3%, from the first quarter of 2014 and an increase of $54.6 million, or 2.5%, over the fourth quarter of 2013. The change in earning assets from the first quarter of 2014 reflects a lower level of public fund deposits and problem loan resolution. The increase compared to the fourth quarter of 2013 reflects a higher level of investments and loans, which as funded through growth in deposits.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $408.7 million during the second quarter of 2014 compared to an average net overnight funds sold position of $467.3 million in the first quarter of 2014 and an average overnight funds sold position of $411.6 million in the fourth quarter of 2013. The lower balance when compared to the first quarter of 2014 primarily reflects higher loan and investment portfolios, and the lower level of public funds. The decrease when compared to the fourth quarter of 2013 reflects an increase in the investment portfolio partially offset by a higher level of public funds.
Slow economic growth and deleveraging by our clients has generated a historically high level of liquidity, which, given the current operating environment, is difficult to profitably deploy without taking inordinate risks. Although we have experienced loan growth in the first half of 2014, where practical, we continue to work to lower the level of overnight funds by adding to our investment portfolio with short-duration, high quality securities and reducing deposit balances. We continue to offer to our clients a fully-insured money market account which is provided 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.
Period end loans increased in each of the last two quarters and, when compared to the first quarter of 2014, average loans increased by $16.5 million, or 1.2%, which represents the first quarter-over-quarter increase in average loans since 2009. The improvement in loans was experienced primarily in the consumer and commercial portfolios. The growth was a result of both an increase in production (which has increased in five of the last six quarters) as well as lower payoffs. Average loans declined by $3.0 million when compared to the fourth quarter of 2013, primarily attributable to lower commercial real estate, which was partially offset by growth in the consumer loan portfolio.
Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business, commercial real estate and consumer portfolios to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio. These programs have helped to increase overall production.
Nonperforming assets (nonaccrual loans and OREO) totaled $68.2 million at the end of the second quarter of 2014, a decrease of $10.3 million from the first quarter of 2014 and $16.8 million from the fourth quarter of 2013. Nonaccrual loans totaled $25.7 million at the end of the second quarter of 2014, a decrease of $8.9 million from the first quarter of 2014 and $11.3 million from the fourth quarter of 2013. Nonaccrual loan additions totaled $4.4 million in the second quarter of 2014 and $11.9 million for the first six months of 2014, which compares to $18.5 million for the same period of 2013. The balance of OREO totaled $42.6 million at the end of the second quarter of 2014, representing decreases of $1.5 million from the first quarter of 2014 and $5.5 million from the fourth quarter of 2013. For the second quarter of 2014, we added properties totaling $8.0 million, sold properties totaling $8.6 million, and recorded valuation adjustments totaling $0.8 million. For the first six months of 2014, we have added properties totaling $9.3 million, sold properties totaling $13.2 million, and recorded valuation adjustments totaling $1.6 million. Nonperforming assets represented 2.66% of total assets at June 30, 2014 compared to 2.98% at March 31, 2014 and 3.26% at December 31, 2013.
Average total deposits were $2.110 billion for the second quarter of 2014, a decrease of $15.4 million, or 0.7%, from the first quarter of 2014 and an increase of $58.7 million, or 2.9%, over the fourth quarter of 2013. The decrease in deposits when compared to the first quarter of 2014 resulted primarily from the reduction in the level of public funds and certificates of deposit. When compared to the fourth quarter of 2013, the increase was a result of higher public funds, noninterest bearing demand and savings accounts, partially offset by lower certificates of deposit and regular NOWs.
Deposit levels remain strong and 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 when compared to the first quarter of 2014 and fourth quarter of 2013 decreased by $5.3 million and $19.8 million, respectively, resulting from payoff/amortization of FHLB advances and lower repurchase agreement balances.
Discussion of Operating Results
Tax equivalent net interest income for the second quarter of 2014 was $18.6 million compared to $18.4 million for the first quarter of 2014 and $19.7 million for the second quarter of 2013. The increase in tax equivalent net interest income compared to the first quarter of 2014 reflects one additional calendar day, a positive shift in earning asset mix due to growth in the investment and loan portfolios and a reduction in interest expense, partially offset by unfavorable asset repricing. The lower net interest income when compared to the second quarter of 2013 reflects 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. For the six months ended June 30, 2014, tax equivalent net interest income totaled $37.0 million compared to $39.8 million for the same period of 2013.
Although the company experienced higher net interest income for the quarter, pressure still remains on net interest income primarily as a result of the low rate environment. The low rate environment remains favorable to the repricing of deposits, but continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.
Although the impact will be minimal, we will continue our efforts to lower our cost of funds, to the extent we can, and shift the mix of our deposits to help mitigate the unfavorable impact of soft loan demand and unfavorable repricing.
The net interest margin for the second quarter of 2014 at 3.29% was equal to the first quarter of 2014 and represented a decline of 30 basis points from the second quarter of 2013. Growth in our investment and loan portfolios helped to maintain our margin from the first to second quarter, while the decrease in the margin from the comparable prior year period was 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 2014 was $0.5 million compared to $0.3 million for the first quarter of 2014 and $1.5 million for the second quarter of 2013. For the first half of 2014, the loan loss provision totaled $0.8 million compared to $2.5 million for the same period of 2013. The lower level of provision reflects continued favorable problem loan migration and improvement in key credit metrics. Net charge-offs for the second quarter of 2014 totaled $2.1 million, or 0.59% (annualized), of average loans compared to $1.3 million, or 0.39% (annualized), for the first quarter of 2014 and $2.0 million, or 0.54% (annualized), for the second quarter of 2013. For the first half of 2014, net charge-offs totaled $3.4 million, or 0.49% (annualized), of average loans compared to $4.4 million, or 0.60%, for the same period of 2013. At quarter-end, the allowance for loan losses of $20.5 million was 1.45% of outstanding loans (net of overdrafts) and provided coverage of 80% of nonperforming loans compared to 1.57% and 64%, respectively, at March 31, 2014 and 1.65% and 62%, respectively, at December 31, 2013.
Noninterest income for the second quarter of 2014 totaled $13.3 million, an increase of $0.6 million, or 4.4%, over the first quarter of 2014 and a decrease of $0.4 million, or 2.8%, from the second quarter of 2013. The increase over the first quarter of 2014 reflects higher deposit fees of $0.3 million, bank card fees of $0.1 million, mortgage banking fees of $0.1 million, and other income of $0.2 million, partially offset by lower wealth management fees of $0.1 million. Higher overdraft fees and account maintenance fees drove the increase in deposit fees. Bank card fees increased due to higher card spend. The increase in mortgage banking fees was attributable to higher new loan production reflective of a seasonal pickup in home purchase activity as well as a higher margin on sold loans. A higher level of miscellaneous recoveries drove the increase in other income. Compared to the second quarter of 2013, the decrease was primarily due to decreases in data processing fees of $0.3 million and mortgage banking fees of $0.2 million that were partially offset by higher other income of $0.1 million. Data processing fees declined due to a lower level of fees from a government processing contract that ended early in the second quarter of 2014. A lower level of refinancing activity drove the reduction in mortgage banking fees. A higher level of miscellaneous recoveries drove the increase in other income.
For the first half of 2014, noninterest income totaled $26.1 million, a $1.1 million decrease from the same period of 2013 reflective of lower deposit fees of $0.3 million, mortgage banking fees of $0.6 million, and data processing fees of $0.4 million, partially offset by higher bank card fees of $0.1 million and other income of $0.1 million. The decrease in deposit fees was due to a lower level of overdraft fees generally reflective of improved financial management by our clients. A lower level of refinancing activity drove the reduction in mortgage banking fees. Data processing fees declined due to the aforementioned government processing contract that ended during the second quarter of 2014. Higher card spend drove the increase in bank card fees. A higher level of miscellaneous recoveries drove the increase in other income.
Noninterest expense for the second quarter of 2014 totaled $29.1 million, an increase of $0.7 million, or 2.5%, over the first quarter of 2014 reflective of higher OREO expense of $0.9 million, occupancy expense of $0.2 million and other expense of $0.2 million, partially offset by a lower compensation expense of $0.6 million. Excluding OREO expense, noninterest expense declined $0.2 million. A higher level of net losses from the sale of bank owned properties drove the increase in OREO expense. The increase in occupancy expense was partially attributable to higher maintenance costs that were mostly non-routine in nature. Other expense increased due to higher legal fees reflective of an increased level of legal support needed for problem loan resolutions during the quarter. The reduction in compensation expense was due to lower performance compensation (cash incentives), payroll taxes and unemployment taxes. Compared to the second quarter of 2013, noninterest expense decreased by $1.4 million, or 4.6%, attributable to lower compensation expense of $1.4 million (reflecting lower pension expense) and other expense of $0.2 million, partially offset by higher occupancy expense of $0.3 million.
For the first six months of 2014, noninterest expense totaled $57.4 million, a decrease of $4.1 million, or 6.8%, from the same period of 2013 attributable to lower compensation expense of $2.4 million, OREO expense of $1.4 million, and other expense of $0.5 million, partially offset by higher occupancy expense of $0.2 million. Compared to the three and six-month prior year periods, the reduction in compensation expense was primarily attributable to lower pension plan expense and the decline in other expense reflects a decrease in our FDIC insurance fees. Utilization of a higher discount rate for determining pension plan liabilities drove the reduction in pension plan expense and a lower premium favorably impacted FDIC fees. Higher furniture, fixtures, and equipment maintenance costs, a majority of which were non-routine, as well as higher maintenance contract expense related to security upgrades drove the increase in occupancy costs compared to both the three and six-month prior year periods. A lower level of net losses from the sale of bank owned properties and a reduction in property valuation adjustments were the primary reasons for the reduction in OREO expense from the comparable prior year six month period.
We realized income tax expense of $0.7 million for the second quarter of 2014 compared to an income tax benefit of $1.4 million for the first quarter of 2014 and income tax expense of $0.6 million for the second quarter of 2013. For the first six months of 2014, we realized an income tax benefit of $0.6 million compared to income tax expense of $1.0 million for the same period of 2013. Income taxes for both the three and six-month periods of 2014 were favorably impacted by a $2.2 million state tax benefit attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded financial 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, 2013, 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, 2014 | Mar 31, 2014 | Jun 30, 2013 | Jun 30, 2014 | Jun 30, 2013 | |||||||||||||||
| EARNINGS | ||||||||||||||||||||
| Net Income | $ | 1,473 | $ | 3,751 | $ | 843 | $ | 5,224 | $ | 1,682 | ||||||||||
| Net Income Per Common Share | $ | 0.08 | $ | 0.22 | $ | 0.05 | $ | 0.30 | $ | 0.10 | ||||||||||
| PERFORMANCE | ||||||||||||||||||||
| Return on Average Assets | 0.23 | % | 0.59 | % | 0.13 | % | 0.41 | % | 0.13 | % | ||||||||||
| Return on Average Equity | 2.09 | % | 5.44 | % | 1.35 | % | 3.75 | % | 1.36 | % | ||||||||||
| Net Interest Margin | 3.29 | % | 3.29 | % | 3.59 | % | 3.29 | % | 3.61 | % | ||||||||||
| Noninterest Income as % of Operating Revenue | 42.31 | % | 42.05 | % | 41.68 | % | 42.18 | % | 41.15 | % | ||||||||||
| Efficiency Ratio | 91.15 | % | 91.02 | % | 91.07 | % | 91.09 | % | 91.87 | % | ||||||||||
| CAPITAL ADEQUACY | ||||||||||||||||||||
| Tier 1 Capital Ratio | 16.85 | % | 16.85 | % | 15.36 | % | 16.85 | % | 15.36 | % | ||||||||||
| Total Capital Ratio | 18.10 | % | 18.10 | % | 16.73 | % | 18.10 | % | 16.73 | % | ||||||||||
| Tangible Common Equity Ratio | 7.93 | % | 7.66 | % | 6.64 | % | 7.93 | % | 6.64 | % | ||||||||||
| Leverage Ratio | 10.70 | % | 10.47 | % | 10.07 | % | 10.70 | % | 10.07 | % | ||||||||||
| Equity to Assets | 10.97 | % | 10.63 | % | 9.73 | % | 10.97 | % | 9.73 | % | ||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Allowance as % of Non-Performing Loans | 80.03 | % | 63.98 | % | 65.66 | % | 80.03 | % | 65.66 | % | ||||||||||
| Allowance as a % of Loans | 1.45 | % | 1.57 | % | 1.89 | % | 1.45 | % | 1.89 | % | ||||||||||
| Net Charge-Offs as % of Average Loans | 0.59 | % | 0.39 | % | 0.54 | % | 0.49 | % | 0.60 | % | ||||||||||
| Nonperforming Assets as % of Loans and ORE | 4.67 | % | 5.42 | % | 6.44 | % | 4.67 | % | 6.44 | % | ||||||||||
| Nonperforming Assets as % of Total Assets | 2.66 | % | 2.98 | % | 3.77 | % | 2.66 | % | 3.77 | % | ||||||||||
| STOCK PERFORMANCE | ||||||||||||||||||||
| High | $ | 14.71 | $ | 14.59 | $ | 12.64 | $ | 14.71 | $ | 12.64 | ||||||||||
| Low | 12.60 | 11.56 | 10.12 | 11.56 | 10.12 | |||||||||||||||
| Close | 14.53 | 13.28 | 11.53 | 14.53 | 11.53 | |||||||||||||||
| Average Daily Trading Volume | 28,428 | 35,921 | 16,366 | 32,114 | 19,827 | |||||||||||||||
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
| 2014 | 2013 | |||||||||||||||||||
| (Dollars in thousands) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and Due From Banks | $ | 63,956 | $ | 59,288 | $ | 55,209 | $ | 51,136 | $ | 67,811 | ||||||||||
| Funds Sold and Interest Bearing Deposits | 354,233 | 468,805 | 474,719 | 358,869 | 391,457 | |||||||||||||||
| Total Cash and Cash Equivalents | 418,189 | 528,093 | 529,928 | 410,005 | 459,268 | |||||||||||||||
| Investment Securities Available for Sale | 275,082 | 229,615 | 251,420 | 271,838 | 350,614 | |||||||||||||||
| Investment Securities Held to Maturity | 180,393 | 191,645 | 148,211 | 97,309 | — | |||||||||||||||
| Total Investment Securities | 455,475 | 421,260 | 399,631 | 369,147 | 350,614 | |||||||||||||||
| Loans Held for Sale | 13,040 | 12,313 | 11,065 | 13,822 | 15,362 | |||||||||||||||
| Loans, Net of Unearned Interest | ||||||||||||||||||||
| Commercial, Financial, & Agricultural | 134,833 | 138,664 | 126,607 | 123,253 | 126,931 | |||||||||||||||
| Real Estate - Construction | 34,244 | 36,454 | 31,012 | 31,454 | 35,823 | |||||||||||||||
| Real Estate - Commercial | 518,580 | 522,019 | 533,871 | 570,736 | 581,501 | |||||||||||||||
| Real Estate - Residential | 298,647 | 297,842 | 303,618 | 305,811 | 302,254 | |||||||||||||||
| Real Estate - Home Equity | 228,232 | 226,411 | 227,922 | 230,212 | 232,530 | |||||||||||||||
| Consumer | 181,209 | 163,768 | 156,718 | 148,321 | 142,620 | |||||||||||||||
| Other Loans | 7,182 | 7,270 | 6,074 | 5,220 | 5,904 | |||||||||||||||
| Overdrafts | 2,664 | 2,349 | 2,782 | 2,835 | 2,554 | |||||||||||||||
| Total Loans, Net of Unearned Interest | 1,405,591 | 1,394,777 | 1,388,604 | 1,417,842 | 1,430,117 | |||||||||||||||
| Allowance for Loan Losses | (20,543 | ) | (22,110 | ) | (23,095 | ) | (25,010 | ) | (27,294 | ) | ||||||||||
| Loans, Net | 1,385,048 | 1,372,667 | 1,365,509 | 1,392,832 | 1,402,823 | |||||||||||||||
| Premises and Equipment, Net | 102,141 | 102,655 | 103,385 | 103,702 | 104,743 | |||||||||||||||
| Intangible Assets | 84,811 | 84,811 | 84,843 | 84,891 | 84,937 | |||||||||||||||
| Other Real Estate Owned | 42,579 | 44,036 | 48,071 | 53,018 | 55,087 | |||||||||||||||
| Other Assets | 66,209 | 67,205 | 69,471 | 87,055 | 89,024 | |||||||||||||||
| Total Other Assets | 295,740 | 298,707 | 305,770 | 328,666 | 333,791 | |||||||||||||||
| Total Assets | $ | 2,567,492 | $ | 2,633,040 | $ | 2,611,903 | $ | 2,514,472 | $ | 2,561,858 | ||||||||||
| LIABILITIES | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest Bearing Deposits | $ | 689,844 | $ | 657,548 | $ | 641,463 | $ | 626,114 | $ | 644,739 | ||||||||||
| NOW Accounts | 712,385 | 775,439 | 794,746 | 668,240 | 706,101 | |||||||||||||||
| Money Market Accounts | 272,255 | 292,923 | 268,449 | 283,338 | 287,340 | |||||||||||||||
| Regular Savings Accounts | 227,470 | 225,481 | 211,668 | 211,174 | 204,594 | |||||||||||||||
| Certificates of Deposit | 206,496 | 212,322 | 219,922 | 228,020 | 228,349 | |||||||||||||||
| Total Deposits | 2,108,450 | 2,163,713 | 2,136,248 | 2,016,886 | 2,071,123 | |||||||||||||||
| Short-Term Borrowings | 36,732 | 48,733 | 51,321 | 51,918 | 46,081 | |||||||||||||||
| Subordinated Notes Payable | 62,887 | 62,887 | 62,887 | 62,887 | 62,887 | |||||||||||||||
| Other Long-Term Borrowings | 33,282 | 33,971 | 38,043 | 40,244 | 41,251 | |||||||||||||||
| Other Liabilities | 44,561 | 43,856 | 47,004 | 91,369 | 91,227 | |||||||||||||||
| Total Liabilities | 2,285,912 | 2,353,160 | 2,335,503 | 2,263,304 | 2,312,569 | |||||||||||||||
| SHAREOWNERS’ EQUITY | ||||||||||||||||||||
| Common Stock | 174 | 174 | 174 | 173 | 173 | |||||||||||||||
| Additional Paid-In Capital | 41,628 | 41,220 | 41,152 | 40,481 | 40,210 | |||||||||||||||
| Retained Earnings | 248,142 | 247,017 | 243,614 | 240,842 | 239,251 | |||||||||||||||
| Accumulated Other Comprehensive Loss, Net of Tax | (8,364 | ) | (8,531 | ) | (8,540 | ) | (30,328 | ) | (30,345 | ) | ||||||||||
| Total Shareowners’ Equity | 281,580 | 279,880 | 276,400 | 251,168 | 249,289 | |||||||||||||||
| Total Liabilities and Shareowners’ Equity | $ | 2,567,492 | $ | 2,633,040 | $ | 2,611,903 | $ | 2,514,472 | $ | 2,561,858 | ||||||||||
| OTHER BALANCE SHEET DATA | ||||||||||||||||||||
| Earning Assets | $ | 2,228,339 | $ | 2,297,154 | $ | 2,274,019 | $ | 2,159,680 | $ | 2,187,549 | ||||||||||
| Intangible Assets | ||||||||||||||||||||
| Goodwill | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||
| Core Deposits | — | — | — | — | — | |||||||||||||||
| Other | — | — | 32 | 80 | 126 | |||||||||||||||
| Interest Bearing Liabilities | 1,551,507 | 1,651,755 | 1,647,036 | 1,545,821 | 1,576,601 | |||||||||||||||
| Book Value Per Diluted Share | $ | 16.08 | $ | 16.02 | $ | 15.85 | $ | 14.44 | $ | 14.36 | ||||||||||
| Tangible Book Value Per Diluted Share | 11.24 | 11.17 | 10.98 | 9.56 | 9.47 | |||||||||||||||
| Actual Basic Shares Outstanding | 17,449 | 17,427 | 17,361 | 17,336 | 17,336 | |||||||||||||||
| Actual Diluted Shares Outstanding | 17,510 | 17,466 | 17,443 | 17,396 | 17,372 | |||||||||||||||
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
| Six Months Ended | ||||||||||||||||||||||||||||
| 2014 | 2013 | June 30, | ||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | Second Quarter | 2014 | 2013 | |||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||
| Interest and Fees on Loans | $ | 18,152 | $ | 18,098 | $ | 19,057 | $ | 19,264 | $ | 19,709 | $ | 36,250 | $ | 39,863 | ||||||||||||||
| Investment Securities | 939 | 847 | 760 | 717 | 710 | 1,786 | 1,414 | |||||||||||||||||||||
| Funds Sold | 257 | 291 | 259 | 269 | 279 | 548 | 549 | |||||||||||||||||||||
| Total Interest Income | 19,348 | 19,236 | 20,076 | 20,250 | 20,698 | 38,584 | 41,826 | |||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||
| Deposits | 293 | 308 | 314 | 335 | 367 | 601 | 782 | |||||||||||||||||||||
| Short-Term Borrowings | 17 | 20 | 46 | 46 | 61 | 37 | 143 | |||||||||||||||||||||
| Subordinated Notes Payable | 331 | 331 | 400 | 339 | 342 | 662 | 681 | |||||||||||||||||||||
| Other Long-Term Borrowings | 269 | 291 | 320 | 330 | 333 | 560 | 680 | |||||||||||||||||||||
| Total Interest Expense | 910 | 950 | 1,080 | 1,050 | 1,103 | 1,860 | 2,286 | |||||||||||||||||||||
| Net Interest Income | 18,438 | 18,286 | 18,996 | 19,200 | 19,595 | 36,724 | 39,540 | |||||||||||||||||||||
| Provision for Loan Losses | 499 | 359 | 397 | 555 | 1,450 | 858 | 2,520 | |||||||||||||||||||||
| Net Interest Income after Provision for Loan Losses | 17,939 | 17,927 | 18,599 | 18,645 | 18,145 | 35,866 | 37,020 | |||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||
| Deposit Fees | 6,213 | 5,869 | 6,398 | 6,474 | 6,217 | 12,082 | 12,382 | |||||||||||||||||||||
| Bank Card Fees | 2,820 | 2,707 | 2,656 | 2,715 | 2,754 | 5,527 | 5,415 | |||||||||||||||||||||
| Wealth Management Fees | 1,852 | 1,918 | 2,233 | 2,130 | 1,901 | 3,770 | 3,816 | |||||||||||||||||||||
| Mortgage Banking Fees | 738 | 625 | 654 | 869 | 968 | 1,363 | 2,011 | |||||||||||||||||||||
| Data Processing Fees | 388 | 541 | 689 | 662 | 670 | 929 | 1,323 | |||||||||||||||||||||
| Securities Transactions | — | — | 3 | — | — | — | — | |||||||||||||||||||||
| Other | 1,336 | 1,125 | 1,192 | 1,176 | 1,221 | 2,461 | 2,313 | |||||||||||||||||||||
| Total Noninterest Income | 13,347 | 12,785 | 13,825 | 14,026 | 13,731 | 26,132 | 27,260 | |||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
| Compensation | 15,206 | 15,781 | 16,583 | 16,158 | 16,647 | 30,987 | 33,386 | |||||||||||||||||||||
| Occupancy, Net | 4,505 | 4,298 | 4,349 | 4,403 | 4,161 | 8,803 | 8,579 | |||||||||||||||||||||
| Intangible Amortization | — | 32 | 48 | 46 | 48 | 32 | 116 | |||||||||||||||||||||
| Other Real Estate | 2,276 | 1,399 | 1,251 | 1,868 | 2,290 | 3,675 | 5,114 | |||||||||||||||||||||
| Other | 7,089 | 6,856 | 7,416 | 7,678 | 7,318 | 13,945 | 14,410 | |||||||||||||||||||||
| Total Noninterest Expense | 29,076 | 28,366 | 29,647 | 30,153 | 30,464 | 57,442 | 61,605 | |||||||||||||||||||||
| OPERATING PROFIT (LOSS) | 2,210 | 2,346 | 2,777 | 2,518 | 1,412 | 4,556 | 2,675 | |||||||||||||||||||||
| Income Tax Expense (Benefit) | 737 | (1,405 | ) | 5 | 927 | 569 | (668 | ) | 993 | |||||||||||||||||||
| NET INCOME | $ | 1,473 | $ | 3,751 | $ | 2,772 | $ | 1,591 | $ | 843 | $ | 5,224 | $ | 1,682 | ||||||||||||||
| PER SHARE DATA | ||||||||||||||||||||||||||||
| Basic Income | $ | 0.08 | $ | 0.22 | $ | 0.16 | $ | 0.09 | $ | 0.05 | $ | 0.30 | $ | 0.10 | ||||||||||||||
| Diluted Income | 0.08 | 0.22 | 0.16 | 0.09 | 0.05 | 0.30 | 0.10 | |||||||||||||||||||||
| Cash Dividend | $ | 0.02 | $ | 0.02 | $ | — | $ | — | $ | — | $ | 0.04 | $ | 0.00 | ||||||||||||||
| AVERAGE SHARES | ||||||||||||||||||||||||||||
| Basic | 17,427 | 17,399 | 17,341 | 17,336 | 17,319 | 17,413 | 17,311 | |||||||||||||||||||||
| Diluted | 17,488 | 17,439 | 17,423 | 17,396 | 17,355 | 17,463 | 17,364 | |||||||||||||||||||||
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND RISK ELEMENT ASSETS
Unaudited
| 2014 | 2014 | 2013 | 2013 | 2013 | ||||||||||||||||
| (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 | $ | 22,110 | $ | 23,095 | $ | 25,010 | $ | 27,294 | $ | 27,803 | ||||||||||
| Provision for Loan Losses | 499 | 359 | 397 | 555 | 1,450 | |||||||||||||||
| Net Charge-Offs | 2,066 | 1,344 | 2,312 | 2,839 | 1,959 | |||||||||||||||
| Balance at End of Period | $ | 20,543 | $ | 22,110 | $ | 23,095 | $ | 25,010 | $ | 27,294 | ||||||||||
| As a % of Loans | 1.45 | % | 1.57 | % | 1.65 | % | 1.75 | % | 1.89 | % | ||||||||||
| As a % of Nonperforming Loans | 80.03 | % | 63.98 | % | 62.48 | % | 60.00 | % | 65.66 | % | ||||||||||
| CHARGE-OFFS | ||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 86 | $ | 11 | $ | 337 | $ | 138 | $ | 119 | ||||||||||
| Real Estate - Construction | — | — | 72 | 278 | 110 | |||||||||||||||
| Real Estate - Commercial | 1,029 | 594 | 676 | 882 | 1,050 | |||||||||||||||
| Real Estate - Residential | 695 | 731 | 921 | 1,178 | 1,053 | |||||||||||||||
| Real Estate - Home Equity | 375 | 403 | 362 | 362 | 322 | |||||||||||||||
| Consumer | 421 | 405 | 430 | 674 | 351 | |||||||||||||||
| Total Charge-Offs | $ | 2,606 | $ | 2,144 | $ | 2,798 | $ | 3,512 | $ | 3,005 | ||||||||||
| RECOVERIES | ||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 45 | $ | 75 | $ | 33 | $ | 87 | $ | 38 | ||||||||||
| Real Estate - Construction | 1 | 4 | — | 1 | — | |||||||||||||||
| Real Estate - Commercial | 152 | 27 | 14 | 167 | 144 | |||||||||||||||
| Real Estate - Residential | 52 | 395 | 179 | 167 | 396 | |||||||||||||||
| Real Estate - Home Equity | 65 | 11 | 39 | 13 | 224 | |||||||||||||||
| Consumer | 225 | 288 | 221 | 238 | 244 | |||||||||||||||
| Total Recoveries | $ | 540 | $ | 800 | $ | 486 | $ | 673 | $ | 1,046 | ||||||||||
| NET CHARGE-OFFS | $ | 2,066 | $ | 1,344 | $ | 2,312 | $ | 2,839 | $ | 1,959 | ||||||||||
| Net Charge-Offs as a % of Average Loans(1) | 0.59 | % | 0.39 | % | 0.65 | % | 0.78 | % | 0.54 | % | ||||||||||
| RISK ELEMENT ASSETS | ||||||||||||||||||||
| Nonaccruing Loans | $ | 25,670 | $ | 34,558 | $ | 36,964 | $ | 41,682 | $ | 41,566 | ||||||||||
| Other Real Estate Owned | 42,579 | 44,036 | 48,071 | 53,018 | 55,087 | |||||||||||||||
| Total Nonperforming Assets | $ | 68,249 | $ | 78,594 | $ | 85,035 | $ | 94,700 | $ | 96,653 | ||||||||||
| Past Due Loans 30-89 Days | $ | 5,092 | $ | 4,902 | $ | 7,746 | $ | 8,427 | $ | 9,017 | ||||||||||
| Past Due Loans 90 Days or More | — | — | — | — | — | |||||||||||||||
| Classified Loans | 95,037 | 107,420 | 115,630 | 128,190 | 153,080 | |||||||||||||||
| Performing Troubled Debt Restructuring’s | $ | 45,440 | $ | 46,249 | $ | 44,764 | $ | 50,692 | $ | 52,729 | ||||||||||
| Nonperforming Loans as a % of Loans | 1.81 | % | 2.46 | % | 2.64 | % | 2.91 | % | 2.88 | % | ||||||||||
| Nonperforming Assets as a % of | ||||||||||||||||||||
| Loans and Other Real Estate | 4.67 | % | 5.42 | % | 5.87 | % | 6.38 | % | 6.44 | % | ||||||||||
| Nonperforming Assets as a % of Total Assets | 2.66 | % | 2.98 | % | 3.26 | % | 3.77 | % | 3.77 | % | ||||||||||
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
| Second Quarter 2014 | First Quarter 2014 | Fourth Quarter 2013 | Third Quarter 2013 | Second Quarter 2013 | Jun 2014 YTD | Jun 2013 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 | $ | 1,411,988 | 18,216 | 5.17 | % | $ | 1,395,506 | 18,161 | 5.28 | % | $ | 1,414,909 | 19,121 | 5.36 | % | $ | 1,436,039 | 19,345 | 5.34 | % | $ | 1,456,904 | 19,790 | 5.45 | $ | 1,403,793 | $ | 36,377 | 5.23 | % | $ | 1,476,559 | $ | 40,018 | 5.47 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable Investment Securities | 345,419 | 816 | 0.87 | 290,942 | 703 | 0.88 | 255,298 | 608 | 0.86 | 232,094 | 568 | 0.95 | 225,770 | 578 | 1.02 | 318,332 | 1,519 | 0.84 | 220,458 | 1,168 | 1.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax-Exempt Investment Securities | 94,810 | 188 | 0.77 | 114,542 | 219 | 0.74 | 124,501 | 233 | 0.74 | 121,119 | 223 | 0.73 | 104,981 | 200 | 0.76 | 104,621 | 407 | 0.75 | 93,030 | 374 | 0.80 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Investment Securities | 440,229 | # | 1,004 | 0.91 | 405,484 | # | 922 | 0.91 | 379,799 | # | 841 | 0.88 | 353,213 | # | 791 | 0.89 | 330,751 | # | 778 | 0.94 | 422,952 | # | 1,926 | 0.91 | 313,488 | # | 1,542 | 0.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Funds Sold | 408,668 | 257 | 0.25 | 467,330 | 291 | 0.25 | 411,578 | 259 | 0.25 | 412,138 | 269 | 0.26 | 419,039 | 279 | 0.27 | 437,837 | 548 | 0.25 | 433,650 | 549 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Earning Assets | 2,260,885 | $ | 19,477 | 3.46 | % | 2,268,320 | $ | 19,374 | 3.46 | % | 2,206,286 | $ | 20,221 | 3.64 | % | 2,201,390 | $ | 20,405 | 3.68 | % | 2,206,694 | $ | 20,847 | 3.79 | 2,264,582 | $ | 38,851 | 3.46 | % | 2,223,697 | $ | 42,109 | 3.82 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and Due From Banks | 44,115 | 48,084 | 48,519 | 51,640 | 49,081 | 46,089 | 49,875 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for Loan Losses | (22,255 | ) | (23,210 | ) | (25,612 | ) | (27,636 | ) | (29,012 | ) | (22,730 | ) | (29,735 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Assets | 296,248 | 305,113 | 324,460 | 333,001 | 337,765 | 300,656 | 337,673 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,578,993 | $ | 2,598,307 | $ | 2,553,653 | $ | 2,558,395 | $ | 2,564,528 | $ | 2,588,597 | $ | 2,581,510 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing Deposits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOW Accounts | $ | 724,635 | $ | 91 | 0.05 | % | $ | 770,302 | $ | 104 | 0.05 | % | $ | 697,468 | $ | 95 | 0.05 | % | $ | 676,855 | $ | 107 | 0.06 | % | $ | 716,459 | $ | 124 | 0.07 | $ | 747,343 | $ | 195 | 0.05 | % | $ | 752,360 | $ | 280 | 0.08 | % | |||||||||||||||||||||||||||||||||||||||||||
| Money Market Accounts | 280,619 | 50 | 0.07 | 274,015 | 48 | 0.07 | 279,608 | 50 | 0.07 | 284,920 | 53 | 0.07 | 289,637 | 54 | 0.07 | 277,335 | 98 | 0.07 | 286,261 | 108 | 0.08 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings Accounts | 227,960 | 28 | 0.05 | 218,825 | 26 | 0.05 | 211,761 | 27 | 0.05 | 207,631 | 26 | 0.05 | 202,784 | 25 | 0.05 | 223,418 | 54 | 0.05 | 197,935 | 48 | 0.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Time Deposits | 209,558 | 124 | 0.24 | 215,291 | 130 | 0.24 | 224,500 | 142 | 0.25 | 231,490 | 149 | 0.26 | 231,134 | 164 | 0.29 | 212,408 | 254 | 0.24 | 234,768 | 346 | 0.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Deposits | 1,442,772 | # | 293 | 0.08 | % | 1,478,433 | # | 308 | 0.08 | % | 1,413,337 | # | 314 | 0.09 | % | 1,400,896 | # | 335 | 0.09 | % | 1,440,014 | # | 367 | 0.10 | 1,460,504 | # | 601 | 0.08 | % | 1,471,324 | # | 782 | 0.11 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Borrowings | 44,473 | 17 | 0.15 | % | 46,343 | 20 | 0.18 | % | 58,126 | 46 | 0.31 | % | 49,919 | 46 | 0.37 | % | 52,399 | 61 | 0.47 | 45,402 | 37 | 0.16 | % | 53,819 | 143 | 0.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subordinated Notes Payable | 62,887 | 331 | 2.08 | 62,887 | 331 | 2.10 | 62,887 | 400 | 2.49 | 62,887 | 339 | 2.11 | 62,887 | 342 | 2.15 | 62,887 | 662 | 2.09 | 62,887 | 681 | 2.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Long-Term Borrowings | 33,619 | 269 | 3.21 | 37,055 | 291 | 3.18 | 39,676 | 320 | 3.19 | 40,832 | 330 | 3.21 | 40,942 | 333 | 3.26 | 35,328 | 560 | 3.19 | 41,915 | 680 | 3.27 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Liabilities | 1,583,751 | $ | 910 | 0.23 | % | 1,624,718 | $ | 950 | 0.24 | % | 1,574,026 | $ | 1,080 | 0.27 | % | 1,554,534 | $ | 1,050 | 0.27 | % | 1,596,242 | $ | 1,103 | 0.28 | 1,604,121 | $ | 1,860 | 0.23 | % | 1,629,945 | $ | 2,286 | 0.28 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest Bearing Deposits | 666,791 | 646,527 | 637,533 | 658,602 | 627,633 | 656,715 | 613,886 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities | 46,105 | 47,333 | 88,095 | 93,642 | 90,168 | 46,716 | 87,656 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 2,296,647 | 2,318,578 | 2,299,654 | 2,306,778 | 2,314,043 | 2,307,552 | 2,331,487 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREOWNERS’ EQUITY: | 282,346 | 279,729 | 253,999 | 251,617 | 250,485 | 281,045 | 250,023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareowners’ Equity | $ | 2,578,993 | $ | 2,598,307 | $ | 2,553,653 | $ | 2,558,395 | $ | 2,564,528 | $ | 2,588,597 | $ | 2,581,510 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Spread | $ | 18,567 | 3.22 | % | $ | 18,424 | 3.23 | % | $ | 19,141 | 3.36 | % | $ | 19,355 | 3.41 | % | $ | 19,744 | 3.51 | $ | 36,991 | 3.23 | % | $ | 39,823 | 3.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Income and Rate Earned(1) | 19,477 | 3.46 | 19,374 | 3.46 | 20,221 | 3.64 | 20,405 | 3.68 | 20,847 | 3.79 | 38,851 | 3.46 | 42,109 | 3.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Expense and Rate Paid(2) | 910 | 0.16 | 950 | 0.17 | 1,080 | 0.19 | 1,050 | 0.19 | 1,103 | 0.20 | 1,860 | 0.17 | 2,286 | 0.21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Margin | $ | 18,567 | 3.29 | % | $ | 18,424 | 3.29 | % | $ | 19,141 | 3.45 | % | $ | 19,355 | 3.49 | % | $ | 19,744 | 3.59 | $ | 36,991 | 3.29 | % | $ | 39,823 | 3.61 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(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.