Capital City Bank Group, Inc.

Reports Third Quarter 2015 Results

 

TALLAHASSEE, Fla. (October 20, 2015) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $1.7 million, or $0.09 per diluted share for the third quarter of 2015 compared to net income of $3.8 million, or $0.22 per diluted share for the second quarter of 2015, and $2.1 million, or $0.12 per diluted share, for the third quarter of 2014. For the first nine months of 2015, the Company reported net income of $6.5 million, or $0.37 per diluted share, compared to net income of $7.3 million, or $0.42 per diluted share for the same period in 2014.

 

HIGHLIGHTS

 

·16% reduction in nonperforming assets sequentially and 27% from year-end 2014
·Continued loan growth of 0.7% sequentially and 4.2% year to date
·Growth in tax-equivalent net interest income driven by improved earning asset mix – 0.4% sequentially and 1.7% over prior year
·Strong fee income from residential mortgage loan sales, up 9% sequentially and 54% over prior year

 

“Loan growth, efficiency and credit quality continue to be major areas of focus,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “Although our annual true-up of pension expense combined with the write-off of some state tax credits adversely impacted this quarter’s earnings by $0.04 per share, the underlying fundamentals continue to trend positively. We’ve experienced seven consecutive quarters of loan growth and, in recent quarters, that growth has been broader based. Credit quality continues to improve as total NPAs declined 16% quarter over quarter, 41% year over year, and equaled 1.47% of assets as of September 30, 2015. Although we did not raise capital during the financial crisis, our capital levels remain strong and we have repurchased 428,828, or 2.5% of our outstanding shares since February 2014. While there is still much work to be done, I continue to be pleased with our progress,” said Smith.

 

Compared to the second quarter of 2015, performance reflects lower noninterest income of $1.6 million and higher noninterest expense of $0.7 million that was partially offset by a $0.1 million increase in net interest income and lower income taxes of $0.1 million.

 

Compared to the third quarter of 2014, the decrease in earnings reflects higher noninterest expense of $0.6 million and a $0.1 million decrease in noninterest income partially offset by higher net interest income of $0.2 million and lower income taxes of $0.1 million.

 

The decrease in earnings for the first nine months of 2015 versus the comparable period in 2014 was attributable to higher noninterest expense of $0.9 million and an increase in income tax expense of $2.4 million that was partially offset by higher net interest income of $0.9 million, noninterest income of $1.4 million, and a lower loan loss provision of $0.2 million.

 

The Return on Average Assets was 0.25% and the Return on Average Equity was 2.43% for the third quarter of 2015 as compared to 0.58% and 5.62% for the second quarter of 2015, and 0.33% and 2.95% for the third quarter of 2014, respectively. For the first nine months of 2015, the Return on Average Assets was 0.33% and the Return on Average Equity was 3.17% compared to 0.38% and 3.48%, respectively, for the same period in 2014.

 

Discussion of Operating Results

 

Tax equivalent net interest income for the third quarter of 2015 was $19.3 million compared to $19.1 million for the second quarter of 2015 and $19.0 million for the third quarter of 2014.  The increase in tax equivalent net interest income compared to the second quarter 2015 reflects one additional calendar day and a positive shift in earning asset mix due to growth in the investment and loan portfolios, partially offset by a decline in yields. The increase in tax equivalent net interest income compared to the third quarter of 2014 also reflects a positive shift in earning asset mix due to growth in the loan and investment portfolios, partially offset by a decline in loan yields. For the nine months ended September 30, 2015, tax equivalent net interest income totaled $57.0 million compared to $56.0 million for the same period in 2014.

 

 

Pressure on net interest income continues primarily as a result of the low rate environment.  Despite an increase in both the loan and investment portfolios, the low rate environment continues to negatively impact the loan yields and, going forward, will have minimal to no impact on cost of funds. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

 

The net interest margin for the third quarter of 2015 was 3.31%, an increase of two basis points over the second quarter of 2015, and a decrease of 11 basis points from the third quarter of 2014. The increase in the margin compared to the second quarter of 2015 was attributable to growth in our investment portfolio and a reduction in foregone interest. For the nine months ended September 30, 2015, the net interest margin declined four basis points to 3.29% compared to the same period of 2014, primarily attributable to a decline in loan yields.

 

The provision for loan losses for the third quarter of 2015 was $0.4 million comparable to both the second quarter of 2015 and the third quarter of 2014. For the first nine months of 2015, the loan loss provision totaled $1.1 million compared to $1.3 million for the same period in 2014. The lower level of the year-to-date provision reflects continued favorable problem loan migration and improvement in key credit metrics partially offset by growth in the loan portfolio. Net charge-offs for the third quarter of 2015 totaled $0.9 million, or 0.24% (annualized), of average loans compared to $1.2 million, or 0.33% (annualized) for the second quarter of 2015 and $1.9 million, or 0.50% (annualized) for the third quarter of 2014. For the first nine months of 2015, net charge-offs totaled $3.9 million, or 0.35% (annualized) of average loans compared to $5.3 million, or 0.50% (annualized) for the same period in 2014. At quarter-end, the allowance for loan losses of $14.7 million was 0.99% of outstanding loans (net of overdrafts) and provided coverage of 112% of nonperforming loans compared to 1.03% and 99%, respectively, at June 30, 2015 and 1.22% and 105%, respectively, at December 31, 2014.

 

Noninterest income for the third quarter of 2015 totaled $13.2 million, a decrease of $1.6 million, or 10.6%, from the second quarter of 2015 and $0.1 million, or 0.9%, from the third quarter of 2014. The decrease from the second quarter of 2015 reflects bank owned life insurance (“BOLI”) proceeds of $1.7 million that are reflected in other income for the second quarter. Mortgage banking fees increased $0.1 million over the second quarter of 2015. The decrease from the third quarter of 2014 was attributable to lower deposit fees of $0.5 million and wealth management fees of $0.2 million, partially offset by higher mortgage banking fees of $0.4 million and bank card fees of $0.1 million. The reduction in deposit fees was driven by lower overdraft fees reflecting lower utilization of our overdraft service. Lower client trading activity drove the reduction in wealth management fees. The increase in mortgage fees was driven by continued strong new home purchase originations. The increase in bank card fees was attributable to higher card spend by our clients.

 

For the first nine months of 2015, noninterest income totaled $40.9 million, a $1.4 million increase over the same period of 2014, primarily attributable to higher other income of $1.6 million (reflecting the receipt of BOLI proceeds) and mortgage banking fees of $1.2 million, partially offset by lower deposit fees of $1.3 million. The year-to-date variances are attributable to the same factors as noted above for the third quarter.

 

Noninterest expense for the third quarter of 2015 totaled $29.2 million, an increase of $0.7 million, or 2.5%, over the second quarter of 2015 attributable to higher other real estate owned (“OREO”) expense of $0.4 million, compensation expense of $0.2 million, and occupancy expense of $0.2 million, partially offset by a $0.1 million decrease in other expense. A higher level of net losses from the sale of properties drove the increase in OREO expense and was primarily attributable to a higher level of gains realized in the second quarter of 2015. Compensation expense increased primarily due to a higher level of required 2015 pension expense, partially offset by lower salary expense. The increase in occupancy expense reflects a seasonal increase in utility expense and an increase in our property/tangible tax expense. Other expense decreased due to lower legal and professional fees.

 

 

Compared to the third quarter of 2014, noninterest expense increased by $0.6 million or 1.9% attributable to higher compensation expense of $1.3 million partially offset by lower OREO expense of $0.5 million, occupancy expense of $0.1 million, and other expense of $0.1 million. The increase in compensation expense reflects higher pension plan expense, partially offset by a reduction in salary expense. The reduction in OREO expense was primarily attributable to lower carrying costs and a reduction in valuation adjustments reflecting both the disposition of larger operating properties as well as improvement in property values. The lower level of occupancy expense reflects non-routine maintenance expenses realized in the third quarter of 2014. Lower legal fees drove the decrease in other expense and reflect a lower level of support needed for problem loan resolutions.

 

For the first nine months of 2015, noninterest expense totaled $87.0 million, an increase of $0.9 million, or 1.1%, over the same period of 2014 attributable to higher compensation expense of $3.2 million, partially offset by lower OREO expense of $1.7 million, occupancy expense of $0.3 million, and other expense of $0.3 million. The increase in compensation expense reflects higher pension plan expense of $2.8 million and commissions of $0.4 million. The increase in our pension plan expense compared to both the three and nine-month prior year periods is primarily attributable to the utilization of a lower discount rate in 2015 for determining plan liabilities reflective of a decrease in long-term bond interest rates. A revision to the mortality tables used to calculate pension liabilities also contributed to the increase, but to a lesser extent. The reduction in OREO expense was primarily attributable to lower property carrying costs and valuation adjustments and to a lesser extent lower net losses from the sale of properties. Lower technology equipment costs and maintenance costs for premises/FF&E drove the decrease in occupancy expense. The decrease in other expense reflects lower legal fees, printing and supply costs, and postage costs, partially offset by higher processing costs.

 

We realized income tax expense of $1.0 million (38% effective rate) for the third quarter of 2015 compared to $1.1 million (23% effective rate) for the second quarter of 2015 and $1.1 million (34% effective rate) for the third quarter of 2014. Income tax expense for the third quarter of 2015 includes a $0.2 million valuation reserve for state tax credits that we expect to expire unused. For the first nine months of 2015, income tax expense totaled $2.8 million. The proceeds from the aforementioned discrete BOLI transaction realized in the second quarter of 2015 were tax-exempt, therefore income tax expense for the nine-months of 2015 was favorably impacted. Income taxes for the nine-months of 2014 were favorably impacted by a $2.2 million state tax benefit that was recognized in the first quarter of 2014 and was attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters. Absent future discrete events, we anticipate our effective income tax rate will normalize within a range of 34%-35%.

 

Discussion of Financial Condition

 

Average earning assets were $2.311 billion for the third quarter of 2015, a decrease of $17.2 million, or 0.7%, from the second quarter of 2015 and an increase of $98.0 million, or 4.4%, over the fourth quarter of 2014.  The change in earning assets from the second quarter 2015 reflects a reduction in short-term investments reflecting lower levels of public fund deposits. The increase compared to the fourth quarter of 2014 reflects growth of $138.8 million in the investment portfolio and $56.9 million in loans, which was funded by deposit growth and a reduction in short-term investments.

 

We maintained average net short-term investments (deposits with banks plus fed funds sold less fed funds purchased) of $190.9 million during the third quarter of 2015 compared to average net short-term investments of $237.1 million in the second quarter of 2015 and $288.6 million in the fourth quarter of 2014.  The decrease in net short-term investments compared to the second quarter of 2015 reflects growth in both the investment and loan portfolios and lower public fund balances. The decrease relative to the fourth quarter of 2014 is primarily attributable to growth in both the loan and investment portfolios, partially offset by an increase in average deposits.

 

 

We continue to work on lowering the level of short-term investments (i.e. funds sold) by investing in short duration, high quality securities for our investment portfolio and reducing our non-core deposit balances. We offer 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 better deploy our short-term investments.

 

Average loans increased $9.7 million, or 0.7%, when compared to the second quarter of 2015, and have grown $56.9 million, or 4.0% compared to the fourth quarter of 2014. During 2014, the growth in loans was driven primarily by auto loans, whereas in recent quarters the growth has been broader based, including commercial, tax-free, construction, home equity as well as consumer.

 

Although we have experienced loan growth in 2014 and into the first nine months of 2015, signs of slowing growth were seen late in the third quarter. Without compromising our credit standards or taking on inordinate interest rate risk, we continue to make minor modifications to some of our lending programs to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio. These programs, coupled with economic improvements in our anchor markets, have helped to increase overall production.

 

Nonperforming assets (nonaccrual loans and OREO) totaled $38.4 million at the end of the third quarter of 2015, a decrease of $7.1 million from the second quarter of 2015 and $14.1 million from the fourth quarter of 2014. Nonaccrual loans totaled $13.1 million at the end of the third quarter of 2015, a decrease of $2.2 million from the second quarter of 2015 and $3.6 million from the fourth quarter of 2014. Nonaccrual loan additions totaled $1.9 million in the third quarter of 2015 and $12.1 million for the first nine months of 2015, which compares to $16.7 million for the same period in 2014. The balance of OREO totaled $25.2 million at the end of the third quarter of 2015, a decrease of $4.9 million and $10.5 million, respectively, from the second quarter of 2015 and fourth quarter of 2014. For the third quarter of 2015, we added properties totaling $1.2 million, sold properties totaling $5.9 million, and recorded valuation adjustments totaling $0.2 million. For the first nine months of 2015, we added properties totaling $4.1 million, sold properties totaling $12.7 million, recorded valuation adjustments totaling $1.6 million, and realized miscellaneous adjustments of $0.3 million. Nonperforming assets represented 1.47% of total assets at September 30, 2015 compared to 1.71% at June 30, 2015 and 2.00% at December 31, 2014.

 

Average total deposits were $2.137 billion for the third quarter of 2015, a decrease of $41.0 million, or 1.9%, over the second quarter of 2015, and an increase of $60.1 million, or 2.9%, over the fourth quarter of 2014.  The decrease in deposits when compared to the prior period primarily reflects lower levels of public fund deposits, and to a lesser degree, certificates of deposit. The higher level of deposits when compared to the fourth quarter of 2014 is primarily attributable to increased balances of noninterest bearing, public fund NOW, and savings accounts, partially offset by a decline in money market accounts and certificates of deposit. The seasonal inflows of public funds began in the fourth quarter of 2014, peaked in the second quarter of 2015, and are expected to decline into the fourth quarter of 2015.

 

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.

 

When compared to the second quarter of 2015 and fourth quarter of 2014, average borrowings increased by $6.6 million and $13.4 million, respectively, attributable to higher levels of repurchase agreement balances, partially offset by FHLB advance pay downs.

 

 

Equity capital was $273.7 million as of September 30, 2015, compared to $272.0 million as of June 30, 2015 and $272.5 million as of December 31, 2014. Our leverage ratio was 10.71%, 10.53%, and 10.99%, respectively, for these periods. Further, as of September 30, 2015, our risk-adjusted capital ratio was 17.24% compared to 16.72% and 17.76% at June 30, 2015 and December 31, 2014, respectively. Our common equity tier 1 ratio was 12.76% as of September 30, 2015 compared to 12.34% as of June 30, 2015. All of our capital ratios significantly exceed the threshold to be designated as “well-capitalized” under the Basel III capital standards. The reduction in our regulatory capital ratios in 2015 reflects the implementation of Basel III and the repurchase of common stock. During 2015, we have repurchased approximately 405,228 shares of our common stock at an average price of $14.73 per share.

 

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, mortgage banking, asset management, trust, 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 accuracy of the Company’s financial statement estimates and assumptions; legislative or regulatory changes, including the Dodd-Frank Act, Basel III, and the ability to repay and qualified mortgage standards; the strength of the U.S. economy and the local economies where the Company conducts operations; 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 or fraud related to debit card products; 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, 2014, 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, 2015  Jun 30, 2015  Sep 30, 2014  Sep 30, 2015  Sep 30, 2014
EARNINGS                         
Net Income  $1,684   $3,845   $2,115   $6,514   $7,339 
Net Income Per Common Share  $0.09   $0.22   $0.12   $0.37   $0.42 
PERFORMANCE                         
Return on Average Assets   0.25%   0.58%   0.33%   0.33%   0.38%
Return on Average Equity   2.43%   5.62%   2.95%   3.17%   3.48%
Net Interest Margin   3.31%   3.29%   3.42%   3.29%   3.33%
Noninterest Income as % of Operating Revenue   40.96%   43.80%   41.40%   41.95%   41.52%
Efficiency Ratio   89.79%   83.85%   88.37%   88.90%   90.11%
CAPITAL ADEQUACY                         
Tier 1 Capital Ratio   16.36%   15.83%   16.88%   16.36%   16.88%
Total Capital Ratio   17.24%   16.72%   18.08%   17.24%   18.08%
Tangible Common Equity Ratio   7.46%   7.29%   8.22%   7.46%   8.22%
Leverage Ratio   10.71%   10.53%   10.97%   10.71%   10.97%
Common Equity Tier 1 Ratio   12.76%   12.34%   —      12.76%   —   
Equity to Assets   10.46%   10.25%   11.33%   10.46%   11.33%
ASSET QUALITY                         
Allowance as % of Non-Performing Loans   112.17%   99.46%   81.31%   112.17%   81.31%
Allowance as a % of Loans   0.99%   1.03%   1.34%   0.99%   1.34%
Net Charge-Offs as % of Average Loans   0.24%   0.33%   0.52%   0.35%   0.50%
Nonperforming Assets as % of Loans and ORE   2.54%   3.00%   4.45%   2.54%   4.45%
Nonperforming Assets as % of Total Assets   1.47%   1.71%   2.61%   1.47%   2.61%
STOCK PERFORMANCE                         
High  $15.75   $16.32   $14.98   $16.33   $14.98 
Low   14.39    13.94    13.26    13.16    11.56 
Close   14.92    15.27    13.54    14.92    13.54 
Average Daily Trading Volume   16,134    33,514    16,889    21,609    26,931 

 

 

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Unaudited

 

   2015  2014
(Dollars in thousands)  Third Quarter  Second Quarter  First Quarter  Fourth Quarter  Third Quarter
ASSETS                         
Cash and Due From Banks  $42,917   $61,484   $51,948   $55,467   $50,049 
Funds Sold and Interest Bearing Deposits   167,787    185,572    296,888    329,589    253,974 
Total Cash and Cash Equivalents   210,704    247,056    348,836    385,056    304,023 
                          
Investment Securities - Available-for-Sale   444,071    433,688    404,887    341,548    322,297 
Investment Securities - Held-to-Maturity   193,964    201,805    183,489    163,581    173,188 
   Total Investment Securities   638,035    635,493    588,376    505,129    495,485 
                          
Loans Held for Sale   10,960    10,991    13,334    10,688    8,700 
                          
Loans, Net of Unearned Interest                         
Commercial, Financial, & Agricultural   169,588    151,116    143,951    136,925    133,756 
Real Estate - Construction   49,475    44,216    41,595    41,596    38,121 
Real Estate - Commercial   491,734    510,962    507,681    510,120    501,863 
Real Estate - Residential   280,690    284,333    287,481    289,952    302,791 
Real Estate - Home Equity   232,254    230,388    228,171    229,572    228,968 
Consumer   238,884    238,599    230,984    214,758    200,363 
Other Loans   10,094    12,048    9,243    6,017    5,504 
Overdrafts   2,464    2,603    2,348    2,434    3,009 
Total Loans, Net of Unearned Interest   1,475,183    1,474,265    1,451,454    1,431,374    1,414,375 
Allowance for Loan Losses   (14,737)   (15,236)   (16,090)   (17,539)   (19,093)
Loans, Net   1,460,446    1,459,029    1,435,364    1,413,835    1,395,282 
                          
Premises and Equipment, Net   98,218    99,108    100,038    101,899    102,546 
Goodwill   84,811    84,811    84,811    84,811    84,811 
Other Real Estate Owned   25,219    30,167    33,835    35,680    41,726 
Other Assets   86,701    87,489    89,121    90,071    67,044 
Total Other Assets   294,949    301,575    307,805    312,461    296,127 
                          
Total Assets  $2,615,094   $2,654,144   $2,693,715   $2,627,169   $2,499,617 
                          
LIABILITIES                         
Deposits:                         
Noninterest Bearing Deposits  $720,824   $723,866   $707,470   $659,115   $667,616 
NOW Accounts   688,491    734,237    801,037    804,337    665,493 
Money Market Accounts   261,050    264,475    257,684    254,149    270,131 
Regular Savings Accounts   262,843    255,185    250,862    233,612    231,301 
Certificates of Deposit   181,775    186,881    192,961    195,581    199,037 
Total Deposits   2,114,983    2,164,644    2,210,014    2,146,794    2,033,578 
                          
Short-Term Borrowings   65,355    53,698    49,488    49,425    42,586 
Subordinated Notes Payable   62,887    62,887    62,887    62,887    62,887 
Other Long-Term Borrowings   29,042    29,733    30,418    31,097    32,305 
Other Liabilities   69,168    71,144    66,821    64,426    45,008 
                          
Total Liabilities   2,341,435    2,382,106    2,419,628    2,354,629    2,216,364 
                          
SHAREOWNERS’ EQUITY                         
Common Stock   171    172    175    174    174 
Additional Paid-In Capital   37,738    37,625    42,941    42,569    41,637 
Retained Earnings   256,265    255,096    251,765    251,306    249,907 
Accumulated Other Comprehensive Loss, Net of Tax   (20,515)   (20,855)   (20,794)   (21,509)   (8,465)
                          
Total Shareowners’ Equity   273,659    272,038    274,087    272,540    283,253 
                          
Total Liabilities and Shareowners’ Equity  $2,615,094   $2,654,144   $2,693,715   $2,627,169   $2,499,617 
                          
OTHER BALANCE SHEET DATA                         
Earning Assets  $2,291,966   $2,306,322   $2,350,052   $2,276,781   $2,172,535 
Interest Bearing Liabilities   1,551,443    1,587,096    1,645,337    1,631,088    1,503,740 
                          
Book Value Per Diluted Share  $15.91   $15.80   $15.59   $15.53   $16.18 
Tangible Book Value Per Diluted Share   10.98    10.87    10.77    10.70    11.33 
                          
Actual Basic Shares Outstanding   17,144    17,154    17,533    17,447    17,433 
Actual Diluted Shares Outstanding   17,223    17,216    17,579    17,544    17,512 

 

 

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited

 

                  Nine Months Ended
   2015  2014     September 30,
(Dollars in thousands, except per share data)  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  Third
Quarter
  2015  2014
INTEREST INCOME                                   
Interest and Fees on Loans  $18,214   $18,231   $17,863   $18,624   $18,528   $54,308   $54,778 
Investment Securities   1,540    1,451    1,294    1,066    1,034    4,285    2,820 
Funds Sold   123    151    189    181    204    463    752 
Total Interest Income   19,877    19,833    19,346    19,871    19,766    59,056    58,350 
                                    
INTEREST EXPENSE                                   
Deposits   220    259    246    243    255    725    856 
Short-Term Borrowings   14    15    21    24    17    50    54 
Subordinated Notes Payable   344    338    332    333    333    1,014    995 
Other Long-Term Borrowings   233    237    240    252    263    710    823 
Total Interest Expense   811    849    839    852    868    2,499    2,728 
Net Interest Income   19,066    18,984    18,507    19,019    18,898    56,557    55,622 
Provision for Loan Losses   413    375    293    623    424    1,081    1,282 
Net Interest Income after Provision for Loan Losses   18,653    18,609    18,214    18,396    18,474    55,476    54,340 
                                    
NONINTEREST INCOME                                   
Deposit Fees   5,721    5,682    5,541    6,027    6,211    16,944    18,293 
Bank Card Fees   2,826    2,844    2,742    2,658    2,707    8,412    8,234 
Wealth Management Fees   1,818    1,776    2,046    1,988    2,050    5,640    5,820 
Mortgage Banking Fees   1,306    1,203    987    808    911    3,496    2,274 
Data Processing Fees   400    364    373    278    336    1,137    1,265 
Other   1,157    2,925    1,159    1,294    1,136    5,241    3,597 
Total Noninterest Income   13,228    14,794    12,848    13,053    13,351    40,870    39,483 
                                    
NONINTEREST EXPENSE                                   
Compensation   16,653    16,404    16,524    15,850    15,378    49,581    46,365 
Occupancy, Net   4,446    4,258    4,396    4,440    4,575    13,100    13,378 
Other Real Estate, Net   1,302    931    1,497    1,353    1,783    3,730    5,458 
Other   6,763    6,846    6,973    6,666    6,871    20,582    20,848 
Total Noninterest Expense   29,164    28,439    29,390    28,309    28,607    86,993    86,049 
                                    
OPERATING PROFIT   2,717    4,964    1,672    3,140    3,218    9,353    7,774 
Income Tax Expense   1,034    1,119    686    1,219    1,103    2,839    435 
NET INCOME  $1,683   $3,845   $986   $1,921   $2,115   $6,514   $7,339 
                                    
PER SHARE DATA                                   
Basic Income  $0.10   $0.22   $0.06   $0.11   $0.12   $0.38   $0.42 
Diluted Income   0.09    0.22    0.06    0.11    0.12    0.37    0.42 
Cash Dividend  $0.03   $0.03   $0.03   $0.03   $0.02   $0.09   $0.06 
AVERAGE SHARES                                   
Basic   17,150    17,296    17,508    17,433    17,440    17,317    17,422 
Diluted   17,229    17,358    17,555    17,530    17,519    17,379    17,482 

 

 

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES 
AND NONPERFORMING ASSETS
Unaudited

 

   2015  2015  2015  2014  2014
(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  $15,236   $16,090   $17,539   $19,093   $20,543 
Provision for Loan Losses   413    375    293    623    424 
Net Charge-Offs   912    1,229    1,742    2,177    1,874 
Balance at End of Period  $14,737   $15,236   $16,090   $17,539   $19,093 
As a % of Loans   0.99%   1.03%   1.10%   1.22%   1.34%
As a % of Nonperforming Loans   112.17%   99.46%   95.83%   104.60%   81.31%
                          
CHARGE-OFFS                         
Commercial, Financial and Agricultural  $365   $239   $290   $688   $86 
Real Estate - Construction   —      —      —      28    —   
Real Estate - Commercial   (26)   285    904    957    1,208 
Real Estate - Residential   476    484    305    522    212 
Real Estate - Home Equity   370    454    182    (20)   621 
Consumer   318    351    576    608    386 
Total Charge-Offs  $1,503   $1,813   $2,257   $2,783   $2,513 
                          
RECOVERIES                         
Commercial, Financial and Agricultural  $45   $82   $55   $66   $28 
Real Estate - Construction   —      —      —      2    2 
Real Estate - Commercial   86    54    30    76    213 
Real Estate - Residential   193    200    48    212    93 
Real Estate - Home Equity   42    33    24    28    37 
Consumer   225    215    358    222    266 
Total Recoveries  $591   $584   $515   $606   $639 
                          
NET CHARGE-OFFS  $912   $1,229   $1,742   $2,177   $1,874 
                          
Net Charge-Offs as a % of Average Loans(1)   0.24%   0.33%   0.49%   0.61%   0.52%
                          
RISK ELEMENT ASSETS                         
Nonaccruing Loans  $13,138   $15,320   $16,790   $16,769   $23,482 
Other Real Estate Owned   25,219    30,167    33,835    35,680    41,726 
Total Nonperforming Assets  $38,357   $45,487   $50,625   $52,449   $65,208 
                          
Past Due Loans 30-89 Days  $4,335   $5,858   $3,689   $6,792   $4,726 
Past Due Loans 90 Days or More   —      —      —      —      62 
Classified Loans   61,411    69,152    74,247    83,137    89,850 
Performing Troubled Debt Restructuring’s  $35,961   $41,632   $42,590   $44,409   $43,578 
                          
Nonperforming Loans as a % of Loans   0.88%   1.03%   1.15%   1.16%   1.65%
Nonperforming Assets as a % of                         
Loans and Other Real Estate   2.54%   3.00%   3.38%   3.55%   4.45%
Nonperforming Assets as a % of Total Assets   1.47%   1.71%   1.88%   2.00%   2.61%
                          
(1) Annualized                         

 

 

CAPITAL CITY BANK GROUP, INC.

AVERAGE BALANCES AND INTEREST RATES(1)

Unaudited

 

                      
   Third Quarter 2015  Second Quarter 2015  First Quarter 2015  Fourth Quarter 2014  Third Quarter 2014  Sept 2015 YTD  Sept 2014 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  $1,483,657    18,290    4.89%  $1,473,954    18,285    4.98%  $1,448,617    17,909    5.01%  $1,426,756    18,670    5.19%  $1,421,327    18,590    5.19%  $1,468,871   $54,484    4.96%  $1,409,701   $54,967    5.21%
                                                                                                          
Investment Securities                                                                                                         
Taxable Investment Securities   543,550    1,347    0.98    540,735    1,313    0.97    491,637    1,198    0.98    423,136    964    0.90    387,966    929    0.95    525,498    3,858    0.98    341,924    2,459    0.96 
Tax-Exempt Investment Securities   92,685    304    1.31    76,191    219    1.15    63,826    154    0.96    74,276    161    0.87    82,583    165    0.80    77,673    677    1.16    97,068    561    0.77 
                                                                                                          
Total Investment Securities   636,235    1,651    1.03    616,926    1,532    0.99    555,463    1,352    0.98    497,412    1,125    0.90    470,549    1,094    0.92    603,171    4,535    1.00    438,992    3,020    0.92 
                                                                                                          
Funds Sold   190,931    123    0.26    237,132    151    0.26    302,405    189    0.25    288,613    181    0.25    317,553    204    0.25    243,081    463    0.26    397,302    752    0.25 
                                                                                                          
Total Earning Assets   2,310,823   $20,064    3.45%   2,328,012   $19,968    3.44%   2,306,485   $19,450    3.42%   2,212,781   $19,976    3.58%   2,209,429   $19,888    3.57%   2,315,123   $59,482    3.43%   2,245,995   $58,739    3.50%
                                                                                                          
Cash and Due From Banks   45,872              52,473              48,615              45,173              44,139              48,977              45,432           
Allowance for Loan Losses   (15,403)             (16,070)             (17,340)             (19,031)             (20,493)             (16,264)             (21,976)          
Other Assets   298,400              306,286              310,791              310,813              297,496              305,113              299,591           
                                                                                                          
Total Assets  $2,639,692             $2,670,701             $2,648,551             $2,549,736             $2,530,571             $2,652,949             $2,569,042           
                                                                                                          
LIABILITIES:                                                                                                         
Interest Bearing Deposits                                                                                                         
NOW Accounts  $709,130   $60    0.03%  $761,388   $64    0.03%  $794,308   $68    0.03%  $689,572   $57    0.03%  $680,154   $66    0.04%  $754,630   $192    0.03%  $724,700   $261    0.05%
Money Market Accounts   261,749    31    0.05    256,265    32    0.05    254,483    41    0.07    267,703    46    0.07    270,133    46    0.07    257,525    104    0.05    274,908    144    0.07 
Savings Accounts   258,752    32    0.05    253,808    31    0.05    242,256    30    0.05    233,161    29    0.05    228,741    29    0.05    251,666    93    0.05    225,212    83    0.05 
Time Deposits   183,976    97    0.21    189,213    132    0.28    194,655    107    0.22    197,129    111    0.22    202,802    114    0.22    189,242    336    0.24    209,171    368    0.24 
Total Interest Bearing Deposits   1,413,607    220    0.06%   1,460,674    259    0.07%   1,485,702    246    0.07%   1,387,565    243    0.07%   1,381,830    255    0.07%   1,453,063    725    0.07%   1,433,991    856    0.08%
                                                                                                          
Short-Term Borrowings   61,548    14    0.09%   54,237    15    0.11%   49,809    21    0.17%   46,055    24    0.21%   40,782    17    0.17%   55,241    50    0.12%   43,846    54    0.17%
Subordinated Notes Payable   62,887    344    2.14    62,887    338    2.13    62,887    332    2.11    62,887    333    2.07    62,887    333    2.07    62,887    1,014    2.13    62,887    995    2.09 
Other Long-Term Borrowings   29,383    233    3.15    30,067    237    3.16    30,751    240    3.16    31,513    252    3.17    32,792    263    3.20    30,062    710    3.16    34,473    823    3.19 
                                                                                                          
Total Interest Bearing Liabilities   1,567,425   $811    0.21%   1,607,865   $849    0.21%   1,629,149   $839    0.21%   1,528,020   $852    0.22%   1,518,291   $868    0.23%   1,601,253   $2,499    0.21%   1,575,197   $2,728    0.23%
                                                                                                          
Noninterest Bearing Deposits   723,826              717,725              677,674              689,800              681,051              706,578              664,916           
Other Liabilities   73,485              70,690              66,424              45,887              47,099              70,226              46,844           
                                                                                                          
Total Liabilities   2,364,736              2,396,280              2,373,247              2,263,707              2,246,441              2,378,057              2,286,957           
                                                                                                          
SHAREOWNERS’ EQUITY:   274,956              274,421              275,304              286,029              284,130              274,892              282,085           
                                                                                                          
Total Liabilities and Shareowners’ Equity  $2,639,692             $2,670,701             $2,648,551             $2,549,736             $2,530,571             $2,652,949             $2,569,042           
                                                                                                          
Interest Rate Spread       $19,253    3.24%       $19,119    3.23%       $18,611    3.21%       $19,124    3.36%       $19,020    3.34%       $56,983    3.23%       $56,011    3.26%
                                                                                                          
Interest Income and Rate Earned(1)        20,064    3.45         19,968    3.44         19,450    3.42         19,976    3.58         19,888    3.57         59,482    3.43         58,739    3.50 
Interest Expense and Rate Paid(2)        811    0.14         849    0.15         839    0.15         852    0.15         868    0.16         2,499    0.14         2,728    0.16 
                                                                                                          
Net Interest Margin       $19,253    3.31%       $19,119    3.29%       $18,611    3.27%       $19,124    3.43%       $19,020    3.42%       $56,983    3.29%       $56,011    3.33%

 

(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.