Capital City Bank Group, Inc.
 
Reports Third Quarter 2022 Results
TALLAHASSEE, Fla.
 
(October 25, 2022) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today
 
reported net income
attributable to common shareowners of $11.3
 
million, or $0.67 per diluted share, for the third quarter of 2022 compared to net
income of $8.7 million, or $0.51 per diluted share, for the second
 
quarter of 2022, and $10.1 million, or $0.60 per diluted share, for
the third quarter of 2021.
 
For the first nine months of 2022, net income attributable to common
 
shareowners totaled $28.5 million, or $1.68 per diluted share,
compared to net income of $27.0 million, or $1.60 per diluted share, for the same period
 
of 2021.
 
QUARTER HIGHLIGHTS (3rd Quarter 2022 versus 2nd Quarter 2022)
●
Continued strong growth
 
in net interest income of 18% - net interest
 
margin percentage
 
grew 44 bps to 3.31%
●
Solid loan growth of 6.0% (end of period) and
 
8.6% (average)
●
Continued strong credit
 
quality metrics – higher credit loss provision
 
driven primarily by loan growth
●
Noninterest income decreased
 
$2.0 million, or 7.9%, due to lower mortgage banking revenues
 
at CCHL -- strong adjustable rate
portfolio production by CCHL contributed
 
to loan growth for the quarter
●
Noninterest expense decreased
 
$0.7 million, or 1.7%, primarily due to lower mortgage and wealth commissions,
 
partially offset
by higher performance-based compensation
●
Tangible
 
book value per share increased
 
$0.07, or 0.4%
 
“We continued
 
to see steady loan growth and margin expansion this quarter,
 
which contributed to nice improvement in our
operating leverage,” said William G. Smith,
 
Jr., Chairman, President and
 
CEO of Capital City Bank Group.
 
“I was particularly
pleased to see tangible book value growth and stable deposit balances, both
 
current headwinds for the industry.
 
On a relative basis,
our residential mortgage business has held up well given the higher rate
 
environment and slowdown in secondary market loan sales,
and we continued to use our balance sheet to book a steady flow of adjustable
 
rate portfolio production,
 
which has contributed to
our earnings.
 
Our credit metrics remain strong,
 
and a large portion of our credit loss provision for the quarter
 
was driven by loan
growth.
 
While the environment remains highly uncertain, I like our positioning, particularly,
 
the value that our core deposit
franchise should contribute in a higher rate environment.
 
I also feel good about our credit risk management discipline.
 
The team is
excited to open two new full-service offices in Watersound,
 
Florida and Marietta, Georgia in the fourth quarter
 
and to ramp up our
service to those communities.
 
As we plan for 2023, we are focused on strategies that will further diversify
 
and grow our revenue
base, both product and geography,
 
and improve our efficiency.”
 
Discussion of Operating Results
Net Interest Income/Net Interest
 
Margin
Tax-equivalent net
 
interest income for the third quarter of 2022 totaled $33.4 million, compared
 
to $28.4 million for the second
quarter of 2022, and $27.7 million for the third quarter of 2021.
 
For the first nine months of 2022, tax-equivalent net interest income
totaled $86.6 million compared to $78.4 million for the same period of 2021.
 
Compared to the referenced prior periods, the increase
primarily reflected strong loan growth, higher investment balances,
 
and higher rates across a majority of our earning assets.
 
Our net interest margin for the third quarter of 2022 was 3.31%, an
 
increase of 44 basis points over the second quarter of 2022 and
33 basis points over the third quarter of 2021, both driven by higher interest rates
 
and an overall improved earning asset mix.
 
For the
month of September 2022, our net interest margin
 
was 3.41%.
 
Excluding the impact of overnight funds in excess of $200 million,
our net interest margin for the third quarter of 2022 was 3.54%.
 
Compared to the nine month period of 2021, the net interest margin
remained flat at 2.91% as the favorable impact of higher interest rates and an
 
improved earning asset mix offset the favorable impact
in 2021 from a significant level of SBA PPP fee income.
 
Provision for Credit Loss
 
es
 
We recorded
 
a provision for credit losses of $2.1 million for the third quarter of 2022 compared
 
to $1.5 million in the second
quarter of 2022 and no provision for the third quarter of 2021.
 
For the first nine months of 2022, the provision was $3.6 million
compared to a benefit of $1.6 million for the same period of 2021.
 
The higher level of provision compared to all prior periods was
primarily attributable to strong loan growth.
 
The credit loss provision in 2021 was favorably impacted by strong loan
recoveries.
 
We discuss the allowance
 
for credit losses further below.
 
2
Noninterest Income and Noninterest
 
Expense
Noninterest income for the third quarter of 2022 totaled $22.9 million compared
 
to $24.9 million for the second quarter of 2022 and
$26.6
 
million for the third quarter of 2021.
 
The $2.0 million decrease from the second quarter of 2022 was primarily
 
attributable to
lower mortgage banking revenues of $1.9 million.
 
Compared to the third quarter of 2021, the $3.6 million decrease was attributable
to lower mortgage banking revenues of $5.2 million, partially offset
 
by higher deposit fees of $0.9 million, other income of $0.3
million, and wealth management fees of $0.3 million.
 
For the first nine months of 2022, noninterest income totaled $73.7
 
million compared to $82.9 million for the same period of 2021
and reflected lower mortgage banking revenues of $17.5
 
million, partially offset by higher deposit fees of $3.0 million and
 
wealth
management fees of $4.4 million (primarily insurance revenues of
 
$3.5 million and retail brokerage fees of $0.9 million).
 
Lower
mortgage banking revenues for 2022 reflected a reduction in refinancing
 
activity and, to a lesser degree,
 
lower purchase mortgage
originations primarily driven by higher interest rates.
 
In addition, gain on sale margins have been pressured due to a lower level of
governmental loan originations and mandatory delivery loan sales (both
 
of which provide a higher gain on sale percentage).
 
During
2022, strong best efforts origination volume has allowed
 
us to book a steady flow of adjustable rate residential loans in our portfolio
and has contributed to loan growth and earnings.
 
In addition, continued stability in our construction/permanent loan program has
partially offset the slowdown in secondary market originations.
 
For 2022, Capital City Home Loans (CCHL) contributed $0.5
million ($0.03 per diluted share) to earnings versus $3.4 million ($0.21 per
 
diluted share) in 2021, which has largely been offset
 
by
a $1.2 million ($0.07 per diluted share) contribution to earnings by Capital City Strategic
 
Wealth (CCSW) and
 
improvement in both
deposit fees and retail brokerage fees, which reflects our continued commitment
 
to revenue diversification.
Noninterest expense for the third quarter of 2022 totaled $39.8 million
 
compared to $40.5 million for the second quarter of 2022
and $39.7 million for the third quarter of 2021.
 
The $0.7 million decrease from the second quarter of 2022 was primarily
attributable
 
to lower variable/performance-based compensation expense at CCHL and CCSW totaling
 
$1.5 million, partially offset
by variable/performance-based compensation of $0.6 million and base
 
salaries (primarily annual merit raises) of $0.2 million at the
Bank.
 
Compared to the third quarter of 2021, the $0.1 million increase reflected higher
 
other real estate expense of $1.0 million,
partially offset by lower compensation expense of $0.5
 
million and pension settlement expense of $0.4 million.
 
The higher level of
other real estate expense was attributable to a gain from the sale of a banking
 
office in the third quarter of 2021.
 
The decrease in
compensation expense reflected lower variable/performance
 
-based compensation at CCHL totaling $1.6 million, partially offset
 
by
higher variable/performance-based compensation of
 
$0.7 million and base salaries of $0.3 million at the Bank.
 
For the first nine months of 2022, noninterest expense totaled $119.5
 
million compared to $122.3 million for the same period of
2021 and reflected lower compensation expense of $1.7 million,
 
pension settlement expense of $2.0 million, and other expense of
$0.8 million, partially offset by higher other real estate expense
 
of $1.4 million and occupancy expense of $0.3 million.
 
The
reduction in compensation expense was primarily due to lower variable
 
/performance-based compensation at CCHL totaling $7.0
million, partially offset by higher variable/performance-based
 
compensation totaling $2.8 million, base salaries (merit and new
market staffing additions) of $2.0 million, and
 
associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million
at the Bank.
 
A lower level of lump sum retirement payments drove the decrease in pension settlement
 
expense compared to both
prior year periods.
 
We expect additional
 
pension settlement expense for the remainder of 2022 based on our current estimate of
lump sum pension pay-outs to retirees.
 
The net $0.8 million decrease in other expense reflected lower pension plan
 
expense (non-
service component) of $3.7 million that was partially offset
 
by higher advertising and travel/entertainment expense totaling $1.0
million (return to pre-pandemic levels and market expansion), mortgage
 
servicing right amortization of $0.6
 
million at CCHL,
 
other
losses of $0.5 million (debit card fraud), and other miscellaneous expenses
 
related to training, hiring, and variable loan related costs.
 
The sale of two banking offices in 2021 drove the increase in other
 
real estate expense.
Income Taxes
We realized income
 
tax expense of $3.1 million (effective rate of 21.4%) for the
 
third quarter of 2022 compared to $2.2 million
(effective rate of 19.4%) for the second quarter of 2022
 
and $2.9 million (effective rate of 20.3%) for the third quarter of 202
 
1.
 
For
the first nine months of 2022, we realized income
 
tax expense of $7.5 million (effective rate of 20.3%) compared to $7.8 million
(effective rate of 19.4%) for the same period of 2021.
 
Absent discrete items, we expect our annual effective tax rate to
 
approximate
21%.
3
Discussion of Financial Condition
Earning Assets
Average earning
 
assets totaled $4.010 billion for the third quarter of 2022, an increase of $35.7
 
million, or 0.9%, over the second
quarter of 2022, and an increase of $218.6 million, or 5.8%, over
 
the fourth quarter of 2021.
 
The increase over both prior periods
was primarily driven by higher deposit balances (see below –
Funding
).
 
The mix of earning assets continues to improve driven by
strong loan growth.
We maintained
 
an average net overnight funds (interest bearing deposits with banks plus FED funds
 
sold less FED funds purchased)
sold position of $570.0 million in the third quarter of 2022 compared
 
to $691.9 million in the second quarter of 2022
 
and $789.1
million in the fourth quarter of 2021. The declining overnight funds position
 
reflects growth in average loans.
 
Average loans
 
held for investment (“HFI”) increased $179.4 million, or 8.6%, over the second quarter of
 
2022 and increased $315.8
million, or 16.2%, over the fourth quarter of 2021.
 
Period end loans increased $132.5 million, or 6.0%, over the second quarter
 
of
2022 and $414.7 million, or 21.5%, over the fourth quarter of 2021.
 
The growth in 2022 has been broad based with increases
realized in all loan categories, more significantly,
 
residential mortgage, residential construction and commercial real
 
estate.
 
The
slowdown in secondary market residential loan sales has allowed us to book
 
a steady flow of CCHL’s
 
adjustable rate production in
our loan portfolio through 2022.
Allowance for Credit Losses
At September 30, 2022, the allowance for credit losses for HFI loans totaled $22.5
 
million compared to $21.3 million at June 30,
2022 and $21.6 million at December 31, 2021.
 
Activity within the allowance is provided on Page 9.
 
The $1.2 million increase in
the allowance for the third quarter was driven by incremental reserves needed
 
for loan growth and, to a lesser extent, a higher
projected rate of unemployment and its potential effect
 
on rates of default.
 
Net charge-offs decreased $0.4 million to $0.7 million
for the third quarter of 2022.
 
At September 30, 2022, the allowance represented 0.96% of HFI loans
 
and provided coverage of
964% of nonperforming loans compared to 0.96% and 678%, respectively,
 
at June 30, 2022, and 1.12% and 500%, respectively,
 
at
December 31, 2021.
Credit Quality
Overall credit quality remains strong.
 
Nonperforming assets (nonaccrual loans and other real estate) totaled $2.
 
4
 
million at
September 30, 2022 compared to $3.2 million at June 30, 2022 and $4.3 million
 
at December 31, 2021.
 
At September 30, 2022,
nonperforming assets as a percent of total assets equaled 0.06%, compared
 
to 0.07% at June 30, 2022 and 0.10% at December 31,
2021.
 
Nonaccrual loans totaled $2.4
 
million at September 30, 2022, a $0.7 million decrease from June 30, 2022
 
and a $1.9 million
decrease from December 31, 2021.
 
Further, classified loans increased $1.4 million ove
 
r
 
the second quarter of 2022 to $21.0 million.
 
Funding (Deposits/Debt)
Average total
 
deposits were $3.770 billion for the third quarter of 2022, an increase of $4.5 million,
 
or 0.1%, over the second
quarter of 2022 and $220.7 million, or 6.2%, over the fourth quarter
 
of 2021.
 
Compared to the second quarter of 2022, the increase
reflected higher noninterest bearing and savings balances.
 
Compared to the fourth quarter of 2021, we have had strong growth in
our noninterest bearing deposits,
 
NOW accounts, and savings account balances.
 
Over the past few years,
 
we have experienced
strong core deposit growth. We
 
continue to closely monitor our cost of deposits and deposit mix as we manage
 
through this rising
rate environment.
 
It is anticipated that liquidity levels will remain strong given our current level of overnight
 
funds.
 
Average borrowings
 
increased $14.9 million over the second quarter of 2022, primarily due to an
 
increase in short-term repurchase
agreements and CCHL’s
 
warehouse line.
 
Capital
Shareowners’ equity was $373.2 million at September 30, 2022
 
compared to $371.7 million at June 30, 2022
 
and $383.2 million at
December 31, 2021.
 
For the first nine months of 2022, shareowners’ equity was positively impacted by
 
net income attributable to
common shareowners of $28.5 million, a $3.3 million increase in the
 
fair value of the interest rate swap related to subordinated debt,
stock compensation accretion of $0.9 million, net adjustments totaling
 
$0.8 million related to transactions under our stock
compensation plans, and a $0.4 million decrease in the accumulated other
 
comprehensive loss for our pension plan.
 
Shareowners’
equity was reduced by common stock dividends
 
of $8.3 million ($0.49 per share) and a $35.6 million increase in the unrealized loss
on investment securities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
At September 30, 2022, our total risk-based capital ratio was 15.75%
 
compared to 16.07% at June 30, 2022 and 17.15% at
December 31, 2021.
 
Our common equity tier 1 capital ratio was 12.83%, 13.07%, and 13.86%, respectively,
 
on these dates.
 
Our
leverage ratio was 8.91%, 8.77%, and 8.95%, respectively,
 
on these dates.
 
Further, our tangible common equity ratio was 6.61%
 
at
September 30, 2022 compared to 6.54% and 6.95% at June 30, 2022 and December
 
31, 2021, respectively.
 
The decline in our
regulatory capital ratios compared to 2021 was attributable to strong loan growth
 
during 2022.
 
At September 30, 2022, all of our
regulatory capital ratios exceeded the threshold to be designated as “well-capitalized”
 
under the Basel III capital standards.
 
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 $4.3 billion in assets.
 
We provide
 
a full range of banking services, including traditional deposit
and credit services, mortgage banking, asset management, trust, merchant
 
services, bankcards,
 
securities brokerage services and
financial advisory services, including the sale of life insurance, risk management
 
and asset protection services.
 
Our bank
subsidiary, Capital City Bank,
 
was founded in 1895 and now has 57 banking offices and 86 ATMs/ITMs
 
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 our future results to differ materially.
 
The following factors, among others, could cause our actual results to
differ: fluctuations in inflation, interest rates, or monetary policies; the
 
accuracy of the our financial statement estimates and
assumptions; legislative or regulatory changes; the effects of security
 
breaches and computer viruses that may affect our computer
systems; fraud related to debit card products; changes in consumer spending
 
and savings habits; our growth and profitability; the
strength of the U.S. economy and the local economies where we conduct operations;
 
the effects of a non-diversified loan portfolio,
including the risks of geographic and industry concentrations; natural disasters, widespread
 
health emergencies, military conflict,
terrorism or other geopolitical events; 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; negative publicity and the impact on our
reputation; technological changes, especially changes that allow out
 
of market competitors to compete in our markets; changes in
accounting; risks from the ongoing COVID-19 pandemic; and our ability
 
to manage the risks involved in the foregoing.
 
Additional
factors can be found in our Annual Report on Form 10-K for the fiscal year
 
ended December 31, 2021, and our 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 we assume no obligation to update
 
forward-looking statements or the reasons why actual
results could differ.
USE OF NON-GAAP FINANCIAL MEASURES
We present a
 
tangible common equity ratio and a tangible book value per diluted share that removes
 
the effect of goodwill and other
intangibles resulting from merger and acquisition activity.
 
We believe these
 
measures are useful to investors because it allows
investors to more easily compare our capital adequacy to other companies in the
 
industry.
 
The GAAP to non-GAAP reconciliations are provided below.
(Dollars in Thousands, except per share data)
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Shareowners' Equity (GAAP)
$
373,165
$
371,675
$
372,145
$
383,166
$
348,868
Less: Goodwill and Other Intangibles (GAAP)
93,133
93,173
93,213
93,253
93,293
Tangible Shareowners' Equity (non-GAAP)
A
280,032
278,502
278,932
289,913
255,575
Total Assets (GAAP)
4,332,671
4,354,297
4,310,045
4,263,849
4,048,733
Less: Goodwill and Other Intangibles (GAAP)
93,133
93,173
93,213
93,253
93,293
Tangible Assets (non-GAAP)
B
$
4,239,538
$
4,261,124
$
4,216,832
$
4,170,596
$
3,955,440
Tangible Common Equity Ratio (non-GAAP)
A/B
6.61%
6.54%
6.61%
6.95%
6.46%
Actual Diluted Shares Outstanding (GAAP)
C
16,998,177
16,981,614
16,962,362
16,935,389
16,911,715
Tangible Book Value
 
per Diluted Share (non-GAAP)
A/C
$
16.47
$
16.40
$
16.44
$
17.12
$
15.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
CAPITAL CITY BANK
 
GROUP,
 
INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended
Nine Months Ended
(Dollars in thousands, except per share data)
Sep 30, 2022
Jun 30, 2022
Sep 30, 2021
Sep 30, 2022
Sep 30, 2021
EARNINGS
Net Income Attributable to Common Shareowners
$
11,315
$
8,713
$
10,091
$
28,483
$
27,024
Diluted Net Income Per Share
$
0.67
$
0.51
$
0.60
$
1.68
$
1.60
PERFORMANCE
Return on Average Assets
1.03
%
0.81
%
0.99
%
0.88
%
0.92
%
Return on Average Equity
11.83
9.36
11.72
10.05
10.87
Net Interest Margin
3.31
2.87
2.98
2.91
2.91
Noninterest Income as % of Operating Revenue
40.76
46.78
48.99
46.03
51.47
Efficiency Ratio
70.66
%
75.96
%
73.09
%
74.60
%
75.83
%
CAPITAL ADEQUACY
Tier 1 Capital
 
14.80
%
15.13
%
15.69
%
14.80
%
15.69
%
Total Capital
 
15.75
16.07
16.70
15.75
16.70
Leverage
 
8.91
8.77
9.05
8.91
9.05
Common Equity Tier 1
12.83
13.07
13.45
12.83
13.45
Tangible Common Equity
(1)
6.61
6.54
6.46
6.61
6.46
Equity to Assets
8.61
%
8.54
%
8.62
%
8.61
%
8.62
%
ASSET QUALITY
Allowance as % of Non-Performing Loans
934.53
%
677.57
%
710.39
%
934.53
%
710.39
%
Allowance as a % of Loans HFI
0.96
0.96
1.11
0.96
1.11
Net Charge-Offs as % of Average Loans HFI
0.12
0.22
0.03
0.17
(0.05)
Nonperforming Assets as % of Loans HFI and OREO
0.10
0.15
0.17
0.10
0.17
Nonperforming Assets as % of Total Assets
0.06
%
0.07
%
0.08
%
0.06
%
0.08
%
STOCK PERFORMANCE
High
 
$
33.93
$
28.55
$
26.10
$
33.93
$
28.98
Low
27.41
24.43
22.02
24.43
21.42
Close
$
31.11
$
27.89
$
24.74
$
31.11
$
24.74
Average Daily Trading Volume
30,546
25,342
30,515
26,677
29,925
(1)
 
Tangible common equity ratio is a non-GAAP financial measure.
 
For additional information, including a
reconciliation to GAAP, refer to Page 4.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT
 
OF FINANCIAL CONDITION
Unaudited
2022
2021
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
ASSETS
Cash and Due From Banks
$
72,686
$
91,209
$
77,963
$
65,313
$
73,132
Funds Sold and Interest Bearing Deposits
497,679
603,315
790,465
970,041
708,988
Total Cash and Cash Equivalents
570,365
694,524
868,428
1,035,354
782,120
Investment Securities Available for Sale
416,745
601,405
624,361
654,611
645,844
Investment Securities Held to Maturity
676,178
528,258
518,678
339,601
341,228
Other Equity Securities
1,349
900
855
861
-
 
Total Investment Securities
1,094,272
1,130,563
1,143,894
995,073
987,072
Loans Held for Sale
 
50,304
48,708
50,815
52,532
77,036
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural
246,304
247,902
230,213
223,086
218,929
Real Estate - Construction
237,718
225,664
174,293
174,394
177,443
Real Estate - Commercial
715,870
699,093
669,110
663,550
683,379
Real Estate - Residential
573,963
478,121
368,020
346,756
355,958
Real Estate - Home Equity
202,512
194,658
188,174
187,821
187,642
Consumer
347,949
359,906
347,785
321,511
309,983
Other Loans
20,822
6,854
6,692
13,265
6,792
Overdrafts
1,047
1,455
1,222
1,082
1,299
Total Loans Held for Investment
2,346,185
2,213,653
1,985,509
1,931,465
1,941,425
Allowance for Credit Losses
(22,510)
(21,281)
(20,756)
(21,606)
(21,500)
Loans Held for Investment, Net
2,323,675
2,192,372
1,964,753
1,909,859
1,919,925
Premises and Equipment, Net
81,736
82,932
82,518
83,412
84,750
Goodwill and Other Intangibles
93,133
93,173
93,213
93,253
93,293
Other Real Estate Owned
13
90
17
17
192
Other Assets
119,173
111,935
106,407
94,349
104,345
Total Other Assets
294,055
288,130
282,155
271,031
282,580
Total Assets
$
4,332,671
$
4,354,297
$
4,310,045
$
4,263,849
$
4,048,733
LIABILITIES
Deposits:
Noninterest Bearing Deposits
$
1,737,046
$
1,724,671
$
1,704,329
$
1,668,912
$
1,592,345
NOW Accounts
990,021
1,036,757
1,062,498
1,070,154
926,201
Money Market Accounts
292,932
289,337
288,877
274,611
286,065
Regular Savings Accounts
646,526
639,594
614,599
599,811
559,714
Certificates of Deposit
92,853
95,899
95,204
99,374
101,637
Total Deposits
3,759,378
3,786,258
3,765,507
3,712,862
3,465,962
Short-Term Borrowings
52,271
39,463
30,865
34,557
51,410
Subordinated Notes Payable
52,887
52,887
52,887
52,887
52,887
Other Long-Term Borrowings
562
612
806
884
1,610
Other Liabilities
84,657
93,319
77,323
67,735
113,720
Total Liabilities
3,949,755
3,972,539
3,927,388
3,868,925
3,685,589
Temporary Equity
9,751
10,083
10,512
11,758
14,276
SHAREOWNERS' EQUITY
Common Stock
170
170
169
169
169
Additional Paid-In Capital
36,234
35,738
35,188
34,423
33,876
Retained Earnings
384,964
376,532
370,531
364,788
359,550
Accumulated Other Comprehensive Loss, Net of Tax
(48,203)
(40,765)
(33,743)
(16,214)
(44,727)
Total Shareowners' Equity
373,165
371,675
372,145
383,166
348,868
Total Liabilities, Temporary Equity and Shareowners' Equity
$
4,332,671
$
4,354,297
$
4,310,045
$
4,263,849
$
4,048,733
OTHER BALANCE SHEET DATA
Earning Assets
$
3,988,440
$
3,996,238
$
3,970,684
$
3,949,111
$
3,714,521
Interest Bearing Liabilities
2,128,052
2,154,549
2,145,736
2,132,278
1,979,524
Book Value Per Diluted Share
$
21.95
$
21.89
$
21.94
$
22.63
$
20.63
Tangible Book Value
 
Per Diluted Share
(1)
16.47
16.40
16.44
17.12
15.11
Actual Basic Shares Outstanding
16,962
16,959
16,948
16,892
16,878
Actual Diluted Shares Outstanding
16,998
16,982
16,962
16,935
16,912
(1)
 
Tangible book value per diluted share is a non-GAAP financial measure.
 
For additional information, including a reconciliation to GAAP, refer to Page 4.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
CAPITAL CITY BANK
 
GROUP,
 
INC.
CONSOLIDATED STATEMENT
 
OF OPERATIONS
Unaudited
2022
2021
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2022
2021
INTEREST INCOME
Loans, including Fees
$
27,761
$
24,072
$
22,133
$
22,744
$
25,885
$
73,966
$
73,817
Investment Securities
4,372
3,840
2,896
2,505
2,350
11,108
6,287
Federal Funds Sold and Interest Bearing Deposits
3,231
1,408
409
300
285
5,048
698
Total Interest Income
35,364
29,320
25,438
25,549
28,520
90,122
80,802
INTEREST EXPENSE
Deposits
1,052
266
224
213
210
1,542
626
Short-Term Borrowings
536
343
192
307
317
1,071
1,053
Subordinated Notes Payable
443
370
317
306
307
1,130
922
Other Long-Term Borrowings
6
8
9
12
14
23
51
Total Interest Expense
2,037
987
742
838
848
3,766
2,652
Net Interest Income
33,327
28,333
24,696
24,711
27,672
86,356
78,150
Provision for Credit Losses
2,099
1,542
-
-
-
3,641
(1,553)
Net Interest Income after Provision for Credit Losses
31,228
26,791
24,696
24,711
27,672
82,715
79,703
NONINTEREST INCOME
Deposit Fees
5,947
5,447
5,191
5,300
5,075
16,585
13,582
Bank Card Fees
3,860
4,034
3,763
3,872
3,786
11,657
11,402
Wealth Management Fees
3,937
4,403
6,070
3,706
3,623
14,410
9,987
Mortgage Banking Revenues
7,116
9,065
8,946
9,800
12,283
25,127
42,625
Other
 
2,074
1,954
1,848
1,994
1,807
5,876
5,277
Total Noninterest Income
22,934
24,903
25,818
24,672
26,574
73,655
82,873
NONINTEREST EXPENSE
Compensation
24,738
25,383
24,856
24,783
25,245
74,977
76,687
Occupancy, Net
6,153
6,075
6,093
5,960
6,032
18,321
17,972
Other Real Estate, Net
(92)
(29)
25
26
(1,126)
(96)
(1,514)
Pension Settlement
102
169
209
572
500
480
2,500
Other
 
8,909
8,900
8,050
8,866
9,051
25,859
26,656
Total Noninterest Expense
39,810
40,498
39,233
40,207
39,702
119,541
122,301
OPERATING PROFIT
14,352
11,196
11,281
9,176
14,544
36,829
40,275
Income Tax Expense
3,074
2,177
2,235
2,040
2,949
7,486
7,795
Net Income
11,278
9,019
9,046
7,136
11,595
29,343
32,480
Pre-Tax Income Attributable to Noncontrolling Interest
37
(306)
(591)
(764)
(1,504)
(860)
(5,456)
NET INCOME ATTRIBUTABLE
 
TO
 
COMMON SHAREOWNERS
$
11,315
$
8,713
$
8,455
$
6,372
$
10,091
$
28,483
$
27,024
PER COMMON SHARE
Basic Net Income
$
0.67
$
0.51
$
0.50
$
0.38
$
0.60
$
1.68
$
1.60
Diluted Net Income
0.67
0.51
0.50
0.38
0.60
1.68
1.60
Cash Dividend
 
$
0.17
$
0.16
$
0.16
$
0.16
$
0.16
$
0.49
$
0.46
AVERAGE
 
SHARES
Basic
 
16,960
16,949
16,931
16,880
16,875
16,947
16,857
Diluted
 
16,996
16,971
16,946
16,923
16,909
16,973
16,886
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
CAPITAL CITY BANK GROUP,
 
INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND CREDIT QUALITY
Unaudited
2022
2021
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2022
2021
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period
$
21,281
$
20,756
$
21,606
$
21,500
$
22,175
$
21,606
$
23,816
Provision for Credit Losses
1,931
1,670
(79)
200
(546)
3,522
(3,042)
Net Charge-Offs (Recoveries)
702
1,145
771
94
129
2,618
(726)
Balance at End of Period
$
22,510
$
21,281
$
20,756
$
21,606
$
21,500
$
22,510
$
21,500
As a % of Loans HFI
0.96%
0.96%
1.05%
1.12%
1.11%
0.96%
1.11%
As a % of Nonperforming Loans
934.53%
677.57%
760.83%
499.93%
710.39%
934.53%
710.39%
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period
2,853
$
2,976
$
2,897
$
3,117
$
2,587
$
2,897
$
1,644
Provision for Credit Losses
 
159
(123)
79
(220)
530
115
1,473
Balance at End of Period
(1)
3,012
2,853
2,976
2,897
3,117
3,012
3,117
ACL - DEBT SECURITIES
Provision for Credit Losses
 
$
9
$
(5)
$
-
$
20
$
16
$
4
$
16
CHARGE-OFFS
Commercial, Financial and Agricultural
$
2
$
1,104
$
73
$
101
$
37
$
1,179
$
138
Real Estate - Construction
-
-
-
-
-
-
-
Real Estate - Commercial
1
-
266
-
405
267
405
Real Estate - Residential
-
-
-
20
17
-
88
Real Estate - Home Equity
-
-
33
9
15
33
94
Consumer
770
533
622
254
221
1,925
1,015
Overdrafts
989
660
780
678
1,093
2,429
2,025
Total Charge-Offs
$
1,762
$
2,297
$
1,774
$
1,062
$
1,788
$
5,833
$
3,765
RECOVERIES
Commercial, Financial and Agricultural
$
58
$
59
$
165
$
148
$
66
$
282
$
305
Real Estate - Construction
2
-
8
-
10
10
10
Real Estate - Commercial
8
56
29
25
169
93
840
Real Estate - Residential
44
115
27
33
401
186
720
Real Estate - Home Equity
22
67
58
173
46
147
240
Consumer
260
453
183
214
334
896
977
Overdrafts
666
402
533
375
633
1,601
1,399
Total Recoveries
$
1,060
$
1,152
$
1,003
$
968
$
1,659
$
3,215
$
4,491
NET CHARGE-OFFS (RECOVERIES)
$
702
$
1,145
$
771
$
94
$
129
$
2,618
$
(726)
Net Charge-Offs as a % of Average Loans
 
HFI
(2)
0.12%
0.22%
0.16%
0.02%
0.03%
0.17%
(0.05)%
CREDIT QUALITY
Nonaccruing Loans
$
2,409
$
3,141
$
2,728
$
4,322
$
3,026
Other Real Estate Owned
13
90
17
17
192
Total Nonperforming Assets ("NPAs")
$
2,422
$
3,231
$
2,745
$
4,339
$
3,218
Past Due Loans 30-89 Days
 
$
6,263
$
3,554
$
3,120
$
3,600
$
3,360
Past Due Loans 90 Days or More
-
-
-
-
-
Classified Loans
20,988
19,620
22,348
17,912
16,310
Performing Troubled Debt Restructurings
$
6,261
$
6,728
$
7,304
$
7,643
$
7,919
Nonperforming Loans as a % of Loans HFI
0.10%
0.14%
0.14%
0.22%
0.16%
NPAs as a % of Loans HFI and Other Real Estate
0.10%
0.15%
0.14%
0.22%
0.17%
NPAs as a % of
 
Total Assets
0.06%
0.07%
0.06%
0.10%
0.08%
(1)
 
Recorded in other liabilities
(2)
 
Annualized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
CAPITAL CITY BANK GROUP,
 
INC.
AVERAGE
 
BALANCE AND INTEREST RATES
Unaudited
Third Quarter 2022
Second Quarter 2022
First Quarter 2022
Fourth Quarter 2021
Third Quarter 2021
Sep 2022 YTD
Sep 2021 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 Held for Sale
$
55,164
$
486
4.82
%
$
52,860
$
711
4.44
%
$
43,004
$
397
3.19
%
$
62,809
522
3.29
%
$
67,753
$
497
2.91
%
$
50,387
$
1,594
4.23
%
$
83,558
$
2,033
3.24
%
Loans Held for Investment
(1)
2,264,075
27,354
4.76
2,084,679
23,433
4.53
1,963,578
21,811
4.52
1,948,324
22,296
4.54
1,974,132
25,458
5.12
2,105,211
72,598
4.61
2,018,168
72,036
4.76
Investment Securities
Taxable Investment Securities
1,117,789
4,359
1.55
1,142,269
3,834
1.34
1,056,736
2,889
1.10
987,700
2,493
1.00
904,962
2,333
1.03
1,105,822
11,082
1.34
708,606
6,232
1.17
Tax-Exempt Investment Securities
(1)
2,939
17
2.30
2,488
10
1.73
2,409
10
1.60
3,380
17
2.07
4,332
25
2.31
2,614
37
1.90
3,904
73
2.49
Total Investment Securities
1,120,728
4,376
1.55
1,144,757
3,844
1.34
1,059,145
2,899
1.10
991,080
2,510
1.01
909,294
2,358
1.03
1,108,436
11,119
1.34
712,510
6,305
1.18
Federal Funds Sold and Interest Bearing
Deposits
569,984
3,231
2.25
691,925
1,408
0.82
873,097
409
0.19
789,100
300
0.15
741,944
285
0.15
710,559
5,048
0.95
791,466
698
0.12
Total Earning Assets
4,009,951
$
35,447
3.51
%
3,974,221
$
29,396
2.97
%
3,938,824
$
25,516
2.63
%
3,791,313
$
25,628
2.68
%
3,693,123
$
28,598
3.07
%
3,974,593
$
90,359
3.04
%
3,605,702
$
81,072
3.01
%
Cash and Due From Banks
79,527
79,730
74,253
73,752
72,773
77,856
71,956
Allowance for Credit Losses
(21,509)
(20,984)
(21,655)
(22,127)
(22,817)
(21,382)
(23,241)
Other Assets
289,709
288,421
275,353
284,999
283,534
284,546
281,162
Total Assets
$
4,357,678
$
4,321,388
$
4,266,775
$
4,127,937
$
4,026,613
$
4,315,613
$
3,935,579
LIABILITIES:
Interest Bearing Deposits
NOW Accounts
$
1,016,475
$
868
0.34
%
$
1,033,190
$
120
0.05
%
$
1,079,906
$
86
0.03
%
$
963,778
$
72
0.03
%
$
945,788
$
72
0.03
%
$
1,042,958
$
1,074
0.14
%
$
965,839
$
222
0.03
%
Money Market Accounts
288,758
71
0.10
286,210
36
0.05
285,406
33
0.05
289,335
34
0.05
282,860
34
0.05
286,804
140
0.07
274,990
100
0.05
Savings Accounts
643,640
80
0.05
628,472
77
0.05
599,359
72
0.05
573,563
71
0.05
551,383
68
0.05
623,986
229
0.05
524,710
192
0.05
Time Deposits
94,073
33
0.14
95,132
33
0.14
97,054
33
0.14
101,037
36
0.14
102,765
36
0.14
95,408
99
0.14
102,619
112
0.15
Total Interest Bearing Deposits
2,042,946
1,052
0.20
%
2,043,004
266
0.05
%
2,061,725
224
0.04
%
1,927,713
213
0.04
%
1,882,796
210
0.04
%
2,049,156
1,542
0.10
%
1,868,158
626
0.04
%
Short-Term Borrowings
46,679
536
4.56
%
31,782
343
4.33
%
32,353
192
2.40
%
46,355
307
2.63
%
49,773
317
2.53
%
36,991
1,071
3.87
%
55,923
1,053
2.52
%
Subordinated Notes Payable
52,887
443
3.28
52,887
370
2.76
52,887
317
2.40
52,887
306
2.26
52,887
307
2.27
52,887
1,130
2.82
52,887
922
2.30
Other Long-Term Borrowings
580
6
4.74
722
8
4.54
833
9
4.49
1,414
12
3.50
1,652
14
3.37
710
23
4.58
2,046
51
3.29
Total Interest Bearing Liabilities
2,143,092
$
2,037
0.38
%
2,128,395
$
987
0.19
%
2,147,798
$
742
0.14
%
2,028,369
$
838
0.16
%
1,987,108
$
848
0.17
%
2,139,744
$
3,766
0.24
%
1,979,014
$
2,652
0.18
%
Noninterest Bearing Deposits
1,726,918
1,722,325
1,652,337
1,621,432
1,564,892
1,700,800
1,490,787
Other Liabilities
98,501
87,207
72,166
114,657
112,707
86,055
110,526
Total Liabilities
3,968,511
3,937,927
3,872,301
3,764,458
3,664,707
3,926,599
3,580,327
Temporary Equity
9,862
10,096
10,518
13,339
20,446
10,156
22,920
SHAREOWNERS' EQUITY:
379,305
373,365
383,956
350,140
341,460
378,858
332,332
Total Liabilities, Temporary
 
Equity and
Shareowners' Equity
$
4,357,678
$
4,321,388
$
4,266,775
$
4,127,937
$
4,026,613
$
4,315,613
$
3,935,579
Interest Rate Spread
$
33,410
3.13
%
$
28,409
2.78
%
$
24,774
2.49
%
$
24,790
2.52
%
$
27,750
2.91
%
$
86,593
2.80
%
$
78,420
2.83
%
Interest Income and Rate Earned
(1)
35,447
3.51
29,396
2.97
25,516
2.63
25,628
2.68
28,598
3.07
90,359
3.04
81,072
3.01
Interest Expense and Rate Paid
(2)
2,037
0.20
987
0.10
742
0.08
838
0.09
848
0.09
3,766
0.13
2,652
0.10
Net Interest Margin
$
33,410
3.31
%
$
28,409
2.87
%
$
24,774
2.55
%
$
24,790
2.60
%
$
27,750
2.98
%
$
86,593
2.91
%
$
78,420
2.91
%
(1)
 
Interest and average rates are
 
calculated on a tax-equivalent basis using a 21% Federal tax rate.
(2)
 
Rate calculated based on average earning assets.