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Strategic Initiatives
.
In 2021, we initiated a new five-year strategic plan “2025 In Focus” that will guide
us in the areas of client
experience, channel optimization, market expansion, and culture.
As part of 2025 In Focus, we aim to take our brand of
relationship banking to the next level, further deepen relationships within
our communities, expand into new higher growth
markets, diversify our revenue sources, invest in new technology that
will support the expansion of client relationships, scale
within our lines of business, and drive higher profitability.
In 2022, we implemented initiatives in support of the strategic plan,
including the implementation of an integrated marketing software aimed at deepening
client relationships, initiation of a
comprehensive review of our banking office network, continued
expansion into new markets, and in 2020 and 2021 continued our
efforts to diversify our revenues by expanding our residential mortgage
banking and wealth businesses (discussed further below -
Recent Acquisition/Expansion Activity
).
Markets
.
We maintain a blend
of large and small markets in Florida and Georgia,
all in close proximity to major interstate
thoroughfares such as Interstates 10 and 75.
Our larger markets include Tallahassee
(Leon County, Florida),
Gainesville
(Alachua County, Florida),
Macon (Bibb County,
Georgia), and Suncoast (Hernando/Pasco/Citrus Counties, Florida).
The larger
employers in these markets are state and local governments, healthcare
providers, educational institutions, and small businesses,
providing stability and good growth dynamics that have historically grown
in excess of the national average.
We serve an
additional fifteen smaller, less competitive,
rural markets located on the outskirts of, and centered between, our larger
markets
where we are positioned as a market leader.
In 12 of 18 markets in Florida and two of four Georgia markets, we frequently
rank
within the top four banks in terms of deposit market share.
Furthermore, in the counties in which we operate, we maintain an
8.4% deposit market share in the Florida counties and 5.4% in the Georgia
counties (excluding Northern Arc markets entered in
2022).
Our markets provide for a strong core deposit funding base, a key differentiator
and driver of our profitability and
Recent Acquisition/Expansion Activity
.
We have continued
our expansion into the Northern Arc of Atlanta, Georgia by opening
full-service offices in Marietta (Cobb County) in the fourth
quarter of 2022 and Duluth (Gwinnett County) in the first quarter of
2023.
Additionally, we expanded our
presence in the Florida Panhandle by opening a full-service office
in Watersound, Florida
in the fourth quarter of 2022.
To expand our presence
and commitment to our Gainesville market, we plan to open a third full-
service banking office in the area in early 2023.
During 2022, we hired leadership and banking teams in the Northern Arc and
Walton County
office markets, including commercial bankers, retail delivery
support, private banking, wealth advisors, and
treasury professionals.
Further, CCHL loan originators will reside in the Northern
Arc and Walton County
offices.
On April 30, 2021, a newly formed subsidiary of CCBG, Capital City Strategic
Wealth, LLC
(“CCSW”) acquired substantially all
of the assets of Strategic Wealth
Group, LLC and certain related businesses (“SWG”) – Refer to Note 1
– Significant Accounting
Policies/Business Combination for additional information
on this transaction.
On March 1, 2020, CCB completed its acquisition of a 51% membership
interest in Brand Mortgage Group, LLC (“Brand”)
which is now operated as CCHL – Refer to Note 1 – Significant Accounting Policies/Business
Combination for additional
information on this transaction.
EXECUTIVE OVERVIEW
For 2022, net income attributable to common shareowners totaled $40.1 million,
or $2.36 per diluted share, compared to net
income of $33.4 million, or $1.98 per diluted share, for 2021 and $31.6 million,
or $1.88 per diluted share, for 2020.
The increase in net income attributable to common shareowners for 202
2
was attributable to higher net interest income of $21.6
million and lower noninterest expense of $0.7 million, partially offset
by an $8.7 million increase in the provision for credit losses,
lower noninterest income of $12.9 million, and higher income taxes of
$0.3 million.
Net income attributable to common
shareowners included a $6.4 million decrease in the deduction
to record the 49% non-controlling interest in the earnings of CCHL.
The increase in net income attributable to common shareowners for 2021
was attributable to a decrease in the provision for credit
losses of $11.2 million, higher net interest income
of $1.5 million and lower income taxes of $0.4 million, partially offset
by
higher noninterest expense of $12.5 million and lower noninterest income
of $3.6 million. Net income attributable to common
shareowners included a $4.9 million decrease in the deduction to
record the 49% non-controlling interest in the earnings of CCHL.
Below are
Summary Highlights
of our 2022 financial performance:
●
Strong growth
in net interest income of 21% reflected
improved earning asset mix and strength
of deposit franchise
●
Loan growth of $594 million, or 30.7% (end of period)
and $189 million, or 9.4% (year-to-date average)
●
Average Deposits grew
$356 million, or 10.5%
●
CCHL contribution decreased $0.24 per share
due to slower secondary market loan sales, but was more than
offset by
strong adjustable rate production
for our loan portfolio, and higher wealth and deposit fees
●
Noninterest expense included pension
settlement charges totaling $2.3 million or $0.11
per share
●
Tangible
book value per share increased $0.54,
or 3.2%, primarily due to strong earnings and a favorable
re-
measurement adjustment for pension plan,
partially offset by higher unrealized investment security losses
For more detailed information, refer to the following additional sections of
the MD&A “Results of Operations” and “Financial
Condition”.