Capital City Bank Group, Inc.

Reports Third Quarter 2013 Results

 

TALLAHASSEE, Fla. (October 29, 2013) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $1.6 million, or $0.09 per diluted share for the third quarter of 2013 compared to net income of $0.8 million, or $0.05 per diluted share for the second quarter of 2013, and net income of $1.1 million, or $0.07 per diluted share, for the third quarter of 2012. For the first nine months of 2013, the Company reported net income of $3.3 million, or $0.19 per diluted share, compared to a net loss of $1.8 million, or $0.10 per diluted share for the same period in 2012.

 

Compared to the second quarter of 2013, performance reflects a lower loan loss provision of $0.9 million, an increase in noninterest income of $0.5 million and a decrease in noninterest expense of $0.1 million, partially offset by lower net interest income of $0.4 million and higher income taxes of $0.3 million.

 

Compared to the third quarter of 2012, the increase in earnings was due to a lower loan loss provision of $2.3 million and higher noninterest income of $0.7 million, partially offset by lower net interest income of $1.8 million, an increase in noninterest expense of $0.2 million and higher income taxes of $0.5 million.

 

The increase in earnings for the first nine months of 2013 versus the comparable period in 2012 is attributable to a lower loan loss provision of $10.3 million, an increase in noninterest income of $0.7 million and a decrease in noninterest expense of $2.9 million, partially offset by a reduction in net interest income of $5.0 million and higher income taxes of $3.8 million.

 

“We continue to make progress as improving credit quality has led to lower credit costs and expense management initiatives are resulting in lower operating costs,” said William G. Smith, Jr., Chairman, President and CEO.  “Our credit metrics continue to improve with nonperforming assets declining for the seventh consecutive quarter, reaching their lowest level since the third quarter of 2008. Past due loans are also at the lowest level we’ve seen since this cycle began. Our retail strategy for the disposition of OREO continues to produce strong results, and we remain committed to this approach as we believe it generates the best economic outcome for our shareowners.  While improving credit costs have been the greatest contributor, year-to-date earnings have also benefited from higher fee income and lower operating expenses.  Although choppy, we are making steady progress, and I am encouraged about the future,” said Smith.

 

The Return on Average Assets was 0.25% and the Return on Average Equity was 2.51% for the third quarter of 2013. These metrics were 0.13% and 1.35% for the second quarter of 2013, and 0.17% and 1.77% for the third quarter of 2012, respectively.

 

For the first nine months of 2013, the Return on Average Assets was 0.17% and the Return on Average Equity was 1.75% compared to -0.09% and -0.93%, respectively, for the same period in 2012.

 

Discussion of Financial Condition

 

Average earning assets were $2.201 billion for the third quarter of 2013, a decrease of $5.3 million, or 0.2%, from the second of 2013 and an increase of $22.4 million, or 1.0%, over the fourth quarter of 2012.  The change in earning assets from the prior quarter reflects a decline in the overnight funds position reflecting a lower level of deposits. The increase compared to the fourth quarter of 2012 primarily reflects a higher level of public fund deposits.

 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $412.1 million during the third quarter of 2013 compared to an average net overnight funds sold position of $419.0 million in the second quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012.  The lower balance when compared to the second quarter of 2013 primarily reflects the decline in deposits. Additionally, a shift in earning asset mix continued to occur due to growth in the investment portfolio while the loan portfolio declined. The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio and a higher level of public funds, partially offset by an increase in the investment portfolio.

 

Economic uncertainty and deleveraging by our clients continues to generate a historically high level of liquidity, which, given the current operating environment, is difficult to profitably deploy without taking inordinate risks. Where practical we are working to lower the level of overnight funds by adding to our investment portfolio with short-duration securities and reducing deposit balances. We continue to use a fully-insured money market account which is offered by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.

 

When compared to the second quarter of 2013 and fourth quarter of 2012, average loans declined by $20.9 million and $82.2 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate categories. Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production.

 

New loan production has improved over the past four quarters as our efforts to stimulate loan growth are ongoing. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try and mitigate the significant impact that consumer and business deleveraging is having on our portfolio.

 

Nonperforming assets (nonaccrual loans and OREO) totaled $94.7 million at the end of the third quarter of 2013, a decrease of $2.0 million from the second quarter of 2013 and $22.9 million from the fourth quarter of 2012. Nonaccrual loans totaled $41.7 million at the end of the third quarter of 2013, a slight increase of $0.1 million over the second quarter of 2013 and a decrease of $22.5 million from the fourth quarter of 2012. Nonaccrual loan additions totaled $11.1 million in the third quarter of 2013 and $29.6 million for the first nine months of 2013, which compares to $48.5 million in the first nine months of 2012. The balance of OREO totaled $53.0 million at the end of the third quarter of 2013, a decrease of $2.1 million from the second quarter of 2013 and $0.4 million from the fourth quarter of 2012. For the third quarter of 2013 we added properties totaling $3.7 million, sold properties totaling $5.2 million, and recorded valuation adjustments totaling $0.6 million. For the first nine months of 2013, we have added properties totaling $21.0 million, sold properties totaling $18.5 million, and recorded valuation adjustments totaling $2.9 million. Nonperforming assets represented 3.77% of total assets at both September 30, 2013 and June 30, 2013,and 4.47% at December 31, 2012.

 

Average total deposits were $2.059 billion for the third quarter of 2013, a decrease of $8.1 million, or 0.4%, from the second quarter of 2013 and higher by $8.4 million, or 0.4%, over the fourth quarter of 2012.  The decrease in deposits when compared to the second quarter of 2013 resulted primarily from the reduction in the level of public funds and money market accounts, partially offset by higher noninterest bearing demand and savings accounts. When compared to the fourth quarter of 2012, the increase was a result of higher public funds and savings accounts, partially offset by lower certificates of deposit and regular NOWs.

 

Core deposits experienced growth when compared to both periods as the Bank continues to expand relationships and grow the client base. The seasonal inflow of public funds will begin late in the fourth quarter of 2013 and continue into the first quarter of 2014. Both events are anticipated to increase the overnight funds position during the fourth quarter.

 

Our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts.  Prudent pricing discipline will continue to be the key to managing our mix of deposits.  Therefore, we do not attempt to compete with higher rate paying competitors for deposits.

 

Average borrowings decreased by $2.6 million when compared to the second quarter of 2013 as a result of payoff/amortization of FHLB advances and lower repurchase agreement balances. Borrowings increased by $2.2 million when compared to the fourth quarter of 2012, primarily a result of higher repurchase agreement balances, partially offset by FHLB advance payoffs/amortization.

 

Discussion of Operating Results

 

Tax equivalent net interest income for the third quarter of 2013 was $19.4 million compared to $19.7 million for the second quarter of 2013 and $21.2 million for the third quarter of 2012.  The decrease in tax equivalent net interest income compared to the prior periods was due to a reduction in loan income primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans.  The lower interest expense is attributable to favorable repricing on FHLB advances and certificates of deposit, which reflects both lower balances and favorable repricing. For the nine months ended September 30, 2013, tax equivalent net interest income totaled $59.2 million compared to $64.3 million for the same period of 2012.

 

Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment.  Loans have declined by approximately $102 million since the third quarter of 2012. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

 

Lowering our cost of funds, to the extent we can, and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and repricing, although the impact is expected to be minimal. 

 

The net interest margin for the third quarter of 2013 was 3.49%, a decrease of ten basis points from the second quarter of 2013, and a decline of 33 basis points from the third quarter of 2012.  The decrease in the margin for both comparable periods is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds.

 

The provision for loan losses for the third quarter of 2013 was $0.6 million compared to $1.4 million in the second quarter of 2013 and $2.9 million for the third quarter of 2012. For the nine month period ended September 30, 2013, the loan loss provision totaled $3.1 million compared to $13.4 million for the same period in 2012. The decrease compared to the second quarter of 2013 reflects continued improvement in key credit metrics, including our level of classified loans which declined noticeably during the quarter. The reduction in the provision from both of the prior year periods was due to a significant decline in loan losses, a reduced level of problem loan inflow, and overall improvement in key credit metric trends. Net charge-offs for the third quarter of 2013 totaled $2.8 million, or 0.78%(annualized), of average loans compared to $2.0 million, or 0.54%, for the second quarter of 2013 and $2.6 million, or 0.66%, in the third quarter of 2012. For the first nine months of 2013, net charge-offs totaled $7.2 million, or 0.66%(annualized), of average loans compared to $14.2 million, or 1.21%, for the same period of 2012. Lower charge-offs in our residential real estate and commercial real estate portfolios drove the decrease in loan losses comparing 2013 to 2012. At September 30, 2013, the allowance for loan losses of $25.0 million was 1.75% of outstanding loans (net of overdrafts) and provided coverage of 60% of nonperforming loans compared to 1.89% and 66%, respectively, at June 30, 2013, and 1.93% and 45%, respectively, at December 31, 2012.

 

Noninterest income for the third quarter of 2013 totaled $14.3 million, an increase of $0.5 million, or 3.3%, over the second quarter of 2013 and $0.7 million, or 5.4%, over the third quarter of 2012. The increase over the second quarter of 2013 was driven by higher deposit fees of $0.3 million and wealth management fees of $0.2 million. The increase in deposit fees was due to higher overdraft fees and the increase in wealth management primarily reflects an increase in retail brokerage fees due to increased client trading activity. Compared to the third quarter of 2012, the increase was due to higher wealth management fees driven by an increase in retail brokerage fees reflective of increased client trading activity and growth in new accounts. For the nine month period ended September 30, 2013, noninterest income totaled $41.7 million, a $0.7 million increase over the same period in 2012 due to higher wealth management fees of $0.6 million and mortgage banking fees of $0.2 million. Wealth management fees increased due to higher retail brokerage fees reflective of increased client trading activity and growth in new account openings. The increase in mortgage fees was attributable to a higher margin for sold loans.

 

Noninterest expense for the third quarter of 2013 totaled $30.4 million, a decrease of $0.1 million, or 0.5%, from the second quarter of 2013 attributable to lower compensation expense of $0.5 million and OREO expense of $0.3 million, partially offset by higher occupancy expense of $0.3 million and other expense of $0.4 million. Compensation expense declined primarily due to a reduction in pension expense reflective of a lower required 2013 expense upon finalization of actuarial work. Lower stock compensation also contributed to the decrease. The decrease in OREO expense was due to a reduction in the level of property valuation adjustments. The increase in occupancy expense was driven by a higher level of premises maintenance activity as well as utility costs. Higher advertising costs and professional fees drove the increase in the other expense category. Compared to the third quarter of 2012, noninterest expense increased by $0.2 million, or 0.8%, primarily reflective of higher compensation expense of $0.6 million that was partially offset by lower OREO expense of $0.5 million. Higher pension expense and stock compensation expense drove the increase in compensation. The reduction in OREO expense reflects a reduced level of property valuation adjustments as well as property carrying costs. For the nine month period ended September 30, 2013, noninterest expense totaled $92.2 million, a decrease of $2.9 million, or 3.0%, from the same period of 2012 attributable to lower occupancy expense of $0.6 million, OREO expense of $2.1 million, intangible amortization expense of $0.2 million, and other expense of $1.1 million, partially offset by higher compensation expense of $1.1 million. Declines were realized in most of the occupancy expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. The reduction in OREO expense was primarily attributable to a lower level of losses from the sale of properties and to a lesser extent reduction in carrying costs for properties. The decrease in intangible amortization reflects the full amortization of our remaining core deposit intangible asset in early 2013. The other expense category declined due to reduction in legal fees, professional fees, postage costs, and printing/supplies expense. Higher compensation expense reflects an increase in our pension plan expense of $0.8 million, stock compensation expense of $0.8 million, and associate insurance expense of $0.2 million that was partially offset by lower salary expense of $0.7 million.

 

About Capital City Bank Group, Inc.

 

Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded bank holding companies headquartered in Florida and has approximately $2.5 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 63 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

 

FORWARD-LOOKING STATEMENTS

 

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the Company’s need and our ability to incur additional debt or equity financing; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate used for the Company’s loan loss provision and deferred tax valuation allowance; a decrease to the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company’s loans; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; the effects of the health and soundness of other financial institutions; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and the Company’s other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

 

 

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited

 

						Three Months Ended								Nine Months Ended
(Dollars in thousands, except per share data)		Sep 30, 2013				Jun 30, 2013				Sep 30, 2012				Sep 30, 2013				Sep 30, 2012
EARNINGS
Net Income (Loss)		$	1,591			$	843			$	1,121			$	3,273			$	(1,767	)
Net Income (Loss) Per Common Share		$	0.09			$	0.05			$	0.07			$	0.19			$	(0.10	)
PERFORMANCE
Return on Average Assets			0.25	%			0.13	%			0.17	%			0.17	%			-0.09	%
Return on Average Equity			2.51	%			1.35	%			1.77	%			1.75	%			-0.93	%
Net Interest Margin			3.49	%			3.59	%			3.82	%			3.57	%			3.81	%
Noninterest Income as % of Operating Revenue			42.82	%			41.68	%			39.31	%			41.71	%			39.28	%
Efficiency Ratio			90.42	%			91.07	%			86.89	%			91.39	%			90.06	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio			15.60	%			15.36	%			14.43	%			15.60	%			14.43	%
Total Capital Ratio			16.97	%			16.73	%			15.80	%			16.97	%			15.80	%
Tangible Common Equity Ratio			6.84	%			6.64	%			6.86	%			6.84	%			6.86	%
Leverage Ratio			10.16	%			10.07	%			9.83	%			10.16	%			9.83	%
Equity to Assets			9.99	%			9.73	%			10.04	%			9.99	%			10.04	%
ASSET QUALITY
Allowance as % of Non-Performing Loans			60.00	%			65.66	%			40.80	%			60.00	%			40.80	%
Allowance as a % of Loans			1.75	%			1.89	%			1.97	%			1.75	%			1.97	%
Net Charge-Offs as % of Average Loans			0.78	%			0.54	%			0.66	%			0.66	%			1.21	%
Nonperforming Assets as % of Loans and ORE			6.38	%			6.44	%			8.02	%			6.38	%			8.02	%
Nonperforming Assets as % of Total Assets			3.77	%			3.77	%			5.10	%			3.77	%			5.10	%
STOCK PERFORMANCE
High		$	13.08			$	12.64			$	10.96			$	13.08			$	10.96
Low			11.06				10.12				7.00				10.12				6.35
Close			11.78				11.53				10.64				11.78				10.64
Average Daily Trading Volume		$	18,380			$	16,366			$	23,737			$	19,334			$	28,826

 

 

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

 

		2013												2012
(Dollars in thousands)		Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Third Quarter
ASSETS
Cash and Due From Banks		$	51,136			$	67,811			$	52,677			$	66,238			$	53,076
Funds Sold and Interest Bearing Deposits			358,869				391,457				461,714				443,494				314,318
Total Cash and Cash Equivalents			410,005				459,268				514,391				509,732				367,394
Investment Securities - Available-for-Sale			271,838				350,614				307,502				296,985				288,166
Investment Securities - Held-to-Maturity			97,309				0				0				0				0
Total Investment Securities			369,147				350,614				307,502				296,985				288,166
Loans Held for Sale			13,822				15,362				11,422				14,189				16,527
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural			123,253				126,931				125,905				139,850				135,939
Real Estate - Construction			31,454				35,823				37,948				37,512				39,537
Real Estate - Commercial			570,736				581,501				599,517				613,625				609,671
Real Estate - Residential			305,811				302,254				304,786				310,439				328,258
Real Estate - Home Equity			230,212				232,530				233,205				236,263				239,446
Consumer			148,321				142,620				146,043				150,728				154,389
Other Loans			5,220				5,904				5,187				11,547				6,891
Overdrafts			2,835				2,554				2,307				7,149				2,637
Total Loans, Net of Unearned Interest			1,417,842				1,430,117				1,454,898				1,507,113				1,516,768
Allowance for Loan Losses			(25,010	)			(27,294	)			(27,803	)			(29,167	)			(30,222	)
Loans, Net			1,392,832				1,402,823				1,427,096				1,477,946				1,486,546
Premises and Equipment, Net			103,702				104,743				105,883				107,092				109,003
Intangible Assets			84,891				84,937				84,985				85,053				85,161
Other Real Estate Owned			53,018				55,087				58,421				53,426				53,172
Other Assets			87,055				89,024				95,613				89,561				87,815
Total Other Assets			328,666				333,791				344,902				335,132				335,151
Total Assets		$	2,514,472			$	2,561,858			$	2,605,313			$	2,633,984			$	2,493,784
LIABILITIES
Deposits:
Noninterest Bearing Deposits		$	626,114			$	644,739			$	616,017			$	609,235			$	596,660
NOW Accounts			668,240				706,101				765,030				842,435				703,327
Money Market Accounts			283,338				287,340				299,118				267,766				285,084
Regular Savings Accounts			211,174				204,594				200,492				184,541				181,523
Certificates of Deposit			228,020				228,349				233,325				241,019				254,000
Total Deposits			2,016,886				2,071,123				2,113,982				2,144,996				2,020,594
Short-Term Borrowings			51,918				46,081				50,682				47,435				42,388
Subordinated Notes Payable			62,887				62,887				62,887				62,887				62,887
Other Long-Term Borrowings			40,244				41,251				41,224				46,859				38,126
Other Liabilities			91,369				91,227				87,930				84,918				79,427
Total Liabilities			2,263,304				2,312,569				2,356,705				2,387,095				2,243,422
SHAREOWNERS' EQUITY
Common Stock			173				173				173				172				172
Additional Paid-In Capital			40,481				40,210				39,580				38,707				38,493
Retained Earnings			240,842				239,251				238,408				237,569				235,694
Accumulated Other Comprehensive Loss, Net of Tax			(30,328	)			(30,345	)			(29,553	)			(29,559	)			(23,997	)
Total Shareowners' Equity			251,168				249,289				248,608				246,889				250,362
Total Liabilities and Shareowners' Equity		$	2,514,4			$	2,561,858			$	2,605,313			$	2,633,984			$	2,493,784
OTHER BALANCE SHEET DATA
Earning Assets		$	2,159,680			$	2,187,549			$	2,235,537			$	2,261,781			$	2,135,779
Intangible Assets
Goodwill			84,811				84,811				84,811				84,811				84,811
Core Deposits			—				—				—				19				79
Other			80				126				174				223				271
Interest Bearing Liabilities			1,545,821				1,576,601				1,652,758				1,692,942				1,567,335
Book Value Per Diluted Share		$	14.44			$	14.36			$	14.35			$	14.31			$	14.54
Tangible Book Value Per Diluted Share			9.56				9.47				9.44				9.38				9.59
Actual Basic Shares Outstanding			17,336				17,336				17,319				17,232				17,223
Actual Diluted Shares Outstanding			17,396				17,372				17,326				17,259				17,223

 

  

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

Unaudited

 

																						Nine Months Ended
		2013												2012								September 30,
(Dollars in thousands, except per share data)		Third Quarter				Second Quarter				First Quarter				Fourth Quarter				Third Quarter				2013				2012
INTEREST INCOME
Interest and Fees on Loans		$	19,264			$	19,709			$	20,154			$	20,756			$	21,274			$	59,127			$	64,638
Investment Securities			717				710				704				808				798				2,131				2,532
Funds Sold			269				279				270				223				254				818				723
Total Interest Income			20,250				20,698				21,128				21,787				22,326				62,076				67,893
INTEREST EXPENSE
Deposits			335				367				415				429				480				1,117				1,679
Short-Term Borrowings			46				61				82				69				71				189				127
Subordinated Notes Payable			339				342				339				351				372				1,020				1,126
Other Long-Term Borrowings			330				333				347				383				372				1,010				1,204
Total Interest Expense			1,050				1,103				1,183				1,232				1,295				3,336				4,136
Net Interest Income			19,200				19,595				19,945				20,555				21,031				58,740				63,757
Provision for Loan Losses			555				1,450				1,070				2,766				2,864				3,075				13,400
Net Interest Income after Provision for Loan Losses			18,645				18,145				18,875				17,789				18,167				55,665				50,357
NONINTEREST INCOME
Deposit Fees			6,474				6,217				6,165				6,764				6,406				18,856				19,028
Bank Card Fees			2,715				2,754				2,661				2,612				2,616				8,130				8,171
Wealth Management Fees			2,130				1,901				1,915				1,818				1,686				5,946				5,363
Mortgage Banking Fees			869				968				1,043				910				978				2,880				2,690
Data Processing Fees			662				670				653				671				687				1,985				2,042
Other			1,456				1,339				1,151				1,343				1,202				3,946				3,773
Total Noninterest Income			14,306				13,849				13,588				14,118				13,575				41,743				41,067
NONINTEREST EXPENSE
Compensation			16,158				16,647				16,739				15,772				15,510				49,544				48,470
Occupancy, Net			4,403				4,161				4,418				4,429				4,590				12,982				13,626
Intangible Amortization			46				48				68				108				108				162				323
Other Real Estate			2,148				2,408				2,884				1,900				2,603				7,440				9,528
Other			7,678				7,318				7,091				7,259				7,390				22,087				23,144
Total Noninterest Expense			30,433				30,582				31,200				29,468				30,201				92,215				95,091
OPERATING PROFIT (LOSS)			2,518				1,412				1,263				2,439				1,541				5,193				(3,667	)
Income Tax Expense (Benefit)			927				569				424				564				420				1,920				(1,900	)
NET INCOME (LOSS)		$	1,591			$	843			$	839			$	1,875			$	1,121			$	3,273			$	(1,767	)
PER SHARE DATA
Basic Income (Loss)		$	0.09			$	0.05			$	0.05			$	0.11			$	0.07			$	0.19			$	(0.10	)
Diluted Income (Loss)		$	0.09			$	0.05			$	0.05			$	0.11			$	0.07			$	0.19			$	(0.10	)
AVERAGE SHARES
Basic			17,336				17,319				17,302				17,229				17,215				17,319				17,196
Diluted			17,396				17,355				17,309				17,256				17,228				17,381				17,196

 

 

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

 

		2013				2013				2013				2012				2012
(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		$	27,294			$	27,803			$	29,167			$	30,222			$	29,929
Provision for Loan Losses			555				1,450				1,070				2,766				2,864
Net Charge-Offs			2,839				1,959				2,434				3,821				2,571
Balance at End of Period		$	25,010			$	27,294			$	27,803			$	29,167			$	30,222
As a % of Loans			1.75	%			1.89	%			1.90	%			1.93	%			1.97	%
As a % of Nonperforming Loans			60.00	%			65.66	%			61.17	%			45.42	%			40.80	%
CHARGE-OFFS
Commercial, Financial and Agricultural		$	138			$	119			$	154			$	166			$	331
Real Estate - Construction			278				110				610				227				127
Real Estate - Commercial			882				1,050				1,043				468				512
Real Estate - Residential			1,178				1,053				683				2,877				981
Real Estate - Home Equity			362				322				113				745				834
Consumer			674				351				296				488				355
Total Charge-Offs		$	3,512			$	3,005			$	2,899			$	4,971			$	3,140
RECOVERIES
Commercial, Financial and Agricultural		$	87			$	38			$	51			$	87			$	53
Real Estate - Construction			1				—				—				7				9
Real Estate - Commercial			167				144				38				468				34
Real Estate - Residential			167				396				96				83				76
Real Estate - Home Equity			13				224				18				250				15
Consumer			238				244				262				255				382
Total Recoveries		$	673			$	1,046			$	465			$	1,150			$	569
NET CHARGE-OFFS		$	2,839			$	1,959			$	2,434			$	3,821			$	2,571
Net Charge-Offs as a % of Average Loans(1)			0.78	%			0.54	%			0.66	%			1.00	%			0.66	%
RISK ELEMENT ASSETS
Nonaccruing Loans		$	41,682			$	41,566			$	45,448			$	64,222			$	74,075
Other Real Estate Owned			53,018				55,087				58,421				53,426				53,172
Total Nonperforming Assets		$	94,700			$	96,653			$	103,869			$	117,648			$	127,247
Past Due Loans 30-89 Days		$	8,427			$	9,017			$	9,274			$	9,934			$	12,923
Past Due Loans 90 Days or More			0				0				0				0				0
Performing Troubled Debt Restructuring's		$	50,692			$	52,729			$	53,108			$	47,474			$	45,973
Nonperforming Loans as a % of Loans			2.91	%			2.88	%			3.10	%			4.22	%			4.83	%
Nonperforming Assets as a % of
Loans and Other Real Estate			6.38	%			6.44	%			6.81	%			7.47	%			8.02	%
Nonperforming Assets as a % of Total Assets			3.77	%			3.77	%			3.99	%			4.47	%			5.10	%

 

(1) Annualized

 

 

CAPITAL CITY BANK GROUP, INC.

AVERAGE BALANCE AND INTEREST RATES(1)

Unaudited

 

		Third Quarter 2013												Second Quarter 2013												First Quarter 2013												Fourth Quarter 2012												Third Quarter 2012												Sept 2013 YTD												Sept 2012 YTD
(Dollars in thousands)		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
ASSETS:
Loans, Net of Unearned Interest		$	1,436,039				19,342				5.34	%		$	1,456,904				19,790				5.45	%		$	1,496,432				20,228				5.48	%		$	1,518,280				20,837				5.46	%		$	1,541,262				21,366				5.51	%		$	1,462,904			$	59,361				5.43	%		$	1,569,420			$	64,943				5.53	%
Investment Securities
Taxable Investment Securities			232,094				571				0.95				225,770				578				1.02				215,087				590				1.10				219,985				697				1.26				214,431				691				1.28				224,379				1,739				0.99				224,584				2,215				1.33
Tax-Exempt Investment Securities			121,119				223				0.73				104,981				200				0.76				80,946				174				0.86				74,647				172				0.92				67,446				163				0.97				102,496				596				0.77				62,509				486				1.04
Total Investment Securities			353,213	#			794				0.89				330,751	#			778				0.94				296,033	#			764				1.04				294,632	#			869				1.17				281,877	#			854				1.21				326,875	#			2,335				0.95				287,093	#			2,701				1.25
Funds Sold			412,138				269				0.26				419,039				279				0.27				448,424				270				0.24				366,034				223				0.24				386,027				254				0.26				426,401				818				0.26				390,122				723				0.25
Total Earning Assets			2,201,390			$	20,405				3.68	%			2,206,694			$	20,847				3.79	%			2,240,889			$	21,262				3.85	%			2,178,946			$	21,929				4.00	%			2,209,166			$	22,474				4.05	%			2,216,180			$	62,514				3.77	%			2,246,635			$	68,367				4.06	%
Cash and Due From Banks			51,640												49,081												50,679												51,344												47,207												50,470												48,112
Allowance for Loan Losses			(27,636	)											(29,012	)											(30,467	)											(30,605	)											(30,260	)											(29,028	)											(31,077	)
Other Assets			333,001												337,765												337,579												334,326												340,126												336,098												345,361
Total Assets		$	2,558,395											$	2,564,528											$	2,598,680											$	2,534,011											$	2,566,239											$	2,573,720											$	2,609,031
LIABILITIES:
Interest Bearing Deposits
NOW Accounts		$	676,855			$	107				0.06	%		$	716,459			$	124				0.07	%		$	788,660			$	156				0.08	%		$	714,682			$	131				0.07	%		$	740,178			$	144				0.08	%		$	726,915			$	388				0.07	%		$	790,733			$	503				0.08	%
Money Market Accounts			284,920				53				0.07				289,637				54				0.07				282,847				54				0.08				275,458				57				0.08				287,250				60				0.08				285,809				161				0.08				281,746				198				0.09
Savings Accounts			207,631				26				0.05				202,784				25				0.05				193,033				23				0.05				182,760				23				0.05				179,445				23				0.05				201,203				74				0.05				173,346				64				0.05
Time Deposits			231,490				149				0.26				231,134				164				0.29				238,441				182				0.31				247,679				218				0.35				263,007				253				0.38				233,663				494				0.28				273,838				914				0.45
Total Interest Bearing Deposits			1,400,896	#			335				0.09	%			1,440,014	#			367				0.10	%			1,502,981	#			415				0.11	%			1,420,579	#			429				0.12	%			1,469,880	#			480				0.13	%			1,447,590	#			1,117				0.10	%			1,519,663	#			1,679				0.15	%
Short-Term Borrowings			49,919				46				0.37	%			52,399				61				0.47	%			55,255				82				0.60	%			45,893				69				0.59	%			59,184				71				0.48	%			52,505				189				0.48	%			54,289				127				0.31	%
Subordinated Notes Payable			62,887				339				2.11				62,887				342				2.15				62,887				339				2.15				62,887				351				2.19				62,887				372				2.31				62,887				1,020				2.14				62,887				1,126				2.35
Other Long-Term Borrowings			40,832				330				3.21				40,942				333				3.26				42,898				347				3.29				42,673				383				3.57				38,494				372				3.85				41,550				1,010				3.25				41,123				1,204				3.91
Total Interest Bearing Liabilities			1,554,534			$	1,050				0.27	%			1,596,242			$	1,103				0.28	%			1,664,021			$	1,183				0.29	%			1,572,032			$	1,232				0.31	%			1,630,445			$	1,295				0.32	%			1,604,532			$	3,336				0.28	%			1,677,962			$	4,136				0.33	%
Noninterest Bearing Deposits			658,602												627,633												599,986												630,520												605,602												628,955												604,333
Other Liabilities			93,642												90,168												85,116												78,442												78,446												89,673												73,795
Total Liabilities			2,306,778												2,314,043												2,349,123												2,280,994												2,314,493												2,323,160												2,356,090
SHAREOWNERS' EQUITY:			251,617												250,485												249,557												253,017												251,746												250,560												252,941
Total Liabilities and Shareowners' Equity		$	2,558,395											$	2,564,528											$	2,598,680											$	2,534,011											$	2,566,239											$	2,573,720											$	2,609,031
Interest Rate Spread						$	19,355				3.41	%						$	19,744				3.51	%						$	20,079				3.56	%						$	20,697				3.69	%						$	21,179				3.73	%						$	59,178				3.49	%						$	64,231				3.73	%
Interest Income and Rate Earned(1)							20,405				3.68								20,847				3.79								21,262				3.85								21,929				4.00								22,474				4.05								62,514				3.77								68,367				4.06
Interest Expense and Rate Paid(2)							1,050				0.19								1,103				0.20								1,183				0.21								1,232				0.22								1,295				0.23								3,336				0.20								4,136				0.26
Net Interest Margin						$	19,355				3.49	%						$	19,744				3.59	%						$	20,079				3.64	%						$	20,697				3.78	%						$	21,179				3.82	%						$	59,178				3.57	%						$	64,231				3.81	%

 

(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.