Capital City Bank Group, Inc.

Reports Second Quarter 2014 Results

 

TALLAHASSEE, Fla. (July 22, 2014) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $1.5 million, or $0.08 per diluted share for the second quarter of 2014 compared to net income of $3.8 million, or $0.22 per diluted share for the first quarter of 2014, and $0.8 million, or $0.05 per diluted share, for the second quarter of 2013. For the first six months of 2014, the Company reported net income of $5.2 million, or $0.30 per diluted share, compared to net income of $1.7 million, or $0.10 per diluted share for the same period in 2013.

 

Compared to the first quarter of 2014, performance reflects higher noninterest income of $0.6 million and net interest income of $0.1 million that was offset by increases in noninterest expense of $0.7 million, loan loss provision of $0.2 million, and income taxes of $2.1 million.

 

Compared to the second quarter of 2013, the increase in earnings was due to a lower loan loss provision of $1.0 million and a $1.4 million decrease in noninterest expense, partially offset by lower net interest income of $1.1 million, noninterest income of $0.4 million, and higher income taxes of $0.2 million.

 

The increase in earnings for the first six months of 2014 versus the comparable period in 2013 was attributable to lower noninterest expense of $4.1 million, a lower loan loss provision of $1.7 million, and lower income taxes of $1.6 million, partially offset by lower net interest income of $2.8 million and noninterest income of $1.1 million.

 

“Capital City posted solid performance in the second quarter, and our year-to-date numbers are strong,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “Quarter over quarter, nonperforming assets fell 13.2% and, while it is too early to suggest the loan portfolio has stabilized, it was encouraging to report growth for the second consecutive quarter. Loan growth coupled with additions to our investment portfolio helped stabilize our net interest margin quarter over quarter. Our retail approach to disposing of ORE properties continues to produce positive results. In fact, second quarter ORE sales totaled $8.6 million – our second best quarter to date. Improving our credit quality and stabilizing our loan portfolio remain primary areas of focus in our 2014 strategy, as will continued efforts to right-size our expense base and identify new revenue opportunities. The economic outlook continues to brighten, though the pace of improvement is slow. There is still work to be done, but I am proud of our accomplishments and like our momentum coming out of the first half of 2014.”

 

The Return on Average Assets was 0.23% and the Return on Average Equity was 2.09% for the second quarter of 2014. These metrics were 0.59% and 5.44% for the first quarter of 2014, and 0.13% and 1.35% for the second quarter of 2013, respectively.

 

For the first six months of 2014, the Return on Average Assets was 0.41% and the Return on Average Equity was 3.75% compared to 0.13% and 1.36%, respectively, for the first half of 2013.

 

Discussion of Financial Condition

 

Average earning assets were $2.261 billion for the second quarter of 2014, a decrease of $7.4 million, or 0.3%, from the first quarter of 2014 and an increase of $54.6 million, or 2.5%, over the fourth quarter of 2013.  The change in earning assets from the first quarter of 2014 reflects a lower level of public fund deposits and problem loan resolution. The increase compared to the fourth quarter of 2013 reflects a higher level of investments and loans, which as funded through growth in deposits.

 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $408.7 million during the second quarter of 2014 compared to an average net overnight funds sold position of $467.3 million in the first quarter of 2014 and an average overnight funds sold position of $411.6 million in the fourth quarter of 2013.  The lower balance when compared to the first quarter of 2014 primarily reflects higher loan and investment portfolios, and the lower level of public funds. The decrease when compared to the fourth quarter of 2013 reflects an increase in the investment portfolio partially offset by a higher level of public funds.

 

Slow economic growth and deleveraging by our clients has generated a historically high level of liquidity, which, given the current operating environment, is difficult to profitably deploy without taking inordinate risks. Although we have experienced loan growth in the first half of 2014, where practical, we continue to work to lower the level of overnight funds by adding to our investment portfolio with short-duration, high quality securities and reducing deposit balances. We continue to offer to our clients a fully-insured money market account which is provided by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.

 

Period end loans increased in each of the last two quarters and, when compared to the first quarter of 2014, average loans increased by $16.5 million, or 1.2%, which represents the first quarter-over-quarter increase in average loans since 2009. The improvement in loans was experienced primarily in the consumer and commercial portfolios. The growth was a result of both an increase in production (which has increased in five of the last six quarters) as well as lower payoffs. Average loans declined by $3.0 million when compared to the fourth quarter of 2013, primarily attributable to lower commercial real estate, which was partially offset by growth in the consumer loan portfolio.

 

Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business, commercial real estate and consumer portfolios to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio. These programs have helped to increase overall production.

 

Nonperforming assets (nonaccrual loans and OREO) totaled $68.2 million at the end of the second quarter of 2014, a decrease of $10.3 million from the first quarter of 2014 and $16.8 million from the fourth quarter of 2013. Nonaccrual loans totaled $25.7 million at the end of the second quarter of 2014, a decrease of $8.9 million from the first quarter of 2014 and $11.3 million from the fourth quarter of 2013. Nonaccrual loan additions totaled $4.4 million in the second quarter of 2014 and $11.9 million for the first six months of 2014, which compares to $18.5 million for the same period of 2013. The balance of OREO totaled $42.6 million at the end of the second quarter of 2014, representing decreases of $1.5 million from the first quarter of 2014 and $5.5 million from the fourth quarter of 2013. For the second quarter of 2014, we added properties totaling $8.0 million, sold properties totaling $8.6 million, and recorded valuation adjustments totaling $0.8 million. For the first six months of 2014, we have added properties totaling $9.3 million, sold properties totaling $13.2 million, and recorded valuation adjustments totaling $1.6 million. Nonperforming assets represented 2.66% of total assets at June 30, 2014 compared to 2.98% at March 31, 2014 and 3.26% at December 31, 2013.

 

Average total deposits were $2.110 billion for the second quarter of 2014, a decrease of $15.4 million, or 0.7%, from the first quarter of 2014 and an increase of $58.7 million, or 2.9%, over the fourth quarter of 2013.  The decrease in deposits when compared to the first quarter of 2014 resulted primarily from the reduction in the level of public funds and certificates of deposit. When compared to the fourth quarter of 2013, the increase was a result of higher public funds, noninterest bearing demand and savings accounts, partially offset by lower certificates of deposit and regular NOWs.

 

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

 

Average borrowings when compared to the first quarter of 2014 and fourth quarter of 2013 decreased by $5.3 million and $19.8 million, respectively, resulting from payoff/amortization of FHLB advances and lower repurchase agreement balances.

 

Discussion of Operating Results

 

Tax equivalent net interest income for the second quarter of 2014 was $18.6 million compared to $18.4 million for the first quarter of 2014 and $19.7 million for the second quarter of 2013.  The increase in tax equivalent net interest income compared to the first quarter of 2014 reflects one additional calendar day, a positive shift in earning asset mix due to growth in the investment and loan portfolios and a reduction in interest expense, partially offset by unfavorable asset repricing. The lower net interest income when compared to the second quarter of 2013 reflects a reduction in loan income primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans. For the six months ended June 30, 2014, tax equivalent net interest income totaled $37.0 million compared to $39.8 million for the same period of 2013.

 

Although the company experienced higher net interest income for the quarter, pressure still remains on net interest income primarily as a result of the low rate environment.  The low rate environment remains favorable to the repricing of deposits, but continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

 

Although the impact will be minimal, we will continue our efforts to lower our cost of funds, to the extent we can, and shift the mix of our deposits to help mitigate the unfavorable impact of soft loan demand and unfavorable repricing. 

 

The net interest margin for the second quarter of 2014 at 3.29% was equal to the first quarter of 2014 and represented a decline of 30 basis points from the second quarter of 2013.  Growth in our investment and loan portfolios helped to maintain our margin from the first to second quarter, while the decrease in the margin from the comparable prior year period was attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds.

 

The provision for loan losses for the second quarter of 2014 was $0.5 million compared to $0.3 million for the first quarter of 2014 and $1.5 million for the second quarter of 2013. For the first half of 2014, the loan loss provision totaled $0.8 million compared to $2.5 million for the same period of 2013. The lower level of provision reflects continued favorable problem loan migration and improvement in key credit metrics. Net charge-offs for the second quarter of 2014 totaled $2.1 million, or 0.59% (annualized), of average loans compared to $1.3 million, or 0.39% (annualized), for the first quarter of 2014 and $2.0 million, or 0.54% (annualized), for the second quarter of 2013. For the first half of 2014, net charge-offs totaled $3.4 million, or 0.49% (annualized), of average loans compared to $4.4 million, or 0.60%, for the same period of 2013. At quarter-end, the allowance for loan losses of $20.5 million was 1.45% of outstanding loans (net of overdrafts) and provided coverage of 80% of nonperforming loans compared to 1.57% and 64%, respectively, at March 31, 2014 and 1.65% and 62%, respectively, at December 31, 2013.

 

Noninterest income for the second quarter of 2014 totaled $13.3 million, an increase of $0.6 million, or 4.4%, over the first quarter of 2014 and a decrease of $0.4 million, or 2.8%, from the second quarter of 2013. The increase over the first quarter of 2014 reflects higher deposit fees of $0.3 million, bank card fees of $0.1 million, mortgage banking fees of $0.1 million, and other income of $0.2 million, partially offset by lower wealth management fees of $0.1 million. Higher overdraft fees and account maintenance fees drove the increase in deposit fees. Bank card fees increased due to higher card spend. The increase in mortgage banking fees was attributable to higher new loan production reflective of a seasonal pickup in home purchase activity as well as a higher margin on sold loans. A higher level of miscellaneous recoveries drove the increase in other income. Compared to the second quarter of 2013, the decrease was primarily due to decreases in data processing fees of $0.3 million and mortgage banking fees of $0.2 million that were partially offset by higher other income of $0.1 million. Data processing fees declined due to a lower level of fees from a government processing contract that ended early in the second quarter of 2014. A lower level of refinancing activity drove the reduction in mortgage banking fees. A higher level of miscellaneous recoveries drove the increase in other income.

 

For the first half of 2014, noninterest income totaled $26.1 million, a $1.1 million decrease from the same period of 2013 reflective of lower deposit fees of $0.3 million, mortgage banking fees of $0.6 million, and data processing fees of $0.4 million, partially offset by higher bank card fees of $0.1 million and other income of $0.1 million. The decrease in deposit fees was due to a lower level of overdraft fees generally reflective of improved financial management by our clients. A lower level of refinancing activity drove the reduction in mortgage banking fees. Data processing fees declined due to the aforementioned government processing contract that ended during the second quarter of 2014. Higher card spend drove the increase in bank card fees. A higher level of miscellaneous recoveries drove the increase in other income.

 

Noninterest expense for the second quarter of 2014 totaled $29.1 million, an increase of $0.7 million, or 2.5%, over the first quarter of 2014 reflective of higher OREO expense of $0.9 million, occupancy expense of $0.2 million and other expense of $0.2 million, partially offset by a lower compensation expense of $0.6 million. Excluding OREO expense, noninterest expense declined $0.2 million. A higher level of net losses from the sale of bank owned properties drove the increase in OREO expense. The increase in occupancy expense was partially attributable to higher maintenance costs that were mostly non-routine in nature. Other expense increased due to higher legal fees reflective of an increased level of legal support needed for problem loan resolutions during the quarter. The reduction in compensation expense was due to lower performance compensation (cash incentives), payroll taxes and unemployment taxes. Compared to the second quarter of 2013, noninterest expense decreased by $1.4 million, or 4.6%, attributable to lower compensation expense of $1.4 million (reflecting lower pension expense) and other expense of $0.2 million, partially offset by higher occupancy expense of $0.3 million.

 

For the first six months of 2014, noninterest expense totaled $57.4 million, a decrease of $4.1 million, or 6.8%, from the same period of 2013 attributable to lower compensation expense of $2.4 million, OREO expense of $1.4 million, and other expense of $0.5 million, partially offset by higher occupancy expense of $0.2 million. Compared to the three and six-month prior year periods, the reduction in compensation expense was primarily attributable to lower pension plan expense and the decline in other expense reflects a decrease in our FDIC insurance fees. Utilization of a higher discount rate for determining pension plan liabilities drove the reduction in pension plan expense and a lower premium favorably impacted FDIC fees. Higher furniture, fixtures, and equipment maintenance costs, a majority of which were non-routine, as well as higher maintenance contract expense related to security upgrades drove the increase in occupancy costs compared to both the three and six-month prior year periods. A lower level of net losses from the sale of bank owned properties and a reduction in property valuation adjustments were the primary reasons for the reduction in OREO expense from the comparable prior year six month period.

 

We realized income tax expense of $0.7 million for the second quarter of 2014 compared to an income tax benefit of $1.4 million for the first quarter of 2014 and income tax expense of $0.6 million for the second quarter of 2013.  For the first six months of 2014, we realized an income tax benefit of $0.6 million compared to income tax expense of $1.0 million for the same period of 2013. Income taxes for both the three and six-month periods of 2014 were favorably impacted by a $2.2 million state tax benefit attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters.

 

About Capital City Bank Group, Inc.

 

Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company’s bank subsidiary, Capital City Bank, was founded in 1895 and now has 63 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

 

FORWARD-LOOKING STATEMENTS

 

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the Company’s need and our ability to incur additional debt or equity financing; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate used for the Company’s loan loss provision and deferred tax valuation allowance; a decrease to the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company’s loans; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; the effects of the health and soundness of other financial institutions; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and the Company’s other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

 

CAPITAL CITY BANK GROUP, INC.

EARNINGS HIGHLIGHTS

Unaudited 

 

		Three Months Ended												Six Months Ended
(Dollars in thousands, except per share data)		Jun 30, 2014				Mar 31, 2014				Jun 30, 2013				Jun 30, 2014				Jun 30, 2013
EARNINGS
Net Income		$	1,473			$	3,751			$	843			$	5,224			$	1,682
Net Income Per Common Share		$	0.08			$	0.22			$	0.05			$	0.30			$	0.10
PERFORMANCE
Return on Average Assets			0.23	%			0.59	%			0.13	%			0.41	%			0.13	%
Return on Average Equity			2.09	%			5.44	%			1.35	%			3.75	%			1.36	%
Net Interest Margin			3.29	%			3.29	%			3.59	%			3.29	%			3.61	%
Noninterest Income as % of Operating Revenue			42.31	%			42.05	%			41.68	%			42.18	%			41.15	%
Efficiency Ratio			91.15	%			91.02	%			91.07	%			91.09	%			91.87	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio			16.85	%			16.85	%			15.36	%			16.85	%			15.36	%
Total Capital Ratio			18.10	%			18.10	%			16.73	%			18.10	%			16.73	%
Tangible Common Equity Ratio			7.93	%			7.66	%			6.64	%			7.93	%			6.64	%
Leverage Ratio			10.70	%			10.47	%			10.07	%			10.70	%			10.07	%
Equity to Assets			10.97	%			10.63	%			9.73	%			10.97	%			9.73	%
ASSET QUALITY
Allowance as % of Non-Performing Loans			80.03	%			63.98	%			65.66	%			80.03	%			65.66	%
Allowance as a % of Loans			1.45	%			1.57	%			1.89	%			1.45	%			1.89	%
Net Charge-Offs as % of Average Loans			0.59	%			0.39	%			0.54	%			0.49	%			0.60	%
Nonperforming Assets as % of Loans and ORE			4.67	%			5.42	%			6.44	%			4.67	%			6.44	%
Nonperforming Assets as % of Total Assets			2.66	%			2.98	%			3.77	%			2.66	%			3.77	%
STOCK PERFORMANCE
High		$	14.71			$	14.59			$	12.64			$	14.71			$	12.64
Low			12.60				11.56				10.12				11.56				10.12
Close			14.53				13.28				11.53				14.53				11.53
Average Daily Trading Volume			28,428				35,921				16,366				32,114				19,827

 

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

Unaudited

 

		2014								2013
(Dollars in thousands)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter
ASSETS
Cash and Due From Banks		$	63,956			$	59,288			$	55,209			$	51,136			$	67,811
Funds Sold and Interest Bearing Deposits			354,233				468,805				474,719				358,869				391,457
Total Cash and Cash Equivalents			418,189				528,093				529,928				410,005				459,268
Investment Securities Available for Sale			275,082				229,615				251,420				271,838				350,614
Investment Securities Held to Maturity			180,393				191,645				148,211				97,309				—
Total Investment Securities			455,475				421,260				399,631				369,147				350,614
Loans Held for Sale			13,040				12,313				11,065				13,822				15,362
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural			134,833				138,664				126,607				123,253				126,931
Real Estate - Construction			34,244				36,454				31,012				31,454				35,823
Real Estate - Commercial			518,580				522,019				533,871				570,736				581,501
Real Estate - Residential			298,647				297,842				303,618				305,811				302,254
Real Estate - Home Equity			228,232				226,411				227,922				230,212				232,530
Consumer			181,209				163,768				156,718				148,321				142,620
Other Loans			7,182				7,270				6,074				5,220				5,904
Overdrafts			2,664				2,349				2,782				2,835				2,554
Total Loans, Net of Unearned Interest			1,405,591				1,394,777				1,388,604				1,417,842				1,430,117
Allowance for Loan Losses			(20,543	)			(22,110	)			(23,095	)			(25,010	)			(27,294	)
Loans, Net			1,385,048				1,372,667				1,365,509				1,392,832				1,402,823
Premises and Equipment, Net			102,141				102,655				103,385				103,702				104,743
Intangible Assets			84,811				84,811				84,843				84,891				84,937
Other Real Estate Owned			42,579				44,036				48,071				53,018				55,087
Other Assets			66,209				67,205				69,471				87,055				89,024
Total Other Assets			295,740				298,707				305,770				328,666				333,791
Total Assets		$	2,567,492			$	2,633,040			$	2,611,903			$	2,514,472			$	2,561,858
LIABILITIES
Deposits:
Noninterest Bearing Deposits		$	689,844			$	657,548			$	641,463			$	626,114			$	644,739
NOW Accounts			712,385				775,439				794,746				668,240				706,101
Money Market Accounts			272,255				292,923				268,449				283,338				287,340
Regular Savings Accounts			227,470				225,481				211,668				211,174				204,594
Certificates of Deposit			206,496				212,322				219,922				228,020				228,349
Total Deposits			2,108,450				2,163,713				2,136,248				2,016,886				2,071,123
Short-Term Borrowings			36,732				48,733				51,321				51,918				46,081
Subordinated Notes Payable			62,887				62,887				62,887				62,887				62,887
Other Long-Term Borrowings			33,282				33,971				38,043				40,244				41,251
Other Liabilities			44,561				43,856				47,004				91,369				91,227
Total Liabilities			2,285,912				2,353,160				2,335,503				2,263,304				2,312,569
SHAREOWNERS’ EQUITY
Common Stock			174				174				174				173				173
Additional Paid-In Capital			41,628				41,220				41,152				40,481				40,210
Retained Earnings			248,142				247,017				243,614				240,842				239,251
Accumulated Other Comprehensive Loss, Net of Tax			(8,364	)			(8,531	)			(8,540	)			(30,328	)			(30,345	)
Total Shareowners’ Equity			281,580				279,880				276,400				251,168				249,289
Total Liabilities and Shareowners’ Equity		$	2,567,492			$	2,633,040			$	2,611,903			$	2,514,472			$	2,561,858
OTHER BALANCE SHEET DATA
Earning Assets		$	2,228,339			$	2,297,154			$	2,274,019			$	2,159,680			$	2,187,549
Intangible Assets
Goodwill			84,811				84,811				84,811				84,811				84,811
Core Deposits			—				—				—				—				—
Other			—				—				32				80				126
Interest Bearing Liabilities			1,551,507				1,651,755				1,647,036				1,545,821				1,576,601
Book Value Per Diluted Share		$	16.08			$	16.02			$	15.85			$	14.44			$	14.36
Tangible Book Value Per Diluted Share			11.24				11.17				10.98				9.56				9.47
Actual Basic Shares Outstanding			17,449				17,427				17,361				17,336				17,336
Actual Diluted Shares Outstanding			17,510				17,466				17,443				17,396				17,372

 

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

Unaudited

 

																						Six Months Ended
		2014								2013												June 30,
(Dollars in thousands, except per share data)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter				2014				2013
INTEREST INCOME
Interest and Fees on Loans		$	18,152			$	18,098			$	19,057			$	19,264			$	19,709			$	36,250			$	39,863
Investment Securities			939				847				760				717				710				1,786				1,414
Funds Sold			257				291				259				269				279				548				549
Total Interest Income			19,348				19,236				20,076				20,250				20,698				38,584				41,826
INTEREST EXPENSE
Deposits			293				308				314				335				367				601				782
Short-Term Borrowings			17				20				46				46				61				37				143
Subordinated Notes Payable			331				331				400				339				342				662				681
Other Long-Term Borrowings			269				291				320				330				333				560				680
Total Interest Expense			910				950				1,080				1,050				1,103				1,860				2,286
Net Interest Income			18,438				18,286				18,996				19,200				19,595				36,724				39,540
Provision for Loan Losses			499				359				397				555				1,450				858				2,520
Net Interest Income after Provision for Loan Losses			17,939				17,927				18,599				18,645				18,145				35,866				37,020
NONINTEREST INCOME
Deposit Fees			6,213				5,869				6,398				6,474				6,217				12,082				12,382
Bank Card Fees			2,820				2,707				2,656				2,715				2,754				5,527				5,415
Wealth Management Fees			1,852				1,918				2,233				2,130				1,901				3,770				3,816
Mortgage Banking Fees			738				625				654				869				968				1,363				2,011
Data Processing Fees			388				541				689				662				670				929				1,323
Securities Transactions			—				—				3				—				—				—				—
Other			1,336				1,125				1,192				1,176				1,221				2,461				2,313
Total Noninterest Income			13,347				12,785				13,825				14,026				13,731				26,132				27,260
NONINTEREST EXPENSE
Compensation			15,206				15,781				16,583				16,158				16,647				30,987				33,386
Occupancy, Net			4,505				4,298				4,349				4,403				4,161				8,803				8,579
Intangible Amortization			—				32				48				46				48				32				116
Other Real Estate			2,276				1,399				1,251				1,868				2,290				3,675				5,114
Other			7,089				6,856				7,416				7,678				7,318				13,945				14,410
Total Noninterest Expense			29,076				28,366				29,647				30,153				30,464				57,442				61,605
OPERATING PROFIT (LOSS)			2,210				2,346				2,777				2,518				1,412				4,556				2,675
Income Tax Expense (Benefit)			737				(1,405	)			5				927				569				(668	)			993
NET INCOME		$	1,473			$	3,751			$	2,772			$	1,591			$	843			$	5,224			$	1,682
PER SHARE DATA
Basic Income		$	0.08			$	0.22			$	0.16			$	0.09			$	0.05			$	0.30			$	0.10
Diluted Income			0.08				0.22				0.16				0.09				0.05				0.30				0.10
Cash Dividend		$	0.02			$	0.02			$	—			$	—			$	—			$	0.04			$	0.00
AVERAGE SHARES
Basic			17,427				17,399				17,341				17,336				17,319				17,413				17,311
Diluted			17,488				17,439				17,423				17,396				17,355				17,463				17,364

 

CAPITAL CITY BANK GROUP, INC.

ALLOWANCE FOR LOAN LOSSES

AND RISK ELEMENT ASSETS

Unaudited

 

		2014				2014				2013				2013				2013
(Dollars in thousands, except per share data)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period		$	22,110			$	23,095			$	25,010			$	27,294			$	27,803
Provision for Loan Losses			499				359				397				555				1,450
Net Charge-Offs			2,066				1,344				2,312				2,839				1,959
Balance at End of Period		$	20,543			$	22,110			$	23,095			$	25,010			$	27,294
As a % of Loans			1.45	%			1.57	%			1.65	%			1.75	%			1.89	%
As a % of Nonperforming Loans			80.03	%			63.98	%			62.48	%			60.00	%			65.66	%
CHARGE-OFFS
Commercial, Financial and Agricultural		$	86			$	11			$	337			$	138			$	119
Real Estate - Construction			—				—				72				278				110
Real Estate - Commercial			1,029				594				676				882				1,050
Real Estate - Residential			695				731				921				1,178				1,053
Real Estate - Home Equity			375				403				362				362				322
Consumer			421				405				430				674				351
Total Charge-Offs		$	2,606			$	2,144			$	2,798			$	3,512			$	3,005
RECOVERIES
Commercial, Financial and Agricultural		$	45			$	75			$	33			$	87			$	38
Real Estate - Construction			1				4				—				1				—
Real Estate - Commercial			152				27				14				167				144
Real Estate - Residential			52				395				179				167				396
Real Estate - Home Equity			65				11				39				13				224
Consumer			225				288				221				238				244
Total Recoveries		$	540			$	800			$	486			$	673			$	1,046
NET CHARGE-OFFS		$	2,066			$	1,344			$	2,312			$	2,839			$	1,959
Net Charge-Offs as a % of Average Loans(1)			0.59	%			0.39	%			0.65	%			0.78	%			0.54	%
RISK ELEMENT ASSETS
Nonaccruing Loans		$	25,670			$	34,558			$	36,964			$	41,682			$	41,566
Other Real Estate Owned			42,579				44,036				48,071				53,018				55,087
Total Nonperforming Assets		$	68,249			$	78,594			$	85,035			$	94,700			$	96,653
Past Due Loans 30-89 Days		$	5,092			$	4,902			$	7,746			$	8,427			$	9,017
Past Due Loans 90 Days or More			—				—				—				—				—
Classified Loans			95,037				107,420				115,630				128,190				153,080
Performing Troubled Debt Restructuring’s		$	45,440			$	46,249			$	44,764			$	50,692			$	52,729
Nonperforming Loans as a % of Loans			1.81	%			2.46	%			2.64	%			2.91	%			2.88	%
Nonperforming Assets as a % of
Loans and Other Real Estate			4.67	%			5.42	%			5.87	%			6.38	%			6.44	%
Nonperforming Assets as a % of Total Assets			2.66	%			2.98	%			3.26	%			3.77	%			3.77	%

 

(1) Annualized

 

CAPITAL CITY BANK GROUP, INC.

AVERAGE BALANCE AND INTEREST RATES⁽¹⁾

Unaudited

 

		Second Quarter 2014												First Quarter 2014												Fourth Quarter 2013												Third Quarter 2013												Second Quarter 2013												Jun 2014 YTD												Jun 2013 YTD
(Dollars in thousands)		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
ASSETS:
Loans, Net of Unearned Interest		$	1,411,988				18,216				5.17	%		$	1,395,506				18,161				5.28	%		$	1,414,909				19,121				5.36	%		$	1,436,039				19,345				5.34	%		$	1,456,904				19,790				5.45			$	1,403,793			$	36,377				5.23	%		$	1,476,559			$	40,018				5.47	%
Investment Securities
Taxable Investment Securities			345,419				816				0.87				290,942				703				0.88				255,298				608				0.86				232,094				568				0.95				225,770				578				1.02				318,332				1,519				0.84				220,458				1,168				1.03
Tax-Exempt Investment Securities			94,810				188				0.77				114,542				219				0.74				124,501				233				0.74				121,119				223				0.73				104,981				200				0.76				104,621				407				0.75				93,030				374				0.80
Total Investment Securities			440,229	#			1,004				0.91				405,484	#			922				0.91				379,799	#			841				0.88				353,213	#			791				0.89				330,751	#			778				0.94				422,952	#			1,926				0.91				313,488	#			1,542				0.98
Funds Sold			408,668				257				0.25				467,330				291				0.25				411,578				259				0.25				412,138				269				0.26				419,039				279				0.27				437,837				548				0.25				433,650				549				0.26
Total Earning Assets			2,260,885			$	19,477				3.46	%			2,268,320			$	19,374				3.46	%			2,206,286			$	20,221				3.64	%			2,201,390			$	20,405				3.68	%			2,206,694			$	20,847				3.79				2,264,582			$	38,851				3.46	%			2,223,697			$	42,109				3.82	%
Cash and Due From Banks			44,115												48,084												48,519												51,640												49,081												46,089												49,875
Allowance for Loan Losses			(22,255	)											(23,210	)											(25,612	)											(27,636	)											(29,012	)											(22,730	)											(29,735	)
Other Assets			296,248												305,113												324,460												333,001												337,765												300,656												337,673
Total Assets		$	2,578,993											$	2,598,307											$	2,553,653											$	2,558,395											$	2,564,528											$	2,588,597											$	2,581,510
LIABILITIES:
Interest Bearing Deposits
NOW Accounts		$	724,635			$	91				0.05	%		$	770,302			$	104				0.05	%		$	697,468			$	95				0.05	%		$	676,855			$	107				0.06	%		$	716,459			$	124				0.07			$	747,343			$	195				0.05	%		$	752,360			$	280				0.08	%
Money Market Accounts			280,619				50				0.07				274,015				48				0.07				279,608				50				0.07				284,920				53				0.07				289,637				54				0.07				277,335				98				0.07				286,261				108				0.08
Savings Accounts			227,960				28				0.05				218,825				26				0.05				211,761				27				0.05				207,631				26				0.05				202,784				25				0.05				223,418				54				0.05				197,935				48				0.05
Time Deposits			209,558				124				0.24				215,291				130				0.24				224,500				142				0.25				231,490				149				0.26				231,134				164				0.29				212,408				254				0.24				234,768				346				0.30
Total Interest Bearing Deposits			1,442,772	#			293				0.08	%			1,478,433	#			308				0.08	%			1,413,337	#			314				0.09	%			1,400,896	#			335				0.09	%			1,440,014	#			367				0.10				1,460,504	#			601				0.08	%			1,471,324	#			782				0.11	%
Short-Term Borrowings			44,473				17				0.15	%			46,343				20				0.18	%			58,126				46				0.31	%			49,919				46				0.37	%			52,399				61				0.47				45,402				37				0.16	%			53,819				143				0.54	%
Subordinated Notes Payable			62,887				331				2.08				62,887				331				2.10				62,887				400				2.49				62,887				339				2.11				62,887				342				2.15				62,887				662				2.09				62,887				681				2.15
Other Long-Term Borrowings			33,619				269				3.21				37,055				291				3.18				39,676				320				3.19				40,832				330				3.21				40,942				333				3.26				35,328				560				3.19				41,915				680				3.27
Total Interest Bearing Liabilities			1,583,751			$	910				0.23	%			1,624,718			$	950				0.24	%			1,574,026			$	1,080				0.27	%			1,554,534			$	1,050				0.27	%			1,596,242			$	1,103				0.28				1,604,121			$	1,860				0.23	%			1,629,945			$	2,286				0.28	%
Noninterest Bearing Deposits			666,791												646,527												637,533												658,602												627,633												656,715												613,886
Other Liabilities			46,105												47,333												88,095												93,642												90,168												46,716												87,656
Total Liabilities			2,296,647												2,318,578												2,299,654												2,306,778												2,314,043												2,307,552												2,331,487
SHAREOWNERS’ EQUITY:			282,346												279,729												253,999												251,617												250,485												281,045												250,023
Total Liabilities and Shareowners’ Equity		$	2,578,993											$	2,598,307											$	2,553,653											$	2,558,395											$	2,564,528											$	2,588,597											$	2,581,510
Interest Rate Spread						$	18,567				3.22	%						$	18,424				3.23	%						$	19,141				3.36	%						$	19,355				3.41	%						$	19,744				3.51							$	36,991				3.23	%						$	39,823				3.54	%
Interest Income and Rate Earned(1)							19,477				3.46								19,374				3.46								20,221				3.64								20,405				3.68								20,847				3.79								38,851				3.46								42,109				3.82
Interest Expense and Rate Paid(2)							910				0.16								950				0.17								1,080				0.19								1,050				0.19								1,103				0.20								1,860				0.17								2,286				0.21
Net Interest Margin						$	18,567				3.29	%						$	18,424				3.29	%						$	19,141				3.45	%						$	19,355				3.49	%						$	19,744				3.59							$	36,991				3.29	%						$	39,823				3.61	%

 

⁽¹⁾ Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.

⁽²⁾ Rate calculated based on average earning assets.