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| 8-K - 8-K - CAPITAL CITY BANK GROUP INC | ccbg-20201027.htm |
Capital City Bank Group, Inc.
Reports Third Quarter 2020 Results
TALLAHASSEE, Fla. (October 27, 2020) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $10.4
million, or $0.62 per diluted share for the third quarter of 20 20 compared to net income of $9.1 million, or $0.55 per diluted share for
the second quarter of 2020, and $8.5 million, or $0.50 per diluted share for the third quarter of 201 9. For the first nine months of
2020, net income totaled $23.8 million, or $1.42 per diluted share, compared to net income of $22.2 million, or $1.32 per diluted
share, for the same period of 2019.
QUARTER HIGHLIGHTS
●
Return on assets improved to 1.17% and return on equity to 12.16%
●
Diversified revenue and strong balance sheet continue to buffer impact of pandemic and lower interest rates
●
Strong performance by Capital City Home Loans (“CCHL”) contributed significantly ($0.23 per share)
●
11% increase in other fee revenues (deposit, bankcard, and wealth management)
●
Credit quality remains strong with no significant problem loan migration
●
88% of loan balances extended in the first and second quarter have resumed payments
“Although the environment remains challenging, Capital City reported a strong third quarter, up 12.7% over the second quarter,”
said William G. Smith, Jr., Chairman, President and CEO. “I am proud of both our financial performance and how our team has
responded to the COVID-19 pandemic. We continue to put the safety and well-being of our associates and clients first, as we reach
out to assist our communities through the origination of SBA PPP loans, grants and volunteer hours, and endeavor to meet the needs
of our clients through both in-person and virtual delivery channels. The mortgage market has been robust and we have benefitted
from our alliance with CCHL, which contributed $0.23 per share in the third quarter – up from $0.20 per share in the second quarter.
Earnings from CCHL and SBA PPP loan fees have helped to mitigate the adverse impacts of a lower interest rate environment and
reserve build attributable to the adoption of CECL and COVID -19. Hopefully, we will continue to experience economic
improvement during the fourth quarter and into 2021. I am proud of what our team has accomplished in a very difficult year, and I
remain optimistic about the long-term outlook for Capital City. Thank you for your continued support.”
COVID-19 Update
●
Lobby access remains open for all of our banking offices and operations are subject to national guidelines and local safety
ordinances to protect both clients and associates – we will continue to monitor changing conditions with the pandemic and its
impact on client and associate interactions within our banking offices
●
Most operational associates returned to work in early June, but we have extended some remote work arrangements on a case-by-
case basis
●
Enhanced digital access options are available for banking products and access to sales associates
●
We continue to monitor COVID-19 case count trends in our markets and respond appropriately to help ensure client and associate
safety
●
We continue to support clients with the Small Business Administration Payment Protection Program (“SBA PPP”) by actively
assisting with the forgiveness process
Discussion of Operating Results
Summary Overview
Compared to the second quarter of 2020, the $2.1 million increase in operating profit was attributable to a $4.7 million increase in
noninterest income and a $0.7 million decrease in the provision for credit losses, partially offset by higher noninterest expense of
$3.0 million and lower net interest income of $0.3 million.
Compared to the third quarter of 2019, the $7.0 million increase in operating profit was attributable to a $21 .1 million increase in
noninterest income, partially offset by higher noninterest expense of $12.5 million, a $0.5 million increase in the provision for credit
losses and lower net interest income of $1.1 million.
The $10.4 million increase in operating profit for the first nine months of 2020 versus the comparable period of 2019 was
attributable to higher noninterest income of $41.4 million, partially offset by higher noninterest expense of $24.2 million, a $6.1
million increase in the provision for credit losses and lower net interest income of $0.7 million.
The aforementioned period over period variances reflect the acquisition of a 51% membership interest and consolidation of CCHL
late in the first quarter of 2020.
Our return on average assets (“ROA”) was 1.17% and our return on average equity (“ROE”) was 12.16% for the third quarter of
2020. These metrics were 1.10% and 11.03% for the second quarter of 2020, respectively, and 1.14% and 10.51% for the third
quarter of 2019, respectively. For the first nine months of 2020, our ROA was 0.96% and our ROE was 9.50% compared to 1.00%
and 9.48%, respectively, for the same period of 2019.
Net Interest Income/Net Interest Margin
Tax-equivalent net interest income for the third quarter of 2020 was $25.2 million compared to $25.6 million for the second quarter
of 2020 and $26.3 million for the third quarter of 201 9. For the first nine months of 2020, tax-equivalent net interest income totaled
$76.7 million compared to $77.5 million in 2019. The decrease compared to all prior periods reflected lower rates earned on
overnight funds, investment securities and variable rate loans, partially offset by lower cost for deposits.
The federal funds target rate has remained in the range of 0.00%-0.25% since March 2020 when the Fed reduced its overnight rate
by 150 basis points, and as a result we continue to experience lower repricing of our variable/adjustable rate earning assets and
investment securities. Our overall cost of funds remained low during the third quarter of 2020 at 0.13% compared to 0.14% for the
second quarter of 2020. Due to highly competitive fixed-rate loan pricing in our markets, we continue to review our loan pricing and
make adjustments where we believe appropriate and prudent.
Our net interest margin for the third quarter of 20 20 was 3.12%, a decrease of 29 basis points from the second quarter of 20 20 and 80
basis points from the third quarter of 2019. For the first nine months of 2020, the net interest margin decreased 42 basis points to
3.42%. The decrease compared to all prior periods was primarily attributable to considerable growth in overnight funds which
reduced our margin. Our net interest margin for the third quarter of 2020 , excluding the impact of SBA PPP loans, was 3.17%. We
discuss the effect of the pandemic related stimulus programs on our balance sheet in more detail below under
Discussion of
Financial Condition
.
Provision for Credit Loss
The provision for credit losses for the third quarter of 2020 was $1.3 million compared to $2.0 million for the second quarter of
2020 and $0.8 million for the third quarter of 2019. For the first nine months of 2020, the provision was $8.3 million compared to
$2.2 million in 2019. The higher provision in 2020 reflected expected losses due to deterioration in economic conditions related to
COVID-19. We discuss the allowance for credit losses and COVID-19 exposure further below.
Noninterest Income and Noninterest Expense
CCHL’s mortgage banking operations impacted our noninterest income and noninterest expense for the three and nine month
periods ended September 30, 2020, and thus, the period over period comparisons reflect the impact of the CCHL consolidation,
which occurred late in the first quarter 2020. The table below provides an overview of CCHL’s impact on our noninterest income
and noninterest expense for 2020.
Noninterest income for the third quarter of 2020 totaled $35.0 million compared to $30.2 million for the second quarter of 2020 and
$13.9 million for the third quarter of 2019. For the first nine months of 2020, noninterest income totaled $80.6 million compared to
$39.2 million for same period of 2019. The improvement over all prior periods was primarily attributable to higher mortgage
banking revenues at CCHL. Higher deposit fees, bank card fees, and wealth management fees contributed to the increase over the
second quarter of 2020. Compared to both prior year periods, deposit fees declined primarily due to the impact of government
stimulus during the second quarter related to the COVID-19 pandemic, but were partially offset by higher debit card activity which
drove improvement in bank card fees. The downward trend in deposit fees we realized in the second quarter of 2020 reversed in the
third quarter of 2020 reflecting higher utilization of our overdraft product.
Noninterest expense for the third quarter of 2020 totaled $40.3 million compared to $37.3 million for the second quarter of 2020
and $27.9 million for the third quarter of 2019. The increase over the second quarter of 2020 was primarily attributable to higher
compensation expense of $2.5 million and other expense of $0.4 million. The increase in compensation reflected higher
commission expense of $1.6 million related to higher mortgage production volume at CCHL and lower realized loan cost (credit
offset to salary expense) of $1.0 million related to the high level of SBA PPP loan originations in the second quarter. Higher
amortization expense for mortgage servicing rights at CCHL and Core CCBG expenses (debit card losses, activity based costs, and
miscellaneous expenses) drove the increase in other expense.
For the first nine months of 2020, noninterest expense totaled $108.6 million, an increase of $24.2 million over the same period of
2019 primarily attributable to the addition of expenses at CCHL, including compensation expense of $21.8 million, occupancy
expense of $1.8 million, and other expense of $3.0 million. Core CCBG noninterest expense decreased $2.6 million and reflected
lower compensation expense of $1.2 million, ORE expense of $0.9 million, and other expense of $1.6 million, partially offset by
higher occupancy expense of $1.1 million. The decrease in compensation expense was primarily attributable to higher realized loan
cost of $0.6 million related to the aforementioned increase in SBA PPP loan originations and lower stock compensation expense of
$0.5 million. A $1.0 million gain from the sale of a banking office in the first quarter of 2020 drove the reduction in ORE expense.
The decline in other expense was primarily attributable to lower service cost expense for our pension plan. Higher expense for
FF&E depreciation and maintenance agreements (related to technology investment and upgrades), deferred maintenance for
premises, and pandemic related cleaning/supply costs drove the increase in occupancy. The same aforementioned factors drove the
increase over the third quarter of 2019.
Overall, CCHL has contributed significantly to the improvement in our efficiency ratio for 2020.
Three Months Ended
Nine Months Ended
Sep 30, 2020
Jun 30, 2020
Sep 30, 2019
Sep 30, 2020
Sep 30, 2019
(Dollars in thousands)
Core
CCBG
CCHL
Core
CCBG
CCHL
Core
CCBG
CCHL
Core
CCBG
CCHL
Core
CCBG
CCHL
Deposit Fees
$
4,316
-
$
3,756
$
-
$
4,961
$
-
$
13,087
$
-
$
14,492
$
-
Bank Card Fees
3,389
-
3,142
-
2,972
-
9,582
-
8,863
-
Wealth Management Fees
2,808
-
2,554
-
2,992
-
7,966
-
7,719
-
Mortgage Banking Fees
208
22,775
241
19,156
1,587
-
1,587
44,046
3,779
-
Other
1,182
287
1,147
203
1,391
-
3,787
587
4,372
-
Total Noninterest Income
$
11,903
$
23,062
$
10,840
$
19,359
$
13,903
$
-
$
36,009
$
44,633
$
39,225
$
-
Salaries
$
11,603
$
10,753
$
11,596
$
8,381
$
12,533
$
-
$
36,687
$
21,376
$
37,314
$
-
Other Associate Benefits
3,616
192
3,477
204
3,670
-
11,049
446
11,675
-
Total Compensation
15,219
10,945
15,073
8,585
16,203
-
47,736
21,822
48,989
-
Occupancy, Net
5,061
845
5,030
768
4,710
-
14,839
1,844
13,756
-
Other
6,930
1,342
6,599
1,248
6,960
-
19,325
3,048
21,722
-
Total Noninterest Expense
$
27,210
$
13,132
$
26,702
$
10,601
$
27,873
$
-
$
81,900
$
26,714
$
84,467
$
-
Income Taxes
We realized income tax expense of $3.2 million (effective rate of 17%) for the third quarter of 2020 compared to $2.9 million
(effective rate of 18%) for the second quarter of 20 20 and $3.0 million (effective rate of 26%) for the third quarter of 2019. For the
first nine months of 2020, we realized income tax expense of $7.4 million (effective rate of 18%) compared to $7.4 million
(effective rate of 25%) for the same period of 2019. The decrease in our effective tax rate in 2020 reflected the impact of converting
CCHL to a partnership for tax purposes in the second quarter of 2020. Absent discrete items, we expect our annual effective tax
rate to approximate 18%-19% for the remainder of 2020 .
Discussion of Financial Condition
Earning Assets
Average earning assets were $3.224 billion for the third quarter of 2020 , an increase of $207.1 million, or 6.9% over the second
quarter of 2020, and an increase of $529.1 million, or 19.6% over the fourth quarter of 2019. The increase over both prior periods
was primarily driven by higher deposit balances which funded growth in the loan portfolio and overnight funds sold. Deposit
balances increased as a result of strong core deposit growth, in addition to funding retained at the bank from SBA PPP loans, and
various other stimulus programs.
We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of
$567.9 million during the third quarter of 2020 compared to an average net overnight funds sold position of $351.5 million in the
second quarter of 2020 and $228.1 million in the fourth quarter of 201 9. The increase compared to both prior periods was driven by
strong core deposit growth, in addition to pandemic related stimulus programs (see below –
Funding
).
Average loans held for investment (“HFI”) increased $22.2 million, or 1.1%, over the second quarter of 2020 and $171.1 million, or
9.3%, over the fourth quarter of 2019. We originated SBA PPP loans totaling $190 million (reflected in the commercial loan
category) which averaged $190 million in the third quarter and $1 34 million in the second quarter. Period-end HFI loans decreased
$24.0, or 1.2%, from the second quarter of 2020 and increased $162.2 million, or 8.8%, over the fourth quarter of 2019. The decline
in the core loan portfolio (ex-SBA PPP loans) has been driven by residential real estate loan run-off reflective of the lower rate
environment and refinancing activity as well as lower utilization of commercial lines of credit reflective of the economic slowdown.
To date, our borrowers have submitted a nominal level of SBA PPP forgiveness applications, but these applications are expected to
accelerate over the next six months. Amortized SBA PPP loan fees totaled approximately $0.6 million for the third quarter of 2020
and $0.4 million for the second quarter of 2020. At September 30, 2020, we had approximately $4.0 million (net) in deferred SBA
PPP loan fees.
Allowance for Credit Losses
At September 30, 2020, the allowance for credit losses totaled $23.1 million compared to $22.5 million at June 30, 2020 and $13.9
million at December 31, 2019. At September 30, 2020, the allowance represented 1.16% of outstanding loans held for investment
(HFI) and provided coverage of 420% of nonperforming loans compared to 1.11% and 322%, respectively, at June 30, 2020 and
0.75% and 311%, respectively, at December 31, 2019. At September 30, 2020, excluding SBA PPP loans (100% government
guaranteed), the allowance represented 1.28% of loans held for investment.
The adoption of ASC 326 (“CECL”) on January 1, 2020 had an impact of $4.0 million ($3.3 million increase in the allowance for
credit losses and $0.7 million increase in the allowance for unfunded loan commitments (other liability account)). The $6.4 million
build (provision of $8.3 million less net charge -offs of $1.9 million) in the allowance for credit losses for the first nine months of
2020 was attributable to deterioration in economic conditions, primarily a higher rate of unemployment due to the COVID -19
pandemic and its potential effect on rates of default.
Credit Quality/COVID-19 Exposure
Nonperforming assets (nonaccrual loans and OREO) totaled $6.7 million at September 30, 2020, a $1.3 million decrease from June
30, 2020, and a $1.3 million increase over December 31, 2019. Nonaccrual loans totaled $5.5 million at September 30, 2020, a $1.5
million decrease from June 30, 2020 and a $1.0 million increase over December 31, 2019. The balance of OREO totaled $1.2
million at September 30, 2020, an increase of $0.2 million over June 30, 2020 and a $0.3 million increase over December 31, 2019.
We continue to analyze our loan portfolio for segments that have been affected by the stressed economic and business conditions
caused by the pandemic. Certain at-risk segments total 8% of our loan balances at September 30, 2020, including hotel (3%),
restaurant (1%), retail and shopping centers (3%), and other (1%). The other segment includes churches, non-profits, education, and
recreational. To assist our clients, in mid-March of 2020, we began allowing short term 60 to 90 day loan extensions for affected
borrowers. A roll-forward of loan extension activity is provided in the table below. Approximately 83% of the $325 million in
loans extended were for commercial borrowers and 17% for consumer borrowers. Approximately $285 million, or 88% of the loan
balances associated with these borrowers have resumed making regularly scheduled payments. Of the $40 million that remains on
extension, approximately $2 million was classified at September 30, 2020 and $26 million is related to six hotel loans which were
not classified, but continue to be monitored closely.
% Loans Extended
At October 2, 2020
# Loans
Loan Amount
# Loans
$ Loans
Loans Extended
2,333
$
325,014
Loans Resuming Payments
(2,129)
(284,548)
91%
88%
Loans Still on Extension
204
$
40,466
9%
12%
Funding (Deposits/Debt)
Average total deposits were $2.971 billion for the third quarter of 2020, an increase of $187.8 million, or 6.8% over the second
quarter of 2020, and an increase of $446.3 million, or 17.7% over the fourth quarter of 2019. Period end deposit balances grew
$54.4 million and $364.0 million over the second quarter of 2020 and fourth quarter of 2019, respectively, indicating strong growth
in core deposit balances. The estimated deposit inflows related to the two pandemic related stimulus programs that occurred
primarily during the second quarter were $179 million (SBA PPP) and $64 million (Economic Impact Payment stimulus checks).
Given these large increases, the potential exists for our deposit levels to be volatile over the coming quarters due to the uncertain
timing of the outflows of the stimulus related deposits and the economic recovery. It is anticipated that current liquidity levels will
remain robust due to our strong overnight funds sold position. We monitor deposit rates on an ongoing basis and adjust if necessary,
as a prudent pricing discipline remains the key to managing our mix of deposits.
Average borrowings increased $0.9 million over the second quarter of 2020 and $65.8 million over the fourth quarter of 2019 as
short-term borrowings (warehouse lines used to support HFS loans) were added as part of the CCHL integration.
Capital
Shareowners’ equity was $339.4 million at September 30, 2020 compared to $335.1 million at June 30, 2020 and $327.0 million at
December 31, 2019. For the first nine months of 2020, shareowners’ equity was positively impacted by net income of $23.8
million, a $2.4 million increase in the unrealized gain on investment securities, net adjustments totaling $0.9 million related to
transactions under our stock compensation plans, and stock compensation accretion of $0.6 million. Shareowners’ equity was
reduced by common stock dividends of $7.1 million ($0.42 per share), a $3.1 million (net of tax) adjustment to retained earnings for
the adoption of CECL, reclassification of $3.1 million to temporary equity to increase the redemption value of the non-controlling
interest in CCHL, and share repurchases of $2.0 million (99,952 shares).
At September 30, 2020, our total risk-based capital ratio was 17.88% compared to 17.60% at June 30, 2020 and 17.90% at
December 31, 2019. Our common equity tier 1 capital ratio was 14.20%, 14.01%, and 14.47%, respectively, on these dates. Our
leverage ratio was 9.64%, 10.12%, and 11.25%, respectively, on these dates. All of our regulatory capital ratios exceeded the
threshold to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio
was 7.16% at September 30, 2020 compared to 7.21% and 8.06% at June 30, 2020 and December 31, 2019, respectively.
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 $3.6 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 and securities brokerage services.
Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 57 banking offices and 85 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: the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions
and our business, results of operations and financial condition, including the impact of our participation in government programs
related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes;
fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our
computer systems or 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; 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, 2019, 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 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, 2020
Jun 30, 2020
Mar 31, 2020
Dec 31, 2019
Sep 30, 2019
Shareowners' Equity (GAAP)
$
339,425
$
335,057
$
328,507
$
327,016
$
321,562
Less: Goodwill (GAAP)
89,095
89,095
89,275
84,811
84,811
Tangible Shareowners' Equity (non-GAAP)
A
250,330
245,962
239,232
242,205
236,751
Total Assets (GAAP)
3,587,041
3,499,524
3,086,523
3,088,953
2,934,513
Less: Goodwill (GAAP)
89,095
89,095
89,275
84,811
84,811
Tangible Assets (non-GAAP)
B
$
3,497,946
$
3,410,429
$
2,997,248
$
3,004,142
$
2,849,702
Tangible Common Equity Ratio (non-GAAP)
A/B
7.16%
7.21%
7.98%
8.06%
8.31%
Actual Diluted Shares Outstanding (GAAP)
C
16,800,563
16,821,743
16,845,462
16,855,161
16,797,241
Tangible Book Value per Diluted Share (non-GAAP)
A/C
$
14.90
$
14.62
$
14.20
$
14.37
$
14.09
CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended
Nine Months Ended
(Dollars in thousands, except per share data)
Sep 30, 2020
Jun 30, 2020
Sep 30, 2019
Sep 30, 2020
Sep 30, 2019
EARNINGS
Net Income Attributable to Common Shareowners
$
10,397
$
9,146
$
8,481
$
23,830
$
22,242
Diluted Net Income Per Share
$
0.62
$
0.55
$
0.50
$
1.42
$
1.32
PERFORMANCE
Return on Average Assets
1.17
%
1.10
%
1.14
%
0.96
%
1.00
%
Return on Average Equity
12.16
11.03
10.51
9.50
9.48
Net Interest Margin
3.12
3.41
3.92
3.42
3.84
Noninterest Income as % of Operating Revenue
58.19
54.26
34.67
51.37
33.72
Efficiency Ratio
67.01
%
66.90
%
69.27
%
69.04
%
72.37
%
CAPITAL ADEQUACY
Tier 1 Capital
16.77
%
16.59
%
16.83
%
16.77
%
16.83
%
Total Capital
17.88
17.60
17.59
17.88
17.59
Leverage
9.64
10.12
11.09
9.64
11.09
Common Equity Tier 1
14.20
14.01
14.13
14.20
14.13
Tangible Common Equity
(1)
7.16
7.21
8.31
7.16
8.31
Equity to Assets
9.46
%
9.57
%
10.96
%
9.46
%
10.96
%
ASSET QUALITY
Allowance as % of Non-Performing Loans
420.30
%
322.37
%
290.55
%
420.30
%
290.55
%
Allowance as a % of Loans HFI
1.16
1.11
0.78
1.16
0.78
Net Charge-Offs as % of Average Loans HFI
0.11
0.05
0.23
0.13
0.15
Nonperforming Assets as % of Loans HFI and OREO
0.34
0.40
0.30
0.34
0.30
Nonperforming Assets as % of Total Assets
0.19
%
0.23
%
0.19
%
0.19
%
0.19
%
STOCK PERFORMANCE
High
$
21.71
$
23.99
$
28.00
$
30.62
$
28.00
Low
17.55
16.16
23.70
15.61
21.04
Close
$
18.79
$
20.95
$
27.45
$
18.79
$
27.45
Average Daily Trading Volume
28,517
49,569
25,596
39,477
22,815
(1)
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2020
2019
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
ASSETS
Cash and Due From Banks
$
76,509
$
75,155
$
72,676
$
60,087
$
61,151
Funds Sold and Interest Bearing Deposits
626,104
513,273
196,936
318,336
177,389
Total Cash and Cash Equivalents
702,613
588,428
269,612
378,423
238,540
Investment Securities Available for Sale
328,253
341,180
382,514
403,601
376,981
Investment Securities Held to Maturity
202,593
232,178
251,792
239,539
240,303
530,846
573,358
634,306
643,140
617,284
Loans Held for Sale ("HFS")
116,561
76,610
82,598
9,509
13,075
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural
402,997
421,270
249,020
255,365
259,870
Real Estate - Construction
125,804
117,794
122,595
115,018
111,358
Real Estate - Commercial
656,064
662,434
656,084
625,556
610,726
Real Estate - Residential
335,713
353,831
354,150
353,642
354,545
Real Estate - Home Equity
197,363
194,479
196,443
197,360
197,326
Consumer
268,393
266,417
275,982
279,565
277,970
Other Loans
10,488
4,883
6,580
7,808
14,248
Overdrafts
1,339
1,069
1,533
1,615
1,710
Total Loans Held for Investment
1,998,161
2,022,177
1,862,387
1,835,929
1,827,753
Allowance for Credit Losses
(23,137)
(22,457)
(21,083)
(13,905)
(14,319)
Loans Held for Investment, Net
1,975,024
1,999,720
1,841,304
1,822,024
1,813,434
Premises and Equipment, Net
87,192
87,972
87,684
84,543
85,810
Goodwill
89,095
89,095
89,275
84,811
84,811
Other Real Estate Owned
1,227
1,059
1,463
953
526
Other Assets
84,483
83,282
80,281
65,550
81,033
Total Other Assets
261,997
261,408
258,703
235,857
252,180
Total Assets
$
3,587,041
$
3,499,524
$
3,086,523
$
3,088,953
$
2,934,513
LIABILITIES
Deposits:
Noninterest Bearing Deposits
$
1,378,314
$
1,377,033
$
1,066,607
$
1,044,699
$
1,022,774
NOW Accounts
827,506
808,244
779,467
902,499
728,395
Money Market Accounts
247,823
240,754
210,124
217,839
239,410
Regular Savings Accounts
451,944
423,924
384,480
374,396
372,601
Certificates of Deposit
103,859
105,041
104,907
106,021
109,827
Total Deposits
3,009,446
2,954,996
2,545,585
2,645,454
2,473,007
Short-Term Borrowings
90,936
63,958
76,516
6,404
10,622
Subordinated Notes Payable
52,887
52,887
52,887
52,887
52,887
Other Long-Term Borrowings
5,268
5,583
5,896
6,514
6,963
Other Liabilities
71,880
75,702
70,044
50,678
69,472
Total Liabilities
3,230,417
3,153,126
2,750,928
2,761,937
2,612,951
Temporary Equity
17,199
11,341
7,088
-
-
SHAREOWNERS' EQUITY
Common Stock
168
168
168
168
167
Additional Paid-In Capital
31,425
31,575
32,100
32,092
31,075
Retained Earnings
333,545
328,570
321,772
322,937
316,551
Accumulated Other Comprehensive Loss, Net of Tax
(25,713)
(25,256)
(25,533)
(28,181)
(26,231)
Total Shareowners' Equity
339,425
335,057
328,507
327,016
321,562
Total Liabilities, Temporary Equity and Shareowners' Equity
$
3,587,041
$
3,499,524
$
3,086,523
$
3,088,953
$
2,934,513
OTHER BALANCE SHEET DATA
Earning Assets
$
3,271,672
$
3,185,418
$
2,776,228
$
2,806,913
$
2,635,501
Interest Bearing Liabilities
1,780,223
1,700,391
1,614,277
1,666,560
1,520,705
Book Value Per Diluted Share
$
20.20
$
19.92
$
19.50
$
19.40
$
19.14
Tangible Book Value Per Diluted Share
(1)
14.90
14.62
14.20
14.37
14.09
Actual Basic Shares Outstanding
16,761
16,780
16,812
16,772
16,749
Actual Diluted Shares Outstanding
16,801
16,822
16,845
16,855
16,797
(1)
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Nine Months Ended
2020
2019
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2020
2019
INTEREST INCOME
Interest and Fees on Loans
$
23,594
$
23,687
$
23,593
$
23,842
$
23,992
$
70,874
$
70,373
Investment Securities
2,426
2,737
3,015
3,221
3,307
8,178
10,213
Funds Sold
146
88
757
945
1,142
991
4,242
Total Interest Income
26,166
26,512
27,365
28,008
28,441
80,043
84,828
INTEREST EXPENSE
Deposits
190
218
939
1,157
1,596
1,347
5,683
Short-Term Borrowings
498
421
132
16
27
1,051
93
Subordinated Notes Payable
316
374
471
525
558
1,161
1,762
Other Long-Term Borrowings
40
41
50
56
63
131
201
Total Interest Expense
1,044
1,054
1,592
1,754
2,244
3,690
7,739
Net Interest Income
25,122
25,458
25,773
26,254
26,197
76,353
77,089
Provision for Credit Losses
1,308
2,005
4,990
(162)
776
8,303
2,189
Net Interest Income after Provision for
23,814
23,453
20,783
26,416
25,421
68,050
74,900
NONINTEREST INCOME
Deposit Fees
4,316
3,756
5,015
4,980
4,961
13,087
14,492
Bank Card Fees
3,389
3,142
3,051
3,131
2,972
9,582
8,863
Wealth Management Fees
2,808
2,554
2,604
2,761
2,992
7,966
7,719
Mortgage Banking Fees
22,983
19,397
3,253
1,542
1,587
45,633
3,779
Other
1,469
1,350
1,555
1,414
1,391
4,374
4,372
Total Noninterest Income
34,965
30,199
15,478
13,828
13,903
80,642
39,225
NONINTEREST EXPENSE
Compensation
26,164
23,658
19,736
17,363
16,203
69,558
48,989
Occupancy, Net
5,906
5,798
4,979
4,680
4,710
16,683
13,756
Other Real Estate, Net
219
116
(798)
102
6
(463)
444
Other
8,053
7,731
7,052
6,997
6,954
22,836
21,278
Total Noninterest Expense
40,342
37,303
30,969
29,142
27,873
108,614
84,467
OPERATING PROFIT
18,437
16,349
5,292
11,102
11,451
40,078
29,658
Income Tax Expense
3,165
2,950
1,282
2,537
2,970
7,397
7,416
Net Income
15,272
13,399
4,010
8,565
8,481
32,681
22,242
Pre-Tax Income Attributable to Noncontrolling Interest
(4,875)
(4,253)
277
-
-
(8,851)
-
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$
10,397
$
9,146
$
4,287
$
8,565
$
8,481
$
23,830
$
22,242
PER COMMON SHARE
Basic Net Income
$
0.62
$
0.55
$
0.25
$
0.51
$
0.51
$
1.42
$
1.33
Diluted Net Income
0.62
0.55
0.25
0.51
0.50
1.42
1.32
Cash Dividend
$
0.14
$
0.14
$
0.14
$
0.13
$
0.13
$
0.42
$
0.35
AVERAGE SHARES
Basic
16,771
16,797
16,808
16,750
16,747
16,792
16,776
Diluted
16,810
16,839
16,842
16,834
16,795
16,823
16,810
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES
AND RISK ELEMENT ASSETS
Unaudited
Nine Months Ended
2020
2019
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2020
2019
ALLOWANCE FOR CREDIT LOSSES
Balance at Beginning of Period
$
22,457
$
21,083
$
13,905
$
14,319
$
14,593
$
13,905
$
14,210
Impact of Adopting ASC 326 (CECL)
-
-
3,269
-
-
3,269
-
Provision for Credit Losses - HFI
1,265
1,615
4,990
(162)
776
7,870
2,189
Net Charge-Offs
585
241
1,081
252
1,050
1,907
2,080
Balance at End of Period
(2)
$
23,137
$
22,457
$
21,083
$
13,905
$
14,319
$
23,137
$
14,319
As a % of Loans HFI
1.16%
1.11%
1.13%
0.75%
0.78%
1.16%
0.78%
As a % of Nonperforming Loans
420.30%
322.37%
432.61%
310.99%
290.55%
420.30%
290.55%
CHARGE-OFFS
Commercial, Financial and Agricultural
$
137
$
186
$
362
$
149
$
289
$
685
$
619
Real Estate - Construction
-
-
0
58
223
-
223
Real Estate - Commercial
17
-
11
33
26
28
181
Real Estate - Residential
1
1
110
27
44
112
373
Real Estate - Home Equity
58
52
31
0
333
141
430
Consumer
619
634
864
819
744
2,117
2,059
Overdrafts
(3)
450
541
702
-
-
1,693
-
Total Charge-Offs
$
1,282
$
1,414
$
2,080
$
1,086
$
1,659
$
4,776
$
3,885
RECOVERIES
Commercial, Financial and Agricultural
$
74
$
74
$
40
$
127
$
86
$
188
$
218
Real Estate - Construction
-
-
-
-
-
-
-
Real Estate - Commercial
30
70
191
266
142
291
312
Real Estate - Residential
35
51
40
116
46
126
313
Real Estate - Home Equity
41
64
33
25
58
138
150
Consumer
280
365
268
300
277
913
812
Overdrafts
(3)
237
549
427
-
-
1,213
-
Total Recoveries
$
697
$
1,173
$
999
$
834
$
609
$
2,869
$
1,805
NET CHARGE-OFFS
$
585
$
241
$
1,081
$
252
$
1,050
$
1,907
$
2,080
Net Charge-Offs as a % of Average Loans HFI
(1)
0.11%
0.05%
0.23%
0.05%
0.23%
0.13%
0.15%
RISK ELEMENT ASSETS
Nonaccruing Loans
$
5,505
$
6,966
$
4,874
$
4,472
$
4,928
Other Real Estate Owned
1,227
1,059
1,463
953
526
Total Nonperforming Assets ("NPAs")
$
6,732
$
8,025
$
6,337
$
5,425
$
5,454
Past Due Loans 30-89 Days
$
3,191
$
2,948
$
5,077
$
4,871
$
5,120
Past Due Loans 90 Days or More
-
-
-
-
-
Classified Loans
16,772
17,091
16,548
20,847
21,323
Performing Troubled Debt Restructuring's
$
14,693
$
15,133
$
15,934
$
16,888
$
18,284
Nonperforming Loans as a % of Loans HFI
0.28%
0.34%
0.26%
0.24%
0.27%
NPAs as a % of Loans HFI and Other Real Estate
0.34%
0.40%
0.34%
0.29%
0.30%
NPAs as a % of Total Assets
0.19%
0.23%
0.21%
0.18%
0.19%
(1)
(2)
(3)
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES
(1)
Unaudited
Third Quarter 2020
Second Quarter 2020
First Quarter 2020
Fourth Quarter 2019
Third Quarter 2019
Sep 2020 YTD
Sep 2019 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 HFI and HFS
$
2,097,700
$
23,698
4.50
%
$
2,057,925
$
23,785
4.65
%
$
1,882,703
$
23,692
5.06
%
$
1,846,190
23,958
5.15
%
$
1,837,548
$
24,113
5.21
%
$
2,013,243
$
71,175
4.73
%
$
1,813,964
$
70,705
5.21
%
Investment Securities
Taxable Investment Securities
553,395
2,401
1.73
601,509
2,708
1.80
629,512
2,995
1.91
610,046
3,186
2.08
607,363
3,249
2.13
594,654
8,104
1.82
613,382
9,936
2.16
Tax-Exempt Investment Securities
4,860
32
2.66
5,865
37
2.51
5,293
25
1.86
10,327
43
1.67
18,041
73
1.63
5,338
94
2.34
29,237
347
1.59
Total Investment Securities
558,255
2,433
1.74
607,374
2,745
1.81
634,805
3,020
1.91
620,373
3,229
2.08
625,404
3,322
2.12
599,992
8,198
1.82
642,619
10,283
2.13
Funds Sold
567,883
146
0.10
351,473
88
0.10
234,372
757
1.30
228,137
945
1.64
207,129
1,142
2.19
385,245
991
0.34
241,323
4,242
2.35
Total Earning Assets
3,223,838
$
26,277
3.25
%
3,016,772
$
26,618
3.55
%
2,751,880
$
27,469
4.01
%
2,694,700
$
28,132
4.14
%
2,670,081
$
28,577
4.25
%
2,998,480
$
80,364
3.58
%
2,697,906
$
85,230
4.22
%
Cash and Due From Banks
69,893
72,647
56,958
53,174
50,981
66,512
52,210
Allowance for Loan Losses
(22,948)
(21,642)
(14,389)
(14,759)
(14,863)
(19,672)
(14,576)
Other Assets
268,549
261,449
244,339
249,089
253,111
257,993
253,152
Total Assets
$
3,539,332
$
3,329,226
$
3,038,788
$
2,982,204
$
2,959,310
$
3,303,313
$
2,988,692
LIABILITIES:
Interest Bearing Deposits
NOW Accounts
$
826,776
$
61
0.03
%
$
789,378
$
78
0.04
%
$
808,811
$
725
0.36
%
$
755,625
$
889
0.47
%
$
749,678
$
1,235
0.65
%
$
808,389
$
864
0.14
%
$
821,819
$
4,613
0.75
%
Money Market Accounts
247,185
32
0.05
222,377
40
0.07
212,211
117
0.22
227,479
170
0.30
238,565
264
0.44
227,331
189
0.11
238,664
775
0.43
Savings Accounts
438,762
54
0.05
409,366
50
0.05
379,237
46
0.05
372,518
46
0.05
372,593
46
0.05
409,230
150
0.05
369,726
136
0.05
Time Deposits
104,522
43
0.16
104,718
50
0.19
105,542
51
0.19
108,407
52
0.19
111,447
51
0.18
104,925
144
0.18
115,215
159
0.18
Total Interest Bearing Deposits
1,617,245
190
0.05
%
1,525,839
218
0.06
%
1,505,801
939
0.25
%
1,464,029
1,157
0.31
%
1,472,283
1,596
0.43
%
1,549,875
1,347
0.12
%
1,545,424
5,683
0.49
%
Short-Term Borrowings
74,557
498
2.66
%
73,377
421
2.31
%
32,915
132
1.61
%
7,448
16
0.87
%
8,697
27
1.24
%
60,335
1,051
2.33
%
9,890
93
1.27
%
Subordinated Notes Payable
52,887
316
2.34
52,887
374
2.80
52,887
471
3.52
52,887
525
3.88
52,887
558
4.13
52,887
1,161
2.89
52,887
1,762
4.39
Other Long-Term Borrowings
5,453
40
2.91
5,766
41
2.84
6,312
50
3.21
6,723
56
3.33
7,158
63
3.47
5,842
131
3.00
7,619
201
3.52
Total Interest Bearing Liabilities
1,750,142
$
1,044
0.24
%
1,657,869
$
1,054
0.26
%
1,597,915
$
1,592
0.40
%
1,531,087
$
1,754
0.45
%
1,541,025
$
2,244
0.58
%
1,668,939
$
3,690
0.30
%
1,615,820
$
7,739
0.64
%
Noninterest Bearing Deposits
1,354,032
1,257,614
1,046,889
1,060,922
1,023,472
1,220,002
996,290
Other Liabilities
83,192
72,073
59,587
63,291
74,540
71,661
62,823
Total Liabilities
3,187,366
2,987,556
2,704,391
2,655,300
2,639,037
2,960,602
2,674,933
Temporary Equity
11,893
8,155
2,506
-
-
7,534
-
SHAREOWNERS' EQUITY:
340,073
333,515
331,891
326,904
320,273
335,177
313,759
Total Liabilities, Temporary Equity and
Shareowners' Equity
$
3,539,332
$
3,329,226
$
3,038,788
$
2,982,204
$
2,959,310
$
3,303,313
$
2,988,692
Interest Rate Spread
$
25,233
3.01
%
$
25,564
3.30
%
$
25,877
3.61
%
$
26,378
3.69
%
$
26,333
3.67
%
$
76,674
3.29
%
$
77,491
3.58
%
Interest Income and Rate Earned
(1)
26,277
3.25
26,618
3.55
27,469
4.01
28,132
4.14
28,577
4.25
80,364
3.58
85,230
4.22
Interest Expense and Rate Paid
(2)
1,044
0.13
1,054
0.14
1,592
0.23
1,754
0.26
2,244
0.33
3,690
0.16
7,739
0.38
Net Interest Margin
$
25,233
3.12
%
$
25,564
3.41
%
$
25,877
3.78
%
$
26,378
3.89
%
$
26,333
3.92
%
$
76,674
3.42
%
$
77,491
3.84
%
(1)
(2)