Capital City Bank Group, Inc. Reports Third Quarter 2015 Results

TALLAHASSEE, Fla., Oct. 20, 2015 (GLOBE NEWSWIRE) — Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.7 million, or $0.09 per diluted share for the third quarter of 2015 compared to net income of $3.8 million, or $0.22 per diluted share for the second quarter of 2015, and $2.1 million, or $0.12 per diluted share, for the third quarter of 2014.  For the first nine months of 2015, the Company reported net income of $6.5 million, or $0.37 per diluted share, compared to net income of $7.3 million, or $0.42 per diluted share for the same period in 2014.        

HIGHLIGHTS

  • 16% reduction in nonperforming assets sequentially and 27% from year-end 2014
  • Continued loan growth of 0.7% sequentially and 4.2% year to date
  • Growth in tax-equivalent net interest income driven by improved earning asset mix – 0.4% sequentially and 1.7% over prior year
  • Strong fee income from residential mortgage loan sales, up 9% sequentially and 54% over prior year

“Loan growth, efficiency and credit quality continue to be major areas of focus,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group.  “Although our annual true-up of pension expense combined with the write-off of some state tax credits adversely impacted this quarter’s earnings by $0.04 per share, the underlying fundamentals continue to trend positively. We’ve experienced seven consecutive quarters of loan growth and, in recent quarters, that growth has been broader based. Credit quality continues to improve as total NPAs declined 16% quarter over quarter, 41% year over year, and equaled 1.47% of assets as of September 30, 2015.  Although we did not raise capital during the financial crisis, our capital levels remain strong and we have repurchased 428,828, or 2.5% of our outstanding shares since February 2014.  While there is still much work to be done, I continue to be pleased with our progress,” said Smith.

Compared to the second quarter of 2015, performance reflects lower noninterest income of $1.6 million and higher noninterest expense of $0.7 million that was partially offset by a $0.1 million increase in net interest income and lower income taxes of $0.1 million.

Compared to the third quarter of 2014, the decrease in earnings reflects higher noninterest expense of $0.6 million and a $0.1 million decrease in noninterest income partially offset by higher net interest income of $0.2 million and lower income taxes of $0.1 million.

The decrease in earnings for the first nine months of 2015 versus the comparable period in 2014 was attributable to higher noninterest expense of $0.9 million and an increase in income tax expense of $2.4 million that was partially offset by higher net interest income of $0.9 million, noninterest income of $1.4 million, and a lower loan loss provision of $0.2 million.

The Return on Average Assets was 0.25% and the Return on Average Equity was 2.43% for the third quarter of 2015 as compared to 0.58% and 5.62% for the second quarter of 2015, and 0.33% and 2.95% for the third quarter of 2014, respectively.  For the first nine months of 2015, the Return on Average Assets was 0.33% and the Return on Average Equity was 3.17% compared to 0.38% and 3.48%, respectively, for the same period in 2014.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2015 was $19.3 million compared to $19.1 million for the second quarter of 2015 and $19.0 million for the third quarter of 2014.  The increase in tax equivalent net interest income compared to the second quarter 2015 reflects one additional calendar day and a positive shift in earning asset mix due to growth in the investment and loan portfolios, partially offset by a decline in yields.  The increase in tax equivalent net interest income compared to the third quarter of 2014 also reflects a positive shift in earning asset mix due to growth in the loan and investment portfolios, partially offset by a decline in loan yields.  For the nine months ended September 30, 2015, tax equivalent net interest income totaled $57.0 million compared to $56.0 million for the same period in 2014.

Pressure on net interest income continues primarily as a result of the low rate environment.  Despite an increase in both the loan and investment portfolios, the low rate environment continues to negatively impact the loan yields and, going forward, will have minimal to no impact on cost of funds.  Increased lending competition in all markets has also unfavorably impacted the pricing for loans. 

The net interest margin for the third quarter of 2015 was 3.31%, an increase of two basis points over the second quarter of 2015, and a decrease of 11 basis points from the third quarter of 2014. The increase in the margin compared to the second quarter of 2015 was attributable to growth in our investment portfolio and a reduction in foregone interest.  For the nine months ended September 30, 2015, the net interest margin declined four basis points to 3.29% compared to the same period of 2014, primarily attributable to a decline in loan yields.

The provision for loan losses for the third quarter of 2015 was $0.4 million comparable to both the second quarter of 2015 and the third quarter of 2014.  For the first nine months of 2015, the loan loss provision totaled $1.1 million compared to $1.3 million for the same period in 2014.  The lower level of the year-to-date provision reflects continued favorable problem loan migration and improvement in key credit metrics partially offset by growth in the loan portfolio.  Net charge-offs for the third quarter of 2015 totaled $0.9 million, or 0.24% (annualized), of average loans compared to $1.2 million, or 0.33% (annualized) for the second quarter of 2015 and $1.9 million, or 0.50% (annualized) for the third quarter of 2014.  For the first nine months of 2015, net charge-offs totaled $3.9 million, or 0.35% (annualized) of average loans compared to $5.3 million, or 0.50% (annualized) for the same period in 2014.  At quarter-end, the allowance for loan losses of $14.7 million was 0.99% of outstanding loans (net of overdrafts) and provided coverage of 112% of nonperforming loans compared to 1.03% and 99%, respectively, at June 30, 2015 and 1.22% and 105%, respectively, at December 31, 2014.

Noninterest income for the third quarter of 2015 totaled $13.2 million, a decrease of $1.6 million, or 10.6%, from the second quarter of 2015 and $0.1 million, or 0.9%, from the third quarter of 2014.  The decrease from the second quarter of 2015 reflects bank owned life insurance (“BOLI”) proceeds of $1.7 million that are reflected in other income for the second quarter.  Mortgage banking fees increased $0.1 million over the second quarter of 2015.  The decrease from the third quarter of 2014 was attributable to lower deposit fees of $0.5 million and wealth management fees of $0.2 million, partially offset by higher mortgage banking fees of $0.4 million and bank card fees of $0.1 million.  The reduction in deposit fees was driven by lower overdraft fees reflecting lower utilization of our overdraft service.  Lower client trading activity drove the reduction in wealth management fees.  The increase in mortgage fees was driven by continued strong new home purchase originations.  The increase in bank card fees was attributable to higher card spend by our clients. 
   
For the first nine months of 2015, noninterest income totaled $40.9 million, a $1.4 million increase over the same period of 2014, primarily attributable to higher other income of $1.6 million (reflecting the receipt of BOLI proceeds) and mortgage banking fees of $1.2 million, partially offset by lower deposit fees of $1.3 million.  The year-to-date variances are attributable to the same factors as noted above for the third quarter.    

Noninterest expense for the third quarter of 2015 totaled $29.2 million, an increase of $0.7 million, or 2.5%, over the second quarter of 2015 attributable to higher other real estate owned (“OREO”) expense of $0.4 million, compensation expense of $0.2 million, and occupancy expense of $0.2 million, partially offset by a $0.1 million decrease in other expense.  A higher level of net losses from the sale of properties drove the increase in OREO expense and was primarily attributable to a higher level of gains realized in the second quarter of 2015.  Compensation expense increased primarily due to a higher level of required 2015 pension expense partially offset by lower salary expense.  The increase in occupancy expense reflects a seasonal increase in utility expense and an increase in our property/tangible tax expense.  Other expense decreased due to lower legal and professional fees.    

Compared to the third quarter of 2014, noninterest expense increased by $0.6 million or 1.9% attributable to higher compensation expense of $1.3 million partially offset by lower OREO expense of $0.5 million, occupancy expense of $0.1 million, and other expense of $0.1 million.  The increase in compensation expense reflects higher pension plan expense, partially offset by a reduction in salary expense.  The reduction in OREO expense was primarily attributable to lower carrying costs and a reduction in valuation adjustments reflecting both the disposition of larger operating properties as well as improvement in property values.  The lower level of occupancy expense reflects non-routine maintenance expenses realized in the third quarter of 2014.  Lower legal fees drove the decrease in other expense and reflect a lower level of support needed for problem loan resolutions. 

For the first nine months of 2015, noninterest expense totaled $87.0 million, an increase of $0.9 million, or 1.1%, over the same period of 2014 attributable to higher compensation expense of $3.2 million, partially offset by lower OREO expense of $1.7 million, occupancy expense of $0.3 million, and other expense of $0.3 million.  The increase in compensation expense reflects higher pension plan expense of $2.8 million and commissions of $0.4 million.  The increase in our pension plan expense compared to both the three and nine-month prior year periods is primarily attributable to the utilization of a lower discount rate in 2015 for determining plan liabilities reflective of a decrease in long-term bond interest rates.  A revision to the mortality tables used to calculate pension liabilities also contributed to the increase, but to a lesser extent.  The reduction in OREO expense was primarily attributable to lower property carrying costs and valuation adjustments and to a lesser extent lower net losses from the sale of properties.  Lower technology equipment costs and maintenance costs for premises/FF&E drove the decrease in occupancy expense.  The decrease in other expense reflects lower legal fees, printing and supply costs, and postage costs, partially offset by higher processing costs.      

We realized income tax expense of $1.0 million (38% effective rate) for the third quarter of 2015 compared to $1.1 million (23% effective rate) for the second quarter of 2015 and $1.1 million (34% effective rate) for the third quarter of 2014.  Income tax expense for the third quarter of 2015 includes a $0.2 million valuation reserve for state tax credits that we expect to expire unused.  For the first nine months of 2015, income tax expense totaled $2.8 million.  The proceeds from the aforementioned discrete BOLI transaction realized in the second quarter of 2015 were tax-exempt, therefore income tax expense for the nine-months of 2015 was favorably impacted.  Income taxes for the nine-months of 2014 were favorably impacted by a $2.2 million state tax benefit that was recognized in the first quarter of 2014 and was attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters.  Absent future discrete events, we anticipate our effective income tax rate will normalize within a range of 34%-35%.
        
Discussion of Financial Condition

Average earning assets were $2.311 billion for the third quarter of 2015, a decrease of $17.2 million, or 0.7%, from the second quarter of 2015 and an increase of $98.0 million, or 4.4%, over the fourth quarter of 2014.  The change in earning assets from the second quarter 2015 reflects a reduction in short-term investments reflecting lower levels of public fund deposits.  The increase compared to the fourth quarter of 2014 reflects growth of $138.8 million in the investment portfolio and $56.9 million in loans, which was funded by deposit growth and a reduction in short-term investments.

We maintained average net short-term investments (deposits with banks plus fed funds sold less fed funds purchased) of $190.9 million during the third quarter of 2015 compared to average net short-term investments of $237.1 million in the second quarter of 2015 and $288.6 million in the fourth quarter of 2014.  The decrease in net short-term investments compared to the second quarter of 2015 reflects growth in both the investment and loan portfolios and lower public fund balances. The decrease relative to the fourth quarter of 2014 is primarily attributable to growth in both the loan and investment portfolios, partially offset by an increase in average deposits.

We continue to work on lowering the level of short-term investments (i.e. funds sold) by investing in short duration, high quality securities for our investment portfolio and reducing our non-core deposit balances.  We offer 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 better deploy our short-term investments. 

Average loans increased $9.7 million, or 0.7%, when compared to the second quarter of 2015, and have grown $56.9 million, or 4.0% compared to the fourth quarter of 2014.  During 2014, the growth in loans was driven primarily by auto loans, whereas in recent quarters the growth has been broader based, including commercial, tax-free, construction, home equity as well as consumer.

Although we have experienced loan growth in 2014 and into the first nine months of 2015, signs of slowing growth were seen late in the third quarter. Without compromising our credit standards or taking on inordinate interest rate risk, we continue to make minor modifications to some of our lending programs to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio.  These programs, coupled with economic improvements in our anchor markets, have helped to increase overall production.

Nonperforming assets (nonaccrual loans and OREO) totaled $38.4 million at the end of the third quarter of 2015, a decrease of $7.1 million from the second quarter of 2015 and $14.1 million from the fourth quarter of 2014.  Nonaccrual loans totaled $13.1 million at the end of the third quarter of 2015, a decrease of $2.2 million from the second quarter of 2015 and $3.6 million from the fourth quarter of 2014.  Nonaccrual loan additions totaled $1.9 million in the third quarter of 2015 and $12.1 million for the first nine months of 2015, which compares to $16.7 million for the same period in 2014.  The balance of OREO totaled $25.2 million at the end of the third quarter of 2015, a decrease of $4.9 million and $10.5 million, respectively, from the second quarter of 2015 and fourth quarter of 2014.  For the third quarter of 2015, we added properties totaling $1.2 million, sold properties totaling $5.9 million, and recorded valuation adjustments totaling $0.2 million.  For the first nine months of 2015, we added properties totaling $4.1 million, sold properties totaling $12.7 million, recorded valuation adjustments totaling $1.6 million, and realized miscellaneous adjustments of $0.3 million.  Nonperforming assets represented 1.47% of total assets at September 30, 2015 compared to 1.71% at June 30, 2015 and 2.00% at December 31, 2014.

Average total deposits were $2.137 billion for the third quarter of 2015, a decrease of $41.0 million, or 1.9%, over the second quarter of 2015, and an increase of $60.1 million, or 2.9%, over the fourth quarter of 2014.  The decrease in deposits when compared to the prior period primarily reflects lower levels of public fund deposits, and to a lesser degree, certificates of deposit. The higher level of deposits when compared to the fourth quarter of 2014 is primarily attributable to increased balances of noninterest bearing, public fund NOW, and savings accounts, partially offset by a decline in money market accounts and certificates of deposit.  The seasonal inflows of public funds began in the fourth quarter of 2014, peaked in the second quarter of 2015, and are expected to decline into the fourth quarter of 2015.

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. 

When compared to the second quarter of 2015 and fourth quarter of 2014, average borrowings increased by $6.6 million and $13.4 million, respectively, attributable to higher levels of repurchase agreement balances, partially offset by FHLB advance pay downs.

Equity capital was $273.7 million as of September 30, 2015, compared to $272.0 million as of June 30, 2015 and $272.5 million as of December 31, 2014.  Our leverage ratio was 10.71%, 10.53%, and 10.99%, respectively, for these periods.  Further, as of September 30, 2015, our risk-adjusted capital ratio was 17.24% compared to 16.72% and 17.76% at June 30, 2015 and December 31, 2014, respectively.  Our common equity tier 1 ratio was 12.76% as of September 30, 2015 compared to 12.34% as of June 30, 2015.  All of our capital ratios significantly exceed the threshold to be designated as “well-capitalized” under the Basel III capital standards.  The reduction in our regulatory capital ratios in 2015 reflects the implementation of Basel III and the repurchase of common stock.  During 2015, we have repurchased approximately 405,228 shares of our common stock at an average price of $14.73 per share.                

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, mortgage banking, asset management, trust, 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 accuracy of the Company’s financial statement estimates and assumptions; legislative or regulatory changes, including the Dodd-Frank Act, Basel III, and the ability to repay and qualified mortgage standards; the strength of the U.S. economy and the local economies where the Company conducts operations; 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 or fraud related to debit card products; 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, 2014, 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, 2015   Jun 30, 2015   Sep 30, 2014   Sep 30, 2015   Sep 30, 2014  
                       
EARNINGS                      
Net Income $   1,684   $   3,845   $   2,115   $   6,514   $   7,339    
Net Income Per Common Share $     0.09   $     0.22   $     0.12   $     0.37   $     0.42    
PERFORMANCE                      
Return on Average Assets     0.25 %     0.58 %     0.33 %     0.33 %     0.38 %  
Return on Average Equity     2.43 %     5.62 %     2.95 %     3.17 %     3.48 %  
Net Interest Margin     3.31 %     3.29 %     3.42 %     3.29 %     3.33 %  
Noninterest Income as % of Operating Revenue   40.96 %     43.80 %     41.40 %     41.95 %     41.52 %  
Efficiency Ratio     89.79 %     83.85 %     88.37 %     88.90 %     90.11 %  
CAPITAL ADEQUACY                      
Tier 1 Capital Ratio     16.36 %     15.83 %     16.88 %     16.36 %     16.88 %  
Total Capital Ratio     17.24 %     16.72 %     18.08 %     17.24 %     18.08 %  
Tangible Common Equity Ratio     7.46 %     7.29 %     8.22 %     7.46 %     8.22 %  
Leverage Ratio     10.71 %     10.53 %     10.97 %     10.71 %     10.97 %  
Common Equity Tier 1 Ratio     12.76 %     12.34 %       –        12.76 %       –     
Equity to Assets     10.46 %     10.25 %     11.33 %     10.46 %     11.33 %  
ASSET QUALITY                      
Allowance as % of Non-Performing Loans     112.17 %     99.46 %     81.31 %     112.17 %     81.31 %  
Allowance as a % of Loans     0.99 %     1.03 %     1.34 %     0.99 %     1.34 %  
Net Charge-Offs as % of Average Loans     0.24 %     0.33 %     0.52 %     0.35 %     0.50 %  
Nonperforming Assets as % of Loans and ORE     2.54 %     3.00 %     4.45 %     2.54 %     4.45 %  
Nonperforming Assets as % of Total Assets     1.47 %     1.71 %     2.61 %     1.47 %     2.61 %  
STOCK PERFORMANCE                      
High  $   15.75   $   16.32   $   14.98   $   16.33   $   14.98    
Low     14.39       13.94       13.26       13.16       11.56    
Close     14.92       15.27       13.54       14.92       13.54    
Average Daily Trading Volume     16,134       33,514       16,889       21,609       26,931    
                       

 

CAPITAL CITY BANK GROUP, INC.                      
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                    
Unaudited                      
                       
                       
      2015       2014    
(Dollars in thousands)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter  
ASSETS                      
Cash and Due From Banks $     42,917   $     61,484   $     51,948   $     55,467   $     50,049    
Funds Sold and Interest Bearing Deposits     167,787       185,572       296,888       329,589       253,974    
Total Cash and Cash Equivalents       210,704         247,056         348,836         385,056         304,023    
                       
Investment Securities – Available-for-Sale       444,071         433,688         404,887         341,548         322,297    
Investment Securities – Held-to-Maturity     193,964       201,805       183,489       163,581       173,188    
Total Investment Securities     638,035       635,493       588,376       505,129       495,485    
                       
Loans Held for Sale       10,960         10,991         13,334         10,688         8,700    
                       
Loans, Net of Unearned Interest                      
Commercial, Financial, & Agricultural     169,588       151,116       143,951       136,925       133,756    
Real Estate – Construction     49,475       44,216       41,595       41,596       38,121    
Real Estate – Commercial     491,734       510,962       507,681       510,120       501,863    
Real Estate – Residential     280,690       284,333       287,481       289,952       302,791    
Real Estate – Home Equity     232,254       230,388       228,171       229,572       228,968    
Consumer     238,884       238,599       230,984       214,758       200,363    
Other Loans     10,094       12,048       9,243       6,017       5,504    
Overdrafts     2,464       2,603       2,348       2,434       3,009    
Total Loans, Net of Unearned Interest       1,475,183         1,474,265         1,451,454         1,431,374         1,414,375    
Allowance for Loan Losses     (14,737 )     (15,236 )     (16,090 )     (17,539 )     (19,093 )  
Loans, Net       1,460,446         1,459,029         1,435,364         1,413,835         1,395,282    
                       
Premises and Equipment, Net     98,218       99,108       100,038       101,899       102,546    
Goodwill     84,811       84,811       84,811       84,811       84,811    
Other Real Estate Owned     25,219       30,167       33,835       35,680       41,726    
Other Assets     86,701       87,489       89,121       90,071       67,044    
Total Other Assets     294,949       301,575       307,805       312,461       296,127    
                       
Total Assets $   2,615,094   $   2,654,144   $   2,693,715   $   2,627,169   $   2,499,617    
                       
LIABILITIES                      
Deposits:                      
Noninterest Bearing Deposits $   720,824   $   723,866   $   707,470   $   659,115   $   667,616    
NOW Accounts     688,491       734,237       801,037       804,337       665,493    
Money Market Accounts     261,050       264,475       257,684       254,149       270,131    
Regular Savings Accounts     262,843       255,185       250,862       233,612       231,301    
Certificates of Deposit     181,775       186,881       192,961       195,581       199,037    
Total Deposits     2,114,983       2,164,644       2,210,014       2,146,794       2,033,578    
                       
Short-Term Borrowings     65,355       53,698       49,488       49,425       42,586    
Subordinated Notes Payable     62,887       62,887       62,887       62,887       62,887    
Other Long-Term Borrowings     29,042       29,733       30,418       31,097       32,305    
Other Liabilities     69,168       71,144       66,821       64,426       45,008    
                       
Total Liabilities     2,341,435       2,382,106       2,419,628       2,354,629       2,216,364    
                       
SHAREOWNERS’ EQUITY                      
Common Stock     171       172       175       174       174    
Additional Paid-In Capital     37,738       37,625       42,941       42,569       41,637    
Retained Earnings     256,265       255,096       251,765       251,306       249,907    
Accumulated Other Comprehensive Loss, Net of Tax     (20,515 )     (20,855 )     (20,794 )     (21,509 )     (8,465 )  
                       
Total Shareowners’ Equity     273,659       272,038       274,087       272,540       283,253    
                       
Total Liabilities and Shareowners’ Equity $   2,615,094   $   2,654,144   $   2,693,715   $   2,627,169   $   2,499,617    
                       
OTHER BALANCE SHEET DATA                      
Earning Assets $   2,291,966   $   2,306,322   $   2,350,052   $   2,276,781   $   2,172,535    
Interest Bearing Liabilities     1,551,443       1,587,096       1,645,337       1,631,088       1,503,740    
                       
Book Value Per Diluted Share $   15.91   $   15.80   $   15.59   $   15.53   $   16.18    
Tangible Book Value Per Diluted Share     10.98       10.87       10.77       10.70       11.33    
                       
Actual Basic Shares Outstanding     17,144       17,154       17,533       17,447       17,433    
Actual Diluted Shares Outstanding     17,223       17,216       17,579       17,544       17,512    
                       

 

CAPITAL CITY BANK GROUP, INC.                            
CONSOLIDATED STATEMENTS OF OPERATIONS                            
Unaudited                            
                             
                        Nine Months Ended
    2015   2014     September 30,
(Dollars in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2015   2014
                             
INTEREST INCOME                            
Interest and Fees on Loans $ 18,214 $ 18,231 $ 17,863 $ 18,624 $ 18,528 $ 54,308 $ 54,778
Investment Securities   1,540   1,451   1,294   1,066   1,034   4,285   2,820
Funds Sold   123   151   189   181   204   463   752
Total Interest Income   19,877   19,833   19,346   19,871   19,766   59,056   58,350
                             
INTEREST EXPENSE                            
Deposits   220   259   246   243   255   725   856
Short-Term Borrowings   14   15   21   24   17   50   54
Subordinated Notes Payable   344   338   332   333   333   1,014   995
Other Long-Term Borrowings   233   237   240   252   263   710   823
Total Interest Expense   811   849   839   852   868   2,499   2,728
Net Interest Income   19,066   18,984   18,507   19,019   18,898   56,557   55,622
Provision for Loan Losses   413   375   293   623   424   1,081   1,282
Net Interest Income after Provision for Loan Losses 18,653   18,609   18,214   18,396   18,474   55,476   54,340
                             
NONINTEREST INCOME                            
Deposit Fees   5,721   5,682   5,541   6,027   6,211   16,944   18,293
Bank Card Fees   2,826   2,844   2,742   2,658   2,707   8,412   8,234
Wealth Management Fees   1,818   1,776   2,046   1,988   2,050   5,640   5,820
Mortgage Banking Fees   1,306   1,203   987   808   911   3,496   2,274
Data Processing Fees   400   364   373   278   336   1,137   1,265
Other    1,157   2,925   1,159   1,294   1,136   5,241   3,597
Total Noninterest Income   13,228   14,794   12,848   13,053   13,351   40,870   39,483
                             
NONINTEREST EXPENSE                            
Compensation   16,653   16,404   16,524   15,850   15,378   49,581   46,365
Occupancy, Net   4,446   4,258   4,396   4,440   4,575   13,100   13,378
Other Real Estate, Net   1,302   931   1,497   1,353   1,783   3,730   5,458
Other    6,763   6,846   6,973   6,666   6,871   20,582   20,848
Total Noninterest Expense   29,164   28,439   29,390   28,309   28,607   86,993   86,049
                             
OPERATING PROFIT   2,717   4,964   1,672   3,140   3,218   9,353   7,774
Income Tax Expense   1,034   1,119   686   1,219   1,103   2,839   435
NET INCOME $ 1,683 $ 3,845 $ 986 $ 1,921 $ 2,115 $ 6,514 $ 7,339
                             
PER SHARE DATA                            
Basic Income $ 0.10 $ 0.22 $ 0.06 $ 0.11 $ 0.12 $ 0.38 $ 0.42
Diluted Income   0.09   0.22   0.06   0.11   0.12   0.37   0.42
Cash Dividend $   0.03 $ 0.03 $ 0.03 $   0.03 $   0.02 $   0.09 $   0.06
AVERAGE SHARES                            
Basic    17,150   17,296   17,508   17,433   17,440   17,317   17,422
Diluted    17,229   17,358   17,555   17,530   17,519   17,379   17,482
                             

 

CAPITAL CITY BANK GROUP, INC.                      
ALLOWANCE FOR LOAN LOSSES                       
AND NONPERFORMING ASSETS                      
Unaudited                      
                       
      2015       2015       2015       2014       2014    
(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 $   15,236   $   16,090   $   17,539   $   19,093   $   20,543    
Provision for Loan Losses     413       375       293       623       424    
Net Charge-Offs     912       1,229       1,742       2,177       1,874    
Balance at End of Period $   14,737   $   15,236   $   16,090   $   17,539   $   19,093    
As a % of Loans     0.99 %     1.03 %     1.10 %     1.22 %     1.34 %  
As a % of Nonperforming Loans     112.17 %     99.46 %     95.83 %     104.60 %     81.31 %  
                       
CHARGE-OFFS                      
Commercial, Financial and Agricultural $   365   $   239   $   290   $   688   $   86    
Real Estate – Construction       –          –          –        28         –     
Real Estate – Commercial     (26 )     285       904       957       1,208    
Real Estate – Residential     476       484       305       522       212    
Real Estate – Home Equity     370       454       182       (20 )     621    
Consumer     318       351       576       608       386    
Total Charge-Offs $   1,503   $   1,813   $   2,257   $   2,783   $   2,513    
                       
RECOVERIES                      
Commercial, Financial and Agricultural $   45   $   82   $   55   $   66   $   28    
Real Estate – Construction       –          –          –          2         2    
Real Estate – Commercial     86       54       30       76       213    
Real Estate – Residential     193       200       48       212       93    
Real Estate – Home Equity     42       33       24       28       37    
Consumer     225       215       358       222       266    
Total Recoveries $   591   $   584   $   515   $   606   $   639    
                       
NET CHARGE-OFFS $   912   $   1,229   $   1,742   $   2,177   $   1,874    
                       
Net Charge-Offs as a % of Average Loans(1)     0.24 %     0.33 %     0.49 %     0.61 %     0.52 %  
                       
RISK ELEMENT ASSETS                      
Nonaccruing Loans $   13,138   $   15,320   $   16,790   $   16,769   $   23,482    
Other Real Estate Owned     25,219       30,167       33,835       35,680       41,726    
Total Nonperforming Assets $   38,357   $   45,487   $   50,625   $   52,449   $   65,208    
                       
Past Due Loans 30-89 Days  $     4,335   $   5,858   $   3,689   $   6,792   $   4,726    
Past Due Loans 90 Days or More       –          –          –          –          62    
Classified Loans       61,411       69,152       74,247       83,137       89,850    
Performing Troubled Debt Restructuring’s $     35,961   $   41,632   $   42,590   $   44,409   $   43,578    
                       
Nonperforming Loans as a % of Loans     0.88 %     1.03 %     1.15 %     1.16 %     1.65 %  
Nonperforming Assets as a % of                      
Loans and Other Real Estate     2.54 %     3.00 %     3.38 %     3.55 %     4.45 %  
Nonperforming Assets as a % of Total Assets     1.47 %     1.71 %     1.88 %     2.00 %     2.61 %  
                       
                       
(1) Annualized                      
                       

 

CAPITAL CITY BANK GROUP, INC.                                                                                         
AVERAGE BALANCES AND INTEREST RATES(1)                                                                                         
Unaudited                                                                                         
                                                                                                     
                                                                                                     
    Third Quarter 2015     Second Quarter 2015     First Quarter 2015     Fourth Quarter 2014     Third Quarter 2014     Sept 2015 YTD     Sept 2014 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 $     1,483,657       18,290   4.89 % $     1,473,954       18,285   4.98 % $     1,448,617       17,909   5.01 % $     1,426,756       18,670   5.19 % $     1,421,327       18,590   5.19 % $     1,468,871   $   54,484   4.96 % $    1,409,701   $   54,967   5.21 %  
                                                                                                     
Investment Securities                                                                                                    
Taxable Investment Securities       543,550       1,347   0.98         540,735       1,313   0.97         491,637       1,198   0.98         423,136       964   0.90         387,966       929   0.95         525,498       3,858   0.98         341,924       2,459   0.96    
Tax-Exempt Investment Securities     92,685       304   1.31       76,191       219   1.15       63,826       154   0.96       74,276       161   0.87       82,583       165   0.80       77,673       677   1.16       97,068       561   0.77    
                                                                                                     
Total Investment Securities       636,235       1,651   1.03         616,926       1,532   0.99         555,463       1,352   0.98         497,412       1,125   0.90         470,549       1,094   0.92         603,171       4,535   1.00         438,992       3,020   0.92    
                                                                                                     
Funds Sold     190,931     123   0.26       237,132     151   0.26       302,405     189   0.25       288,613     181   0.25       317,553     204   0.25       243,081     463   0.26       397,302     752   0.25    
                                                                                                     
Total Earning Assets       2,310,823   $ 20,064   3.45 %       2,328,012   $ 19,968   3.44 %       2,306,485   $ 19,450   3.42 %       2,212,781   $ 19,976   3.58 %       2,209,429   $ 19,888   3.57 %       2,315,123   $ 59,482   3.43 %      2,245,995   $ 58,739   3.50 %  
                                                                                                     
Cash and Due From Banks       45,872                   52,473                   48,615                   45,173                   44,139                   48,977                   45,432              
Allowance for Loan Losses       (15,403 )                 (16,070 )                 (17,340 )                 (19,031 )                 (20,493 )                 (16,264 )                 (21,976 )            
Other Assets     298,400                 306,286                 310,791                 310,813                 297,496                 305,113                 299,591              
                                                                                                     
Total Assets $   2,639,692             $   2,670,701             $   2,648,551             $   2,549,736             $   2,530,571             $   2,652,949             $   2,569,042              
                                                                                                     
LIABILITIES:                                                                                                    
Interest Bearing Deposits                                                                                                    
NOW Accounts $     709,130   $   60   0.03 % $     761,388   $   64   0.03 % $     794,308   $   68   0.03 % $     689,572   $   57   0.03 % $     680,154   $   66   0.04 % $     754,630   $   192   0.03 % $     724,700   $   261   0.05 %  
Money Market Accounts       261,749       31   0.05         256,265       32   0.05         254,483       41   0.07         267,703       46   0.07         270,133       46   0.07         257,525       104   0.05         274,908       144   0.07    
Savings Accounts       258,752       32   0.05         253,808       31   0.05         242,256       30   0.05         233,161       29   0.05         228,741       29   0.05         251,666       93   0.05         225,212       83   0.05    
Time Deposits     183,976     97   0.21       189,213     132   0.28       194,655     107   0.22       197,129     111   0.22       202,802     114   0.22       189,242     336   0.24       209,171     368   0.24    
Total Interest Bearing Deposits       1,413,607       220   0.06 %       1,460,674       259   0.07 %       1,485,702       246   0.07 %       1,387,565       243   0.07 %       1,381,830       255   0.07 %       1,453,063       725   0.07 %      1,433,991       856   0.08 %  
                                                                                                     
Short-Term Borrowings       61,548       14   0.09 %       54,237       15   0.11 %       49,809       21   0.17 %       46,055       24   0.21 %       40,782       17   0.17 %       55,241       50   0.12 %       43,846       54   0.17 %  
Subordinated Notes Payable       62,887       344   2.14         62,887       338   2.13         62,887       332   2.11         62,887       333   2.07         62,887       333   2.07         62,887       1,014   2.13         62,887       995   2.09    
Other Long-Term Borrowings     29,383     233   3.15       30,067     237   3.16       30,751     240   3.16       31,513     252   3.17       32,792     263   3.20       30,062     710   3.16       34,473     823   3.19    
                                                                                                     
Total Interest Bearing Liabilities       1,567,425   $ 811   0.21 %       1,607,865   $ 849   0.21 %       1,629,149   $ 839   0.21 %       1,528,020   $ 852   0.22 %       1,518,291   $ 868   0.23 %       1,601,253   $ 2,499   0.21 %      1,575,197   $ 2,728   0.23 %  
                                                                                                     
Noninterest Bearing Deposits       723,826                   717,725                   677,674                   689,800                   681,051                   706,578                   664,916              
Other Liabilities     73,485                 70,690                 66,424                 45,887                 47,099                 70,226                 46,844              
                                                                                                     
Total Liabilities     2,364,736                 2,396,280                 2,373,247                 2,263,707                 2,246,441                 2,378,057                 2,286,957              
                                                                                                     
SHAREOWNERS’ EQUITY:     274,956                 274,421                 275,304                 286,029                 284,130                 274,892                 282,085              
                                                                                                     
Total Liabilities and Shareowners’ Equity $   2,639,692             $   2,670,701             $   2,648,551             $   2,549,736             $   2,530,571             $   2,652,949             $   2,569,042              
                                                                                                     
Interest Rate Spread     $ 19,253   3.24 %     $ 19,119   3.23 %     $ 18,611   3.21 %     $ 19,124   3.36 %     $ 19,020   3.34 %     $ 56,983   3.23 %     $ 56,011   3.26 %  
                                                                                                     
Interest Income and Rate Earned(1)       20,064   3.45         19,968   3.44         19,450   3.42         19,976   3.58         19,888   3.57         59,482   3.43         58,739   3.50    
Interest Expense and Rate Paid(2)       811   0.14         849   0.15         839   0.15         852   0.15         868   0.16         2,499   0.14         2,728   0.16    
                                                                                                     
Net Interest Margin     $ 19,253   3.31 %     $ 19,119   3.29 %     $ 18,611   3.27 %     $ 19,124   3.43 %     $ 19,020   3.42 %     $ 56,983   3.29 %     $ 56,011   3.33 %  
                                                                                                     
                                                                                                     
(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.                                                             
                                                                                                     

 

 

CONTACT: CONTACT: For Information Contact:
         J. Kimbrough Davis
         Executive Vice President and Chief Financial Officer
         850.402.7820