Capital City Bank Group, Inc.

Reports Fourth Quarter and Full Year 2013 Results

 

TALLAHASSEE, Fla. (January 28, 2014) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $2.8 million, or $0.16 per diluted share for the fourth quarter of 2013, compared to net income of $1.6 million, or $0.09 per diluted share for the third quarter of 2013, and net income of $1.9 million, or $0.11 per diluted share, for the fourth quarter of 2012. For the full year 2013, the Company reported net income of $6.0 million, or $0.35 per diluted share, compared to net income of $0.1 million, or $0.01 per diluted share in 2012.

 

Compared to the third quarter of 2013, the increase in earnings reflects a lower loan loss provision of $0.2 million, an increase in noninterest income of $0.4 million, and lower income taxes of $0.9 million, partially offset by lower net interest income of $0.2 million and higher noninterest expense of $0.1 million. Compared to the fourth quarter of 2012, the increase in earnings was due to a lower loan loss provision of $2.4 million, higher noninterest income of $0.5 million, and lower income taxes of $0.6 million, partially offset by lower net interest income of $1.6 million and an increase in noninterest expense of $1.0 million.

 

For the full year 2013, the increase in earnings was driven by a lower loan loss provision of $12.7 million, higher noninterest income of $1.2 million, and lower noninterest expense of $1.8 million, partially offset by a reduction in net interest income of $6.6 million and higher income taxes of $3.2 million.

 

“Capital City finished the year strong with another quarter of consistent financial performance,” said William G. Smith, Chairman, President, and CEO of Capital City Bank Group. “While there is still work to be done, I am pleased with our continued progress. We reduced our nonperforming assets by 28%, grew earnings to $0.35 per share – up from $0.01 per share in 2012 – and rescinded our informal board resolutions, which are discussed further herein. Additionally, as of December 31, 2013, all deferred interest on our trust preferred securities was brought current. It is gratifying to know that we managed through this cycle without taking TARP or diluting our shareowners. Improving our credit quality will remain a primary area of focus in our 2014 strategy, as will continued efforts to right-size our expense base and identify new revenue opportunities. While the economic environment is improving, it is at a slow pace and we anticipate loan growth will remain challenging.  Our team has a lot of work ahead of us, but I am proud of our accomplishments and like our momentum as we head into 2014,” said Smith.

 

The Return on Average Assets was 0.43% and the Return on Average Equity was 4.33% for the fourth quarter of 2013. These metrics were 0.25% and 2.51% for the third quarter of 2013, and 0.29% and 2.95% for the fourth quarter of 2012, respectively.

 

For the full year of 2013, the Return on Average Assets was 0.24% and the Return on Average Equity was 2.40% compared to 0.00% and 0.04%, respectively, for 2012.

 

Discussion of Financial Condition

 

Average earning assets were $2.206 billion for the fourth quarter of 2013, an increase of $4.9 million, or 0.2%, from the third quarter of 2013 and an increase of $27.3 million, or 1.3%, over the fourth quarter of 2012.  The change in earning assets reflects an increase in short-term borrowings and a decline in other assets, partially offset by problem loan resolutions and lower deposits.

 

 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $411.6 million during the fourth quarter of 2013 compared to an average net overnight funds sold position of $412.1 million in the third quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012.  The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio, partially offset by an increase in the investment portfolio.

 

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

 

When compared to the third quarter of 2013 and fourth quarter of 2012, average loans declined by $21.1 million and $103.4 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate categories. Our core loan portfolio continues to be impacted by normal amortization and payoffs that have outpaced our new loan production.

 

New loan production for 2013 was higher than 2012 as our efforts to stimulate loan growth are ongoing. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try and mitigate the significant impact that consumer and business deleveraging is having on our portfolio.

 

Nonperforming assets (nonaccrual loans and other real estate (“OREO”) totaled $85.0 million at year-end 2013, a decrease of $9.7 million, or 10.2% from the third quarter of 2013 and $32.6 million, or 27.7% from year-end 2012. Nonaccrual loans totaled $37.0 million at year-end 2013, a decrease of $4.7 million from the third quarter of 2013 and a decrease of $27.3 million from year-end 2012. Nonaccrual loan additions totaled $14.5 million in the fourth quarter of 2013 and $44.1 million for the full year 2013, which compares to $12.5 million and $61.1 million, respectively, for the same periods of 2012. The balance of OREO totaled $48.1 million at year-end 2013, a decrease of $4.9 million from the third quarter of 2013 and $5.4 million from year-end 2012. For the fourth quarter of 2013 we added properties totaling $3.5 million, sold properties totaling $7.4 million, recorded valuation adjustments totaling $0.8 million, and realized miscellaneous reductions totaling $0.2 million. For the full year 2013, we added properties totaling $24.5 million, sold properties totaling $25.9 million, recorded valuation adjustments totaling $3.6 million, and realized miscellaneous adjustments totaling $0.3 million. Nonperforming assets represented 3.26% of total assets at December 31, 2013, 3.77% at September 30, 2013, and 4.47% at December 31, 2012.

 

Average total deposits were $2.051 billion for the fourth quarter of 2013, a decrease of $8.6 million, or 0.4%, from the third quarter of 2013 and $0.2 million, or 0.01%, over the fourth quarter of 2012.  The decrease in deposits when compared to the third quarter of 2013 resulted primarily from the reduction in noninterest bearing demand accounts and money market accounts, partially offset by higher public funds and savings accounts. When compared to the fourth quarter of 2012, the slight decrease was a result of lower certificates of deposit and regular NOWs, partially offset by higher public funds and savings accounts.

 

The seasonal inflow of public funds started in the fourth quarter of 2013 and will continue through the first quarter of 2014. This is anticipated to increase the overnight funds position during the first quarter. Our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts.  Our strategy is to manage the mix of our deposits rather than compete on rate, which enables us to maintain an exceptionally low cost of funds – 19 basis points in the fourth quarter and 20 basis points for the year 2013.

 

When compared to the third quarter of 2013 and fourth quarter of 2012, average borrowings increased by $7.1 million and $9.2 million, respectively, primarily as a result of higher repurchase agreement balances, partially offset by FHLB advance payoffs/amortization.

 

Equity capital was $276.4 million as of December 31, 2013, compared to $251.2 million as of September 30, 2013 and $246.9 million as of December 31, 2012. Our leverage ratio was 10.46%, 10.16%, and 9.90%, respectively, for these periods. Further, our risk-adjusted capital ratio of 17.94% at December 31, 2013 compares to 15.72% at December 31, 2012, and significantly exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines. At December 31, 2013, our tangible common equity ratio was 7.58%, compared to 6.84% at September 30, 2013 and 6.35% at December 31, 2012. The increase in our tangible common equity ratio in the fourth quarter of 2013 was due to earnings and a favorable adjustment in the pension component of our other comprehensive income. The favorable adjustment in the pension component reflects (1) an increase in the plan discount rate, which drives a reduction in pension liabilities, and (2) an increase in the market value of plan assets.

 

Discussion of Operating Results

 

Tax equivalent net interest income for the fourth quarter of 2013 was $19.2 million compared to $19.4 million for the third quarter of 2013 and $20.7 million for the fourth quarter of 2012.  The decrease in tax equivalent net interest income compared to the prior periods was due to a reduction in loan income, primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a lower level of foregone interest on loans and higher loan fees.  For the full year 2013, tax equivalent net interest income totaled $78.3 million compared to $85.0 million for 2012 with the decline attributable to the factors mentioned above, partially offset by a reduction in the cost of funds.

 

Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment.  Period end loan balances have declined by approximately $121.6 million since the fourth quarter of 2012. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

 

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

 

The net interest margin for the fourth quarter of 2013 was 3.45%, a decrease of four basis points from the third quarter of 2013, and a decline of 33 basis points from the fourth quarter of 2012.  The decrease in the margin for both comparable periods was attributable to the shift in our earning asset mix and unfavorable asset repricing. The average cost of funds was lower in the fourth quarter of 2013 when compared to the fourth quarter of 2012 by three basis points and remained unchanged from the third quarter of 2013.

 

 

The provision for loan losses for the fourth quarter of 2013 was $0.4 million compared to $0.6 million in the third quarter of 2013 and $2.8 million for the fourth quarter of 2012. For the full year 2013, the loan loss provision totaled $3.5 million compared to $16.2 million for 2012. The lower level of provision reflects continued favorable problem loan migration, lower loan losses, and overall improvement in key credit metrics. Net charge-offs for the fourth quarter of 2013 totaled $2.3 million, or 0.65% (annualized), of average loans compared to $2.8 million, or 0.78% (annualized), for the third quarter of 2013 and $3.8 million, or 1.00% (annualized), in the fourth quarter of 2012. For the full year 2013, net charge-offs totaled $9.5 million, or 0.66%, of average loans compared to $18.0 million, or 1.16%, for the same period of 2012. Lower charge-offs in our residential real estate and commercial real estate portfolios drove the decrease in loan losses comparing 2013 to 2012. At December 31, 2013, the allowance for loan losses of $23.1 million was 1.65% of outstanding loans (net of overdrafts) and provided coverage of 62% of nonperforming loans compared to 1.75% and 60%, respectively, at September 30, 2013, and 1.93% and 45%, respectively, at December 31, 2012.

 

Noninterest income for the fourth quarter of 2013 totaled $14.7 million, an increase of $0.4 million, or 2.6%, over the third quarter of 2013. The increase over the third quarter of 2013 reflects higher other income of $0.6 million and an increase in wealth management fees of $0.1 million, partially offset by lower mortgage banking fees of $0.2 million and deposit fees of $0.1 million. The increase in other income was driven by gains from the sale of OREO properties and the increase in wealth management fees was primarily due to improved account values for managed accounts on which fees are based. Mortgage banking fees declined due to a reduction in refinancing volume, which is attributable to the higher rate environment. The reduction in deposit fees was attributable to a slightly lower level of overdraft fees. Compared to the fourth quarter of 2012, noninterest income increased $0.6 million, or 3.9%, due to higher wealth management fees of $0.4 million, other income of $0.7 million, and bank card fees of $0.1 million, partially offset by lower deposit fees of $0.4 million and mortgage banking fees of $0.2 million. The increase in wealth management fees reflects increased retail client trading activity and growth in new accounts. A higher level of gains from the sale of OREO properties drove the increase in other income. Slightly higher spend volume drove the increase in bank card fees. The reduction in deposit fees was attributable to lower overdraft fees that were partially offset by a reduction in checking account losses. Mortgage banking fees declined due to a slowdown in refinancing volume that was partially offset by an increase in margin from sold loans. For the full year 2013, noninterest income totaled $56.4 million, a $1.2 million, or 2.2%, increase over 2012 due to higher wealth management fees of $1.0 million and other income of $0.9 million, partially offset by lower deposit fees of $0.5 million and mortgage banking fees of $0.1 million. Wealth management fees increased due to higher retail brokerage fees reflective of increased client trading activity and growth in new account openings. A higher level of gains from the sale of OREO properties drove the increase in other income. Deposit fees declined due to a lower level of overdraft fees, partially offset by higher business account analysis fees. Mortgage banking fees declined due to a slowdown in refinancing volume that was partially offset by an increase in margin from sold loans.

 

Noninterest expense for the fourth quarter of 2013 totaled $30.5 million, an increase of $0.1 million, or 0.2%, over the third quarter of 2013 attributable to higher compensation expense of $0.4 million, partially offset by lower other expense of $0.3 million. The increase in compensation was attributable to higher pension plan expense of $0.3 million and stock compensation expense of $0.1 million. The reduction in other expense was due to lower professional fees of $0.2 million and advertising fees of $0.1 million. The higher level of pension expense reflects a cumulative adjustment made in the third quarter to reduce year-to-date pension expense to reflect the final numbers as provided by our actuaries. Stock compensation expense increased due to a higher level of performance for our stock award plans. The reduction in professional fees reflects a decrease in internal audit fees and consulting engagement fees. Higher costs in the third quarter due to the roll-out of our mobile remote deposit capture product drove the favorable variance in advertising fees. Compared to the fourth quarter of 2012, noninterest expense increase by $1.0 million, or 3.5%, primarily attributable to higher compensation expense of $0.8 million and OREO expense of $0.2 million. The increase in compensation reflects a $0.4 million increase in expense for cash based incentive plans, and higher pension plan expense of $0.3 million and stock compensation expense of $0.1 million. A higher level of valuation adjustments for OREO properties drove the increase in OREO expense. The increase in pension plan expense reflects the utilization of a lower discount rate assumption for our pension plans and the increase in stock compensation was driven by a higher level of company performance. For the full year 2013, noninterest expense totaled $122.7 million, a decrease of $1.8 million, or 1.5% from 2012, reflective of declines in OREO expense of $1.9 million, other expense of $0.9 million, occupancy of $0.7 million, and intangible amortization expense of $0.2 million, partially offset by higher compensation of $1.9 million. OREO expense decreased due to lower carrying costs and valuation adjustments reflecting improving property values in our markets. Lower legal fees supporting loan collection as well as a decline in professional fees drove the reduction in other expense. Declines were realized in most of the occupancy expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. The decrease in intangible amortization reflects the full amortization of our remaining core deposit intangible asset in early 2013. The higher level of compensation expense was attributable to an increase in our pension plan expense of $1.0 million and stock compensation expense of $0.9 million, both due to the same aforementioned reasons.

 

We realized income tax expense of $5,000 in the fourth quarter of 2013 compared to $0.9 million for the third quarter of 2013 and $0.6 million for the fourth quarter of 2012.  The resolution of certain tax contingencies in the fourth quarter of 2013 and 2012 favorably impacted income tax expense. For the full year 2013, we realized income tax expense of $1.9 million compared to an income tax benefit of $1.3 million for 2012.  The increase in the tax provision year over year was driven by higher operating profits.

 

Regulatory Matter

 

During the fourth quarter of 2013, the Company rescinded the informal board resolutions adopted by the Company’s Board of Directors in February 2010 at the request of the Federal Reserve. In addition, the informal board resolutions previously adopted by Capital City Bank’s Board of Directors in April 2012, at the request of the Federal Reserve, was also rescinded. These sets of board resolutions had restricted Capital City Bank’s ability to declare or pay dividends to the Company and had restricted the Company’s ability to incur any new debt or refinance existing debt, declare any dividends on its common stock, make payments on its trust preferred securities, and redeem shares of its common stock. By rescinding both sets of board resolutions, the Company and the Capital City Bank are no longer operating under these restrictions. While we remain committed to resuming dividend payments to our shareowners, our Board of Directors has not made any decision as to when dividend payments will resume.

 

About Capital City Bank Group, Inc.

 

Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded bank holding companies headquartered in Florida and has approximately $2.6 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 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; 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; 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; the Company’s need and our ability to incur additional debt or equity financing; a decrease to the market value of the Company that could result in an impairment of goodwill; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and the Company’s other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

 

CAPITAL CITY BANK GROUP, INC.

EARNINGS HIGHLIGHTS

Unaudited 

						Three Months Ended								Twelve Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2013				Sep 30, 2013				Dec 31, 2012				Dec 31, 2013				Dec 31, 2012
EARNINGS
Net Income		$	2,772			$	1,591			$	1,874			$	6,045			$	108
Net Income Per Common Share		$	0.16			$	0.09			$	0.11			$	0.35			$	0.01
PERFORMANCE
Return on Average Assets			0.43	%			0.25	%			0.29	%			0.24	%			0.00	%
Return on Average Equity			4.33	%			2.51	%			2.95	%			2.40	%			0.04	%
Net Interest Margin			3.45	%			3.49	%			3.78	%			3.54	%			3.81	%
Noninterest Income as % of Operating Revenue			43.85	%			42.82	%			40.81	%			42.25	%			39.66	%
Efficiency Ratio			90.22	%			90.42	%			84.68	%			91.09	%			88.72	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio			16.56	%			15.60	%			14.35	%			16.56	%			14.35	%
Total Capital Ratio			17.94	%			16.97	%			15.72	%			17.94	%			15.72	%
Tangible Common Equity Ratio			7.58	%			6.84	%			6.35	%			7.58	%			6.35	%
Leverage Ratio			10.46	%			10.16	%			9.90	%			10.46	%			9.90	%
Equity to Assets			10.58	%			9.99	%			9.37	%			10.58	%			9.37	%
ASSET QUALITY
Allowance as % of Non-Performing Loans			62.48	%			60.00	%			45.42	%			62.48	%			45.42	%
Allowance as a % of Loans			1.65	%			1.75	%			1.93	%			1.65	%			1.93	%
Net Charge-Offs as % of Average Loans			0.65	%			0.78	%			1.00	%			0.66	%			1.16	%
Nonperforming Assets as % of Loans and ORE			5.87	%			6.38	%			7.47	%			5.87	%			7.47	%
Nonperforming Assets as % of Total Assets			3.26	%			3.77	%			4.47	%			3.26	%			4.47	%
STOCK PERFORMANCE
High		$	12.69			$	13.08			$	11.91			$	13.08			$	11.91
Low			11.33				11.06				9.04				10.12				6.35
Close			11.77				11.78				11.37				11.77				11.37
Average Daily Trading Volume		$	28,682			$	18,380			$	20,045			$	21,708			$	26,622

 

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

Unaudited 

		2013																2012
(Dollars in thousands)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter
ASSETS
Cash and Due From Banks		$	55,209			$	51,136			$	67,811			$	52,677			$	66,238
Funds Sold and Interest Bearing Deposits			474,719				358,869				391,457				461,714				443,494
Total Cash and Cash Equivalents			529,928				410,005				459,268				514,391				509,732
Investment Securities - Available-for-Sale			251,420				271,838				350,614				307,502				296,985
Investment Securities - Held-to-Maturity			148,211				97,309				—				—				—
Total Investment Securities			399,631				369,147				350,614				307,502				296,985
Loans Held for Sale			11,065				13,822				15,362				11,422				14,189
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural			126,607				123,253				126,931				125,905				139,850
Real Estate - Construction			31,012				31,454				35,823				37,948				37,512
Real Estate - Commercial			533,871				570,736				581,501				599,517				613,625
Real Estate - Residential			303,618				305,811				302,254				304,786				310,439
Real Estate - Home Equity			227,922				230,212				232,530				233,205				236,263
Consumer			156,718				148,321				142,620				146,043				150,728
Other Loans			6,074				5,220				5,904				5,187				11,547
Overdrafts			2,782				2,835				2,554				2,307				7,149
Total Loans, Net of Unearned Interest			1,388,604				1,417,842				1,430,117				1,454,898				1,507,113
Allowance for Loan Losses			(23,095	)			(25,010	)			(27,294	)			(27,803	)			(29,167	)
Loans, Net			1,365,509				1,392,832				1,402,823				1,427,096				1,477,946
Premises and Equipment, Net			103,385				103,702				104,743				105,883				107,092
Intangible Assets			84,843				84,891				84,937				84,985				85,053
Other Real Estate Owned			48,071				53,018				55,087				58,421				53,426
Other Assets			69,471				87,055				89,024				95,613				89,561
Total Other Assets			305,770				328,666				333,791				344,902				335,132
Total Assets		$	2,611,903			$	2,514,472			$	2,561,858			$	2,605,313			$	2,633,984
LIABILITIES
Deposits:
Noninterest Bearing Deposits		$	641,463			$	626,114			$	644,739			$	616,017			$	609,235
NOW Accounts			794,746				668,240				706,101				765,030				842,435
Money Market Accounts			268,449				283,338				287,340				299,118				267,766
Regular Savings Accounts			211,668				211,174				204,594				200,492				184,541
Certificates of Deposit			219,922				228,020				228,349				233,325				241,019
Total Deposits			2,136,248				2,016,886				2,071,123				2,113,982				2,144,996
Short-Term Borrowings			51,321				51,918				46,081				50,682				47,435
Subordinated Notes Payable			62,887				62,887				62,887				62,887				62,887
Other Long-Term Borrowings			38,043				40,244				41,251				41,224				46,859
Other Liabilities			47,004				91,369				91,227				87,930				84,918
Total Liabilities			2,335,503				2,263,304				2,312,569				2,356,705				2,387,095
SHAREOWNERS' EQUITY
Common Stock			174				173				173				173				172
Additional Paid-In Capital			41,152				40,481				40,210				39,580				38,707
Retained Earnings			243,614				240,842				239,251				238,408				237,569
Accumulated Other Comprehensive Loss, Net of Tax			(8,540	)			(30,328	)			(30,345	)			(29,553	)			(29,559	)
Total Shareowners' Equity			276,400				251,168				249,289				248,608				246,889
Total Liabilities and Shareowners' Equity		$	2,611,903			$	2,514,472			$	2,561,858			$	2,605,313			$	2,633,984
OTHER BALANCE SHEET DATA
Earning Assets		$	2,274,019			$	2,159,680			$	2,187,549			$	2,235,537			$	2,261,781
Intangible Assets
Goodwill			84,811				84,811				84,811				84,811				84,811
Core Deposits			—				—				—				—				19
Other			32				80				126				174				223
Interest Bearing Liabilities			1,647,036				1,545,821				1,576,601				1,652,758				1,692,942
Book Value Per Diluted Share		$	15.85			$	14.44			$	14.36			$	14.35			$	14.31
Tangible Book Value Per Diluted Share			10.98				9.56				9.47				9.44				9.38
Actual Basic Shares Outstanding			17,361				17,336				17,336				17,319				17,232
Actual Diluted Shares Outstanding			17,443				17,396				17,372				17,326				17,259

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

Unaudited

																						Twelve Months Ended
		2013																2012				December 31,
(Dollars in thousands, except per share data)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter				2013				2012
INTEREST INCOME
Interest and Fees on Loans		$	19,057			$	19,264			$	19,709			$	20,154			$	20,756			$	78,184			$	85,394
Investment Securities			760				717				710				704				808				2,891				3,340
Funds Sold			259				269				279				270				223				1,077				946
Total Interest Income			20,076				20,250				20,698				21,128				21,787				82,152				89,680
INTEREST EXPENSE
Deposits			314				335				367				415				429				1,431				2,108
Short-Term Borrowings			46				46				61				82				69				235				196
Subordinated Notes Payable			400				339				342				339				351				1,420				1,477
Other Long-Term Borrowings			320				330				333				347				383				1,330				1,587
Total Interest Expense			1,080				1,050				1,103				1,183				1,232				4,416				5,368
Net Interest Income			18,996				19,200				19,595				19,945				20,555				77,736				84,312
Provision for Loan Losses			397				555				1,450				1,070				2,766				3,472				16,166
Net Interest Income after Provision for Loan Losses			18,599				18,645				18,145				18,875				17,789				74,264				68,146
NONINTEREST INCOME
Deposti Fees			6,398				6,474				6,217				6,165				6,764				25,254				25,792
Bank Card Fees			2,656				2,715				2,754				2,661				2,612				10,786				10,783
Wealth Management Fees			2,233				2,130				1,901				1,915				1,818				8,179				7,181
Mortgage Banking Fees			654				869				968				1,043				910				3,534				3,600
Data Processing Fees			689				662				670				653				671				2,674				2,713
Securities Transactions			3				—				—				—				—				3				—
Other			2,040				1,456				1,339				1,151				1,343				5,986				5,116
Total Noninterest Income			14,673				14,306				13,849				13,588				14,118				56,416				55,185
NONINTEREST EXPENSE
Compensation			16,583				16,158				16,647				16,739				15,772				66,127				64,242
Occupancy, Net			4,349				4,403				4,161				4,418				4,429				17,331				18,055
Intangible Amortization			48				46				48				68				108				210				431
Other Real Estate			2,099				2,148				2,408				2,884				1,900				9,539				11,428
Other			7,416				7,678				7,318				7,091				7,259				29,503				30,403
Total Noninterest Expense			30,495				30,433				30,582				31,200				29,468				122,710				124,559
OPERATING PROFIT (LOSS)			2,777				2,518				1,412				1,263				2,439				7,970				(1,228	)
Income Tax Expense (Benefit)			5				927				569				424				564				1,925				(1,336	)
NET INCOME		$	2,772			$	1,591			$	843			$	839			$	1,875			$	6,045			$	108
PER SHARE DATA
Basic Income		$	0.16			$	0.09			$	0.05			$	0.05			$	0.11			$	0.35			$	0.01
Diluted Income		$	0.16			$	0.09			$	0.05			$	0.05			$	0.11			$	0.35			$	0.01
AVERAGE SHARES
Basic			17,341				17,336				17,319				17,302				17,229				17,325				17,205
Diluted			17,423				17,396				17,355				17,309				17,256				17,399				17,220

 

CAPITAL CITY BANK GROUP, INC.

ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING ASSETS

Unaudited 

		2013				2013				2013				2013				2012
(Dollars in thousands, except per share data)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period		$	25,010			$	27,294			$	27,803			$	29,167			$	30,222
Provision for Loan Losses			397				555				1,450				1,070				2,766
Net Charge-Offs			2,312				2,839				1,959				2,434				3,821
Balance at End of Period		$	23,095			$	25,010			$	27,294			$	27,803			$	29,167
As a % of Loans			1.65	%			1.75	%			1.89	%			1.90	%			1.93	%
As a % of Nonperforming Loans			62.48	%			60.00	%			65.66	%			61.17	%			45.42	%
CHARGE-OFFS
Commercial, Financial and Agricultural		$	337			$	138			$	119			$	154			$	166
Real Estate - Construction			72				278				110				610				227
Real Estate - Commercial			676				882				1,050				1,043				468
Real Estate - Residential			921				1,178				1,053				683				2,877
Real Estate - Home Equity			362				362				322				113				745
Consumer			430				674				351				296				488
Total Charge-Offs		$	2,798			$	3,512			$	3,005			$	2,899			$	4,971
RECOVERIES
Commercial, Financial and Agricultural		$	33			$	87			$	38			$	51			$	87
Real Estate - Construction			—				1				—				—				7
Real Estate - Commercial			14				167				144				38				468
Real Estate - Residential			179				167				396				96				83
Real Estate - Home Equity			39				13				224				18				250
Consumer			221				238				244				262				255
Total Recoveries		$	486			$	673			$	1,046			$	465			$	1,150
NET CHARGE-OFFS		$	2,312			$	2,839			$	1,959			$	2,434			$	3,821
Net Charge-Offs as a % of Average Loans(1)			0.65	%			0.78	%			0.54	%			0.66	%			1.00	%
RISK ELEMENT ASSETS
Nonaccruing Loans		$	36,964			$	41,682			$	41,566			$	45,448			$	64,222
Other Real Estate Owned			48,071				53,018				55,087				58,421				53,426
Total Nonperforming Assets		$	85,035			$	94,700			$	96,653			$	103,869			$	117,648
Past Due Loans 30-89 Days		$	7,746			$	8,427			$	9,017			$	9,274			$	9,934
Past Due Loans 90 Days or More			—				—				—				—				—
Performing Troubled Debt Restructuring's		$	44,764			$	50,692			$	52,729			$	53,108			$	47,474
Nonperforming Loans as a % of Loans			2.64	%			2.91	%			2.88	%			3.10	%			4.22	%
Nonperforming Assets as a % of
Loans and Other Real Estate			5.87	%			6.38	%			6.44	%			6.81	%			7.47	%
Nonperforming Assets as a % of Total Assets			3.26	%			3.77	%			3.77	%			3.99	%			4.47	%

 

(1) Annualized

 

CAPITAL CITY BANK GROUP, INC.

AVERAGE BALANCE AND INTEREST RATES⁽¹⁾

Unaudited

	Fourth Quarter 2013													Third Quarter 2013												Second Quarter 2013												First Quarter 2013												Fourth Quarter 2012												Dec 2013 YTD												Dec 2012 YTD
(Dollars in thousands)		Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate				Average Balance				Interest				Average Rate
ASSETS:
Loans, Net of Unearned Interest		$	1,414,909				19,121				5.36	%		$	1,436,039				19,345				5.34	%		$	1,456,904				19,790				5.45	%		$	1,496,432				20,228				5.48	%		$	1,518,280				20,837				5.46	%		$	1,450,806			$	78,484				5.41	%		$	1,556,565			$	85,780				5.51	%
Investment Securities
Taxable Investment Securities			255,298				608				0.86				232,094				568				0.95				225,770				578				1.02				215,087				590				1.10				219,985				697				1.26				232,173				2,344				0.94				223,429				2,912				1.27
Tax-Exempt Investment Securities			124,501				233				0.74				121,119				223				0.73				104,981				200				0.76				80,946				174				0.86				74,647				172				0.92				108,042				830				0.76				65,560				658				1.00
Total Investment Securities			379,799				841				0.88				353,213				791				0.89				330,751				778				0.94				296,033				764				1.04				294,632				869				1.17				340,215				3,174				0.93				288,989				3,570				1.23
Funds Sold			411,578				259				0.25				412,138				269				0.26				419,039				279				0.27				448,424				270				0.24				366,034				223				0.24				422,665				1,077				0.25				384,067				946				0.25
Total Earning Assets			2,206,286			$	20,221				3.64	%			2,201,390			$	20,405				3.68	%			2,206,694			$	20,847				3.79	%			2,240,889			$	21,262				3.85	%			2,178,946			$	21,929				4.00	%			2,213,686			$	82,735				3.74	%			2,229,621			$	90,296				4.05	%
Cash and Due From Banks			48,519												51,640												49,081												50,679												51,344												49,978												48,924
Allowance for Loan Losses			(25,612	)											(27,636	)											(29,012	)											(30,467	)											(30,605	)											(28,167	)											(30,959	)
Other Assets			324,460												333,001												337,765												337,579												334,326												333,165												342,587
Total Assets		$	2,553,653											$	2,558,395											$	2,564,528											$	2,598,680											$	2,534,011											$	2,568,662											$	2,590,173
LIABILITIES:
Interest Bearing Deposits
NOW Accounts		$	697,468			$	95				0.05	%		$	676,855			$	107				0.06	%		$	716,459			$	124				0.07	%		$	788,660			$	156				0.08	%		$	714,682			$	131				0.07	%		$	719,493			$	482				0.07	%		$	771,617			$	634				0.08	%
Money Market Accounts			279,608				50				0.07				284,920				53				0.07				289,637				54				0.07				282,847				54				0.08				275,458				57				0.08				284,245				211				0.07				280,165				255				0.09
Savings Accounts			211,761				27				0.05				207,631				26				0.05				202,784				25				0.05				193,033				23				0.05				182,760				23				0.05				203,864				101				0.05				175,712				87				0.05
Time Deposits			224,500				142				0.25				231,490				149				0.26				231,134				164				0.29				238,441				182				0.31				247,679				218				0.35				231,354				637				0.28				267,263				1,132				0.42
Total Interest Bearing Deposits			1,413,337				314				0.09	%			1,400,896				335				0.09	%			1,440,014				367				0.10	%			1,502,981				415				0.11	%			1,420,579				429				0.12	%			1,438,956				1,431				0.10	%			1,494,757				2,108				0.14	%
Short-Term Borrowings			58,126				46				0.31	%			49,919				46				0.37	%			52,399				61				0.47	%			55,255				82				0.60	%			45,893				69				0.59	%			53,922				235				0.44	%			52,178				196				0.38	%
Subordinated Notes Payable			62,887				400				2.49				62,887				339				2.11				62,887				342				2.15				62,887				339				2.15				62,887				351				2.19				62,887				1,420				2.23				62,887				1,477				2.31
Other Long-Term Borrowings			39,676				320				3.19				40,832				330				3.21				40,942				333				3.26				42,898				347				3.29				42,673				383				3.57				41,077				1,330				3.24				41,513				1,587				3.82
Total Interest Bearing Liabilities			1,574,026			$	1,080				0.27	%			1,554,534			$	1,050				0.27	%			1,596,242			$	1,103				0.28	%			1,664,021			$	1,183				0.29	%			1,572,032			$	1,232				0.31	%			1,596,842			$	4,416				0.28	%			1,651,335			$	5,368				0.33	%
Noninterest Bearing Deposits			637,533												658,602												627,633												599,986												630,520												631,117												610,915
Other Liabilities			88,095												93,642												90,168												85,116												78,442												89,276												74,963
Total Liabilities			2,299,654												2,306,778												2,314,043												2,349,123												2,280,994												2,317,235												2,337,213
SHAREOWNERS' EQUITY:			253,999												251,617												250,485												249,557												253,017												251,427												252,960
Total Liabilities and Shareowners' Equity		$	2,553,653											$	2,558,395											$	2,564,528											$	2,598,680											$	2,534,011											$	2,568,662											$	2,590,173
Interest Rate Spread						$	19,141				3.36	%						$	19,355				3.41	%						$	19,744				3.51	%						$	20,079				3.56	%						$	20,697				3.69	%						$	78,319				3.46	%						$	84,928				3.72	%
Interest Income and Rate Earned(1)							20,221				3.64								20,405				3.68								20,847				3.79								21,262				3.85								21,929				4.00								82,735				3.74								90,296				4.05
Interest Expense and Rate Paid(2)							1,080				0.19								1,050				0.19								1,103				0.20								1,183				0.21								1,232				0.22								4,416				0.20								5,368				0.24
Net Interest Margin						$	19,141				3.45	%						$	19,355				3.49	%						$	19,744				3.59	%						$	20,079				3.64	%						$	20,697				3.78	%						$	78,319				3.54	%						$	84,928				3.81	%

 

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

⁽²⁾ Rate calculated based on average earning assets.