Capital City Bank Group, Inc.

Reports Second Quarter 2015 Results

 

TALLAHASSEE, Fla. (July 21, 2015) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $3.8 million, or $0.22 per diluted share for the second quarter of 2015 compared to net income of $1.0 million, or $0.06 per diluted share for the first quarter of 2015, and $1.5 million, or $0.08 per diluted share, for the second quarter of 2014. For the first six months of 2015, net income of $4.8 million, or $0.28 per diluted share, compared to net income of $5.2 million, or $0.30 per diluted share for the same period in 2014.

 

HIGHLIGHTS

 

	·	Continued loan growth - 1.8% sequentially and 3.3% year to date

	·	Growth in tax-equivalent net interest income driven by improved earning asset mix – 2.7% sequentially and 2.0% over prior year

	·	Strong fee income from residential mortgage loan sales, up 22% sequentially and 60% over prior year

	·	BOLI proceeds added $0.10 per share to second quarter earnings

	·	10% reduction in nonperforming assets and 27% decline in total credit costs from linked quarter

·

Repurchased 393,000 shares during second quarter of 2015

 

“Loan growth, higher net interest income, expense management and improved credit quality contributed to a strong second quarter performance,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group.  “We have experienced six consecutive quarters of loan growth and our portfolio has grown by more than $85 million since the end of 2013.  Growth in our loan and investment portfolios produced higher net interest income, and we remain focused on improving our operating efficiency by increasing revenues and lowering operating expenses.  To date, we have repurchased 411,000 shares of our common stock with the majority being purchased in the second quarter.”

 

Compared to the first quarter of 2015, performance reflects higher net interest income of $0.5 million, a $1.9 million increase in noninterest income, and lower noninterest expense of $0.9 million, that was partially offset by a $0.1 million increase in the loan loss provision and higher income taxes of $0.4 million.

 

Compared to the second quarter of 2014, the increase in earnings reflects higher net interest income of $0.5 million, a $1.5 million increase in noninterest income, lower noninterest expense of $0.6 million, and a $0.1 million reduction in the loan loss provision, partially offset by higher income taxes of $0.4 million.

 

The increase in earnings for the first six months of 2015 versus the comparable period in 2014 was attributable to higher net interest income of $0.8 million, a $1.5 million increase in noninterest income, and a $0.2 million reduction in the loan loss provision, partially offset by higher noninterest expense of $0.4 million and income taxes of $2.5 million.

 

The Return on Average Assets was 0.58% and the Return on Average Equity was 5.62% for the second quarter of 2015. These metrics were 0.15% and 1.45% for the first quarter of 2015, and 0.23% and 2.09% for the second quarter of 2014, respectively. For the first six months of 2015, the Return on Average Assets was 0.37% and the Return on Average Equity was 3.54% compared to 0.41% and 3.75%, respectively, for the first half of 2014.

 

Discussion of Operating Results

 

Tax equivalent net interest income for the second quarter of 2015 was $19.1 million compared to $18.6 million for the first quarter of 2015 and $18.6 million for the second quarter of 2014.  The increase in tax equivalent net interest income compared to the first quarter of 2015 reflects one additional calendar day and a positive shift in earning asset mix due to growth in the loan and investment portfolios, partially offset by unfavorable loan repricing. The increase in tax equivalent net interest income compared to the second quarter of 2014 reflects a positive shift in earning asset mix due to growth in the loan and investment portfolios and a slight reduction in interest expense. The lower interest expense is attributable to FHLB advance pay downs and favorable repricing on several non-maturity deposit products. For the six months ended June 30, 2015, tax equivalent net interest income totaled $37.7 million compared to $37.0 million for the comparable period in 2014. The year over year increase was driven by the same factors as noted above.

 

The extended low interest rate environment has put pressure on our net interest margin. However, our asset portfolios are relatively short in duration and we believe we are well positioned to capitalize as the interest rate environment improves.

 

The net interest margin for the second quarter of 2015 was 3.29%, an increase of two basis points over the first quarter of 2015 and unchanged from the second quarter of 2014.  The increase in the margin compared to the first quarter was attributable to growth in our loan and investment portfolios. For the six months ended June 30, 2015, the net interest margin declined by one basis point to 3.28% compared to the same period of 2014, primarily attributable to unfavorable loan pricing. It is important to note that net interest income is growing period over period and the lack of improvement in the net interest margin percentage is primarily attributable to the continued growth in average deposits, which is generally invested in overnight funds.

 

The provision for loan losses for the second quarter of 2015 was $0.4 million compared to $0.3 million for the first quarter of 2015 and $0.5 million for the second quarter of 2014. For the first half of 2015, the loan loss provision totaled $0.7 million compared to $0.9 million for the same period of 2014. The lower level of the year-to-date provision reflects continued favorable problem loan migration and improvement in key credit metrics. Net charge-offs for the second quarter of 2015 totaled $1.2 million, or 0.33% (annualized), of average loans compared to $1.7 million, or 0.49% (annualized), for the first quarter of 2015 and $2.1 million, or 0.59% (annualized), for the second quarter of 2014. For the first half of 2015, net charge-offs totaled $3.0 million, or 0.41% (annualized), of average loans compared to $3.4 million, or 0.49% (annualized), for the same period of 2014. At quarter-end, the allowance for loan losses of $15.2 million was 1.03% of outstanding loans (net of overdrafts) and provided coverage of 99% of nonperforming loans compared to 1.10% and 96%, respectively, at March 31, 2015 and 1.22% and 105%, respectively, at December 31, 2014.

 

Noninterest income for the second quarter of 2015 totaled $14.8 million, an increase of $1.9 million, or 15.1%, over the first quarter of 2015 and $1.5 million, or 10.8%, over the second quarter of 2014. The increase over the first quarter of 2015 was primarily attributable to bank owned life insurance (“BOLI”) proceeds of $1.7 million that is reflected in other income. Higher mortgage banking fees of $0.2, bank card fees of $0.1 million, and deposit fees of $0.2 million also contributed to the increase and were partially offset by lower wealth management fees of $0.3 million. 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 and the increase in deposit fees reflects higher overdraft fees. Wealth management fees declined due to lower trading volume by our clients. Compared to the second quarter of 2014, the increase reflects higher other income of $1.6 million and mortgage banking fees of $0.5 million that were partially offset by lower deposit fees of $0.5 million and wealth management fees of $0.1 million. The increase in other income, which was primarily due to the aforementioned BOLI proceeds, was partially offset by a lower level of miscellaneous recoveries. Strong new home purchase originations and a higher margin on sold loans drove the increase in mortgage banking fees. Deposit fees declined primarily due to lower overdraft fees and to a lesser extent maintenance fees. Lower client trading activity drove the reduction in wealth management fees.

 

For the first half of 2015, noninterest income totaled $27.6 million, a $1.5 million increase over the same period of 2014, primarily attributable to higher other income of $1.6 million and mortgage banking fees of $0.8 million, partially offset by lower deposit fees of $0.9 million. The year-to-date variances are attributable to the same factors as noted above for the second quarter.

 

Noninterest expense for the second quarter of 2015 totaled $28.4 million, a decrease of $0.9 million, or 3.2%, from the first quarter of 2015 attributable to lower other real estate owned (“OREO”) expense of $0.6 million, compensation expense of $0.1 million, occupancy expense of $0.1 million, and other expense of $0.1 million. A lower level of net losses from the sale of properties and to a lesser extent lower valuation adjustments drove the reduction in OREO expense. The decrease in occupancy expense was attributable to lower building and equipment maintenance costs. Other expense decreased due to lower processing fees which were higher than normal in the first quarter of 2015 due to the implementation of a new on-line/mobile banking platform. Compared to the second quarter of 2014, noninterest expense decreased by $0.6 million or 2.2% attributable to lower OREO expense of $1.3 million, occupancy expense of $0.2 million and other expense of $0.2 million, partially offset by higher compensation expense of $1.1 million. The reduction in OREO expense was driven by a lower level of net losses from the sale of properties. The lower level of occupancy expense primarily reflects non-routine maintenance expenses realized in the second quarter of 2014. Lower legal fees drove the decrease in other expense and reflect a lower level of support needed for problem loan resolutions. The increase in compensation expense reflects higher pension plan expense of $0.6 million, performance based pay (commissions and incentives) of $0.4 million, and associate salaries of $0.1 million.

 

For the first six months of 2015, noninterest expense totaled $57.8 million, an increase of $0.4 million, or 0.7%, over the same period of 2014 attributable to higher compensation expense of $1.9 million that was partially offset by lower OREO expense of $1.2 million, occupancy expense of $0.1 million, and other expense of $0.2 million. The increase in compensation expense reflects higher pension plan expense of $1.3 million, performance based pay (commissions) of $0.3 million, and associate salaries of $0.3 million. The increase in our pension plan expense compared to both the three and six-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 net losses from the sale of properties and to a lesser extent lower property carrying costs and valuation adjustments. Lower technology equipment costs drove the decrease in occupancy expense. The decrease in other expense reflects lower legal fees, printing and supply costs, and postage costs.

 

We realized income tax expense of $1.1 million (23% effective rate) for the second quarter of 2015 compared to $0.7 million (41% effective rate) for the first quarter of 2015 and $0.7 million (33% effective rate) for the second quarter of 2014. For the first six months of 2015, income tax expense totaled $1.8 million (27% effective rate) compared to an income tax benefit of $0.7 million (-15% effective rate) for the comparable period of 2014. The aforementioned discrete BOLI transaction realized in the second quarter of 2015 was tax-free, therefore income tax expense for the three and six-months of 2015 were favorably impacted. Income taxes for the three and six-months of 2014 were favorably impacted by a $2.2 million state tax benefit attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters. Absent future discrete events, we anticipate our effective income tax rate for the second half of 2015 will normalize within a range of 34%-35%.

 

Discussion of Financial Condition

 

Average earning assets were $2.328 billion for the second quarter of 2015, an increase of $21.5 million, or 0.9%, over the first quarter of 2015 and $115.2 million, or 5.2%, over the fourth quarter of 2014.  The increase in earning assets from the first quarter 2015 reflects higher levels of noninterest bearing and savings accounts, partially offset by a lower level of public funds. The increase compared to the fourth quarter of 2014 reflects higher levels for all deposit products with the exception of money market accounts and certificates of deposit. Additionally, growth in both the loan and investment portfolios led to a more favorable earning asset mix.

 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $237.1 million during the second quarter of 2015 compared to an average net overnight funds sold position of $302.4 million in the first quarter of 2015 and an average overnight funds sold position of $288.6 million in the fourth quarter of 2014.  The decrease in overnight funds compared to the prior quarter reflects growth in both the loan and investment portfolios. Partially offsetting this decline was an increase in average deposit balances despite a decline in public funds. 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.

 

Although we have experienced loan growth for the last six quarters, we continue to work on lowering the level of overnight funds by adding to our investment portfolio with short-duration, high quality securities and reducing deposit balances. We offer to our clients a fully-insured money market account which is provided by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to better deploy our overnight fund balances.

 

Average loans increased $25.3 million, or 1.8%, when compared to the first quarter of 2015, and have grown $47.2 million, or 3.3% compared to the fourth quarter of 2014. The improvement in loans was primarily driven by increases in the consumer portfolio, commercial loans, and commercial mortgages.

 

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

 

Nonperforming assets (nonaccrual loans and OREO) totaled $45.5 million at the end of the second quarter of 2015, a decrease of $5.1 million from the first quarter of 2015 and $7.0 million from the fourth quarter of 2014. Nonaccrual loans totaled $15.3 million at the end of the second quarter of 2015, a decrease of $1.5 million from both the first quarter of 2015 and fourth quarter of 2014. Nonaccrual loan additions totaled $4.5 million in the second quarter of 2015 and $10.3 million for the first six months of 2015, which compares to $11.9 million for the same period of 2014. The balance of OREO totaled $30.2 million at the end of the second quarter of 2015, a decrease of $3.6 million and $5.5 million, respectively, from the first quarter of 2015 and fourth quarter of 2014. For the second quarter of 2015, we added properties totaling $1.1 million, sold properties totaling $4.0 million, recorded valuation adjustments totaling $0.5 million, and realized miscellaneous adjustments of $0.2 million. For the first six months of 2015, we added properties totaling $2.8 million, sold properties totaling $6.8 million, recorded valuation adjustments totaling $1.3 million, and realized miscellaneous adjustments of $0.3 million. Nonperforming assets represented 1.71% of total assets at June 30, 2015 compared to 1.88% at March 31, 2015 and 2.00% at December 31, 2014.

 

Average total deposits were $2.178 billion for the second quarter of 2015, an increase of $15.0 million, or 0.7%, over the first quarter of 2015 and an increase of $101.0 million, or 4.9%, over the fourth quarter of 2014.  The increase in deposits when compared to the first quarter of 2015 reflects higher levels of all non-maturity account types except NOW accounts, partially offset by declines in public fund deposits and 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 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, most likely 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 first quarter of 2015 and fourth quarter of 2014, average borrowings increased by $3.7 million and $6.7 million, respectively, attributable to higher levels of repurchase agreement balances, partially offset by FHLB advance pay downs.

 

Equity capital was $272.0 million as of June 30, 2015, compared to $274.1 million as of March 31, 2015 and $272.5 million as of December 31, 2014. Our leverage ratio was 10.57%, 10.73%, and 10.99%, respectively, for these periods. Further, as of June 30, 2015, our risk-adjusted capital ratio was 16.75% compared to 17.11% and 17.76% at March 31, 2015 and December 31, 2014, respectively. Our common equity tier 1 ratio was 12.31% as of June 30, 2015 compared to 12.57% as of March 31, 2015, which was the first reporting period this ratio was published under the Basel III capital standards. 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 393,000 shares of our common stock at an average price of $14.72 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 $2.7 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								Six Months Ended
(Dollars in thousands, except per share data)		Jun 30, 2015				Mar 31, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
EARNINGS
Net Income		$	3,845			$	986			$	1,473			$	4,831			$	5,224
Net Income Per Common Share		$	0.22			$	0.06			$	0.08			$	0.28			$	0.30
PERFORMANCE
Return on Average Assets			0.58	%			0.15	%			0.23	%			0.37	%			0.41	%
Return on Average Equity			5.62	%			1.45	%			2.09	%			3.54	%			3.75	%
Net Interest Margin			3.29	%			3.27	%			3.29	%			3.28	%			3.29	%
Noninterest Income as % of Operating Revenue			43.80	%			40.98	%			41.99	%			42.44	%			41.57	%
Efficiency Ratio			83.85	%			93.42	%			91.11	%			88.46	%			91.00	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio			15.86	%			16.16	%			16.85	%			15.86	%			16.85	%
Total Capital Ratio			16.75	%			17.11	%			18.10	%			16.75	%			18.10	%
Tangible Common Equity Ratio			7.29	%			7.26	%			7.93	%			7.29	%			7.93	%
Leverage Ratio			10.57	%			10.73	%			10.70	%			10.57	%			10.70	%
Common Equity Tier 1 Ratio			12.31	%			12.57	%			—				12.31	%			—
Equity to Assets			10.25	%			10.18	%			10.97	%			10.25	%			10.97	%
ASSET QUALITY
Allowance as % of Non-Performing Loans			99.46	%			95.83	%			80.03	%			99.46	%			80.03	%
Allowance as a % of Loans			1.03	%			1.10	%			1.45	%			1.03	%			1.45	%
Net Charge-Offs as % of Average Loans			0.33	%			0.49	%			0.59	%			0.41	%			0.49	%
Nonperforming Assets as % of Loans and ORE			3.00	%			3.38	%			4.67	%			3.00	%			4.67	%
Nonperforming Assets as % of Total Assets			1.71	%			1.88	%			2.66	%			1.71	%			2.66	%
STOCK PERFORMANCE
High		$	16.32			$	16.33			$	14.71			$	16.33			$	14.71
Low			13.94				13.16				12.60				13.16				11.56
Close			15.27				16.25				14.53				15.27				14.53
Average Daily Trading Volume		$	33,514			$	15,058			$	28,428			$	24,435			$	32,114

 

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

 

		2015								2014
(Dollars in thousands)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter
ASSETS
Cash and Due From Banks		$	61,484			$	51,948			$	55,467			$	50,049			$	63,956
Funds Sold and Interest Bearing Deposits			185,572				296,888				329,589				253,974				354,233
Total Cash and Cash Equivalents			247,056				348,836				385,056				304,023				418,189
Investment Securities Available for Sale			433,688				404,887				341,548				322,297				275,082
Investment Securities Held to Maturity			201,805				183,489				163,581				173,188				180,393
Total Investment Securities			635,493				588,376				505,129				495,485				455,475
Loans Held for Sale			10,991				13,334				10,688				8,700				13,040
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural			151,116				143,951				136,925				133,756				134,833
Real Estate - Construction			44,216				41,595				41,596				38,121				34,244
Real Estate - Commercial			510,962				507,681				510,120				501,863				518,580
Real Estate - Residential			284,333				287,481				289,952				302,791				298,647
Real Estate - Home Equity			230,388				228,171				229,572				228,968				228,232
Consumer			238,599				230,984				214,758				200,363				181,209
Other Loans			12,048				9,243				6,017				5,504				7,182
Overdrafts			2,603				2,348				2,434				3,009				2,664
Total Loans, Net of Unearned Interest			1,474,265				1,451,454				1,431,374				1,414,375				1,405,591
Allowance for Loan Losses			(15,236	)			(16,090	)			(17,539	)			(19,093	)			(20,543	)
Loans, Net			1,459,029				1,435,364				1,413,835				1,395,282				1,385,048
Premises and Equipment, Net			99,108				100,038				101,899				102,546				102,141
Goodwill			84,811				84,811				84,811				84,811				84,811
Other Real Estate Owned			30,167				33,835				35,680				41,726				42,579
Other Assets			87,489				89,121				90,071				67,044				66,209
Total Other Assets			301,575				307,805				312,461				296,127				295,740
Total Assets		$	2,654,144			$	2,693,715			$	2,627,169			$	2,499,617			$	2,567,492
LIABILITIES
Deposits:
Noninterest Bearing Deposits		$	723,866			$	707,470			$	659,115			$	667,616			$	689,844
NOW Accounts			734,237				801,037				804,337				665,493				712,385
Money Market Accounts			264,475				257,684				254,149				270,131				272,255
Regular Savings Accounts			255,185				250,862				233,612				231,301				227,470
Certificates of Deposit			186,881				192,961				195,581				199,037				206,496
Total Deposits			2,164,644				2,210,014				2,146,794				2,033,578				2,108,450
Short-Term Borrowings			53,698				49,488				49,425				42,586				36,732
Subordinated Notes Payable			62,887				62,887				62,887				62,887				62,887
Other Long-Term Borrowings			29,733				30,418				31,097				32,305				33,282
Other Liabilities			71,144				66,821				64,426				45,008				44,561
Total Liabilities			2,382,106				2,419,628				2,354,629				2,216,364				2,285,912
SHAREOWNERS’ EQUITY
Common Stock			172				175				174				174				174
Additional Paid-In Capital			37,625				42,941				42,569				41,637				41,628
Retained Earnings			255,096				251,765				251,306				249,907				248,142
Accumulated Other Comprehensive Loss, Net of Tax			(20,855	)			(20,794	)			(21,509	)			(8,465	)			(8,364	)
Total Shareowners’ Equity			272,038				274,087				272,540				283,253				281,580
Total Liabilities and Shareowners’ Equity		$	2,654,144			$	2,693,715			$	2,627,169			$	2,499,617			$	2,567,492
OTHER BALANCE SHEET DATA
Earning Assets		$	2,306,322			$	2,350,052			$	2,276,781			$	2,172,535			$	2,228,339
Interest Bearing Liabilities			1,587,096				1,645,337				1,631,088				1,503,740				1,551,507
Book Value Per Diluted Share		$	15.80			$	15.59			$	15.53			$	16.18			$	16.08
Tangible Book Value Per Diluted Share			10.87				10.77				10.70				11.33				11.24
Actual Basic Shares Outstanding			17,154				17,533				17,447				17,433				17,449
Actual Diluted Shares Outstanding			17,216				17,579				17,544				17,512				17,510

 

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

Unaudited

 

																						Six Months Ended
		2015								2014												June 30,
(Dollars in thousands, except per share data)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter				2015				2014
INTEREST INCOME
Interest and Fees on Loans		$	18,231			$	17,863			$	18,624			$	18,528			$	18,152			$	36,094			$	36,250
Investment Securities			1,451				1,294				1,066				1,034				939				2,745				1,786
Funds Sold			151				189				181				204				257				340				548
Total Interest Income			19,833				19,346				19,871				19,766				19,348				39,179				38,584
INTEREST EXPENSE
Deposits			259				246				243				255				293				505				601
Short-Term Borrowings			15				21				24				17				17				36				37
Subordinated Notes Payable			338				332				333				333				331				670				662
Other Long-Term Borrowings			237				240				252				263				269				477				560
Total Interest Expense			849				839				852				868				910				1,688				1,860
Net Interest Income			18,984				18,507				19,019				18,898				18,438				37,491				36,724
Provision for Loan Losses			375				293				623				424				499				668				858
Net Interest Income after Provision for Loan Losses			18,609				18,214				18,396				18,474				17,939				36,823				35,866
NONINTEREST INCOME
Deposit Fees			5,682				5,541				6,027				6,211				6,213				11,223				12,082
Bank Card Fees			2,844				2,742				2,658				2,707				2,820				5,586				5,527
Wealth Management Fees			1,776				2,046				1,988				2,050				1,852				3,822				3,770
Mortgage Banking Fees			1,203				987				808				911				738				2,190				1,363
Data Processing Fees			364				373				278				336				388				737				929
Other			2,925				1,159				1,294				1,136				1,336				4,084				2,461
Total Noninterest Income			14,794				12,848				13,053				13,351				13,347				27,642				26,132
NONINTEREST EXPENSE
Compensation			16,404				16,524				15,850				15,378				15,206				32,928				30,987
Occupancy, Net			4,258				4,396				4,440				4,575				4,505				8,654				8,803
Other Real Estate			931				1,497				1,353				1,783				2,276				2,428				3,675
Other			6,846				6,973				6,666				6,871				7,089				13,819				13,977
Total Noninterest Expense			28,439				29,390				28,309				28,607				29,076				57,829				57,442
OPERATING PROFIT			4,964				1,672				3,140				3,218				2,210				6,636				4,556
Income Tax Expense (Benefit)			1,119				686				1,219				1,103				737				1,805				(668	)
NET INCOME		$	3,845			$	986			$	1,921			$	2,115			$	1,473			$	4,831			$	5,224
PER SHARE DATA
Basic Income		$	0.22			$	0.06			$	0.11			$	0.12			$	0.08			$	0.28			$	0.30
Diluted Income		$	0.22			$	0.06			$	0.11			$	0.12			$	0.08			$	0.28			$	0.30
Cash Dividend		$	0.03			$	0.03			$	0.03			$	0.02			$	0.02			$	0.06			$	0.04
AVERAGE SHARES
Basic			17,296				17,508				17,433				17,440				17,427				17,402				17,413
Diluted			17,358				17,555				17,530				17,519				17,488				17,456				17,463

 

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

 

		2015				2015				2014				2014				2014
(Dollars in thousands, except per share data)		Second Quarter				First Quarter				Fourth Quarter				Third Quarter				Second Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period		$	16,090			$	17,539			$	19,093			$	20,543			$	22,110
Provision for Loan Losses			375				293				623				424				499
Net Charge-Offs			1,229				1,742				2,177				1,874				2,066
Balance at End of Period		$	15,236			$	16,090			$	17,539			$	19,093			$	20,543
As a % of Loans			1.03	%			1.10	%			1.22	%			1.34	%			1.45	%
As a % of Nonperforming Loans			99.46	%			95.83	%			104.60	%			81.31	%			80.03	%
CHARGE-OFFS
Commercial, Financial and Agricultural		$	239			$	290			$	688			$	86			$	86
Real Estate - Construction			—				—				28				—				—
Real Estate - Commercial			285				904				957				1,208				1,029
Real Estate - Residential			484				305				522				212				695
Real Estate - Home Equity			454				182				(20	)			621				375
Consumer			351				576				608				386				421
Total Charge-Offs		$	1,813			$	2,257			$	2,783			$	2,513			$	2,606
RECOVERIES
Commercial, Financial and Agricultural		$	82			$	55			$	66			$	28			$	45
Real Estate - Construction			—				—				2				2				1
Real Estate - Commercial			54				30				76				213				152
Real Estate - Residential			200				48				212				93				52
Real Estate - Home Equity			33				24				28				37				65
Consumer			215				358				222				266				225
Total Recoveries		$	584			$	515			$	606			$	639			$	540
NET CHARGE-OFFS		$	1,229			$	1,742			$	2,177			$	1,874			$	2,066
Net Charge-Offs as a % of Average Loans(1)			0.33	%			0.49	%			0.61	%			0.52	%			0.59	%
RISK ELEMENT ASSETS
Nonaccruing Loans		$	15,320			$	16,790			$	16,769			$	23,482			$	25,670
Other Real Estate Owned			30,167				33,835				35,680				41,726				42,579
Total Nonperforming Assets		$	45,487			$	50,625			$	52,449			$	65,208			$	68,249
Past Due Loans 30-89 Days		$	5,858			$	3,689			$	6,792			$	4,726			$	5,092
Past Due Loans 90 Days or More			—				—				—				62				—
Classified Loans			69,152				74,247				83,137				89,850				95,037
Performing Troubled Debt Restructuring’s		$	41,632			$	42,590			$	44,409			$	43,578			$	45,440
Nonperforming Loans as a % of Loans			1.03	%			1.15	%			1.16	%			1.65	%			1.81	%
Nonperforming Assets as a % of
Loans and Other Real Estate			3.00	%			3.38	%			3.55	%			4.45	%			4.67	%
Nonperforming Assets as a % of Total Assets			1.71	%			1.88	%			2.00	%			2.61	%			2.66	%

 

(1) Annualized

 

CAPITAL CITY BANK GROUP, INC.

AVERAGE BALANCE AND INTEREST RATES(1)

Unaudited

 

		Second Quarter 2015												First Quarter 2015												Fourth Quarter 2014												Third Quarter 2014												Second Quarter 2014																Jun 2015 YTD												Jun 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		$	1,473,954				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	%		$	1,411,988				18,216				5.17	%			1,461,356				36,194				4.99	%		$	1,403,793				36,377				5.23	%
Investment Securities
Taxable Investment Securities			540,735				1,313				0.97				491,637				1,198				0.98				423,136				964				0.90				387,966				929				0.95				345,798				822				0.95				516,321				2,511				0.95				318,521				1,530				0.93
Tax-Exempt Investment Securities			76,191				219				1.15				63,826				154				0.96				74,276				161				0.87				82,583				165				0.80				94,431				182				0.77				70,043				373				1.06				104,431				396				0.76
Total Investment Securities			616,926				1,532				0.99				555,463				1,352				0.98				497,412				1,125				0.90				470,549				1,094				0.92				440,229				1,004				0.91				586,364				2,884				0.99				422,952				1,926				0.91
Funds Sold			237,132				151				0.26				302,405				189				0.25				288,613				181				0.25				317,553				204				0.25				408,668				257				0.25				269,588				340				0.25				437,837				548				0.25
Total Earning Assets			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	%			2,260,885			$	19,477				3.46	%			2,317,308			$	39,418				3.43	%			2,264,582			$	38,851				3.46	%
Cash and Due From Banks			52,473												48,615												45,173												44,139												44,115												50,555												46,089
Allowance for Loan Losses			(16,070	)											(17,340	)											(19,031	)											(20,493	)											(22,255	)											(16,702	)											(22,730	)
Other Assets			306,286												310,791												310,813												297,496												296,248												308,526												300,656
Total Assets		$	2,670,701											$	2,648,551											$	2,549,736											$	2,530,571											$	2,578,993												2,659,687											$	2,588,597
LIABILITIES:
Interest Bearing Deposits
NOW Accounts		$	761,388			$	64				0.03	%		$	794,308			$	68				0.03	%		$	689,572			$	57				0.03	%		$	680,154			$	66				0.04	%		$	724,635			$	91				0.05	%			777,757			$	132				0.03	%		$	747,343			$	195				0.05	%
Money Market Accounts			256,265				32				0.05				254,483				41				0.07				267,703				46				0.07				270,133				46				0.07				280,619				50				0.07				255,378				73				0.06				277,335				98				0.07
Savings Accounts			253,808				31				0.05				242,256				30				0.05				233,161				29				0.05				228,741				29				0.05				227,960				28				0.05				248,064				61				0.05				223,418				54				0.05
Time Deposits			189,213				132				0.28				194,655				107				0.22				197,129				111				0.22				202,802				114				0.22				209,558				124				0.24				191,919				239				0.25				212,408				254				0.24
Total Interest Bearing Deposits			1,460,674				259				0.07	%			1,485,702				246				0.07	%			1,387,565				243				0.07	%			1,381,830				255				0.07	%			1,442,772				293				0.08	%			1,473,118				505				0.07	%			1,460,504				601				0.08	%
Short-Term Borrowings			54,237				15				0.11	%			49,809				21				0.17	%			46,055				24				0.21	%			40,782				17				0.17	%			44,473				17				0.15	%			52,035				36				0.14	%			45,402				37				0.16	%
Subordinated Notes Payable			62,887				338				2.13				62,887				332				2.11				62,887				333				2.07				62,887				333				2.07				62,887				331				2.08				62,887				670				2.12				62,887				662				2.09
Other Long-Term Borrowings			30,067				237				3.16				30,751				240				3.16				31,513				252				3.17				32,792				263				3.20				33,619				269				3.21				30,407				477				3.16				35,328				560				3.19
Total Interest Bearing Liabilities			1,607,865			$	849				0.21	%			1,629,149			$	839				0.21	%			1,528,020			$	852				0.22	%			1,518,291			$	868				0.23	%			1,583,751			$	910				0.23	%			1,618,447			$	1,688				0.21	%			1,604,121			$	1,860				0.23	%
Noninterest Bearing Deposits			717,725												677,674												689,800												681,051												666,791												697,811												656,715
Other Liabilities			70,690												66,424												45,887												47,099												46,105												68,569												46,716
Total Liabilities			2,396,280												2,373,247												2,263,707												2,246,441												2,296,647												2,384,827												2,307,552
SHAREOWNERS’ EQUITY:			274,421												275,304												286,029												284,130												282,346												274,860												281,045
Total Liabilities and Shareowners’ Equity		$	2,670,701											$	2,648,551											$	2,549,736											$	2,530,571											$	2,578,993												2,659,687											$	2,588,597
Interest Rate Spread						$	19,119				3.23	%						$	18,611				3.21	%						$	19,124				3.36	%						$	19,020				3.34	%						$	18,567				3.22	%						$	37,730				3.22	%						$	36,991				3.23	%
Interest Income and Rate Earned(1)							19,968				3.44								19,450				3.42								19,976				3.58								19,888				3.57								19,477				3.46								39,418				3.43								38,851				3.46
Interest Expense and Rate Paid(2)							849				0.15								839				0.15								852				0.15								868				0.16								910				0.16								1,688				0.15								1,860				0.17
Net Interest Margin						$	19,119				3.29	%						$	18,611				3.27	%						$	19,124				3.43	%						$	19,020				3.42	%						$	18,567				3.29	%						$	37,730				3.28	%						$	36,991				3.29	%

 

(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.