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CAPITAL CITY BANK GROUP
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Capital City Bank Group, Inc. Reports Third Quarter 2012 Results

2012-10-23 07:44 ET - News Release

TALLAHASSEE, Fla., Oct. 23, 2012 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.1 million, or $0.07 per diluted share, for the third quarter of 2012, compared to a net loss of $1.7 million, or $0.10 per diluted share, for the second quarter of 2012, and net income of $2.0 million, or $0.12 per diluted share, for the third quarter of 2011. For the first nine months of 2012, the Company reported a net loss of $1.8 million, or $0.10 per diluted share, compared to net income of $5.4 million, or $0.32 per diluted share, for the same period in 2011.

Compared to the second quarter of 2012, the increase in earnings reflects a lower loan loss provision of $2.9 million, and a $2.1 million decline in noninterest expense, partially offset by lower operating revenues (net interest income plus noninterest income) of $0.4 million and higher income taxes of $1.8 million.

Compared to the third quarter of 2011, the reduction in earnings was due to lower operating revenues of $2.7 million partially offset by a $0.9 million decrease in the loan loss provision, a $0.4 million reduction in noninterest expense, and lower income taxes of $0.5 million.

The decrease in earnings for the nine month period ended September 30, 2012 is attributable to lower operating revenues of $9.7 million, and a higher loan loss provision of $2.0 million, partially offset by lower noninterest expense of $0.1 million and income taxes of $4.4 million. Earnings in 2011 reflect the sale of our Visa Class B shares of stock which resulted in a net pre-tax gain of $2.6 million ($3.2 million pre-tax gain included in noninterest income and recognition of a $0.6 million swap liability included in noninterest expense).

"While the economy remains challenging, our pre-tax, pre-credit cost operating income improved as we continued to trim expenses," said William G. Smith, Jr., Chairman, President and CEO. "Credit quality remains a top priority and continues to improve. Nonperforming assets declined as did our past due loans and net charge-offs; and our retail strategy for the disposition of problem assets continues to produce results, which we believe are in the best interest of our shareowners. A modest level of loss in newly identified problem loans coupled with less severe valuation adjustments on our other real estate owned properties have contributed to lower credit costs and improved profitability. As we have stated all along, we don't expect the path forward to be linear and anticipate quarterly performance will continue to be choppy, but when viewed on an annual basis, we are clearly making progress and are optimistic about the future."

The Return on Average Assets was 0.17% and the Return on Average Equity was 1.77% for the third quarter of 2012. These metrics were -0.26% and -2.75% for the second quarter of 2012, and 0.31% and 2.97% for the third quarter of 2011, respectively.

For the first nine months of 2012, the Return on Average Assets was -0.09% and the Return on Average Equity was -0.93% compared to 0.28% and 2.77%, respectively, for the same period in 2011.

Discussion of Financial Condition

Average earning assets were $2.209 billion for the third quarter of 2012, a decrease of $53.7 million, or 2.4%, from the second quarter of 2012, and an increase of $62.7 million, or 2.9%, over the fourth quarter of 2011. As compared to the second quarter of 2012, the decline in average earning assets is attributable to a lower level of overnight funds resulting from a decline in deposits and the resolution of problem loans. The shift in the mix of earning assets continued as the loan portfolio declined when compared to the prior quarter. The increase in average earning assets compared to the fourth quarter of 2011 primarily reflects the higher level of deposits resulting from the seasonal influx of public funds.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $386.0 million during the third quarter of 2012 compared to an average net overnight funds sold position of $411.3 million in the second quarter of 2012 and an average overnight funds sold position of $191.8 million in the fourth quarter of 2011. The lower balance when compared to the second quarter of 2012 reflects lower levels of public fund deposits partially offset by a decrease in the loan portfolio. The higher balances when compared to the fourth quarter of 2011 reflect higher levels of public funds and savings accounts, in addition to lower balances in the loan and investment portfolios.

When compared to the second quarter of 2012 and the fourth quarter of 2011, average loans declined by $29.6 million and $105.5 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential categories. Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production. New loan production continues to be impacted by weak loan demand attributable to the trend toward consumers and businesses deleveraging, the lack of consumer confidence, and a persistently sluggish economy.

The resolution of problem loans (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to other real estate owned "OREO") also contributed to the overall decline. During the third quarter of 2012, loan charge-offs and loans transferred to OREO accounted for $6.0 million, or 26%, of the net reduction in total loans of $22.9 million from the second quarter of 2012. Compared to the fourth quarter of 2011, loan resolution accounted for $31.3 million, or 33%, of the net reduction in loans of $95.4 million1.

Nonperforming assets (nonaccrual loans and OREO) totaled $127.2 million at the end of the third quarter of 2012 compared to $132.8 million at the end of the second quarter of 2012 and $137.6 million at the end of the fourth quarter of 2011. Nonaccrual loans totaled $74.1 million, a decrease of $0.7 million from the second quarter of 2012 and $0.9 million from the fourth quarter of 2011, reflective of loan charge-offs and the migration of loans to OREO, which outpaced gross additions. Gross additions to nonaccrual status were up slightly during the third quarter, but have slowed noticeably during the first nine months of 2012. The balance of OREO totaled $53.2 million at the end of the third quarter, a $4.9 million decrease from the second quarter of 2012 and $9.4 million from the fourth quarter of 2011. We continue to experience progress in our efforts to dispose of OREO by selling properties totaling $20.1 million during the first nine months of 2012. Nonperforming assets represented 5.10% of total assets at September 30, 2012 compared to 5.02% at June 30, 2012 and 5.21% at December 31, 2011.

Average total deposits were $2.075 billion for the third quarter of 2012, a decrease of $60.2 million, or 2.8%, from the second quarter of 2012 and higher by $42.5 million, or 2.1%, from the fourth quarter of 2011. The decrease in deposits when compared to the second quarter of 2012 resulted from lower public funds and certificates of deposit, partially offset by growth in noninterest bearing accounts, regular savings, and money market accounts. Compared to the fourth quarter of 2011, the increase was driven primarily by higher public fund balances, savings and noninterest bearing deposits. This was partially offset by a reduction of certificates of deposit. The seasonal low in public fund balances generally occurs in the fourth quarter, and these balances are anticipated to increase through the first quarter of 2013.

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.

During the fourth quarter of 2012, we may realize some attrition in noninterest bearing deposit balances due to the unlimited government guarantee on noninterest bearing accounts, which if not extended, is set to expire at year-end. Our average noninterest bearing deposits represented 29.2% of our total deposits during the third quarter of 2012.

Borrowings decreased by $0.9 million when compared to the second quarter of 2012 as a result of lower balances in repurchase agreements, and were higher by $8.1 million when compared to the fourth quarter of 2011, as a result of higher balances in repurchase agreements.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2012 was $21.2 million, which is comparable to the second quarter of 2012, and down from $23.3 million for the third quarter of 2011. For the nine months ended September 30, 2012, tax equivalent net interest income totaled $64.2 million compared to $70.3 million for the same period of 2011. Factors affecting net interest income relative to the second quarter of 2012 include a reduction in loan income attributable to declining loan balances, primarily offset by one additional calendar day and interest recoveries. When compared to the three and nine month periods of 2011, the decrease was primarily driven by declines in loan income attributable to lower portfolio balances, which was partially offset by a reduction in interest expense. The lower interest expense is primarily attributable to certificates of deposit and reflects both lower balances and favorable repricing. 

The decline in the loan portfolio, coupled with the low rate environment continues to put pressure on our net interest income. The loan portfolio yield is declining as the existing portfolio reprices. 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 third quarter of 2012 was 3.82%, an increase of 5 basis points from the second quarter of 2012 and a decline of 38 basis points from the third quarter of 2011. Year-to-date net interest margin of 3.81% declined 37 basis points from the comparable period in 2011. The increase in margin compared to the linked quarter reflects a lower level of earning assets and higher interest recoveries. The decrease in the margin compared to the third quarter of 2011 and year-to-date is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds.

The provision for loan losses for the third quarter of 2012 was $2.9 million compared to $5.7 million in the second quarter of 2012 and $3.7 million for the third quarter of 2011. The decrease from both periods was driven by slower problem loan migration and lower net charge-offs resulting in a favorable impact on our general reserve allocation. For the first nine months of 2012, the loan loss provision totaled $13.4 million compared to $11.4 million for the same period in 2011 with the increase primarily attributable to an increase in impaired loans. Net charge-offs for the third quarter of 2012 totaled $2.6 million, or 0.66%, of average loans (annualized) compared to $7.0 million, or 1.80%, for the second quarter of 2012 and $5.1 million, or 1.22%, in the third quarter of 2011. For the first nine months of 2012, net charge-offs totaled $14.2 million, or 1.21%, of average loans (annualized) compared to $17.2 million, or 1.35%, for the same period of 2011. At quarter-end, the allowance for loan losses of $30.2 million was 1.97% of outstanding loans (net of overdrafts) and provided coverage of 41% of nonperforming loans compared to 1.93% and 40%, respectively, at June 30, 2012, and 1.91% and 41%, respectively, at December 31, 2011.

Noninterest income for the third quarter of 2012 totaled $13.6 million, a decrease of $0.3 million, or 2.4%, from the second quarter of 2012 and a decrease of $0.6 million, or 4.4%, from the third quarter of 2011. The decrease from the second quarter of 2012 was driven primarily by lower wealth management fees (trust fees and retail brokerage fees) of $0.2 million and bank card fees of $0.2 million, partially offset by higher mortgage banking fees of $0.1 million. Compared to the third quarter of 2011, the decrease primarily reflects a reduction in deposit fees of $0.2 million, wealth management fees of $0.2 million, data processing fees of $0.1 million, and other income of $0.5 million, partially offset by higher mortgage banking fees of $0.3 million. For the first nine months of 2012, noninterest income totaled $41.1 million, a decrease of $3.9 million from the same period of 2011 reflective of lower data processing fees of $0.4 million, wealth management fees of $0.4 million, and other income of $4.6 million, partially offset by higher mortgage banking fees of $0.9 million and bank card fees of $0.5 million. Data processing fees declined due to a reduction in the number of banks that we process for as two of our user banks were acquired and discontinued service in early 2011. The reduction in wealth management fees reflects a decline in trust fees reflective of a lower level of assets under management due to account distributions, and a decrease in retail brokerage fees due to lower client trading activity. The decrease in other income was primarily attributable to the Visa gain realized in the first quarter of 2011 and a lower level of gains from the sale of OREO properties. Increased loan origination drove the higher level of mortgage banking fees reflecting increased home purchase activity in our markets. The increase in bank card fees was attributable to an increase in active cards and higher card utilization.

Noninterest expense for the third quarter of 2012 totaled $30.2 million, a decrease of $2.1 million, or 6.5%, from the second quarter of 2012 and $0.4 million, or 1.5%, from the third quarter of 2011. The decrease compared to the second quarter of 2012 reflects a reduction in salaries/associate benefit expense of $0.6 million, OREO expense of $0.8 million, and other expense of $0.7 million. The decrease in salaries/associate benefit expense was due to lower associate salary expense reflective of lower headcount, pension plan expense, and associate insurance expense. A decline in valuation adjustments drove the decrease in OREO expense. Other expense declined due to lower advertising fees and professional fees, as well as one-time severance costs that were recorded in the second quarter of 2012. Lower salaries/associate benefit expense and occupancy expense drove the decrease compared to the third quarter of 2011.

For the first nine months of 2012, noninterest expense totaled $95.1 million, a decrease of $0.1 million from the same period of 2011 attributable to lower occupancy expense of $0.5 million and intangible amortization expense of $0.2 million, partially offset by higher furniture/equipment expense of $0.2 million, OREO expense of $0.3 million, and salaries/associate benefit expense of $0.1 million. A decrease in building maintenance/repairs and utility expense drove the decline in occupancy expense. The reduction in intangible amortization expense reflects the full amortization of certain core deposit intangibles related to past acquisitions. Higher software and maintenance costs for newly implemented information systems drove the increase in furniture/equipment expense. A slightly higher level of carrying costs and valuation adjustments drove the increase in ORE expense. The slight net increase in salaries/associate benefit expense reflects higher pension plan expense that was partially offset by lower expense for associate salaries and performance compensation. Utilization of a lower discount rate in 2012 due to lower long-term bond interest rates drove the aforementioned increase in pension plan expense.        

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 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 66 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the Company's need and our ability to incur additional debt or equity financing; the accuracy of the Company's financial statement estimates and assumptions, including the estimate used for the Company's loan loss provision and deferred tax valuation allowance; continued depression of the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company's loans; restrictions on our operations, including the inability to pay dividends without our regulators' consent; the effects of the health and soundness of other financial institutions, including the FDIC's need to increase Deposit Insurance Fund assessments; 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 impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; the Company's ability to integrate acquisitions; 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, 2011, 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.

1 The reductions in loan portfolio balances stated in this paragraph are based on "as of" balances, not averages.

           
CAPITAL CITY BANK GROUP, INC.          
EARNINGS HIGHLIGHTS          
Unaudited          
           
 Three Months EndedNine Months Ended
(Dollars in thousands, except per share data)Sep 30, 2012Jun 30, 2012Sep 30, 2011Sep 30, 2012Sep 30, 2011
           
EARNINGS          
Net Income (Loss) $ 1,121 $ (1,726) $ 1,977 $ (1,767) $ 5,432
Net Income (Loss) Per Common Share $ 0.07 $ (0.10)  $ 0.12 $ (0.10)  $ 0.32
PERFORMANCE          
Return on Average Equity 1.77% -2.75% 2.97% -0.93% 2.77%
Return on Average Assets 0.17% -0.26% 0.31% -0.09% 0.28%
Net Interest Margin 3.82% 3.77% 4.20% 3.81% 4.18%
Noninterest Income as % of Operating Revenue 39.31% 39.88% 38.14% 39.28% 39.38%
Efficiency Ratio 87.68% 90.88% 81.40% 90.12% 82.07%
CAPITAL ADEQUACY          
Tier 1 Capital Ratio 14.43% 14.17% 14.05% 14.43% 14.05%
Total Capital Ratio 15.80% 15.54% 15.41% 15.80% 15.41%
Tangible Common Equity Ratio 6.86% 6.40% 7.19% 6.86% 7.19%
Leverage Ratio 9.83% 9.60% 10.20% 9.83% 10.20%
Equity to Assets 10.04% 9.41% 10.34% 10.04% 10.34%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 40.80% 40.03% 55.54% 40.80% 55.54%
Allowance as a % of Loans 1.97% 1.93% 1.79% 1.97% 1.79%
Net Charge-Offs as % of Average Loans 0.66% 1.80% 1.22% 1.21% 1.35%
Nonperforming Assets as % of Loans and ORE 8.02% 8.23% 6.67% 8.02% 6.67%
Nonperforming Assets as % of Total Assets 5.10% 5.02% 4.54% 5.10% 4.54%
STOCK PERFORMANCE          
High  $ 10.96 $ 8.73 $ 11.18 $ 10.96 $ 13.80
Low 7.00 6.35 9.81 6.35 9.81
Close 10.64 7.37 10.38 10.64 10.38
Average Daily Trading Volume $ 23,737 $ 37,926 $ 43,483 $ 28,826 $ 31,783
           
           
CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION        
Unaudited          
           
 20122011
(Dollars in thousands)Third QuarterSecond QuarterFirst QuarterFourth QuarterThird Quarter
ASSETS          
Cash and Due From Banks  $ 53,076 $  57,477 $ 50,567 $ 54,953 $ 53,027
Funds Sold and Interest Bearing Deposits 314,318 434,814 418,678 330,361 193,387
Total Cash and Cash Equivalents  367,394  492,291  469,245  385,314  246,414
           
Investment Securities, Available-for-Sale 288,166 280,753 284,490 307,149 306,038
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural 135,939 136,736 132,119 130,879 142,511
Real Estate - Construction 43,278 46,803 34,554 26,367 31,991
Real Estate - Commercial 609,671 605,819 624,528 639,140 644,128
Real Estate - Residential 341,044 353,198 364,123 386,877 388,686
Real Estate - Home Equity 239,446 242,929 240,800 244,263 245,438
Consumer 154,389 162,899 174,132 186,216 188,933
Other Loans 6,891 5,638 6,555 12,495 13,720
Overdrafts 2,637 2,214 2,073 2,446 2,292
Total Loans, Net of Unearned Interest  1,533,295  1,556,236  1,578,884  1,628,683  1,657,699
Allowance for Loan Losses (30,222) (29,929) (31,217) (31,035) (29,658)
Loans, Net  1,503,073  1,526,307  1,547,667  1,597,648  1,628,041
           
Premises and Equipment, Net 109,003 110,302 111,408 110,991 111,471
Intangible Assets 85,161 85,269 85,376 85,484 85,591
Other Real Estate Owned 53,172 58,059 58,100 62,600 61,196
Other Assets 87,815 92,869 103,992 92,126 85,221
Total Other Assets 335,151 346,499 358,876 351,201 343,479
           
Total Assets $ 2,493,784 $ 2,645,850 $ 2,660,278 $ 2,641,312 $ 2,523,972
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits $ 596,660 $ 623,130 $ 605,774 $ 618,317 $ 584,628
NOW Accounts 703,327 789,103 845,149 828,990 708,066
Money Market Accounts 285,084 288,352 283,224 276,910 280,001
Regular Savings Accounts 181,523 178,388 172,262 158,462 154,136
Certificates of Deposit 254,000 271,413 279,295 289,840 316,968
Total Deposits 2,020,594 2,150,386 2,185,704 2,172,519 2,043,798
           
Short-Term Borrowings 42,388 69,449 42,188 43,372 47,508
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 38,126 38,846 42,826 44,606 45,389
Other Liabilities 79,427 75,260 75,876 65,986 63,465
           
Total Liabilities 2,243,422 2,396,828 2,409,481 2,389,370 2,263,047
           
SHAREOWNERS' EQUITY          
Common Stock 172 172 172 172 172
Additional Paid-In Capital 38,493 38,260 38,101 37,838 38,074
Retained Earnings 235,694 234,573 236,299 237,461 237,969
Accumulated Other Comprehensive Loss, Net of Tax (23,997) (23,983) (23,775) (23,529) (15,290)
           
Total Shareowners' Equity 250,362 249,022 250,797 251,942 260,925
           
Total Liabilities and Shareowners' Equity $ 2,493,784 $ 2,645,850 $ 2,660,278 $ 2,641,312 $ 2,523,972
           
OTHER BALANCE SHEET DATA          
Earning Assets $ 2,135,779 $ 2,271,803 $ 2,282,053 $ 2,266,193 $ 2,157,124
Intangible Assets          
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 79 139 198 258 318
Other 271 319 367 415 462
Interest Bearing Liabilities 1,567,335 1,698,438 1,727,831 1,705,066 1,614,954
           
Book Value Per Diluted Share $ 14.54 $ 14.48 $ 14.60 $ 14.68 $ 15.20
Tangible Book Value Per Diluted Share 9.59 9.52 9.63 9.70 10.21
           
Actual Basic Shares Outstanding 17,223 17,198 17,182 17,160 17,157
Actual Diluted Shares Outstanding 17,223 17,198 17,182 17,161 17,172
               
               
CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF OPERATIONS              
Unaudited              
               
           Nine Months Ended
 20122011September 30,
(Dollars in thousands, except per share data)Third QuarterSecond QuarterFirst QuarterFourth QuarterThird Quarter20122011
               
INTEREST INCOME              
Interest and Fees on Loans $ 21,274 $ 21,359 $ 22,005 $ 22,915 $ 23,777 $ 64,638 $ 72,029
Investment Securities 798 834 900 902 978 2,532 3,066
Funds Sold 254 244 225 95 136 723 452
Total Interest Income 22,326 22,437 23,130 23,912 24,891 67,893 75,547
               
INTEREST EXPENSE              
Deposits 480 556 643 699 907 1,679 3,248
Short-Term Borrowings 71 48 8 6 78 127 299
Subordinated Notes Payable 372 372 382 358 339 1,126 1,022
Other Long-Term Borrowings 372 396 436 452 467 1,204 1,453
Total Interest Expense 1,295 1,372 1,469 1,515 1,791 4,136 6,022
Net Interest Income 21,031 21,065 21,661 22,397 23,100 63,757 69,525
Provision for Loan Losses 2,864 5,743 4,793 7,600 3,718 13,400 11,396
Net Interest Income after Provision for Loan Losses 18,167 15,322 16,868 14,797 19,382 50,357 58,129
               
NONINTEREST INCOME              
Service Charges on Deposit Accounts 6,406 6,313 6,309 6,530 6,629 19,028 18,921
Data Processing Fees 687 680 675 743 749 2,042 2,487
Asset Management Fees(1) 1,020 1,020 1,015 1,124 1,080 3,055 3,240
Retail Brokerage Fees(1) 666 884 758 776 807 2,308 2,475
Mortgage Banking Fees 978 864 848 845 645 2,690 1,830
Interchange Fees (2) 1,619 1,580 1,526 1,399 1,420 4,725 4,223
ATM/Debit Card Fees (2) 997 1,204 1,245 1,098 1,170 3,446 3,421
Other  1,202 1,361 1,210 1,358 1,693 3,773 8,378
Total Noninterest Income 13,575 13,906 13,586 13,873 14,193 41,067 44,975
               
NONINTEREST EXPENSE              
Salaries and Associate Benefits 15,510 16,117 16,843 15,260 15,805 48,470 48,382
Occupancy, Net 2,332 2,276 2,266 2,284 2,495 6,874 7,338
Furniture and Equipment 2,245 2,245 2,201 2,097 2,118 6,691 6,461
Intangible Amortization 108 107 108 107 108 323 568
Other Real Estate 2,616 3,460 3,513 3,425 2,542 9,589 9,252
Other  7,390 8,088 7,666 7,930 7,579 23,144 23,144
Total Noninterest Expense 30,201 32,293 32,597 31,103 30,647 95,091 95,145
               
OPERATING PROFIT (LOSS)  1,541 (3,065) (2,143) (2,433) 2,928 (3,667) 7,959
Income Tax Expense (Benefit)  420 (1,339) (981) (1,898) 951 (1,900) 2,527
NET INCOME (LOSS) $ 1,121 $ (1,726) $ (1,162) $ (535) $ 1,977 $ (1,767) $ 5,432
               
PER SHARE DATA              
Basic Income (Loss) $ 0.07 $ (0.10) $ (0.07) $ (0.03) $ 0.12 $ (0.10) $ 0.32
Diluted Income (Loss) $ 0.07 $ (0.10) $ (0.07) $ (0.03) $ 0.12 $ (0.10) $ 0.32
Cash Dividends 0.000 0.000 0.000 0.000 0.100 0.000 0.300
AVERAGE SHARES              
Basic  17,215 17,192 17,181 17,157 17,152 17,196 17,134
Diluted  17,228 17,192 17,181 17,157 17,167 17,196 17,143
               
(1) Together referred to as "Wealth Management Fees"            
(2) Together referred to as "Bank Card Fees"              
           
           
CAPITAL CITY BANK GROUP, INC.          
ALLOWANCE FOR LOAN LOSSES           
AND NONPERFORMING ASSETS          
Unaudited          
           
 20122012201220112011
(Dollars in thousands, except per share data)Third QuarterSecond QuarterFirst QuarterFourth QuarterThird Quarter
           
ALLOWANCE FOR LOAN LOSSES          
Balance at Beginning of Period $ 29,929 $ 31,217 $ 31,035 $ 29,658 $ 31,080
Provision for Loan Losses 2,864 5,743 4,793 7,600 3,718
Net Charge-Offs 2,571 7,031 4,611 6,223 5,140
Balance at End of Period $ 30,222 $ 29,929 $ 31,217 $ 31,035 $ 29,658
As a % of Loans 1.97% 1.93% 1.98% 1.91% 1.79%
As a % of Nonperforming Loans 40.80% 40.03% 39.65% 41.37% 55.54%
           
CHARGE-OFFS          
Commercial, Financial and Agricultural $ 331 $ 57 $ 268 $ 634 $ 186
Real Estate - Construction 127 275 -- 25 75
Real Estate - Commercial 512 3,519 1,532 2,443 1,031
Real Estate - Residential 981 3,894 1,967 2,755 3,287
Real Estate - Home Equity 834 425 892 205 580
Consumer 355 550 732 879 832
Total Charge-Offs $ 3,140 $ 8,720 $ 5,391 $ 6,941 $ 5,991
           
RECOVERIES          
Commercial, Financial and Agricultural $ 53 $ 83 $ 67 $ 242 $ 33
Real Estate - Construction  9  27 --  --   -- 
Real Estate - Commercial 34 42 138 87 37
Real Estate - Residential 76 969 163 34 271
Real Estate - Home Equity 15 116 18 13 108
Consumer 382 452 394 342 402
Total Recoveries $ 569 $ 1,689 $ 780 $ 718 $ 851
           
NET CHARGE-OFFS $ 2,571 $ 7,031 $ 4,611 $ 6,223 $ 5,140
           
Net Charge-Offs as a % of Average Loans(1) 0.66% 1.80% 1.16% 1.50% 1.22%
           
RISK ELEMENT ASSETS          
Nonaccruing Loans $ 74,075 $ 74,770 $ 78,726 $ 75,023 $ 53,396
Other Real Estate Owned 53,172 58,059 58,100 62,600 61,196
Total Nonperforming Assets $ 127,247 $ 132,829 $ 136,826 $ 137,623 $ 114,592
           
Past Due Loans 30-89 Days  $ 12,923 $ 16,695 $ 9,193 $ 19,425 $ 17,053
Past Due Loans 90 Days or More  --   --  25 224 26
Performing Troubled Debt Restructuring's $ 45,973 $ 38,734 $ 37,373 $ 37,675 $ 28,404
           
Nonperforming Loans as a % of Loans 4.83% 4.80% 4.99% 4.61% 3.22%
Nonperforming Assets as a % of          
Loans and Other Real Estate 8.02% 8.23% 8.36% 8.14% 6.67%
Nonperforming Assets as a % of Capital(2) 45.35% 47.62% 48.52% 48.63% 39.44%
Nonperforming Assets as a % of Total Assets 5.10% 5.02% 5.14% 5.21% 4.54%
           
(1) Annualized          
(2) Capital includes allowance for loan losses          
                   
                   
CAPITAL CITY BANK GROUP, INC.                  
AVERAGE BALANCE AND INTEREST RATES(1)                  
Unaudited                  
                   
                   
 Third Quarter 2012Second Quarter 2012First Quarter 2012
(Dollars in thousands)Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:                  
Loans, Net of Unearned Interest  $ 1,541,262  21,366 5.51%  $ 1,570,827  21,456 5.49%  $ 1,596,480  22,121 5.57%
                   
Investment Securities                  
Taxable Investment Securities  214,431  691 1.28  216,952  730 1.35  242,481  794 1.31
Tax-Exempt Investment Securities 67,446 163 0.97 63,715 161 1.01 56,313 162 1.15
                   
Total Investment Securities  281,877  854 1.21  280,667  891 1.27  298,794  956 1.28
                   
Funds Sold 386,027 254 0.26 411,353 244 0.24 373,033 225 0.24
                   
Total Earning Assets  2,209,166 $ 22,474 4.05%  2,262,847 $ 22,591 4.01%  2,268,307 $ 23,302 4.13%
                   
Cash and Due From Banks  47,207      47,711      49,427    
Allowance for Loan Losses  (30,260)      (31,599)      (31,382)    
Other Assets 340,126     345,458     350,555    
                   
Total Assets $ 2,566,239     $ 2,624,417     $ 2,636,907    
                   
LIABILITIES:                  
Interest Bearing Deposits                  
NOW Accounts $ 740,178 $ 144 0.08%  $ 809,172  $ 167 0.08% $ 823,406  $ 192 0.09%
Money Market Accounts  287,250  60 0.08  280,371  63 0.09  277,558  75 0.11
Savings Accounts  179,445  23 0.05  174,923  21 0.05  165,603  20 0.05
Time Deposits 263,007 253 0.38 274,497 305 0.45 284,129 356 0.50
Total Interest Bearing Deposits  1,469,880  480 0.13%  1,538,963  556 0.15%  1,550,696  643 0.17%
                   
Short-Term Borrowings  59,184  71 0.48%  57,983  48 0.33%  45,645  8 0.07%
Subordinated Notes Payable  62,887  372 2.31  62,887  372 2.34  62,887  382 2.40
Other Long-Term Borrowings 38,494 372 3.85 40,617 396 3.92 44,286 436 3.96%
                   
Total Interest Bearing Liabilities  1,630,445 $ 1,295 0.32%  1,700,450 $ 1,372 0.32%  1,703,514 $ 1,469 0.35%
                   
Noninterest Bearing Deposits  605,602      596,690      610,692    
Other Liabilities 78,446     74,633     68,254    
                   
Total Liabilities 2,314,493     2,371,773     2,382,460    
                   
SHAREOWNERS' EQUITY: 251,746     252,644     254,447    
                   
Total Liabilities and Shareowners' Equity $ 2,566,239     $ 2,624,417     $ 2,636,907    
                   
Interest Rate Spread   $ 21,179 3.73%   $ 21,219 3.69%   $ 21,833 3.78%
                   
Interest Income and Rate Earned(1)   22,474 4.05   22,591 4.01   23,302 4.13
Interest Expense and Rate Paid(2)   1,295 0.23   1,372 0.24   1,469 0.26
                   
Net Interest Margin   $ 21,179 3.82%   $ 21,219 3.77%   $ 21,833 3.87%
                   
(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.                
             
             
CAPITAL CITY BANK GROUP, INC.            
AVERAGE BALANCE AND INTEREST RATES(1)            
Unaudited            
             
             
 Fourth Quarter 2011Third Quarter 2011
(Dollars in thousands)Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:            
Loans, Net of Unearned Interest $ 1,646,715  $ 23,032 5.55%  $ 1,667,720  $ 23,922 5.69%
             
Investment Securities            
Taxable Investment Securities  248,217  816 1.31  248,138  828 1.32
Tax-Exempt Investment Securities 59,647 131 0.88 55,388 231 1.67
             
Total Investment Securities  307,864  947 1.22  303,526  1,059 1.39
             
Funds Sold 191,884 96 0.20 231,681 136 0.23
             
Total Earning Assets  2,146,463 $ 24,075 4.45%  2,202,927 $ 25,117 4.52%
             
Cash and Due From Banks  49,666      47,252    
Allowance for Loan Losses  (29,550)      (30,969)    
Other Assets 343,336     344,041    
             
Total Assets $ 2,509,915     $ 2,563,251    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts  $ 700,005  $ 148 0.08% $ 726,652  $ 222 0.12%
Money Market Accounts  283,677  75 0.11  282,378  95 0.13
Savings Accounts  156,088  20 0.05  153,748  19 0.05
Time Deposits 299,487 456 0.60 324,951 571 0.70
Total Interest Bearing Deposits  1,439,257  699 0.19%  1,487,729  907 0.24%
             
Short-Term Borrowings  44,573  6 0.05%  64,160  78 0.48%
Subordinated Notes Payable  62,887  358 2.23  62,887  339 2.11
Other Long-Term Borrowings 45,007 452 3.99 46,435 467 3.99
             
Total Interest Bearing Liabilities  1,591,724 $ 1,515 0.38%  1,661,211 $ 1,791 0.43%
             
Noninterest Bearing Deposits  593,718      574,184    
Other Liabilities 60,197     63,954    
             
Total Liabilities 2,245,639     2,299,349    
             
SHAREOWNERS' EQUITY: 264,276     263,902    
             
Total Liabilities and Shareowners' Equity $ 2,509,915     $ 2,563,251    
             
Interest Rate Spread   $ 22,560 4.07%   $ 23,326 4.09%
             
Interest Income and Rate Earned(1)   24,075 4.45   25,117 4.52
Interest Expense and Rate Paid(2)   1,515 0.28   1,791 0.32
             
Net Interest Margin   $ 22,560 4.17%   $ 23,326 4.20%
             
(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.          
         
         
CAPITAL CITY BANK GROUP, INC.        
AVERAGE BALANCE AND INTEREST RATES(1)        
Unaudited        
             
             
 Sep 2012 YTDSep 2011 YTD
(Dollars in thousands)Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:            
Loans, Net of Unearned Interest  $ 1,569,420  $ 64,943 5.53%  $ 1,700,570  $ 72,488 5.70%
             
Investment Securities            
Taxable Investment Securities  224,584  2,215 1.33  241,321  2,504 1.40
Tax-Exempt Investment Securities 62,509 486 1.04 63,457 865 1.82
             
Total Investment Securities  287,093  2,701 1.25  304,778  3,369 1.47
             
Funds Sold 390,122 723 0.25 241,195 452 0.25
             
Total Earning Assets  2,246,635 $ 68,367 4.06%  2,246,543 $ 76,309 4.54%
             
Cash and Due From Banks  48,112      48,539    
Allowance for Loan Losses  (31,077)      (32,914)    
Other Assets 345,361     345,725    
             
Total Assets $ 2,609,031     $ 2,607,893    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts $ 790,733 $ 503 0.08%  $ 765,209 $ 742 0.13%
Money Market Accounts  281,746  198 0.09  281,798  362 0.17
Savings Accounts  173,346  64 0.05  150,357  53 0.05
Time Deposits 273,838 914 0.45 341,286 2,091 0.82
Total Interest Bearing Deposits  1,519,664  1,679 0.15%  1,538,650  3,248 0.28%
             
Short-Term Borrowings  54,289  127 0.31%  75,976  299 0.53%
Subordinated Notes Payable  62,887  1,126 2.35  62,887  1,022 2.14
Other Long-Term Borrowings 41,123 1,204 3.91 48,795 1,453 3.98
             
Total Interest Bearing Liabilities  1,677,962 $ 4,136 0.33%  1,726,308 $ 6,022 0.47%
             
Noninterest Bearing Deposits  604,333      559,316    
Other Liabilities 73,795     59,635    
             
Total Liabilities 2,356,090     2,345,260    
             
SHAREOWNERS' EQUITY: 252,941     262,634    
             
Total Liabilities and Shareowners' Equity $ 2,609,031     $ 2,607,894    
             
Interest Rate Spread   $ 64,231 3.73%   $ 70,287 4.07%
             
Interest Income and Rate Earned(1)   68,367 4.06   76,309 4.54
Interest Expense and Rate Paid(2)   4,136 0.25   6,022 0.36
             
Net Interest Margin   $ 64,231 3.81%   $ 70,287 4.18%
             
(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: J. Kimbrough Davis
         Executive Vice President and Chief Financial Officer
         850.402.7820

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