TALLAHASSEE, Fla., Oct. 24, 2017 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $4.6 million, or $0.27 per diluted share for the third quarter of 2017 compared to net income of $3.6 million, or $0.21 per diluted share for the second quarter of 2017, and $2.9 million, or $0.17 per diluted share, for the third quarter of 2016. For the first nine months of 2017, net income totaled $10.9 million, or $0.64 per diluted share, compared to net income of $8.4 million, or $0.49 per diluted share for the same period in 2016.
HIGHLIGHTS
- Earnings per share grew 29% sequentially and 31% over prior year to date
- Significant improvement in operating leverage driven by margin expansion and expense reduction
- Net interest income up 3.7% sequentially and 6.2% over prior year to date
- Average loan growth of 1.9% sequentially and 5.2% over prior year to date
- Noninterest expense down 4.3% sequentially and 3.6% from prior year to date
- NPAs down 21% sequentially and 35% from year-end 2016
“We delivered another quarter of strong results through a persistent focus on growing our loan portfolio and managing expenses,” said William G. Smith, Jr., Chairman President and Chief Executive Officer of Capital City Bank Group. Given our asset-sensitive balance sheet, the higher rate environment has produced strong growth in our margin. We continue to manage our credit risk in line with our commitment to responsible growth in the markets we serve. Lower expenses reflect our sustained focus on streamlining our operations. The possibilities for the future are exciting as we execute on initiatives that provide shareowner value and enhance performance.”
Compared to the second quarter of 2017, the increase in earnings reflected higher net interest income of $0.8 million, a $1.2 million decrease in noninterest expense, and a $0.1 million reduction in the loan loss provision, partially offset by higher income taxes of $1.0 million and a $0.1 million decrease in noninterest income.
Compared to the third quarter of 2016, performance reflected higher net interest income of $1.9 million and a $1.3 million decrease in noninterest expense, partially offset by higher income taxes of $1.1 million and a $0.4 million increase in the loan loss provision.
The increase in earnings for the first nine months of 2017 versus the comparable period in 2016 was attributable to higher net interest income of $3.6 million and a $3.1 million reduction in noninterest expense, partially offset by lower noninterest income of $2.0 million, a $1.2 million increase in income taxes, and a $1.0 million increase in the loan loss provision.
Our return on average assets (“ROA”) was 0.65% and our return on average equity (“ROE”) was 6.33% for the third quarter of 2017. These metrics were 0.51% and 5.07% for the second quarter of 2017, respectively, and 0.42% and 4.12% for the third quarter of 2016, respectively. For the first nine months of 2017, our ROA was 0.52% and our ROE was 5.15% compared to 0.41% and 4.06%, respectively, for the same period in 2016.
Discussion of Operating Results
Tax equivalent net interest income for the third quarter of 2017 was $21.6 million compared to $20.8 million for the second quarter of 2017 and $19.6 million for the third quarter of 2016. The increase in tax equivalent net interest income compared to both prior periods reflected a favorable shift in the earning asset mix and improved yields, partially offset by higher rates paid on negotiated rate deposits. Also, as compared to the second quarter of 2017, there was one additional calendar day. For the first nine months of 2017, tax equivalent net interest income totaled $62.4 million compared to $58.6 million for the comparable period in 2016. The year over year increase was driven by growth in the loan and investment portfolios, coupled with higher short-term rates, partially offset by a higher rate paid on negotiated rate deposits and one less calendar day as 2016 was a Leap Year.
The overnight funds rate has increased four times since December 2015, positively affecting our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these rate increases have also resulted in higher rates paid on our negotiated rate deposit products, we continue to monitor and manage our overall cost of funds, which was 17 basis points in the third quarter of 2017, and 15 basis points for the full year. Despite highly competitive loan pricing across most markets, the yield of the overall loan portfolio has increased quarter-over-quarter.
Our net interest margin for the third quarter of 2017 was 3.48%, an increase of 15 basis points over the second quarter of 2017 and an increase of 25 basis points over the third quarter of 2016. For the first nine months of 2017, the net interest margin increased 12 basis points to 3.34% compared to the same period in 2016. The increase in the margin as compared to all respective periods reflects rising interest rates and a favorable shift in our earning asset mix, which has produced higher net interest income in each period.
The provision for loan losses for the third quarter of 2017 was $0.5 million compared to $0.6 million for the second quarter of 2017 and no provision for the third quarter of 2016. For the first nine months of 2017, the loan loss provision totaled $1.4 million compared to $0.4 million for the same period in 2016. The increase in the loan loss provision compared to the prior year was primarily attributable to growth in the loan portfolio. At September 30, 2017, the allowance for loan losses was $13.3 million, or 0.82% of outstanding loans (net of overdrafts) and provided coverage of 203% of nonperforming loans compared to 0.81% and 166%, respectively, at June 30, 2017 and 0.86% and 157%, respectively, at December 31, 2016.
Noninterest income for the third quarter of 2017 totaled $13.0 million, a decrease of $0.1 million, or 1.1%, from the second quarter of 2017, and unchanged from the third quarter of 2016. For the first nine months of 2017, noninterest income totaled $38.8 million, a $2.0 million, or 5.0%, decrease from the same period in 2016, primarily due to lower other income of $2.5 million and deposit fees of $0.8 million, partially offset by higher wealth management fees of $0.9 million and mortgage banking fees of $0.5 million. The decrease in other income was attributable to a $2.5 million gain from the partial retirement of our trust preferred securities (“TRUPs”) in the second quarter of 2016. Growth in assets under management as well as improved sales efforts have resulted in strong growth in wealth management fees. Third quarter 2017 wealth management fees reflected a large account booked during the quarter that contributed $0.2 million in gross fees. Continued strong home sales in our markets and a growing market share of residential loan production have driven the improvement in mortgage banking fees.
Noninterest expense for the third quarter of 2017 totaled $26.7 million, a decrease of $1.2 million, or 4.3%, from the second quarter of 2017, and a $1.3 million, or 4.7%, decline from the third quarter of 2016. Lower other real estate owned (“OREO”) expense and other expense drove the reduction from both prior periods. The reduction in OREO expense reflected a higher level of gains recognized on the sale of OREO properties. The decrease in other expense was attributable to lower advertising expense, legal expense, professional fees, and processing fees. For the first nine months of 2017, noninterest expense totaled $82.6 million, a decrease of $3.1 million, or 3.6%, from the same period in 2016 primarily attributable to lower OREO expense of $2.5 million, other expense of $1.1 million, and occupancy expense of $0.3 million that was partially offset by higher compensation expense of $0.8 million. All OREO expense categories (gain/loss on sale, carrying costs, and valuation adjustments) continue to improve as we liquidate our remaining properties. Continued reduction in legal expense and FDIC insurance expense drove the decline in other expense. The decrease in occupancy expense reflected our continuing efforts to optimize our banking office structure. The increase in compensation expense was primarily due to higher stock compensation expense related to higher pay-out values reflective of improving financial performance. Higher pension plan expense contributed to a lesser extent and was attributable to utilization of a lower discount rate for plan liabilities.
We realized income tax expense of $2.5 million (35% effective rate) for the third quarter of 2017 compared to $1.6 million (30% effective rate) for the second quarter of 2017 and $1.4 million (33% effective rate) for the third quarter of 2016. The lower effective tax rate for the second quarter of 2017 reflected income tax benefits realized in connection with stock based compensation awards. For the first nine months of 2017, income tax expense totaled $5.5 million (34% effective rate) compared to $4.3 million (34% effective rate) for the comparable period in 2016.
Discussion of Financial Condition
Average earning assets were $2.466 billion for the third quarter of 2017, a decrease of $35.7 million, or 1.4%, from the second quarter of 2017, and an increase of $42.9 million, or 1.8%, over the fourth quarter of 2016. The decline in earning assets compared to the second quarter 2017 was attributable to decreases in our short-term investments, partially offset by growth in our loan portfolio. The increase in earning assets compared to the fourth quarter 2016 was primarily due to growth in the loan portfolio, partially offset by a decline in total investment securities. The decline in the level of our short-term investments (which consists primarily of overnight funds) during the third quarter was mostly attributable to the seasonality of our public fund deposits.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $140.7 million during the third quarter of 2017 compared to an average net overnight funds sold position of $200.8 million in the second quarter of 2017 and $145.5 million in the fourth quarter of 2016. The decrease in net overnight funds compared to the second quarter of 2017 reflected growth in our loan portfolio and declines in public fund balances. The decrease in net overnight funds compared to the fourth quarter of 2016 primarily reflected higher levels of loan growth, partially offset by increases in noninterest bearing deposits and savings accounts.
Average loans increased $29.9 million, or 1.9% compared to the second quarter of 2017, and have grown $65.3 million, or 4.2% compared to the fourth quarter of 2016. Increases over both prior periods reflected growth in all loans types except commercial loans and home equity loans. We have acquired three loan pools during 2017, including $18.3 million of adjustable rate residential loans in the first quarter, $16.4 million of fixed and adjustable commercial real estate loans in the second quarter, and $8.5 million of adjustable residential real estate loans in the third quarter. The loans were individually reviewed and evaluated in accordance with our credit underwriting standards.
We continue to make minor modifications on some of our lending programs to try to mitigate the impact that consumer and business deleveraging has had 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 $12.5 million at September 30, 2017, a decrease of $3.4 million, or 21%, from June 30, 2017 and $6.6 million, or 35%, from December 31, 2016. Nonaccrual loans totaled $6.6 million at September 30, 2017, a $1.4 million decrease from June 30, 2017 and a $2.0 million decrease from December 31, 2016. The balance of OREO totaled $6.0 million at September 30, 2017, a decrease of $2.0 million from June 30, 2017 and $4.6 million from December 31, 2016. Nonperforming assets represented 0.45% of total assets at September 30, 2017 compared to 0.57% at June 30, 2017 and 0.67% at December 31, 2016.
Average total deposits were $2.329 billion for the third quarter of 2017, a decrease of $44.3 million, or 1.9%, from the second quarter of 2017, and an increase of $22.2 million, or 1.0% over the fourth quarter of 2016. The decline in average deposits compared to the second quarter of 2017 reflected lower public NOW account and certificates of deposit balances, partially offset by increases in all other deposit types. The increase over the fourth quarter 2016 reflects higher levels of noninterest bearing deposits, savings accounts, and money market accounts, partially offset by declines in public NOW accounts and certificates of deposit. The seasonal inflows of public funds peaked in the first quarter of 2017 for this cycle, and are expected to decline into the fourth quarter of 2017.
Deposit levels remain strong, as the seasonal decline in public NOW accounts was partially offset by increases in all other non-maturity deposits during the quarter. Average core deposits continue to experience growth as rates have increased from historical lows. We continue to monitor our overall liquidity position and deposit rates as we believe that a prudent pricing discipline remains the key to managing our mix of deposits.
Compared to the second quarter of 2017, average borrowings increased $0.3 million due to an increase in the balance of repurchase agreements, partially offset by a decline in long-term borrowings. Compared to the fourth quarter of 2016, average borrowings decreased by $6.9 million primarily driven by FHLB pay-downs of matched funded advances.
Shareowners’ equity was $285.2 million at September 30, 2017, compared to $281.5 million at June 30, 2017 and $275.2 million at December 31, 2016. Our leverage ratio was 10.48%, 10.20%, and 10.23%, respectively, for these periods. Further, at September 30, 2017, our risk-adjusted capital ratio was 16.96% compared to 16.32% and 16.28% at June 30, 2017 and December 31, 2016, respectively. Our common equity tier 1 ratio was 13.26% at September 30, 2017, compared to 12.72% at June 30, 2017 and 12.61% at December 31, 2016. All of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.
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 $2.8 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 60 banking offices and 73 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; fluctuations in inflation, interest rates, or monetary policies; 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; 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; 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; 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, 2016, 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.
USE OF NON-GAAP FINANCIAL MEASURES
We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. The GAAP to non-GAAP reconciliation is provided below.
| (Dollars in Thousands) | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | |||||||||||||||||
| Shareowners' Equity (GAAP) | $ | 285,201 | $ | 281,513 | $ | 278,059 | $ | 275,168 | $ | 276,624 | ||||||||||||
| Less: Goodwill (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||||
| Tangible Shareowners' Equity (non-GAAP) | A | 200,390 | 196,702 | 193,248 | 190,357 | 191,813 | ||||||||||||||||
| Total Assets (GAAP) | 2,790,842 | 2,814,843 | 2,895,531 | 2,845,197 | 2,753,154 | |||||||||||||||||
| Less: Goodwill (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||||
| Tangible Assets (non-GAAP) | B | $ | 2,706,031 | $ | 2,730,032 | $ | 2,810,720 | $ | 2,760,386 | $ | 2,668,343 | |||||||||||
| Tangible Common Equity Ratio (non-GAAP) | A/B | 7.41 | % | 7.21 | % | 6.88 | % | 6.90 | % | 7.19 | % | |||||||||||
| Actual Diluted Shares Outstanding (GAAP) | C | 17,045 | 17,025 | 16,979 | 16,949 | 16,874 | ||||||||||||||||
| Tangible Book Value per Diluted Share (non-GAAP) | A/C | $ | 11.76 | $ | 11.55 | $ | 11.38 | $ | 11.23 | $ | 11.37 | |||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||
| EARNINGS HIGHLIGHTS | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| (Dollars in thousands, except per share data) | Sep 30, 2017 | Jun 30, 2017 | Sep 30, 2016 | Sep 30, 2017 | Sep 30, 2016 | |||||||||||||
| EARNINGS | ||||||||||||||||||
| Net Income | $ | 4,555 | $ | 3,561 | $ | 2,873 | $ | 10,860 | $ | 8,450 | ||||||||
| Net Income Per Common Share | $ | 0.27 | $ | 0.21 | $ | 0.17 | $ | 0.64 | $ | 0.49 | ||||||||
| PERFORMANCE | ||||||||||||||||||
| Return on Average Assets | 0.65 | % | 0.51 | % | 0.42 | % | 0.52 | % | 0.41 | % | ||||||||
| Return on Average Equity | 6.33 | % | 5.07 | % | 4.12 | % | 5.15 | % | 4.06 | % | ||||||||
| Net Interest Margin | 3.48 | % | 3.33 | % | 3.23 | % | 3.34 | % | 3.22 | % | ||||||||
| Noninterest Income as % of Operating Revenue | 37.94 | % | 39.05 | % | 40.24 | % | 38.72 | % | 41.40 | % | ||||||||
| Efficiency Ratio | 77.21 | % | 82.28 | % | 85.92 | % | 81.53 | % | 86.05 | % | ||||||||
| CAPITAL ADEQUACY | ||||||||||||||||||
| Tier 1 Capital Ratio | 16.19 | % | 15.58 | % | 15.48 | % | 16.19 | % | 15.48 | % | ||||||||
| Total Capital Ratio | 16.96 | % | 16.32 | % | 16.28 | % | 16.96 | % | 16.28 | % | ||||||||
| Tangible Common Equity Ratio | 7.41 | % | 7.21 | % | 7.19 | % | 7.41 | % | 7.19 | % | ||||||||
| Leverage Ratio | 10.48 | % | 10.20 | % | 10.12 | % | 10.48 | % | 10.12 | % | ||||||||
| Common Equity Tier 1 Ratio | 13.26 | % | 12.72 | % | 12.55 | % | 13.26 | % | 12.55 | % | ||||||||
| Equity to Assets | 10.22 | % | 10.00 | % | 10.05 | % | 10.22 | % | 10.05 | % | ||||||||
| ASSET QUALITY | ||||||||||||||||||
| Allowance as % of Non-Performing Loans | 203.39 | % | 166.23 | % | 159.56 | % | 203.39 | % | 159.56 | % | ||||||||
| Allowance as a % of Loans | 0.82 | % | 0.81 | % | 0.88 | % | 0.82 | % | 0.88 | % | ||||||||
| Net Charge-Offs as % of Average Loans | 0.10 | % | 0.17 | % | (0.02 | )% | 0.12 | % | 0.05 | % | ||||||||
| Nonperforming Assets as % of Loans and ORE | 0.76 | % | 0.97 | % | 1.35 | % | 0.76 | % | 1.35 | % | ||||||||
| Nonperforming Assets as % of Total Assets | 0.45 | % | 0.57 | % | 0.78 | % | 0.45 | % | 0.78 | % | ||||||||
| STOCK PERFORMANCE | ||||||||||||||||||
| High | $ | 24.58 | $ | 22.39 | $ | 15.35 | $ | 24.58 | $ | 15.96 | ||||||||
| Low | 19.60 | 17.68 | 13.32 | 17.68 | 12.83 | |||||||||||||
| Close | $ | 24.01 | $ | 20.42 | $ | 14.77 | $ | 24.01 | $ | 14.77 | ||||||||
| Average Daily Trading Volume | 29,551 | 23,349 | 19,696 | 25,362 | 20,840 | |||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | ||||||||||||||||
| Unaudited | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| (Dollars in thousands) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | |||||||||||
| ASSETS | ||||||||||||||||
| Cash and Due From Banks | $ | 50,420 | $ | 72,801 | $ | 47,650 | $ | 48,268 | $ | 79,608 | ||||||
| Funds Sold and Interest Bearing Deposits | 140,694 | 162,377 | 290,897 | 247,779 | 144,576 | |||||||||||
| Total Cash and Cash Equivalents | 191,114 | 235,178 | 338,547 | 296,047 | 224,184 | |||||||||||
| Investment Securities Available for Sale | 510,846 | 529,686 | 541,102 | 522,734 | 500,139 | |||||||||||
| Investment Securities Held to Maturity | 184,262 | 157,074 | 158,515 | 177,365 | 189,928 | |||||||||||
| Total Investment Securities | 695,108 | 686,760 | 699,617 | 700,099 | 690,067 | |||||||||||
| Loans Held for Sale | 7,800 | 8,213 | 7,498 | 10,886 | 10,510 | |||||||||||
| Loans, Net of Unearned Interest | ||||||||||||||||
| Commercial, Financial, & Agricultural | 215,963 | 213,544 | 214,595 | 216,404 | 223,278 | |||||||||||
| Real Estate - Construction | 67,813 | 67,331 | 59,938 | 58,443 | 54,107 | |||||||||||
| Real Estate - Commercial | 527,331 | 519,140 | 503,868 | 503,978 | 497,775 | |||||||||||
| Real Estate - Residential | 306,272 | 302,072 | 295,406 | 272,895 | 276,193 | |||||||||||
| Real Estate - Home Equity | 228,499 | 230,995 | 231,300 | 236,512 | 235,433 | |||||||||||
| Consumer | 273,670 | 269,539 | 268,921 | 262,735 | 258,173 | |||||||||||
| Other Loans | 9,311 | 17,057 | 9,586 | 8,614 | 10,875 | |||||||||||
| Overdrafts | 1,479 | 1,518 | 1,345 | 1,708 | 1,678 | |||||||||||
| Total Loans, Net of Unearned Interest | 1,630,338 | 1,621,196 | 1,584,959 | 1,561,289 | 1,557,512 | |||||||||||
| Allowance for Loan Losses | (13,339 | ) | (13,242 | ) | (13,335 | ) | (13,431 | ) | (13,744 | ) | ||||||
| Loans, Net | 1,616,999 | 1,607,954 | 1,571,624 | 1,547,858 | 1,543,768 | |||||||||||
| Premises and Equipment, Net | 92,345 | 92,495 | 93,755 | 95,476 | 96,499 | |||||||||||
| Goodwill | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||
| Other Real Estate Owned | 5,987 | 7,968 | 9,501 | 10,638 | 12,738 | |||||||||||
| Other Assets | 96,678 | 91,464 | 90,178 | 99,382 | 90,577 | |||||||||||
| Total Other Assets | 279,821 | 276,738 | 278,245 | 290,307 | 284,625 | |||||||||||
| Total Assets | $ | 2,790,842 | $ | 2,814,843 | $ | 2,895,531 | $ | 2,845,197 | $ | 2,753,154 | ||||||
| LIABILITIES | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Noninterest Bearing Deposits | $ | 870,644 | $ | 842,314 | $ | 836,011 | $ | 791,182 | $ | 801,671 | ||||||
| NOW Accounts | 749,816 | 787,090 | 882,605 | 904,014 | 793,363 | |||||||||||
| Money Market Accounts | 249,964 | 265,032 | 263,080 | 252,800 | 257,004 | |||||||||||
| Regular Savings Accounts | 329,742 | 327,560 | 321,160 | 304,680 | 298,682 | |||||||||||
| Certificates of Deposit | 147,451 | 149,937 | 156,449 | 159,610 | 164,387 | |||||||||||
| Total Deposits | 2,347,617 | 2,371,933 | 2,459,305 | 2,412,286 | 2,315,107 | |||||||||||
| Short-Term Borrowings | 6,777 | 6,105 | 7,603 | 12,749 | 12,113 | |||||||||||
| Subordinated Notes Payable | 52,887 | 52,887 | 52,887 | 52,887 | 52,887 | |||||||||||
| Other Long-Term Borrowings | 15,047 | 15,631 | 16,460 | 14,881 | 21,368 | |||||||||||
| Other Liabilities | 83,313 | 86,774 | 81,217 | 77,226 | 75,055 | |||||||||||
| Total Liabilities | 2,505,641 | 2,533,330 | 2,617,472 | 2,570,029 | 2,476,530 | |||||||||||
| SHAREOWNERS' EQUITY | ||||||||||||||||
| Common Stock | 170 | 170 | 170 | 168 | 168 | |||||||||||
| Additional Paid-In Capital | 35,892 | 35,522 | 34,859 | 34,188 | 33,152 | |||||||||||
| Retained Earnings | 275,013 | 271,646 | 268,934 | 267,037 | 264,581 | |||||||||||
| Accumulated Other Comprehensive Loss, Net of Tax | (25,874 | ) | (25,825 | ) | (25,904 | ) | (26,225 | ) | (21,277 | ) | ||||||
| Total Shareowners' Equity | 285,201 | 281,513 | 278,059 | 275,168 | 276,624 | |||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,790,842 | $ | 2,814,843 | $ | 2,895,531 | $ | 2,845,197 | $ | 2,753,154 | ||||||
| OTHER BALANCE SHEET DATA | ||||||||||||||||
| Earning Assets | $ | 2,473,940 | $ | 2,478,546 | $ | 2,582,971 | $ | 2,520,053 | $ | 2,402,664 | ||||||
| Interest Bearing Liabilities | 1,551,684 | 1,604,242 | 1,700,244 | 1,701,621 | 1,599,804 | |||||||||||
| Book Value Per Diluted Share | $ | 16.73 | $ | 16.54 | $ | 16.38 | $ | 16.23 | $ | 16.39 | ||||||
| Tangible Book Value Per Diluted Share | 11.76 | 11.55 | 11.38 | 11.23 | 11.37 | |||||||||||
| Actual Basic Shares Outstanding | 16,966 | 16,964 | 16,954 | 16,845 | 16,807 | |||||||||||
| Actual Diluted Shares Outstanding | 17,045 | 17,025 | 16,979 | 16,949 | 16,874 | |||||||||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||||
| Unaudited | |||||||||||||||||
| Nine Months Ended | |||||||||||||||||
| 2017 | 2016 | September 30, | |||||||||||||||
| (Dollars in thousands, except per share data) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2017 | 2016 | ||||||||||
| INTEREST INCOME | |||||||||||||||||
| Interest and Fees on Loans | $ | 19,479 | $ | 18,720 | $ | 18,005 | $ | 18,671 | $ | 18,046 | $ | 56,204 | $ | 54,196 | |||
| Investment Securities | 2,416 | 2,169 | 2,042 | 1,949 | 1,846 | 6,627 | 5,234 | ||||||||||
| Funds Sold | 446 | 533 | 493 | 212 | 212 | 1,472 | 892 | ||||||||||
| Total Interest Income | 22,341 | 21,422 | 20,540 | 20,832 | 20,104 | 64,303 | 60,322 | ||||||||||
| INTEREST EXPENSE | |||||||||||||||||
| Deposits | 530 | 388 | 281 | 224 | 223 | 1,199 | 655 | ||||||||||
| Short-Term Borrowings | 15 | 17 | 45 | 57 | 43 | 77 | 91 | ||||||||||
| Subordinated Notes Payable | 420 | 404 | 379 | 363 | 341 | 1,203 | 1,071 | ||||||||||
| Other Long-Term Borrowings | 115 | 117 | 99 | 129 | 177 | 331 | 599 | ||||||||||
| Total Interest Expense | 1,080 | 926 | 804 | 773 | 784 | 2,810 | 2,416 | ||||||||||
| Net Interest Income | 21,261 | 20,496 | 19,736 | 20,059 | 19,320 | 61,493 | 57,906 | ||||||||||
| Provision for Loan Losses | 490 | 589 | 310 | 464 | - | 1,389 | 355 | ||||||||||
| Net Interest Income after Provision for Loan Losses | 20,771 | 19,907 | 19,426 | 19,595 | 19,320 | 60,104 | 57,551 | ||||||||||
| NONINTEREST INCOME | |||||||||||||||||
| Deposit Fees | 5,153 | 5,052 | 5,090 | 5,238 | 5,373 | 15,295 | 16,094 | ||||||||||
| Bank Card Fees | 2,688 | 2,870 | 2,803 | 2,754 | 2,759 | 8,361 | 8,467 | ||||||||||
| Wealth Management Fees | 2,197 | 2,073 | 1,842 | 1,773 | 1,774 | 6,112 | 5,256 | ||||||||||
| Mortgage Banking Fees | 1,480 | 1,556 | 1,308 | 1,392 | 1,503 | 4,344 | 3,800 | ||||||||||
| Other | 1,478 | 1,584 | 1,675 | 1,621 | 1,602 | 4,737 | 7,286 | ||||||||||
| Total Noninterest Income | 12,996 | 13,135 | 12,718 | 12,778 | 13,011 | 38,849 | 40,903 | ||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||
| Compensation | 16,349 | 16,292 | 16,496 | 16,699 | 15,993 | 49,137 | 48,285 | ||||||||||
| Occupancy, Net | 4,501 | 4,555 | 4,381 | 4,519 | 4,734 | 13,437 | 13,777 | ||||||||||
| Other Real Estate, Net | (118 | ) | 315 | 583 | 343 | 821 | 780 | 3,306 | |||||||||
| Other | 5,975 | 6,759 | 6,462 | 5,999 | 6,474 | 19,196 | 20,286 | ||||||||||
| Total Noninterest Expense | 26,707 | 27,921 | 27,922 | 27,560 | 28,022 | 82,550 | 85,654 | ||||||||||
| OPERATING PROFIT | 7,060 | 5,121 | 4,222 | 4,813 | 4,309 | 16,403 | 12,800 | ||||||||||
| Income Tax Expense | 2,505 | 1,560 | 1,478 | 1,517 | 1,436 | 5,543 | 4,350 | ||||||||||
| NET INCOME | $ | 4,555 | $ | 3,561 | $ | 2,744 | $ | 3,296 | $ | 2,873 | $ | 10,860 | $ | 8,450 | |||
| PER SHARE DATA | |||||||||||||||||
| Basic Net Income | $ | 0.27 | $ | 0.21 | $ | 0.16 | $ | 0.20 | $ | 0.18 | $ | 0.64 | $ | 0.50 | |||
| Diluted Net Income | 0.27 | 0.21 | 0.16 | 0.20 | 0.17 | 0.64 | 0.49 | ||||||||||
| Cash Dividend | $ | 0.07 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.04 | $ | 0.17 | $ | 0.12 | |||
| AVERAGE SHARES | |||||||||||||||||
| Basic | 16,965 | 16,955 | 16,919 | 16,809 | 16,804 | 16,946 | 17,049 | ||||||||||
| Diluted | 17,044 | 17,016 | 16,944 | 16,913 | 16,871 | 17,009 | 17,100 | ||||||||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||
| AND RISK ELEMENT ASSETS | |||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||
| 2017 | 2016 | September 30, | |||||||||||||||||||||
| (Dollars in thousands, except per share data) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2017 | 2016 | ||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||
| Balance at Beginning of Period | $ | 13,242 | $ | 13,335 | $ | 13,431 | $ | 13,744 | $ | 13,677 | $ | 13,431 | $ | 13,953 | |||||||||
| Provision for Loan Losses | 490 | 589 | 310 | 464 | 0 | 1,389 | 355 | ||||||||||||||||
| Net Charge-Offs | 393 | 682 | 406 | 777 | (67 | ) | 1,481 | 564 | |||||||||||||||
| Balance at End of Period | $ | 13,339 | $ | 13,242 | $ | 13,335 | $ | 13,431 | $ | 13,744 | $ | 13,339 | $ | 13,744 | |||||||||
| As a % of Loans | 0.82 | % | 0.81 | % | 0.84 | % | 0.86 | % | 0.88 | % | 0.82 | % | 0.88 | % | |||||||||
| As a % of Nonperforming Loans | 203.39 | % | 166.23 | % | 160.70 | % | 157.40 | % | 159.56 | % | 203.39 | % | 159.56 | % | |||||||||
| CHARGE-OFFS | |||||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 276 | $ | 324 | $ | 93 | $ | 377 | $ | 143 | $ | 693 | $ | 484 | |||||||||
| Real Estate - Construction | - | - | - | - | - | - | - | ||||||||||||||||
| Real Estate - Commercial | 94 | 478 | 71 | 70 | 5.00 | 643 | 279 | ||||||||||||||||
| Real Estate - Residential | 125 | 44 | 116 | 120 | 96 | 285 | 779 | ||||||||||||||||
| Real Estate - Home Equity | 50 | - | 92 | 38 | 51 | 142 | 412 | ||||||||||||||||
| Consumer | 455 | 537 | 624 | 771 | 479 | 1,616 | 1,356 | ||||||||||||||||
| Total Charge-Offs | $ | 1,000 | $ | 1,383 | $ | 996 | $ | 1,376 | $ | 774 | $ | 3,379 | $ | 3,310 | |||||||||
| RECOVERIES | |||||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 79 | $ | 40 | $ | 81 | $ | 50 | $ | 199 | $ | 200 | $ | 287 | |||||||||
| Real Estate - Construction | 50 | - | - | - | - | 50 | - | ||||||||||||||||
| Real Estate - Commercial | 69 | 58 | 23 | 45 | 45 | 150 | 363 | ||||||||||||||||
| Real Estate - Residential | 60 | 202 | 213 | 277 | 139 | 475 | 954 | ||||||||||||||||
| Real Estate - Home Equity | 84 | 39 | 29 | 32 | 237 | 152 | 377 | ||||||||||||||||
| Consumer | 265 | 362 | 244 | 195 | 221 | 871 | 765 | ||||||||||||||||
| Total Recoveries | $ | 607 | $ | 701 | $ | 590 | $ | 599 | $ | 841 | $ | 1,898 | $ | 2,746 | |||||||||
| NET CHARGE-OFFS | $ | 393 | $ | 682 | $ | 406 | $ | 777 | $ | (67 | ) | $ | 1,481 | $ | 564 | ||||||||
| Net Charge-Offs as a % of Average Loans (1) | 0.10 | % | 0.17 | % | 0.10 | % | 0.20 | % | (0.02 | )% | 0.12 | % | 0.05 | % | |||||||||
| RISK ELEMENT ASSETS | |||||||||||||||||||||||
| Nonaccruing Loans | $ | 6,558 | $ | 7,966 | $ | 8,298 | $ | 8,533 | $ | 8,614 | |||||||||||||
| Other Real Estate Owned | 5,987 | 7,968 | 9,501 | 10,638 | 12,738 | ||||||||||||||||||
| Total Nonperforming Assets | $ | 12,545 | $ | 15,934 | $ | 17,799 | $ | 19,171 | $ | 21,352 | |||||||||||||
| Past Due Loans 30-89 Days | $ | 5,687 | $ | 3,789 | $ | 3,263 | $ | 6,438 | $ | 5,667 | |||||||||||||
| Past Due Loans 90 Days or More | - | - | - | - | - | ||||||||||||||||||
| Classified Loans | 36,545 | 41,322 | 40,978 | 41,507 | 43,228 | ||||||||||||||||||
| Performing Troubled Debt Restructuring's | $ | 33,427 | $ | 35,436 | $ | 36,555 | $ | 38,233 | $ | 35,046 | |||||||||||||
| Nonperforming Loans as a % of Loans | 0.40 | % | 0.49 | % | 0.52 | % | 0.54 | % | 0.55 | % | |||||||||||||
| Nonperforming Assets as a % of Loans and | |||||||||||||||||||||||
| Other Real Estate | 0.76 | % | 0.97 | % | 1.11 | % | 1.21 | % | 1.35 | % | |||||||||||||
| Nonperforming Assets as a % of Total Assets | 0.45 | % | 0.57 | % | 0.61 | % | 0.67 | % | 0.78 | % | |||||||||||||
| (1) Annualized | |||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCE AND INTEREST RATES(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Third Quarter 2017 | Second Quarter 2017 | First Quarter 2017 | Fourth Quarter 2016 | Third Quarter 2016 | Sep 2017 YTD | Sep 2016 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 | $ | 1,638,578 | 19,672 | 4.76 | % | $ | 1,608,629 | 18,880 | 4.71 | % | $ | 1,585,561 | 18,137 | 4.64 | % | $ | 1,573,264 | 18,827 | 4.76 | % | $ | 1,555,889 | 18,216 | 4.66 | % | $ | 1,611,117 | 56,689 | 4.70 | % | $ | 1,531,813 | 54,590 | 4.76 | % | ||||||||||||||||||||||||||||||
| Investment Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable Investment Securities | 588,518 | 2,150 | 1.45 | 591,825 | 1,898 | 1.28 | 600,528 | 1,784 | 1.20 | 614,560 | 1,726 | 1.12 | 606,606 | 1,632 | 1.07 | 593,579 | 5,832 | 1.31 | 576,790 | 4,591 | 1.03 | ||||||||||||||||||||||||||||||||||||||||||||
| Tax-Exempt Investment Securities | 98,463 | 407 | 1.65 | 100,742 | 414 | 1.64 | 97,965 | 396 | 1.62 | 90,046 | 343 | 1.52 | 89,241 | 327 | 1.47 | 99,059 | 1,217 | 1.64 | 91,399 | 984 | 1.44 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Investment Securities | 686,981 | 2,557 | 1.48 | 692,567 | 2,312 | 1.34 | 698,493 | 2,180 | 1.26 | 704,606 | 2,069 | 1.17 | 695,847 | 1,959 | 1.12 | 692,638 | 7,049 | 1.36 | 668,189 | 5,575 | 1.11 | ||||||||||||||||||||||||||||||||||||||||||||
| Funds Sold | 140,728 | 446 | 1.26 | 200,834 | 533 | 1.06 | 245,153 | 493 | 0.81 | 145,518 | 212 | 0.58 | 166,207 | 212 | 0.51 | 195,189 | 1,472 | 1.01 | 235,414 | 892 | 0.51 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Earning Assets | 2,466,287 | $ | 22,675 | 3.65 | % | 2,502,030 | $ | 21,725 | 3.48 | % | 2,529,207 | $ | 20,810 | 3.33 | % | 2,423,388 | $ | 21,108 | 3.47 | % | 2,417,943 | $ | 20,387 | 3.35 | % | 2,498,944 | $ | 65,210 | 3.49 | % | 2,435,416 | $ | 61,057 | 3.35 | % | ||||||||||||||||||||||||||||||
| Cash and Due From Banks | 51,880 | 52,312 | 48,906 | 50,207 | 45,139 | 51,043 | 46,521 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for Loan Losses | (13,542 | ) | (13,662 | ) | (13,436 | ) | (14,017 | ) | (14,052 | ) | (13,547 | ) | (14,102 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Assets | 275,335 | 276,799 | 280,463 | 283,885 | 285,435 | 277,514 | 287,444 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,779,960 | $ | 2,817,479 | $ | 2,845,140 | $ | 2,743,463 | $ | 2,734,465 | $ | 2,813,954 | $ | 2,755,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing Deposits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOW Accounts | $ | 755,620 | $ | 339 | 0.18 | % | $ | 806,621 | $ | 222 | 0.11 | % | $ | 880,707 | $ | 134 | 0.06 | % | $ | 782,518 | $ | 78 | 0.04 | % | $ | 774,899 | $ | 78 | 0.04 | % | $ | 813,858 | $ | 694 | 0.11 | % | $ | 778,840 | $ | 214 | 0.04 | % | |||||||||||||||||||||||
| Money Market Accounts | 262,486 | 80 | 0.12 | 261,726 | 57 | 0.09 | 259,106 | 35 | 0.06 | 257,398 | 31 | 0.05 | 258,183 | 30 | 0.05 | 261,118 | 172 | 0.09 | 255,885 | 89 | 0.05 | ||||||||||||||||||||||||||||||||||||||||||||
| Savings Accounts | 327,675 | 40 | 0.05 | 322,833 | 39 | 0.05 | 311,212 | 38 | 0.05 | 303,006 | 37 | 0.05 | 297,172 | 37 | 0.05 | 320,634 | 118 | 0.05 | 288,740 | 107 | 0.05 | ||||||||||||||||||||||||||||||||||||||||||||
| Time Deposits | 148,652 | 71 | 0.19 | 152,811 | 70 | 0.18 | 158,289 | 74 | 0.19 | 161,859 | 78 | 0.19 | 165,324 | 78 | 0.19 | 153,215 | 215 | 0.19 | 171,052 | 245 | 0.19 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Deposits | 1,494,433 | 530 | 0.14 | % | 1,543,991 | 388 | 0.10 | % | 1,609,314 | 281 | 0.07 | % | 1,504,781 | 224 | 0.06 | % | 1,495,578 | 223 | 0.06 | % | 1,548,825 | 1,199 | 0.11 | % | 1,494,517 | 655 | 0.06 | % | |||||||||||||||||||||||||||||||||||||
| Short-Term Borrowings | 9,920 | 15 | 0.59 | % | 8,957 | 17 | 0.75 | % | 12,810 | 45 | 1.43 | % | 14,768 | 57 | 1.54 | % | 12,162 | 43 | 1.39 | % | 10,552 | 77 | 0.97 | % | 44,147 | 91 | 0.28 | % | |||||||||||||||||||||||||||||||||||||
| Subordinated Notes Payable | 52,887 | 420 | 3.11 | 52,887 | 404 | 3.02 | 52,887 | 379 | 2.86 | 52,887 | 363 | 2.68 | 52,887 | 341 | 2.52 | 52,887 | 1,203 | 3.00 | 56,683 | 1,071 | 2.48 | ||||||||||||||||||||||||||||||||||||||||||||
| Other Long-Term Borrowings | 15,427 | 115 | 2.95 | 16,065 | 117 | 2.93 | 14,468 | 99 | 2.77 | 17,473 | 129 | 2.93 | 23,629 | 177 | 2.98 | 15,324 | 331 | 2.89 | 26,031 | 599 | 3.07 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Interest Bearing Liabilities | 1,572,667 | $ | 1,080 | 0.28 | % | 1,621,900 | $ | 926 | 0.23 | % | 1,689,479 | $ | 804 | 0.20 | % | 1,589,909 | $ | 773 | 0.20 | % | 1,584,256 | $ | 784 | 0.20 | % | 1,627,588 | $ | 2,810 | 0.24 | % | 1,621,378 | $ | 2,416 | 0.20 | % | ||||||||||||||||||||||||||||||
| Noninterest Bearing Deposits | 834,729 | 829,432 | 797,964 | 802,136 | 793,163 | 820,843 | 780,167 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities | 87,268 | 84,486 | 79,208 | 72,475 | 79,639 | 83,683 | 75,603 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 2,494,664 | 2,535,818 | 2,566,651 | 2,464,520 | 2,457,058 | 2,532,114 | 2,477,148 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREOWNERS' EQUITY: | 285,296 | 281,661 | 278,489 | 278,943 | 277,407 | 281,840 | 278,131 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,779,960 | $ | 2,817,479 | $ | 2,845,140 | $ | 2,743,463 | $ | 2,734,465 | $ | 2,813,954 | $ | 2,755,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Spread | $ | 21,595 | 3.37 | % | $ | 20,799 | 3.25 | % | $ | 20,006 | 3.14 | % | $ | 20,335 | 3.27 | % | $ | 19,603 | 3.15 | % | $ | 62,400 | 3.25 | % | $ | 58,641 | 3.15 | % | |||||||||||||||||||||||||||||||||||||
| Interest Income and Rate Earned(1) | 22,675 | 3.65 | 21,725 | 3.48 | 20,810 | 3.33 | 21,108 | 3.47 | 20,387 | 3.35 | 65,210 | 3.49 | 61,057 | 3.35 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Expense and Rate Paid(2) | 1,080 | 0.17 | 926 | 0.15 | 804 | 0.13 | 773 | 0.13 | 784 | 0.13 | 2,810 | 0.15 | 2,416 | 0.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Margin | $ | 21,595 | 3.48 | % | $ | 20,799 | 3.33 | % | $ | 20,006 | 3.21 | % | $ | 20,335 | 3.34 | % | $ | 19,603 | 3.23 | % | $ | 62,400 | 3.34 | % | $ | 58,641 | 3.22 | % | |||||||||||||||||||||||||||||||||||||
| (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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For Information Contact:
J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820