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Capital City Bank Group, Inc. Reports First Quarter 2012 Results

By: Globe Newswire
By: Globe Newswire

TALLAHASSEE, Fla., May 1, 2012 (GLOBE NEWSWIRE) --

Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported a net loss of $1.2 million, or $0.07 per diluted share for the first quarter of 2012 compared to a net loss of $0.5 million, or $0.03 per diluted share in the fourth quarter of 2011 and net income of $1.3 million, or $0.08 per diluted share for the first quarter of 2011.

Compared to the fourth quarter of 2011, performance reflects lower
operating revenues of $1.1 million, an increase in noninterest expense
of $1.5 million, and higher income taxes of $0.9 million. These
unfavorable variances were partially offset by a $2.8 million reduction
in the loan loss provision reflecting improved metrics related to
problem loan inflow and lower net charge-offs.

Compared to the first quarter of 2011, the reduction in earnings was
due to lower operating revenues of $4.1 million and a higher loan loss
provision of $0.7 million, partially offset by lower noninterest
expense of $0.7 million and income taxes of $1.6 million. Earnings for
the first quarter of 2011 reflect the sale of our Visa stock, which
resulted in a net pre-tax gain of $2.6 million.

"Credit quality continues to be our number one priority," said William
G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group.
"We are encouraged by a significant reduction in gross additions to our
nonaccruing loan portfolio, which were at a level consistent with the
trends we experienced during most of 2011. Additionally, our past due
loans declined 53% to $9.2 million, which represents the lowest level
since 2003. Sales of other real estate (OREO) totaled $7.9 million
which is the second best quarter since this economic downturn began. As
we enter the second quarter, we have a strong pipeline of OREO
contracts pending. From a lending perspective, real estate markets
remain weak, which when combined with the historically low interest
rates and high levels of liquidity continues to put pressure on our
margin. An uncertain economy and mounting regulation have produced the
most difficult operating environment of my career, but our managers are
working diligently to capitalize on market opportunities and to
eliminate non-essential expenses. While disappointed with the first
quarter loss, we acknowledged early on that the road to recovery would
be bumpy, and we will continue to stay focused and commit resources to
those aspects of our business which will return Capital City to its
historical performance level. Although the present remains challenging,
I continue to be optimistic about our long term prospects."

The Return on Average Assets was -0.18% and the Return on Average
Equity was -1.84% for the first quarter of 2012, compared to -0.08% and
-0.80%, respectively for the fourth quarter of 2011, and 0.20% and
2.03%, respectively for the comparable quarter in 2011.

Discussion of Financial Condition

Average earning assets were $2.268 billion for the first quarter of
2012, an increase of $121.8 million, or 5.7% over the fourth quarter of
2011, and a decline of $10.3 million, or 0.5%, from the first quarter
of 2011. The increase compared to the fourth quarter of 2011 primarily
reflects the higher level of deposits resulting from the seasonal
influx of public funds. The slight decline in earning assets when
compared to the prior year is attributable to the continued resolution
of problem loans as they were charged off or transferred to the other
real estate category (OREO). Partially offsetting the decline was a
higher fund sold balance due to loan maturities/repayments and payoffs.

When compared to the fourth and first quarters of 2011, average
deposits increased by $128.4 million and $36.0 million, respectively,
and average loans declined (a portion of which is attributable to
problem loan resolution) by $50.2 million and $133.9 million,
respectively.

Loan balances continued to decline throughout the portfolio, driven
primarily by a reduction in the commercial real estate, residential and
commercial loan categories. Our core loan portfolio continues to be
impacted by a 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 lack of consumer
confidence and a 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 OREO) also contributed to the
overall decline. During the first quarter of 2012, loan charge-offs and
loans transferred to OREO accounted for $9.5 million, or 19%, of the
net reduction in total loans of $49.8 million from the fourth quarter
of 2011. Compared to the first quarter of 2011, loan resolution
accounted for $57.8 million, or 43%, of the net reduction in loans of
$133.9 million(1). Efforts to stimulate new loan growth are ongoing and
we have recently introduced new lending programs in our business and
commercial real estate lending areas to mitigate the significant impact
that consumer and business deleveraging is having on our portfolio.

Nonperforming assets (nonaccrual loans and OREO) totaled $136.8 million
at the end of the first quarter of 2012, a decrease of $0.8 million
from the fourth quarter of 2011 and an increase of $7.5 million over
the first quarter of 2011. Nonaccrual loans totaled $78.7 million at
the end of the first quarter of 2012, an increase of $3.7 million and
$4.8 million, respectively, over the same prior year periods. The
addition of one large commercial real estate loan drove the increase
over both prior periods. The balance of OREO totaled $58.1 million at
the end of the first quarter of 2012, a decrease of $4.5 million from
the fourth quarter of 2011 and an increase of $2.7 million over the
first quarter of 2011. OREO sales picked up momentum in the first
quarter of 2012 as we sold properties totaling $7.9 million.
Nonperforming assets represented 5.14% of total assets at March 31,
2012 compared to 5.21% at December 31, 2011 and 4.86% at March 31,
2011.

Average total deposits were $2.161 billion for the first quarter of
2012, an increase of $128.4 million, or 6.3%, from the fourth quarter
of 2011 and higher by $36.0 million, or 1.7%, from the first quarter of
2011. The increase in deposits when compared to both periods was driven
primarily by higher public funds balances, savings and noninterest
bearing deposits. This was partially offset by a reduction of
certificates of deposit. Although public funds are seasonal in nature
they continue to represent a larger component of our deposit mix.

We continue to experience a favorable shift in the mix of our deposits
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.

Borrowings were slightly higher when compared to the fourth quarter of
2011, but declined $47.8 million when compared to the first quarter of
2011, as a result of lower balances in repurchase agreements and
amortization/payment of FHLB advances.

We maintained an average net overnight funds (deposits with banks plus
fed funds sold less fed funds purchased) sold position of $373.0
million during the first quarter of 2012 compared to an average net
overnight funds sold position of $191.8 million in the fourth quarter
of 2011 and an average overnight funds sold position of $238.1 million
in the first quarter of 2011. The higher balance when compared to both
periods reflects higher deposits (public funds and noninterest
bearing), and a decrease in the loan and investment portfolios.

Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2012 was
$21.8 million compared to $22.6 million for the fourth quarter of 2011
and $23.3 million for the first quarter of 2011. The decrease in tax
equivalent net interest income compared to the prior periods was due to
a reduction in loan income primarily attributable to declining loan
balances and unfavorable asset repricing, partially offset by a
reduction in interest expense and a lower level of foregone interest on
loans. The lower interest expense is 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.
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 first quarter of 2012 was 3.87%, a
decrease of 30 basis points from the fourth quarter of 2011 and a
decline of 27 basis points from the first quarter of 2011. The decrease
in the margin for all comparable periods is attributable to the shift
in our earning asset mix and unfavorable asset repricing, partially
offset by a lower average cost of funds. The shift in the earning asset
mix compared to the fourth quarter of 2011 was driven by both a
reduction in the loan portfolio and an increase in seasonal deposits
(which are invested in overnight funds), while the shift in mix year
over year was primarily attributable to the decline in the loan
portfolio.

The provision for loan losses for the first quarter of 2012 was $4.8
million compared to $7.6 million in the fourth quarter of 2011 and $4.1
million for the first quarter of 2011. The decrease in the loan loss
provision compared to fourth quarter of 2011 primarily reflects a lower
level of reserves for impaired loan additions and a reduced level of
loan charge-offs. The higher level of loan loss provision compared to
the first quarter of 2011 reflects a higher level of general reserves.
Net charge-offs for the first quarter of 2012 totaled $4.6 million, or
1.16% (annualized), of average loans compared to $6.2 million, or 1.50%
for the fourth quarter of 2011 and $5.7 million, or 1.33% in the first
quarter of 2011. At quarter-end, the allowance for loan losses of $31.2
million was 1.98% of outstanding loans (net of overdrafts) and provided
coverage of 40% of nonperforming loans compared to 1.91% and 41%,
respectively, at December 31, 2011, and 1.98% and 46%, respectively, at
March 31, 2011.

Noninterest income for the first quarter of 2012 totaled $13.6 million,
a decrease of $0.3 million, or 2.1%, from the fourth quarter of 2011
and $2.7 million, or 16.8%, from the first quarter of 2011. The decline
from the fourth quarter of 2011 was driven by a $0.2 million reduction
in deposit fees and a $0.1 million decrease in trust fees. The decline
in deposit fees reflects a seasonal reduction in overdraft fees and the
decline in trust fees reflects a lower level of estate management fees,
which will vary depending on the number of estates being managed. The
unfavorable variance compared to the first quarter of 2011 was driven
by a $3.2 million gain from the sale of our Visa stock in the first
quarter of 2011. Higher deposit fees of $0.3 million, mortgage banking
fees of $0.2 million, and bank card fees of $0.3 million, partially
offset by lower data processing fees of $0.3 million also contributed
to the variance. The increase in deposit fees reflects a lower level of
overdraft charge-offs. Increased loan production 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. 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.

Noninterest expense for the first quarter of 2012 totaled $32.6
million, an increase of $1.5 million, or 4.8%, over the fourth quarter
of 2011 and a decrease of $0.7 million, or 2.2%, from the first quarter
of 2011. The increase compared to the fourth quarter of 2011 was due to
higher expense for salary/associate benefits, primarily pension plan
expense of $0.6 million, stock compensation expense of $0.5 million,
and unemployment taxes of $0.3 million. The increase in expense for our
pension plan was due to the utilization of a lower discount rate in
2012 reflective of lower long-term bond interest rates. The unfavorable
variance in stock compensation reflects the adjustment to our stock
compensation expense accrual in the fourth quarter of 2011 due to not
meeting the award criteria. The higher level of unemployment taxes
reflects a higher rate due to continued high unemployment levels in
Florida. The favorable variance in noninterest expense compared to the
first quarter of 2011 was attributable to a reduction in other expense
of $0.4 million and intangible amortization expense of $0.3 million.
The decrease in other expense was primarily due to lower FDIC insurance
fees of $0.3 million, advertising costs of $0.2 million, and
miscellaneous expense of $0.3 million, partially offset by higher
professional fees of $0.5 million. The reduction in intangible
amortization expense reflects the full amortization of certain core
deposit intangibles from past acquisitions. FDIC insurance fees
declined due to a lower premium rate reflective of the revised rate
structure implemented in mid-2011. Advertising expense declined due to
improved cost controls over advertising for our free checking account
products. A swap liability recorded in the first quarter of 2011
related to the sale of our Visa stock drove the favorable variance in
miscellaneous expense. The increase in professional fees reflects
higher audit and consulting fees.

We realized an income tax benefit of $1.0 million in the first quarter
of 2012 compared to a benefit of $1.9 million for the fourth quarter of
2011. The unfavorable variance was primarily attributable to the
favorable resolution of certain tax contingencies in the fourth quarter
of 2011. Lower operating profit drove the variance in income taxes
compared to the first quarter of 2011.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. ("Company") (Nasdaq:CCBG) is one of the
largest publicly traded financial services 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, 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 70 banking offices and 74 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: legislative or regulatory changes, including the
Dodd-Frank Act; the strength of the U.S. economy and the local
economies where the Company conducts operations; the accuracy of the
Company's financial statement estimates and assumptions, including the
estimate for the Company's loan loss provision; the frequency and
magnitude of foreclosure of the Company's loans; continued depression
of the market value of the Company that could result in an impairment
of goodwill; 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 Ended
------------------------------

(Dollars in thousands, Mar 31, Dec 31, Mar 31,
except per share data) 2012 2011 2011
------------------------ --------- --------- --------

EARNINGS
Net (Loss) Income $ (1,162) $ (535) $ 1,310

Net (Loss) Income Per
Common Share $ (0.07) $ (0.03) $ 0.08
------------------------ --------- --------- --------
PERFORMANCE
Return on Average Equity -1.84% -0.80% 2.03%
Return on Average Assets -0.18% -0.08% 0.20%
Net Interest Margin 3.87% 4.17% 4.14%
Noninterest Income as %
of Operating Revenue 38.64% 38.34% 41.54%

Efficiency Ratio 91.73% 85.08% 83.30%
------------------------ --------- --------- --------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 14.17% 13.96% 13.46%
Total Capital Ratio 15.54% 15.32% 14.82%
Tangible Common Equity
Ratio 6.42% 6.51% 6.73%
Leverage Ratio 9.71% 10.26% 9.74%

Equity to Assets 9.43% 9.54% 9.74%
------------------------ --------- --------- --------
ASSET QUALITY
Allowance as % of
Non-Performing Loans 39.65% 41.37% 45.80%
Allowance as a % of
Loans 1.98% 1.91% 1.98%
Net Charge-Offs as % of
Average Loans 1.16% 1.50% 1.33%
Nonperforming Assets as
% of Loans and ORE 8.36% 8.14% 7.31%

Nonperforming Assets as
% of Total Assets 5.14% 5.21% 4.86%
------------------------ --------- --------- --------
STOCK PERFORMANCE
High $ 9.91 $ 11.11 $ 13.80
Low 7.32 9.43 11.87
Close 7.45 9.55 12.68

Average Daily Trading
Volume $ 24,751 $ 33,026 $ 21,740
------------------------ --------- --------- --------

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

---------------------------------------------------------------------------------------------

2012 2011
----------- --------------------------------------------------

First Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
---------------------------- ----------- ----------- ----------- ----------- -----------
ASSETS
Cash and Due From Banks $ 50,567 $ 54,953 $ 53,027 $ 71,554 $ 52,000

Funds Sold and Interest
Bearing Deposits 418,678 330,361 193,387 223,183 271,375
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Cash and Cash
Equivalents 469,245 385,314 246,414 294,737 323,375

Investment Securities,
Available-for-Sale 284,490 307,149 306,038 304,313 311,356

Loans, Net of Unearned
Interest
Commercial, Financial, &
Agricultural 132,119 130,879 142,511 149,830 153,960
Real Estate - Construction 34,554 26,367 31,991 30,867 35,614
Real Estate - Commercial 624,528 639,140 644,128 660,058 668,583
Real Estate - Residential 364,123 386,877 388,686 395,126 404,204
Real Estate - Home Equity 240,800 244,263 245,438 248,228 248,745
Consumer 174,132 186,216 188,933 194,624 196,205
Other Loans 6,555 12,495 13,720 5,987 5,098

Overdrafts 2,073 2,446 2,292 2,882 2,385
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Loans, Net of
Unearned Interest 1,578,884 1,628,683 1,657,699 1,687,602 1,714,794

Allowance for Loan Losses (31,217) (31,035) (29,658) (31,080) (33,873)
---------------------------- ----------- ----------- ----------- ----------- -----------
Loans, Net 1,547,667 1,597,648 1,628,041 1,656,522 1,680,921

Premises and Equipment, Net 111,408 110,991 111,471 112,576 113,918
Intangible Assets 85,376 85,483 85,591 85,699 85,806
Other Real Estate Owned 58,100 62,600 61,196 61,016 55,364

Other Assets 103,992 92,127 85,221 84,395 91,754
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Other Assets 358,876 351,201 343,479 343,686 346,842
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Assets $ 2,660,278 $ 2,641,312 $ 2,523,972 $ 2,599,258 $ 2,662,494
---------------------------- ----------- ----------- ----------- ----------- -----------

LIABILITIES
Deposits:
Noninterest Bearing
Deposits $ 605,774 $ 618,317 $ 584,628 $ 568,813 $ 540,184
NOW Accounts 845,149 828,990 708,066 764,480 818,512
Money Market Accounts 283,224 276,910 280,001 283,230 288,224
Regular Savings Accounts 172,262 158,462 154,136 153,403 150,051

Certificates of Deposit 279,295 289,840 316,968 331,085 350,076
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Deposits 2,185,704 2,172,519 2,043,798 2,101,011 2,147,047

Short-Term Borrowings 42,188 43,372 47,508 65,237 86,650
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 42,826 44,606 45,389 49,196 50,050

Other Liabilities 75,876 65,986 63,465 60,383 56,582
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Liabilities 2,409,481 2,389,370 2,263,047 2,338,714 2,403,216
---------------------------- ----------- ----------- ----------- ----------- -----------

SHAREOWNERS' EQUITY
Common Stock 172 172 172 171 171
Additional Paid-In Capital 38,101 37,838 38,074 37,724 37,548
Retained Earnings 236,299 237,461 237,969 237,709 237,276

Accumulated Other
Comprehensive Loss, Net of
Tax (23,775) (23,529) (15,290) (15,060) (15,717)
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Shareowners' Equity 250,797 251,942 260,925 260,544 259,278
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Liabilities and
Shareowners' Equity $ 2,660,278 $ 2,641,312 $ 2,523,972 $ 2,599,258 $ 2,662,494
---------------------------- ----------- ----------- ----------- ----------- -----------

OTHER BALANCE SHEET DATA
Earning Assets $ 2,282,053 $ 2,266,193 $ 2,157,124 $ 2,215,098 $ 2,297,525
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 198 258 318 378 437
Other 367 414 462 510 558

Interest Bearing Liabilities 1,727,831 1,705,066 1,614,954 1,709,518 1,806,450
---------------------------- ----------- ----------- ----------- ----------- -----------

Book Value Per Diluted Share $ 14.60 $ 14.68 $ 15.20 $ 15.20 $ 15.13

Tangible Book Value Per
Diluted Share 9.63 9.70 10.21 10.21 10.13
---------------------------- ----------- ----------- ----------- ----------- -----------

Actual Basic Shares
Outstanding 17,182 17,160 17,157 17,127 17,127

Actual Diluted Shares
Outstanding 17,182 17,161 17,172 17,139 17,136
---------------------------- ----------- ----------- ----------- ----------- -----------

CAPITAL CITY BANK GROUP,
INC.
CONSOLIDATED STATEMENT OF
OPERATIONS
Unaudited

-----------------------------------------------------------------------------

2012 2011
--------- --------------------------------------

(Dollars in thousands, First Fourth Third Second First
except per share data) Quarter Quarter Quarter Quarter Quarter
-------------------------- --------- -------- -------- -------- --------

INTEREST INCOME
Interest and Fees on Loans $ 22,005 $ 22,915 $ 23,777 $ 24,305 $ 23,947
Investment Securities 900 902 978 1,017 1,071

Funds Sold 225 95 136 145 171
-------------------------- --------- -------- -------- -------- --------

Total Interest Income 23,130 23,912 24,891 25,467 25,189
-------------------------- --------- -------- -------- -------- --------

INTEREST EXPENSE
Deposits 643 699 907 1,083 1,258
Short-Term Borrowings 8 6 78 110 111
Subordinated Notes Payable 382 358 339 343 340

Other Long-Term Borrowings 436 452 467 492 494
-------------------------- --------- -------- -------- -------- --------

Total Interest Expense 1,469 1,515 1,791 2,028 2,203
-------------------------- --------- -------- -------- -------- --------
Net Interest Income 21,661 22,397 23,100 23,439 22,986

Provision for Loan Losses 4,793 7,600 3,718 3,545 4,133
-------------------------- --------- -------- -------- -------- --------

Net Interest Income after
Provision for Loan Losses 16,868 14,797 19,382 19,894 18,853
-------------------------- --------- -------- -------- -------- --------

NONINTEREST INCOME
Service Charges on Deposit
Accounts 6,309 6,530 6,629 6,309 5,983
Data Processing Fees 675 743 749 764 974
Asset Management Fees 1,015 1,124 1,080 1,080 1,080
Retail Brokerage Fees 758 776 807 939 729
Gain on Sale of Investment
Securities -- -- -- -- --
Mortgage Banking Fees 848 845 645 568 617
Interchange Fees (1) 1,526 1,399 1,420 1,443 1,360
ATM/Debit Card Fees (1) 1,245 1,098 1,170 1,115 1,136

Other 1,210 1,358 1,693 2,230 4,455
-------------------------- --------- -------- -------- -------- --------

Total Noninterest Income 13,586 13,873 14,193 14,448 16,334
-------------------------- --------- -------- -------- -------- --------

NONINTEREST EXPENSE
Salaries and Associate
Benefits 16,843 15,260 15,805 16,000 16,577
Occupancy, Net 2,266 2,284 2,495 2,447 2,396
Furniture and Equipment 2,201 2,097 2,118 2,117 2,226
Intangible Amortization 107 107 108 107 353
Other Real Estate 3,513 3,425 2,542 3,033 3,677

Other 7,667 7,930 7,579 7,463 8,102
-------------------------- --------- -------- -------- -------- --------

Total Noninterest Expense 32,597 31,103 30,647 31,167 33,331
-------------------------- --------- -------- -------- -------- --------

OPERATING (LOSS) PROFIT (2,143) (2,433) 2,928 3,175 1,856

Income Tax (Benefit)
Expense (981) (1,898) 951 1,030 546
-------------------------- --------- -------- -------- -------- --------

NET (LOSS) INCOME $ (1,162) $ (535) $ 1,977 $ 2,145 $ 1,310
-------------------------- --------- -------- -------- -------- --------

PER SHARE DATA
Basic (Loss) Income $ (0.07) $ (0.03) $ 0.12 $ 0.12 $ 0.08
Diluted (Loss) Income $ (0.07) $ (0.03) $ 0.12 $ 0.12 $ 0.08
Cash Dividends 0.000 0.000 0.100 0.100 0.100
AVERAGE SHARES
Basic 17,181 17,157 17,152 17,127 17,122

Diluted 17,181 17,157 17,167 17,139 17,130
-------------------------- --------- -------- -------- -------- --------

(1) Together referred to
as "Bank Card Fees"

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

-------------------------------------------------------------------------------------
2012 2011 2011 2011 2011

(Dollars in thousands, except First Fourth Third Second First
per share data) Quarter Quarter Quarter Quarter Quarter
------------------------------ --------- --------- --------- --------- ---------

ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 31,035 $ 29,658 $ 31,080 $ 33,873 $ 35,436
Provision for Loan Losses 4,793 7,600 3,718 3,545 4,133
Net Charge-Offs 4,611 6,223 5,140 6,338 5,696

Balance at End of Period $ 31,217 $ 31,035 $ 29,658 $ 31,080 $ 33,873
------------------------------ --------- --------- --------- --------- ---------
As a % of Loans 1.98% 1.91% 1.79% 1.84% 1.98%
As a % of Nonperforming Loans 39.65% 41.37% 55.54% 50.89% 45.80%

As a % of Nonperforming Assets 22.82% 22.55% 25.88% 25.46% 26.19%
------------------------------ --------- --------- --------- --------- ---------

CHARGE-OFFS
Commercial, Financial and
Agricultural $ 268 $ 634 $ 186 $ 301 $ 721
Real Estate - Construction -- 25 75 14 --
Real Estate - Commercial 1,532 2,443 1,031 2,808 430
Real Estate - Residential 1,967 2,755 3,287 2,371 3,456
Real Estate - Home Equity 892 205 580 944 998
Consumer 732 879 832 606 620

Total Charge-Offs $ 5,391 $ 6,941 $ 5,991 $ 7,044 $ 6,216
------------------------------ --------- --------- --------- --------- ---------

RECOVERIES
Commercial, Financial and
Agricultural $ 67 $ 242 $ 33 $ 43 $ 63
Real Estate - Construction -- -- -- 5 9
Real Estate - Commercial 138 87 37 115 12
Real Estate - Residential 163 34 271 113 60
Real Estate - Home Equity 18 13 108 57 36
Consumer 394 342 402 373 340

Total Recoveries $ 780 $ 718 $ 851 $ 706 $ 520
------------------------------ --------- --------- --------- --------- ---------

NET CHARGE-OFFS $ 4,611 $ 6,223 $ 5,140 $ 6,338 $ 5,696
------------------------------ --------- --------- --------- --------- ---------

Net Charge-Offs as a % of
Average Loans(1) 1.16% 1.50% 1.22% 1.49% 1.33%
------------------------------ --------- --------- --------- --------- ---------

RISK ELEMENT ASSETS
Nonaccruing Loans $ 78,726 $ 75,023 $ 53,396 $ 61,076 $ 73,954
Other Real Estate 58,100 62,600 61,196 61,016 55,364

Total Nonperforming Assets $ 136,826 $ 137,623 $ 114,592 $ 122,092 $ 129,318
------------------------------ --------- --------- --------- --------- ---------

Past Due Loans 30-89 Days $ 9,193 $ 19,425 $ 17,053 $ 18,103 $ 19,391
Past Due Loans 90 Days or More 25 224 26 271 --

Performing Troubled Debt
Restructuring's $ 37,373 $ 37,675 $ 28,404 $ 23,582 $ 24,028
------------------------------ --------- --------- --------- --------- ---------

Nonperforming Loans as a % of
Loans 4.99% 4.61% 3.22% 3.62% 4.31%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.36% 8.14% 6.67% 6.98% 7.31%
Nonperforming Assets as a % of
Capital(2) 48.52% 48.63% 39.44% 41.87% 44.11%

Nonperforming Assets as a % of
Total Assets 5.14% 5.21% 4.54% 4.70% 4.86%
------------------------------ --------- --------- --------- --------- ---------

(1) Annualized
(2) Capital includes allowance
for loan losses.

AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited

----------------------------------------------------------------------------------------------------------------------

First Quarter 2012 Fourth Quarter 2011 Third Quarter 2011
-------------------------------- -------------------------------- --------------------------------

(Dollars in Average Average Average Average Average Average
thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
ASSETS:
Loans, Net of
Unearned
Interest $ 1,596,480 $ 22,121 5.57% $ 1,646,715 $ 23,032 5.55% $ 1,667,720 $ 23,922 5.69%

Investment
Securities
Taxable
Investment
Securities 242,481 794 1.31 248,217 816 1.31 248,138 828 1.32

Tax-Exempt
Investment
Securities 56,313 162 1.15 59,647 131 0.88 55,388 231 1.67
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Investment
Securities 298,794 956 1.28 307,864 947 1.22 303,526 1,059 1.39

Funds Sold 373,033 225 0.24 191,884 96 0.20 231,681 136 0.23
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Earning
Assets 2,268,307 $ 23,302 4.13% $ 24,075 4.45% $ 25,117 4.52%
--------- ------- 2,146,463 --------- ------- 2,202,927 --------- -------

Cash and Due
From Banks 49,427 49,666 47,252
Allowance for
Loan Losses (31,382) (29,550) (30,969)

Other Assets 350,555 343,336 344,041
---------------- ------------ ------------ ------------

Total Assets $ 2,636,907 $ 2,509,915 $ 2,563,251
---------------- ------------ ------------ ------------

LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 823,406 192 0.09% $ 700,005 $ 148 0.08% $ 726,652 $ 222 0.12%
Money Market
Accounts 277,558 75 0.11 283,677 75 0.11 282,378 95 0.13
Savings Accounts 165,603 20 0.05 156,088 20 0.05 153,748 19 0.05

Time Deposits 284,129 356 0.50 299,487 456 0.60 324,951 571 0.70
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Interest
Bearing
Deposits 1,550,696 643 0.17% 1,439,257 699 0.19% 1,487,729 907 0.24%

Short-Term
Borrowings 45,645 8 0.07% 44,573 6 0.05% 64,160 78 0.48%
Subordinated
Notes Payable 62,887 382 2.40 62,887 358 2.23 62,887 339 2.11

Other Long-Term
Borrowings 44,286 436 3.96 45,007 452 3.99 46,435 467 3.99
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Interest
Bearing
Liabilities 1,703,514 $ 1,469 0.35% $ 1,515 0.38% $ 1,791 0.43%
--------- ------- 1,591,724 --------- ------- 1,661,211 --------- -------

Noninterest
Bearing
Deposits 610,692 593,718 574,184

Other
Liabilities 68,254 60,197 63,954
---------------- ------------ ------------ ------------

Total
Liabilities 2,382,460 2,245,639 2,299,349

SHAREOWNERS'
EQUITY: 254,447 264,276 263,902
---------------- ------------ ------------ ------------

Total
Liabilities and
Shareowners'
Equity $ 2,636,907 $ 2,509,915 $ 2,563,251
---------------- ------------ ------------ ------------

Interest Rate
Spread $ 21,833 3.78% $ 22,560 4.07% $ 23,326 4.09%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Interest Income
and Rate
Earned(1) 23,302 4.13 24,075 4.45 25,117 4.52

Interest Expense
and Rate
Paid(2) 1,469 0.26 1,515 0.28 1,791 0.32
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Net Interest
Margin $ 21,833 3.87% $ 22,560 4.17% $ 23,326 4.20%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

------------------------------------------------------------------------------------------------

Second Quarter 2011 First Quarter 2011
-------------------------------- --------------------------------

Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ------------ --------- ------- ------------ --------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,704,348 $ 24,465 5.76% $ 1,730,330 $ 24,101 5.65%

Investment Securities
Taxable Investment
Securities 244,487 825 1.35 231,153 851 1.48

Tax-Exempt Investment
Securities 60,963 297 1.95 74,226 337 1.81
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Investment Securities 305,450 1,122 1.47 305,379 1,188 1.56

Funds Sold 249,133 145 0.23 242,893 171 0.28
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Earning Assets 2,258,931 $ 25,732 4.57% $ 25,460 4.53%
--------- ------- 2,278,602 --------- -------

Cash and Due From Banks 47,465 50,942
Allowance for Loan Losses (32,993) (34,822)

Other Assets 344,884 348,295
---------------------------- ------------ ------------

Total Assets $ 2,618,287 $ 2,643,017
---------------------------- ------------ ------------

LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 782,698 $ 259 0.13% $ 786,939 $ 261 0.13%
Money Market Accounts 284,411 136 0.19 278,562 131 0.19
Savings Accounts 152,599 16 0.04 144,623 18 0.05

Time Deposits 338,723 672 0.80 360,575 848 0.95
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Interest Bearing
Deposits 1,558,431 1,083 0.28% 1,570,699 1,258 0.32%

Short-Term Borrowings 76,754 110 0.58% 87,267 111 0.52%
Subordinated Notes Payable 62,887 343 2.16 62,887 340 2.16

Other Long-Term Borrowings 49,650 492 3.97 50,345 494 3.98
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Interest Bearing
Liabilities 1,747,722 $ 2,028 0.47% $ 2,203 0.50%
--------- ------- 1,771,198 --------- -------

Noninterest Bearing Deposits 548,870 554,680

Other Liabilities 59,324 55,536
---------------------------- ------------ ------------

Total Liabilities 2,355,916 2,381,414

SHAREOWNERS' EQUITY: 262,371 261,603
---------------------------- ------------ ------------

Total Liabilities and
Shareowners' Equity $ 2,618,287 $ 2,643,017
---------------------------- ------------ ------------

Interest Rate Spread $ 23,704 4.10% $ 23,257 4.03%
---------------------------- ------------ --------- ------- ------------ --------- -------

Interest Income and Rate
Earned(1) 25,732 4.57 25,460 4.53

Interest Expense and Rate
Paid(2) 2,028 0.36 2,203 0.39
---------------------------- ------------ --------- ------- ------------ --------- -------

Net Interest Margin $ 23,704 4.21% $ 23,257 4.14%
---------------------------- ------------ --------- ------- ------------ --------- -------

(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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