TALLAHASSEE, Fla., Jan. 27, 2012 (GLOBE NEWSWIRE) -- Capital City Bank
Group, Inc. (Nasdaq:CCBG) today reported a net loss of $0.5 million, or
$0.03 per diluted share, for the fourth quarter of 2011, compared to
net income of $2.0 million, or $0.12 per diluted share for the third
quarter of 2011 and net income of $1.9 million, or $0.12 per diluted
share, for the fourth quarter of 2010. For the full year 2011, CCBG
reported net income of $4.9 million, or $0.29 per diluted share
compared to a net loss of $0.4 million, or $0.02 per diluted share in
2010.
Compared to the third quarter of 2011, earnings reflect lower operating
revenues of $1.0 million, a $3.9 million increase in the loan loss
provision and higher noninterest expense of $0.5 million, partially
offset by lower income taxes of $2.9 million. Compared to the fourth
quarter of 2010, the reduction in earnings was due to lower operating
revenues of $2.8 million and a $3.8 million increase in the loan loss
provision, partially offset by a $2.4 million reduction in noninterest
expense and a higher income tax benefit of $1.8 million.
For the full year 2011, the improvement in earnings was due to a $7.7
million reduction in noninterest expense and a lower loan loss
provision of $4.8 million, partially offset by a $3.6 million decline
in operating revenues and higher income taxes of $3.6 million. 2011
performance also reflects the sale of our Visa Class B shares of stock
during the first quarter which resulted in a $2.6 million net gain
($3.2 million pre-tax included in noninterest income and a swap
liability of $0.6 million included in noninterest expense).
"Given the economic environment, we are proud of our accomplishments
during 2011," said William G. Smith, Jr., Chairman, President and CEO.
"Year over year we earned $0.29 per share versus a loss of $0.02 per
share in 2010, our sales of OREO exceeded the combined sales of the
prior two years and gross additions to our problem loan pool continued
their downward trend. While the fourth quarter results were
disappointing, they were consistent with our prior comments that our
performance would be uneven as we work through this economic cycle. It
remains a tough operating environment and there is work left to be
done, but as the economy recovers, I believe we have the experience and
capability to return Capital City to its historical performance
levels."
The Return on Average Assets was -0.08% and the Return on Average
Equity was -0.80% for the fourth quarter of 2011. These metrics were
0.31% and 2.97% for the third quarter of 2011, and 0.30% and 2.90% for
the fourth quarter of 2010, respectively.
For the full year 2011, the Return on Average Assets was 0.19% and the
Return on Average Equity was 1.86% compared to -0.02% and -0.16%,
respectively, for the full year of 2010.
Discussion of Financial Condition
Average earning assets were $2.146 billion for the fourth quarter of
2011, a decrease of $56.5 million, or 2.6% from the third quarter of
2011, and a decline of $71.6 million, or 3.2%, from the fourth quarter
of 2010. The decrease in both periods is attributable to a reduction in
the level of deposits (primarily seasonal in nature) and the resolution
of problem loans as they were charged off or transferred to the other
real estate category ("OREO"). Period over period, average deposits
declined $28.9 million and $82.9 million, respectively, and average
loans declined (a portion of which is attributable to problem loan
resolution) by $21.0 million and $136.2 million, respectively.
Loan balances continue to decline throughout the portfolio, driven
primarily by a reduction in the commercial real estate, residential and
commercial loan categories. The loan portfolio has been impacted by
weak loan demand attributable to the lack of consumer confidence and a
sluggish economy. In addition to lower production, normal amortization
and payoffs, the resolution of problem loans (which has the effect of
lowering the loan portfolio as loans are either charged off or
transferred to the OREO category) also contributed to the overall
decline. During the fourth quarter of 2011, loan charge-offs and loans
transferred to OREO accounted for $13.1 million, or 45%, of the net
reduction in total loans of $29.0 million from the third quarter of
2011. Compared to the fourth quarter of 2010, this accounted for $63.6
million, or 49%, of the net reduction in loans of $130.0 million(1).
Average total deposits were $2.033 billion for the fourth quarter of
2011, a decrease of $28.9 million, or 1.4%, from the third quarter of
2011 and a decrease of $82.9 million, or 3.9%, from the fourth quarter
of 2010. The decrease in deposits in both periods was driven primarily
by a reduction in certificates of deposit. Additionally, a decrease
resulting from existing clients moving from our Guaranteed Now Account
("GNA") product to repurchase agreements occurred late in the fourth
quarter of 2010 as further discussed below. Noninterest bearing demand
and savings accounts increased in both periods, partially offsetting
the above mentioned declines in GNA and certificates of deposit.
Pursuant to changes in the FDIC's Temporary Liquidity Guarantee
Program, our government guaranteed NOW product was discontinued during
the fourth quarter of 2010. Approximately $95 million in balances for
this product remained in the NOW category, $95 million migrated to the
noninterest bearing DDA category, and $60 million in balances moved to
repurchase agreements as of the end of December 2010.
We continue to pursue prudent pricing discipline to manage the mix of
our deposits. Therefore, we are not attempting to compete with higher
rate paying competitors for deposits. We continue to experience a
favorable shift in the mix of our deposits as higher cost certificates
of deposit balances are replaced with lower rate non-maturity deposits
and noninterest bearing demand accounts.
We maintained an average net overnight funds (deposits with banks plus
fed funds sold less fed funds purchased) sold position of $191.8
million during the fourth quarter of 2011 compared to an average net
overnight funds sold position of $231.7 million in the prior quarter
and an average overnight funds sold position of $172.7 million in the
fourth quarter of 2010. The lower balance when compared to the third
quarter of 2011 reflects declining deposits (public funds and
certificates of deposit) and lower levels of short-term borrowings,
partially offset by a decrease in the loan portfolio. The higher
balance as compared to the fourth quarter of 2010 is primarily
attributable to a net reduction in loans and an increase in repurchase
agreements, partially offset by a decline in deposits, borrowings and
the deployment of funds to the investment portfolio.
Nonperforming assets (including nonaccrual loans, troubled debt
restructurings ("TDR's") and OREO) totaled $158.3 million at year-end
2011, an increase of $15.3 million from the third quarter of 2011 and
$13.0 million from year-end 2010. The increase in nonperforming assets
compared to both periods was driven by a higher level of nonaccrual
loans added during the fourth quarter of 2011 generally reflective of
the prolonged economic recovery in our markets and its impact on our
borrowers. Nonaccrual loans totaled $75.0 million at the end of the
fourth quarter of 2011, an increase of $21.6 million from the third
quarter of 2011 and $9.3 million from the fourth quarter of 2010.
Nonaccrual loan inflow during the fourth quarter of 2011 was primarily
comprised of loans secured by residential 1-4 family real estate,
commercial real estate, and farm property. Five relationships
constituted $16.9 million of the $21.6 million increase. TDR's totaled
$20.6 million at the end of the fourth quarter of 2011, a decrease of
$7.8 million from the third quarter of 2011 and a decrease of $1.0
million from the fourth quarter of 2010. OREO balances totaled $62.6
million at year-end 2011 compared to $61.2 million at the end of the
third quarter of 2011 and $57.9 million at year-end 2010. Nonperforming
assets represented 5.99% of total assets at December 31, 2011, compared
to 5.67% at September 30, 2011 and 5.54% at December 31, 2010.
Equity capital was $251.9 million as of December 31, 2011, compared to
$260.9 million as of September 30, 2011 and $259.0 million as of
December 31, 2010. Our leverage ratio was 10.02%, 10.20%, and 10.10%,
respectively, for these periods. Further, our risk-adjusted capital
ratio of 15.32% at December 31, 2011 exceeds the 10.0% threshold to be
designated as "well-capitalized" under the risk-based regulatory
guidelines. At December 31, 2011, our tangible common equity ratio was
6.51%, compared to 7.19% at September 30, 2011 and 6.82% at December
31, 2010. The tangible common equity ratio was impacted by an $8.0
million unfavorable variance in the pension component of our other
comprehensive income. This unfavorable variance was driven by a
reduction in our pension plan's discount rate due to a decline in
market rates, and a lower than anticipated return on plan assets.
Discussion of Operating Results
Tax equivalent net interest income for the fourth quarter of 2011 was
$22.6 million compared to $23.3 million for the third quarter of 2011
and $24.6 million for the fourth quarter of 2010. For the full year
2011, tax equivalent net interest income totaled $92.8 million compared
to $99.0 million in 2010.
The decrease of $0.7 million in tax equivalent net interest income
compared to the third quarter of 2011 was due to a reduction in loan
income attributable to declining loan balances, an increase in foregone
interest on nonaccrual loans and continued unfavorable asset repricing,
partially offset by lower interest expense. The lower interest expense
reflects the reduction in deposit rates enacted late in the third
quarter of 2011. The rate change affected all interest bearing deposit
categories with the exception of savings.
The decrease in tax equivalent net interest income of $2.0 million and
$6.2 million, for the three and twelve month periods ended December 31,
2011, respectively, as compared to the same periods in 2010, resulted
from an unfavorable change in earning asset mix and yield, partially
offset by a reduction in interest expense and a lower level of foregone
interest on nonaccrual loans.
The decline in loans, 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.
The net interest margin for the fourth quarter of 2011 was 4.17%, a
decrease of 3 basis points from the third quarter of 2011 and a decline
of 24 basis points from the fourth quarter of 2010. For the full year
2011, the margin declined by 14 basis points to 4.18%. 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 provision for loan losses for the fourth quarter of 2011 was $7.6
million compared to $3.7 million in the third quarter of 2011 and $3.8
million for the fourth quarter of 2010. For the full year 2011, the
loan loss provision totaled $19.0 million compared to $23.8 million for
2010. Compared to the third quarter of 2011, the increase in the
provision was driven by a higher level of general reserves reflective
of an increase in the level of internally classified loans, delinquent
loans and higher loan loss factors. While the level of impaired loans
increased quarter over quarter, our impaired loan reserves declined
reflective of charge-offs realized on loans migrating to OREO status
and lower specific reserves needed for loans added to impaired status
during the quarter. For the full year 2011, the lower loan loss
provision was primarily due to lower specific reserves required for
newly identified impaired loans. Net charge-offs for the fourth quarter
of 2011 totaled $6.2 million, or 1.50% of average loans, compared to
$5.1 million, or 1.22%, in the third quarter of 2011, and $6.1 million,
or 1.35%, in the fourth quarter of 2010. For 2011, our net charge-offs
totaled $23.4 million, or 1.39% of average loans, compared to $32.4
million, or 1.77%, for 2010. A $6.0 million reduction in construction
loan charge-offs drove the year over year decline in net charge-offs.
Over the last four years, we have recorded a cumulative loan loss
provision totaling $115.3 million, or 6.0% of beginning loans and have
recognized cumulative net charge-offs of $102.0 million, or 5.3%. At
year-end 2011, the allowance for loan losses of $31.0 million was 1.91%
of outstanding loans (net of overdrafts) and provided coverage of 32%
of nonperforming loans compared to 1.79% and 36%, respectively, at the
end of the third quarter of 2011, and 2.01% and 41%, respectively, at
year-end 2010.
Noninterest income for the fourth quarter of 2011 totaled $13.9
million, a decrease of $0.3 million, or 2.2%, from the third quarter of
2011 and a decrease of $0.9 million, or 5.8%, from the fourth quarter
of 2010. Lower deposit fees of $0.1 million, bank card fees of $0.1
million and other income of $0.3 million, partially offset by higher
mortgage banking fees of $0.2 million, drove the decline over the third
quarter of 2011. The unfavorable variance compared to the fourth
quarter of 2010 was primarily due to lower data processing fees of $0.1
million, mortgage banking fees of $0.2 million and other income of $0.9
million, partially offset by higher deposit fees of $0.1 million and
bank card fees of $0.2 million. For the full year 2011, noninterest
income totaled $58.8 million, an increase of $2.0 million over 2010
driven by a $2.2 million increase in other income. The increase in
other income reflects a $3.2 million pre-tax gain from the sale of our
Class B shares of Visa stock during the first quarter of 2011 that was
partially offset by lower merchant fees of $1.1 million. Higher retail
brokerage fees of $0.4 million and bank card fees of $0.9 million also
contributed to the year over year increase, but were partially offset
by lower deposit fees of $1.0 million. Year over year, the
aforementioned reduction in merchant fees reflects the transfer of our
merchant processing business to another processor, which was completed
in August 2010. This decline is substantially offset by a reduction in
processing costs, which is reflected as interchange fees in noninterest
expense. The higher level of brokerage fees reflects increased client
investment activity. Bank card fees increased due to an increase in new
deposit accounts as well as higher card utilization. The reduction in
deposit fees reflects a lower level of overdraft fees due to reduced
activity as well as the implementation of new rules under Regulation E.
Noninterest expense for the fourth quarter of 2011 totaled $31.1
million, an increase of $0.5 million over the third quarter of 2011 and
a decrease of $2.4 million from the fourth quarter of 2010. The
increase from the third quarter was primarily due to higher OREO
expense of $0.9 million and other expense of $0.4 million, partially
offset by lower salary/associate benefit expense of $0.5 million and
occupancy expense of $0.2 million. Lower OREO expense of $1.3 million,
intangible amortization of $0.4 million, and other expense of $0.3
million drove the favorable variance compared to the fourth quarter of
2010.
For the full year 2011, noninterest expense totaled $126.2 million, a
$7.7 million decline from 2010, which was primarily attributable to
lower expense for OREO of $2.2 million, intangible amortization of $2.0
million, and other expense of $3.5 million. The lower level of OREO
expense reflects both a reduction in valuation adjustments and property
carrying costs. Intangible amortization expense declined due to the
full amortization of core deposit intangibles related to several past
acquisitions. The reduction in other expense primarily reflects a
reduction in FDIC insurance expense of $1.8 million, interchange fees
of $1.0 million, professional fees of $0.5 million, and advertising
expense of $0.4 million. The reduction in FDIC insurance expense
reflects a lower rate due to recent changes to the FDIC premium
structure. Lower interchange fees are attributable to the sale of our
merchant processing business as noted above in our discussion of
noninterest income. Professional fees declined due to higher consulting
fees paid in 2010 related to the review of our vendor contracts. The
reduction in advertising fees primarily reflects efficiencies gained in
the promotion of our free checking products.
We realized a tax benefit of $1.8 million in the fourth quarter of 2011
compared to income tax expense of $1.0 million for the third quarter of
2011 and a tax benefit of $0.1 million for the fourth quarter of 2010.
For the full year 2011, we realized income tax expense of $0.6 million
compared to a tax benefit of $3.0 million for 2010. The increase in the
tax provision year over year reflects higher operating profits, a lower
level of tax exempt income and the resolution of certain tax
contingencies.
Regulatory Matters
Our bank regulators recently concluded a regular safety and soundness
examination. As of today, our regulators have not issued their report,
but have indicated that they will not require an adjustment to our
allowance for loan losses. The regulators have discussed with us a
range of outcomes from continuing the existing board resolutions we
adopted in February 2010 (the "Existing Board Resolutions") to entering
into a Memorandum of Understanding ("MOU"). An MOU would be an informal
action that is not published or publicly available and that is used
when circumstances warrant a milder form of action than a formal
supervisory action, such as a formal written agreement or order. We
have had discussions with our bank regulators concerning their
findings, but we do not know their requirements at this time. Those
requirements, once finalized, may be more restrictive than those
currently contained in the Existing Board Resolutions. In particular,
any new board resolutions or MOU could limit our ability to pay
dividends to our shareowners, require us to suspend dividend payments
to holders of our trust preferred securities, and take various other
actions to improve our asset quality and preserve our capital position.
As with our Existing Board Resolutions, we expect that our management
and board of directors will be required to focus considerable time and
attention on taking corrective actions to comply with the terms of any
new board resolutions or MOU.
As disclosed in a press release issued on December 14, 2011, we
suspended the payment of quarterly dividends on our common stock. We
believe that, given our inability to fully earn our dividend in 2011,
it was, and continues to be, prudent to preserve our capital at least
until the economic conditions in Florida and Georgia improve. We remain
committed to resuming dividend payments as soon as conditions warrant,
and subject to any limitations from our regulators.
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 $2.6 billion in assets. The Company
provides a full range of banking services, including traditional
deposit and credit services, asset management, trust, mortgage banking,
merchant services, bankcards, data processing and securities brokerage
services. The Company's bank subsidiary, Capital City Bank, was founded
in 1895 and now has 70 banking offices and 78 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, 2010, 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 Twelve Months Ended
------------------------------- --------------------
(Dollars in thousands, Dec 31, Sep 30, Dec 31, Dec 31, Dec 31,
except per share data) 2011 2011 2010 2011 2010
------------------------ --------- --------- --------- --------- ---------
EARNINGS
Net Income (Loss) $ (535) $ 1,977 $ 1,918 $ 4,897 $ (413)
Net Income (Loss) Per
Common Share $ (0.03) $ 0.12 $ 0.12 $ 0.29 $ (0.02)
------------------------ --------- --------- --------- --------- ---------
PERFORMANCE
Return on Average Equity (0.80%) 2.97% 2.90% 1.86% (0.16%)
Return on Average Assets (0.08%) 0.31% 0.30% 0.19% (0.02%)
Net Interest Margin 4.17% 4.20% 4.41% 4.18% 4.32%
Noninterest Income as %
of Operating Revenue 38.34% 38.14% 37.69% 39.13% 36.81%
Efficiency Ratio 85.08% 81.40% 83.75% 82.79% 84.23%
------------------------ --------- --------- --------- --------- ---------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 13.96% 14.05% 13.14% 13.96% 13.14%
Total Capital Ratio 15.32% 15.41% 14.50% 15.32% 14.50%
Tangible Common Equity
Ratio 6.51% 7.19% 6.82% 6.51% 6.82%
Leverage Ratio 10.26% 10.20% 10.10% 10.26% 10.10%
Equity to Assets 9.54% 10.34% 9.88% 9.54% 9.88%
------------------------ --------- --------- --------- --------- ---------
ASSET QUALITY
Allowance as % of
Non-Performing Loans 32.44% 36.26% 40.57% 32.05% 40.57%
Allowance as a % of
Loans 1.91% 1.79% 2.01% 1.91% 2.01%
Net Charge-Offs as % of
Average Loans 1.50% 1.22% 1.35% 1.39% 1.77%
Nonperforming Assets as
% of Loans and ORE 9.36% 8.32% 8.00% 9.43% 8.00%
Nonperforming Assets as
% of Total Assets 5.99% 5.67% 5.54% 6.04% 5.54%
------------------------ --------- --------- --------- --------- ---------
STOCK PERFORMANCE
High $ 11.11 $ 11.18 $ 14.19 $ 13.80 $ 18.25
Low $ 9.43 $ 9.81 $ 11.56 $ 9.43 $ 10.76
Close $ 9.55 $ 10.38 $ 12.60 $ 9.55 $ 12.60
Average Daily Trading
Volume $ 33,026 $ 43,483 $ 21,385 $ 32,096 $ 31,174
------------------------ --------- --------- --------- --------- ---------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
--------------------------------------------------------------------------------------------------
2011 2010
------------------------------------------------------ ------------
Fourth Third Second First Fourth
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
---------------------------- ------------ ------------ ------------ ------------ ------------
ASSETS
Cash and Due From Banks $ 54,953 $ 53,027 $ 71,554 $ 52,000 $ 35,410
Funds Sold and Interest
Bearing Deposits 330,361 193,387 223,183 271,375 200,783
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Cash and Cash
Equivalents 385,314 246,414 294,737 323,375 236,193
Investment Securities,
Available-for-Sale 307,149 306,038 304,313 311,356 309,731
Loans, Net of Unearned
Interest
Commercial, Financial, &
Agricultural 130,879 142,511 149,830 153,960 157,394
Real Estate - Construction 26,367 31,991 30,867 35,614 43,239
Real Estate - Commercial 639,140 644,128 660,058 668,583 671,702
Real Estate - Residential 386,877 388,686 395,126 404,204 420,604
Real Estate - Home Equity 244,263 245,438 248,228 248,745 251,565
Consumer 186,216 188,933 194,624 196,205 200,727
Other Loans 12,495 13,720 5,987 5,098 9,937
Overdrafts 2,446 2,292 2,882 2,385 3,503
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Loans, Net of
Unearned Interest 1,628,683 1,657,699 1,687,602 1,714,794 1,758,671
Allowance for Loan Losses (31,035) (29,658) (31,080) (33,873) (35,436)
---------------------------- ------------ ------------ ------------ ------------ ------------
Loans, Net 1,597,648 1,628,041 1,656,522 1,680,921 1,723,235
Premises and Equipment, Net 110,991 111,471 112,576 113,918 115,356
Intangible Assets 85,483 85,591 85,699 85,806 86,159
Other Real Estate Owned 62,600 61,196 61,016 55,364 57,937
Other Assets 92,127 85,221 84,395 91,754 93,442
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Other Assets 351,201 343,479 343,686 346,842 352,894
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Assets 2,641,312 2,523,972 2,599,258 2,662,494 2,622,053
---------------------------- ------------ ------------ ------------ ------------ ------------
LIABILITIES
Deposits:
Noninterest Bearing
Deposits 618,317 584,628 568,813 540,184 546,257
NOW Accounts 828,990 708,066 764,480 818,512 770,149
Money Market Accounts 276,910 280,001 283,230 288,224 275,416
Regular Savings Accounts 158,462 154,136 153,403 150,051 139,888
Certificates of Deposit 289,840 316,968 331,085 350,076 372,266
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Deposits 2,172,519 2,043,798 2,101,011 2,147,047 2,103,976
Short-Term Borrowings 43,372 47,508 65,237 86,650 92,928
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 44,606 45,389 49,196 50,050 50,101
Other Liabilities 65,986 63,465 60,383 56,582 53,142
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities 2,389,370 2,263,047 2,338,714 2,403,216 2,363,034
---------------------------- ------------ ------------ ------------ ------------ ------------
SHAREOWNERS' EQUITY
Common Stock 172 172 171 171 171
Additional Paid-In Capital 37,838 38,074 37,724 37,548 36,920
Retained Earnings 237,461 237,969 237,709 237,276 237,679
Accumulated Other
Comprehensive Loss, Net of
Tax (23,529) (15,290) (15,060) (15,717) (15,751)
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Shareowners' Equity 251,942 260,925 260,544 259,278 259,019
---------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities and
Shareowners' Equity $ 2,641,312 $ 2,523,972 $ 2,599,258 $ 2,662,494 $ 2,622,053
---------------------------- ------------ ------------ ------------ ------------ ------------
OTHER BALANCE SHEET DATA
Earning Assets $ 2,266,193 $ 2,157,124 $ 2,215,098 $ 2,297,525 $ 2,269,185
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 258 318 378 437 742
Other 414 462 510 558 606
Interest Bearing Liabilities 1,705,066 1,614,954 1,709,518 1,806,450 1,763,635
---------------------------- ------------ ------------ ------------ ------------ ------------
Book Value Per Diluted Share $ 14.68 $ 15.20 $ 15.20 $ 15.13 $ 15.15
Tangible Book Value Per
Diluted Share 9.70 10.21 10.21 10.13 10.11
---------------------------- ------------ ------------ ------------ ------------ ------------
Actual Basic Shares
Outstanding 17,160 17,157 17,127 17,127 17,100
Actual Diluted Shares
Outstanding 17,161 17,172 17,139 17,136 17,101
---------------------------- ------------ ------------ ------------ ------------ ------------
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
--------------------------------------------------------------------------------------------------------
Twelve Months Ended
2011 2010 December 31,
------------------------------------------ --------- ---------------------
(Dollars in thousands, Fourth Third Second First Fourth
except per share data) Quarter Quarter Quarter Quarter Quarter 2011 2010
-------------------------- --------- --------- --------- --------- --------- --------- ----------
INTEREST INCOME
Interest and Fees on Loans $ 22,915 $ 23,777 $ 24,305 $ 23,947 $ 25,656 $ 94,944 $ 105,710
Investment Securities 902 978 1,017 1,071 1,080 3,968 4,198
Funds Sold 95 136 145 171 95 547 587
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Total Interest Income 23,912 24,891 25,467 25,189 26,831 99,459 110,495
-------------------------- --------- --------- --------- --------- --------- --------- ----------
INTEREST EXPENSE
Deposits 699 907 1,083 1,258 1,524 3,947 8,645
Short-Term Borrowings 6 78 110 111 99 305 159
Subordinated Notes Payable 358 339 343 340 342 1,380 2,008
Other Long-Term Borrowings 452 467 492 494 508 1,905 2,150
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Total Interest Expense 1,515 1,791 2,028 2,203 2,473 7,537 12,962
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Net Interest Income 22,397 23,100 23,439 22,986 24,358 91,922 97,533
Provision for Loan Losses 7,600 3,718 3,545 4,133 3,783 18,996 23,824
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Net Interest Income after
Provision for Loan Losses 14,797 19,382 19,894 18,853 20,575 72,926 73,709
-------------------------- --------- --------- --------- --------- --------- --------- ----------
NONINTEREST INCOME
Service Charges on Deposit
Accounts 6,530 6,629 6,309 5,983 6,434 25,451 26,500
Data Processing Fees 743 749 764 974 880 3,230 3,610
Asset Management Fees 1,124 1,080 1,080 1,080 1,095 4,364 4,235
Retail Brokerage Fees 776 807 939 729 738 3,251 2,820
Gain on Sale of Investment
Securities -- -- -- -- -- -- 8
Mortgage Banking Fees 845 645 568 617 1,027 2,675 2,948
Interchange Fees (1) 1,399 1,420 1,443 1,360 1,285 5,622 5,077
ATM/Debit Card Fees (1) 1,098 1,170 1,115 1,136 1,051 4,519 4,123
Other 1,358 1,693 2,230 4,455 2,225 9,736 7,504
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Total Noninterest Income 13,873 14,193 14,448 16,334 14,735 58,848 56,825
-------------------------- --------- --------- --------- --------- --------- --------- ----------
NONINTEREST EXPENSE
Salaries and Associate
Benefits 15,260 15,805 16,000 16,577 15,389 63,642 62,755
Occupancy, Net 2,284 2,495 2,447 2,396 2,406 9,622 10,010
Furniture and Equipment 2,097 2,118 2,117 2,226 2,268 8,558 8,929
Intangible Amortization 107 108 107 353 553 675 2,682
Other Real Estate 3,425 2,542 3,033 3,677 4,709 12,677 14,922
Other 7,930 7,579 7,463 8,102 8,215 31,074 34,618
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Total Noninterest Expense 31,103 30,647 31,167 33,331 33,540 126,248 133,916
-------------------------- --------- --------- --------- --------- --------- --------- ----------
OPERATING PROFIT (LOSS) (2,433) 2,928 3,175 1,856 1,770 5,526 (3,382)
Provision for Income Taxes (1,898) 951 1,030 546 (148) 629 (2,969)
-------------------------- --------- --------- --------- --------- --------- --------- ----------
NET INCOME (LOSS) $ (535) $ 1,977 $ 2,145 $ 1,310 $ 1,918 $ 4,897 $ (413)
-------------------------- --------- --------- --------- --------- --------- --------- ----------
PER SHARE DATA
Basic Earnings $ (0.03) $ 0.12 $ 0.12 $ 0.08 $ 0.12 $ 0.29 $ (0.02)
Diluted Earnings $ (0.03) $ 0.12 $ 0.12 $ 0.08 $ 0.12 $ 0.29 $ (0.02)
Cash Dividends 0.000 0.100 0.100 0.100 0.100 0.300 0.490
AVERAGE SHARES
Basic 17,157 17,152 17,127 17,122 17,095 17,140 17,076
Diluted 17,157 17,167 17,139 17,130 17,096 17,140 17,077
-------------------------- --------- --------- --------- --------- --------- --------- ----------
(1) Together referred to
as "Bank Card Fees"
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
------------------------------------------------------------------------------------------
2011 2011 2011 2011 2010
(Dollars in thousands, except Fourth Third Second First Fourth
per share data) Quarter Quarter Quarter Quarter Quarter
------------------------------ ---------- ---------- ---------- ---------- ----------
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 29,658 $ 31,080 $ 33,873 $ 35,436 $ 37,720
Provision for Loan Losses 7,600 3,718 3,545 4,133 3,783
Net Charge-Offs $ 6,223 $ 5,140 $ 6,338 $ 5,696 $ 6,067
------------------------------ ---------- ---------- ---------- ---------- ----------
Balance at End of Period 31,035 29,658 31,080 33,873 35,436
------------------------------ ---------- ---------- ---------- ---------- ----------
As a % of Loans 1.91% 1.79% 1.84% 1.98% 2.01%
As a % of Nonperforming Loans 32.05% 36.26% 36.71% 34.57% 40.57%
As a % of Nonperforming Assets 19.46% 20.74% 21.34% 22.09% 24.39%
------------------------------ ---------- ---------- ---------- ---------- ----------
CHARGE-OFFS
Commercial, Financial and
Agricultural $ 634 $ 186 $ 301 $ 721 $ 629
Real Estate - Construction 25 75 14 -- 234
Real Estate - Commercial 2,443 1,031 2,808 430 1,469
Real Estate - Residential 2,960 3,867 3,315 4,445 3,629
Consumer 879 832 606 620 582
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Charge-Offs $ 6,941 $ 5,991 $ 7,044 $ 6,216 $ 6,543
------------------------------ ---------- ---------- ---------- ---------- ----------
RECOVERIES
Commercial, Financial and
Agricultural $ 242 $ 33 $ 43 $ 63 $ 48
Real Estate - Construction -- -- 5 9 --
Real Estate - Commercial 87 37 115 12 55
Real Estate - Residential 47 379 170 96 7
Consumer 342 402 373 340 366
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Recoveries $ 718 $ 851 $ 706 $ 520 $ 476
------------------------------ ---------- ---------- ---------- ---------- ----------
NET CHARGE-OFFS $ 6,223 $ 5,140 $ 6,338 $ 5,696 $ 6,067
------------------------------ ---------- ---------- ---------- ---------- ----------
Net Charge-Offs as a % of
Average Loans(1) 1.50% 1.22% 1.49% 1.33% 1.35%
------------------------------ ---------- ---------- ---------- ---------- ----------
RISK ELEMENT ASSETS
Nonaccruing Loans $ 75,023 $ 53,396 $ 61,076 $ 73,954 $ 65,700
Troubled Debt Restructurings
("TDR's") 20,644 28,404 23,582 24,028 21,649
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Loans 95,667 81,800 84,658 97,982 87,349
Other Real Estate 62,600 61,196 61,016 55,364 57,937
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Assets $ 158,267 $ 142,996 $ 145,674 $ 153,346 $ 145,286
------------------------------ ---------- ---------- ---------- ---------- ----------
Past Due Loans 30-89 Days $ 19,425 $ 17,053 $ 18,103 $ 19,391 $ 24,193
Past Due Loans 90 Days or More $ 224 $ 26 $ 271 $ -- $ 159
------------------------------ ---------- ---------- ---------- ---------- ----------
Nonperforming Loans as a % of
Loans 5.87% 4.93% 5.02% 5.71% 4.97%
Nonperforming Assets as a % of
Loans and Other Real Estate 9.36% 8.32% 8.33% 8.66% 8.00%
Nonperforming Assets as a % of
Capital(2) 55.93% 49.21% 49.95% 52.31% 49.34%
Nonperforming Assets as a % of
Total Assets 5.99% 5.67% 5.60% 5.76% 5.54%
------------------------------ ---------- ---------- ---------- ---------- ----------
(1) Annualized
(2) Capital includes allowance
for loan losses.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
----------------------------------------------------------------------------------------------------------------------
Fourth Quarter 2011 Third Quarter 2011 Second 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 $ 1,646,715 23,032 5.55% $ 1,667,720 $ 23,922 5.69% $ 1,704,348 $ 24,465 5.76%
Investment
Securities
Taxable
Investment
Securities 248,217 816 1.31% 248,138 828 1.32% 244,487 825 1.35%
Tax-Exempt
Investment
Securities 59,647 131 0.88% 55,388 231 1.67% 60,963 297 1.95%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Investment
Securities 307,864 947 1.22% 303,526 1,059 1.39% 305,450 1,122 1.47%
Funds Sold 191,884 96 0.20% 231,681 136 0.23% 249,133 145 0.23%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Earning
Assets 2,146,463 $ 24,075 4.45% $ 25,117 4.52% $ 25,732 4.57%
--------- ------- 2,202,927 --------- ------- 2,258,931 --------- -------
Cash and Due
From Banks 49,666 47,252 47,465
Allowance for
Loan Losses (29,550) (30,969) (32,993)
Other Assets 343,336 344,041 344,884
---------------- ------------ ------------ ------------
Total Assets $ 2,509,915 $ 2,563,251 $ 2,618,287
---------------- ------------ ------------ ------------
LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 700,005 $ 148 0.08% $ 726,652 $ 222 0.12% $ 782,698 $ 259 0.13%
Money Market
Accounts 283,677 75 0.11% 282,378 95 0.13% 284,411 136 0.19%
Savings Accounts 156,088 20 0.05% 153,748 19 0.05% 152,599 16 0.04%
Time Deposits 299,487 456 0.60% 324,951 571 0.70% 338,723 672 0.80%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Interest
Bearing
Deposits 1,439,257 699 0.19% 1,487,729 907 0.24% 1,558,431 1,083 0.28%
Short-Term
Borrowings 44,573 6 0.05% 64,160 78 0.48% 76,754 110 0.58%
Subordinated
Notes Payable 62,887 358 2.23% 62,887 339 2.11% 62,887 343 2.16%
Other Long-Term
Borrowings 45,007 452 3.99% 46,435 467 3.99% 49,650 492 3.97%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Interest
Bearing
Liabilities 1,591,724 $ 1,515 0.38% $ 1,791 0.43% $ 2,028 0.47%
--------- ------- 1,661,211 --------- ------- 1,747,722 --------- -------
Noninterest
Bearing
Deposits 593,718 574,184 548,870
Other
Liabilities 60,197 63,954 59,324
---------------- ------------ ------------ ------------
Total
Liabilities 2,245,639 2,299,349 2,355,916
SHAREOWNERS'
EQUITY: $ 264,276 $ 263,902 $ 262,371
---------------- ------------ ------------ ------------
Total
Liabilities and
Shareowners'
Equity $ 2,509,915 $ 2,563,251 $ 2,618,287
---------------- ------------ ------------ ------------
Interest Rate
Spread $ 22,560 4.07% $ 23,326 4.09% $ 23,704 4.10%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Interest Income
and Rate
Earned(1) 24,075 4.45% 25,117 4.52% 25,732 4.57%
Interest Expense
and Rate
Paid(2) 1,515 0.28% 1,791 0.32% 2,028 0.36%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Net Interest
Margin $ 22,560 4.17% $ 23,326 4.20% $ 23,704 4.21%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
(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.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
------------------------------------------------------------------------------------------------
First Quarter 2011 Fourth Quarter 2010
-------------------------------- --------------------------------
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ------------ --------- ------- ------------ --------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,730,330 $ 24,101 5.65% $ 1,782,916 $ 25,799 5.74%
Investment Securities
Taxable Investment
Securities 231,153 851 1.48% 178,926 799 1.78%
Tax-Exempt Investment
Securities 74,226 337 1.81% 83,469 434 2.08%
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Investment Securities 305,379 1,188 1.56% 262,395 1,233 1.87%
Funds Sold 242,893 171 0.28% 172,738 95 0.24%
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Earning Assets 2,278,602 $ 25,460 4.53% $ 27,127 4.85%
--------- ------- 2,218,049 --------- -------
Cash and Due From Banks 50,942 51,030
Allowance for Loan Losses (34,822) (37,713)
Other Assets 348,295 345,427
---------------------------- ------------ ------------
Total Assets $ 2,643,017 $ 2,576,793
---------------------------- ------------ ------------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 786,939 $ 261 0.13% $ 837,625 $ 296 0.14%
Money Market Accounts 278,562 131 0.19% 282,887 134 0.19%
Savings Accounts 144,623 18 0.05% 136,276 16 0.05%
Time Deposits 360,575 848 0.95% 382,870 1,078 1.12%
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Interest Bearing
Deposits 1,570,699 1,258 0.32% 1,639,658 1,524 0.37%
Short-Term Borrowings 87,267 111 0.52% 34,706 99 1.14%
Subordinated Notes Payable 62,887 340 2.16% 62,887 342 2.13%
Other Long-Term Borrowings 50,345 494 3.98% 50,097 508 4.02%
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Interest Bearing
Liabilities 1,771,198 $ 2,203 0.50% $ 2,473 0.55%
--------- ------- 1,787,348 --------- -------
Noninterest Bearing Deposits 554,680 476,209
Other Liabilities 55,536 50,614
---------------------------- ------------ ------------
Total Liabilities 2,381,414 2,314,171
SHAREOWNERS' EQUITY: $ 261,603 $ 262,622
---------------------------- ------------ ------------
Total Liabilities and
Shareowners' Equity $ 2,643,017 $ 2,576,793
---------------------------- ------------ ------------
Interest Rate Spread $ 23,257 4.03% $ 24,654 4.30%
---------------------------- ------------ --------- ------- ------------ --------- -------
Interest Income and Rate
Earned(1) 25,460 4.53% 27,127 4.85%
Interest Expense and Rate
Paid(2) 2,203 0.39% 2,473 0.44%
---------------------------- ------------ --------- ------- ------------ --------- -------
Net Interest Margin $ 23,257 4.14% $ 24,654 4.41%
---------------------------- ------------ --------- ------- ------------ --------- -------
(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.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
December 2011 YTD December 2010 YTD
--------------------------------- ---------------------------------
Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ------------ ---------- ------- ------------ ---------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,686,995 $ 95,520 5.66% $ 1,829,193 $ 106,342 5.81%
Investment Securities
Taxable Investment
Securities 243,059 3,320 1.38% 126,078 2,681 2.12%
Tax-Exempt Investment
Securities 62,497 996 1.59% 90,352 2,332 2.58%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Total Investment Securities 305,556 4,316 1.41% 216,430 5,013 2.31%
Funds Sold 228,766 548 0.24% 248,659 587 0.23%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Total Earning Assets 2,221,317 $ 100,384 4.52% $ 111,942 4.88%
---------- ------- 2,294,282 ---------- -------
Cash and Due From Banks 48,823 51,883
Allowance for Loan Losses (32,066) (40,717)
Other Assets 345,123 339,283
---------------------------- ------------ ------------
Total Assets $ 2,583,197 $ 2,644,731
---------------------------- ------------ ------------
LIABILITIES:
Interest Bearing Deposits
NOW Accounts 748,774 $ 890 0.12% $ 863,719 $ 1,406 0.16%
Money Market Accounts 282,271 437 0.15% 320,786 1,299 0.41%
Savings Accounts 151,801 73 0.05% 131,945 65 0.05%
Time Deposits 330,750 2,547 0.77% 413,428 5,875 1.42%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Total Interest Bearing
Deposits 1,513,596 3,947 0.26% 1,729,878 8,645 0.05%
Short-Term Borrowings 68,061 305 0.45% 27,864 159 0.57%
Subordinated Notes Payable 62,887 1,380 2.16% 62,887 2,008 3.15%
Other Long-Term Borrowings 47,841 1,905 3.98% 51,767 2,150 4.15%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Total Interest Bearing
Liabilities 1,692,385 $ 7,537 0.45% $ 12,962 0.69%
---------- ------- 1,872,396 ---------- -------
Noninterest Bearing Deposits 567,987 462,445
Other Liabilities 59,777 45,211
---------------------------- ------------ ------------
Total Liabilities 2,320,149 2,380,052
SHAREOWNERS' EQUITY: $ 263,048 $ 264,679
---------------------------- ------------ ------------
Total Liabilities and
Shareowners' Equity $ 2,583,197 $ 2,644,731
---------------------------- ------------ ------------
Interest Rate Spread $ 92,847 4.07% $ 98,980 4.19%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Interest Income and Rate
Earned(1) 100,384 4.52% 111,942 4.88%
Interest Expense and Rate
Paid(2) 7,537 0.34% 12,962 0.56%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
Net Interest Margin $ 92,847 4.18% $ 98,980 4.32%
---------------------------- ------------ ---------- ------- ------------ ---------- -------
(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.
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