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Capital City Bank Group, Inc. Reports Third Quarter 2011 Results

By: Globe Newswire
By: Globe Newswire

TALLAHASSEE, Fla., Oct. 25, 2011 (GLOBE NEWSWIRE) --

Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the third quarter of 2011 totaling $2.0 million, or $0.12 per diluted share,compared to $2.1 million, or $0.12 per diluted share for the second
quarter of 2011, and $0.4 million, or $0.02 per diluted share, for the
third quarter of 2010. Net income for the nine month period ended
September 30, 2011 was $5.4 million, or $0.32 per diluted share,
compared to a net loss of $2.3 million, or $0.14 per diluted share for
the same period in 2010.

Compared to the second quarter of 2011, third quarter 2011 earnings
reflect lower operating revenues of $0.6 million and a $0.2 million
increase in the loan loss provision, partially offset by a $0.5 million
decline in noninterest expense and lower income tax expense of $0.1
million. A $1.9 million decline in the loan loss provision and a $1.7
million reduction in noninterest expense partially offset by lower
operating revenues of $0.9 million and higher income taxes of $1.1
million drove the improvement in earnings compared to the third quarter
of 2010.

The increase in earnings for the nine month period ended September 30,
2011 is attributable to an $8.6 million reduction in the loan loss
provision and lower noninterest expense of $5.2 million, partially
offset by a $0.8 million decline in operating revenues and higher
income taxes of $5.2 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).

"Although we are still facing a challenging operating environment, I am
pleased with our progress," said William G. Smith, Jr., Chairman,
President and Chief Executive Officer. "Market disruption continues to
present opportunities and strengthen the Capital City brand. Profit in
the third quarter of $2.0 million, or $0.12 per share represents our
sixth consecutive quarter of profitability. Highlights from the quarter
include lower nonperforming assets, declining credit costs, a strong
net interest margin and lower operating expenses. While the economy
remains sluggish and revenue growth continues to be a challenge, I am
pleased with our third quarter performance."

The Return on Average Assets was 0.31% and the Return on Average Equity
was 2.97% for the third quarter of 2011. These metrics were 0.33% and
3.28% for the second quarter of 2011, and 0.06% and 0.60% for the third
quarter of 2010, respectively.

For the nine month period ended September 30, 2011, the Return on
Average Assets was 0.28% and the Return on Average Equity was 2.77%
compared to -0.12% and -1.17%, respectively, for the same period of
2010.

Discussion of Financial Condition

Average earning assets were $2.203 billion for the third quarter of
2011, a decrease of $56.0 million, or 2.5% from the second quarter of
2011 and an increase of $15.1 million, or 0.7%, from the fourth quarter
of 2010. The lower level of earning assets over the second quarter of
2011 was a result of a decline in the loan portfolio of $36.6 million,
short-term investments of $17.4 million and the investment portfolio of
$2.0 million. Compared to the fourth quarter of 2010, average overnight
funds were higher by $59.0 million, the investment portfolio increased
$41.1 million and loans declined $115.2 million, partially attributable
to the resolution of problem loans during 2011.

Average loans continued to decline throughout the portfolio, driven
primarily by a reduction in the commercial real estate, residential and
commercial loan categories. The loan portfolio is impacted by weak loan
demand attributable to the lack of consumer confidence and a sluggish
economy. In addition to lower production, normal amortization, payoffs
and the resolution of problem loans (which has the effect of lowering
the loan portfolio as loans are either charged off or transferred to
the other real estate owned ("OREO") category), contributed to the
overall decline. During the third quarter, problem loan resolutions
accounted for $13.5 million or 45% of the net reduction in total loans
of $29.9 million from the second quarter of 2011. Problem loan
resolutions accounted for $44.5 million, or 44%, of the net reduction
in loans of $101.0 million from the fourth quarter of 20101.

Nonperforming assets (including nonaccrual loans, restructured loans
("TDRs"), and OREO) totaled $143.0 million at the end of the third
quarter of 2011, a decrease of $2.7 million from the second quarter of
2011 and a decrease of $2.3 million from the fourth quarter of 2010.
Nonaccrual loans decreased $7.7 million from the second quarter of 2011
to $53.4 million, primarily reflecting migration of loans into the
restructured loan category and the transfer of loans to OREO.
Nonaccrual loan inflow for the third quarter of 2011 was comparable to
the second quarter of 2011.

Compared to the fourth quarter of 2010, nonaccrual loans declined by
$12.3 million reflecting the movement of loans to the OREO category
and, to a lesser extent, migration to the restructured loan category.
TDRs totaled $28.4 million at the end of the third quarter, a $4.8
million increase over the second quarter of 2011 and a $6.8 million
increase over the fourth quarter of 2010. The balance of OREO totaled
$61.2 million at the end of the third quarter, a slight increase of
$0.2 million from the second quarter of 2011. For 2011, we have
realized a slower pace of loan defaults, momentum in working loans
through the collection cycle, and progress in our property disposition
efforts, which has contributed to the overall improvement in our
nonperforming asset portfolio. So far in 2011, we have sold OREO
properties totaling $25.2 million, which compares to $18.0 million for
the full year 2010. Nonperforming assets represented 5.67% of total
assets at September 30, 2011 compared to 5.60% at June 30, 2011 and
5.54% at December 31, 2010.

Average total deposits were $2.061 billion for the third quarter, a
decrease of $45.4 million, or 2.2%, from the second quarter of 2011 and
$53.9 million, or 2.6%, from the fourth quarter of 2010. Deposits
decreased in both periods driven primarily by a reduction in
certificates of deposit. Additionally, a decrease resulting from
existing clients moving from our Guaranteed Now Account product to
repurchase agreements occurred late in the fourth quarter of 2010 as
further discussed below. Public funds balances increased as anticipated
from the fourth quarter of 2010, but have declined from the second
quarter level, which reflects the seasonality within this deposit
category. Noninterest bearing demand and savings accounts experienced a
slight increase in both periods, partially offsetting the above
mentioned decline.

As a result of changes in the FDIC's Temporary Liquidity Guarantee
Program, our government guaranteed NOW product was discontinued during
the fourth quarter. As of December 31, 2010, approximately $95 million
in balances from this product remained in the NOW category, $95 million
migrated to the noninterest bearing DDA category, and $60 million moved
into repurchase agreements.

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 nonmaturity 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 $231.7
million during the third quarter of 2011 compared to an average
overnight funds sold position of $249.1 million in the linked quarter
and $164.9 million in the fourth quarter of 2010. The lower balance
when compared to the linked quarter primarily reflects declining
deposits mentioned above and lower levels of short-term borrowings,
partially offset by a decrease in the loan portfolio. The variance 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 and the deployment of funds
to the investment portfolio.

Equity capital was $260.9 million as of September 30, 2011, compared to
$260.5 million as of June 30, 2011 and $259.0 million as of December
31, 2010. Our leverage ratio was 10.20%, 9.95%, and 10.10%,
respectively, for these periods. Further, our risk-adjusted capital
ratio of 15.41% at September 30, 2011 exceeds the 10.0% threshold to be
designated as "well-capitalized" under the risk-based regulatory
guidelines. At September 30, 2011, our tangible common equity ratio was
7.19%, compared to 6.96% at June 30, 2011 and 6.82% at December 31,
2010.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2011 was
$23.3 million compared to $23.7 million for the second quarter of 2011
and $25.1 million for the third quarter of 2010. For the nine month
period ended September 30, 2011, tax equivalent net interest income
totaled $70.3 million compared to $74.3 million for the same period in
2010.

The decrease of $0.4 million in tax equivalent net interest income from
the second quarter of 2011 was due to lower loan balances, declining
loan fees and lower earning asset yields, partially offset by a
reduction in the costs of funds, an additional calendar day and a lower
level of foregone interest on nonaccrual loans.

The decrease in tax equivalent net interest income of $1.8 million and
$4.0 million, for the three and nine month periods ended September 30,
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 costs 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 re-pricing.

The net interest margin in the third quarter of 2011 was 4.20%, a
decrease of one basis point over the linked quarter and a decline of 18
basis points from the third quarter of 2010. Year over year, for the
nine month period, the margin declined 11 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 re-pricing,
partially offset by a favorable variance in our average cost of funds.

The provision for loan losses for the third quarter of 2011 was $3.7
million compared to $3.5 million in the second quarter of 2011 and $5.7
million for the third quarter of 2010. For the nine month period ended
September 30, 2011, the loan loss provision totaled $11.4 million
compared to $20.0 million for the same period in 2010. This change was
driven by a reduction in impaired loans and related reserves as well as
a lower general reserve, which is primarily reflective of a 14%
reduction in the level of internally classified loans, and lower loss
rates. Net charge-offs for the third quarter of 2011 totaled $5.1
million, or 1.22%, of average loans compared to $6.3 million, or 1.49%
for the second quarter of 2011 and $6.4 million, or 1.40%, in the third
quarter of 2010. For the nine month period ended September 30, 2011,
net charge-offs totaled $17.2 million, or 1.35%, of average loans
compared to $26.3 million, or 1.91%, for the same period of 2010. At
quarter-end, the allowance for loan losses of $29.7 million was 1.79%
of outstanding loans (net of overdrafts) and provided coverage of 36%
of nonperforming loans compared to 1.84% and 37%, respectively, at June
30, 2011, and 2.01% and 41%, respectively, at December 31, 2010.

Noninterest income for the third quarter of 2011 totaled $14.2 million,
a decrease of $0.3 million, or 1.8%, from the second quarter of 2011
and an increase of $0.7 million, or 5.5%, over the third quarter of
2010. A $0.5 million reduction in other income drove the decline from
the second quarter of 2011 and reflects a lower level of gains from the
sale of ORE properties. Partially offsetting the lower level of other
income was a $0.3 million increase in deposit fees. The favorable
variance compared to the third quarter of 2010 was primarily due to a
higher deposit and bank card fees of $0.2 million and $0.3 million,
respectively. For the nine month period ended September 30, 2011,
noninterest income totaled $45.0 million, an increase of $2.9 million,
or 6.8%, from the same period in 2010. The increase reflects a $3.3
million increase in other income reflective of a $3.2 million pre-tax
gain from the sale of our Class B shares of Visa stock during the first
quarter of 2011, and a $1.0 million increase in gains from the sale of
OREO properties, partially offset by a $1.1 million decline in merchant
fees. Increases in retail brokerage and bank card fees of $0.4 million
and $0.8 million, respectively, also contributed to the increase for
the year. Partially offsetting these favorable variances was a $1.1
million reduction in deposit fees reflective of a lower level of
overdraft fees due to reduced activity as well as the implementation of
new rules under Regulation E. 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.

Noninterest expense for the third quarter of 2011 totaled $30.6
million, a decrease of $0.5 million from the second quarter of 2011 and
$1.7 million from the third quarter of 2010. The decline from the
second quarter of 2011 was primarily due to a $0.5 million reduction in
OREO expense reflective of both a reduction in valuation adjustments
and losses from the sale of properties. Compared to the third quarter
of 2010, the favorable variance was due to lower OREO expense of $0.8
million, intangible amortization expense of $0.6 million, occupancy
expense of $0.3 million, and other expense of $0.9 million, partially
offset by higher salaries/associate benefit expense of $0.8 million.
The lower level of OREO expense primarily reflects a reduction in the
level of losses recognized on the sale of OREO. Intangible amortization
expense declined due to the full amortization of core deposit
intangibles related to several past acquisitions. Occupancy expense
declined due to lower lease expense for two banking offices that have
been relocated to newly constructed offices as well as lower expense
for furniture/equipment, reflecting the full depreciation of our
imaging system components. The $0.9 million decline in other expense
was primarily due to lower FDIC insurance expense of $0.5 million and
professional fees of $0.2 million. FDIC insurance expense declined due
to a lower rate reflecting recent changes to the FDIC premium
structure. Professional fees declined due to reduction in consulting
fees related to a review of our vendor contracts. The increase in
salaries/associate benefit expense primarily reflects a higher level of
performance incentive expense and associate salaries reflective of
third quarter, 2011 merit raises.

For the nine month period ended September 30, 2011, noninterest expense
totaled $95.1 million, a $5.2 million decline from the same period of
2010 attributable to lower occupancy expense of $0.3 million,
furniture/equipment expense of $0.2 million, intangible amortization
expense of $1.6 million, other real estate expense of $1.0 million, and
a decline in other expense of $3.3 million. Partially offsetting the
aforementioned favorable variances was a $1.0 million increase in
salaries/associate benefit expense. Occupancy expense declined due to
lower lease expense for two banking offices that have been relocated to
newly constructed offices and the reduction in furniture/equipment
expense reflects the full depreciation of several system components.
Intangible amortization expense declined due to the full amortization
of core deposit intangibles related to several past acquisitions. The
lower level of OREO expense reflects both a reduction in valuation
adjustments and property carrying costs. The $3.3 million reduction in
other expense primarily reflects a reduction in FDIC insurance expense
of $1.3 million, interchange fees of $0.9 million, professional fees of
$0.5 million, advertising expense of $0.2 million, and telephone
expense of $0.2 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 lower consulting
fees. The reduction in advertising fees reflects efficiencies gained in
the promotion of our free checking products. Telephone expense declined
primarily due to the renegotiation of contracts.

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 $2.5 billion in assets. The Company
provides a full range of banking services, including traditional
deposit and credit services, asset management, trust, mortgage banking,
merchant services, bankcards, data processing and securities brokerage
services. The Company's bank subsidiary, Capital City Bank, was founded
in 1895 and now has 70 banking offices and 79 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; our ability
to declare and pay dividends; 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 problem loan resolutions and reductions in portfolio balances
stated in this paragraph are based on "as of" balances, not averages.

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

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

Three Months Ended Nine Months Ended
------------------------------- ---------------------

(Dollars in thousands, Sep 30, June 30, Sep 30, Sep 30, Sep 30,
except per share data) 2011 2011 2010 2011 2010
------------------------- --------- --------- --------- --------- ----------

EARNINGS
Net Income (Loss) $ 1,977 $ 2,145 $ 401 $ 5,432 $ (2,331)

Net Income (Loss) Per
Common Share $ 0.12 $ 0.12 $ 0.02 $ 0.32 $ (0.14)
------------------------- --------- --------- --------- --------- ----------
PERFORMANCE
Return on Average Equity 2.97% 3.28% 0.60% 2.77% -1.17%
Return on Average Assets 0.31% 0.33% 0.06% 0.28% -0.12%
Net Interest Margin 4.20% 4.21% 4.38% 4.18% 4.29%
Noninterest Income as %
of Operating Revenue 38.14% 38.13% 35.17% 39.38% 36.52%

Efficiency Ratio 81.40% 81.41% 82.08% 82.07% 84.39%
------------------------- --------- --------- --------- --------- ----------
CAPITAL ADEQUACY
Tier 1 Capital Ratio 14.05% 13.83% 12.93% 14.05% 12.93%
Total Capital Ratio 15.41% 15.19% 14.29% 15.41% 14.29%
Tangible Common Equity
Ratio 7.19% 6.96% 6.98% 7.19% 6.98%
Leverage Ratio 10.20% 9.95% 9.75% 10.20% 9.75%

Equity to Assets 10.34% 10.02% 10.10% 10.34% 10.10%
------------------------- --------- --------- --------- --------- ----------
ASSET QUALITY
Allowance as % of
Non-Performing Loans 36.26% 36.71% 39.94% 36.26% 39.94%
Allowance as a % of Loans 1.79% 1.84% 2.10% 1.79% 2.10%
Net Charge-Offs as % of
Average Loans 1.22% 1.49% 1.40% 1.35% 1.91%
Nonperforming Assets as %
of Loans and ORE 8.32% 8.33% 7.86% 8.32% 7.86%

Nonperforming Assets as %
of Total Assets 5.67% 5.60% 5.65% 5.67% 5.65%
------------------------- --------- --------- --------- --------- ----------
STOCK PERFORMANCE
High $ 11.18 $ 13.12 $ 14.24 $ 13.80 $ 18.25
Low $ 9.81 $ 9.94 $ 10.76 $ 9.81 $ 10.76
Close $ 10.38 $ 10.26 $ 12.14 $ 10.38 $ 12.14

Average Daily Trading
Volume $ 43,483 $ 29,716 $ 29,747 $ 31,783 $ 34,489
------------------------- --------- --------- --------- --------- ----------

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

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

2011 2011 2011 2010 2010
----------- ----------- ----------- ----------- -----------

Third Second First Fourth Third
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter
---------------------------- ----------- ----------- ----------- ----------- -----------
ASSETS:
Cash and Due From Banks $ 53,027 $ 71,554 $ 52,000 $ 35,410 $ 48,701

Funds Sold and Interest
Bearing Deposits 193,387 223,183 271,375 200,783 193,415
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Cash and Cash
Equivalents 246,414 294,737 323,375 236,193 242,116

Investment Securities,
Available-for-Sale 306,038 304,313 311,356 309,731 231,303

Loans, Net of Unearned
Interest
Commercial, Financial, &
Agricultural 142,511 149,830 153,960 157,394 156,049
Real Estate - Construction 31,991 30,867 35,614 43,239 45,346
Real Estate - Commercial 644,128 660,058 668,583 671,702 680,639
Real Estate - Residential 388,686 395,126 404,204 420,604 448,704
Real Estate - Home Equity 245,438 248,228 248,745 251,565 250,795
Consumer 188,933 194,624 196,205 200,727 207,207
Other Loans 13,720 5,987 5,098 9,937 9,828

Overdrafts 2,292 2,882 2,385 3,503 2,669
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Loans, Net of
Unearned Interest 1,657,699 1,687,602 1,714,794 1,758,671 1,801,237

Allowance for Loan Losses $ (29,658) $ (31,080) $ (33,873) $ (35,436) $ (37,720)
---------------------------- ----------- ----------- ----------- ----------- -----------
Loans, Net 1,628,041 1,656,522 1,680,921 1,723,235 1,763,517

Premises and Equipment, Net 111,471 112,576 113,918 115,356 115,689
Intangible Assets $ 85,591 $ 85,699 $ 85,806 $ 86,159 $ 86,712
Other Real Estate Owned 61,196 61,016 55,364 57,937 51,208

Other Assets 85,221 84,395 91,754 93,442 89,451
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Other Assets 343,479 343,686 346,842 352,894 343,060
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Assets 2,523,972 2,599,258 2,662,494 2,622,053 2,579,996
---------------------------- ----------- ----------- ----------- ----------- -----------

LIABILITIES
Deposits:
Noninterest Bearing
Deposits 584,628 568,813 540,184 546,257 479,887
NOW Accounts 708,066 764,480 818,512 770,149 830,297
Money Market Accounts 280,001 283,230 288,224 275,416 282,848
Regular Savings Accounts 154,136 153,403 150,051 139,888 135,143

Certificates of Deposit 316,968 331,085 350,076 372,266 393,268
---------------------------- ----------- ----------- ----------- ----------- -----------
Total Deposits 2,043,798 2,101,011 2,147,047 2,103,976 2,121,443

Short-Term Borrowings 47,508 65,237 86,650 92,928 38,138
Subordinated Notes Payable $ 62,887 $ 62,887 $ 62,887 $ 62,887 $ 62,887
Other Long-Term Borrowings 45,389 49,196 50,050 50,101 46,456

Other Liabilities $ 63,465 $ 60,383 $ 56,582 $ 53,142 $ 50,383
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Liabilities 2,263,047 2,338,714 2,403,216 2,363,034 2,319,307
---------------------------- ----------- ----------- ----------- ----------- -----------

SHAREOWNERS' EQUITY
Common Stock 172 171 171 171 171
Additional Paid-In Capital 38,074 37,724 37,548 36,920 36,864
Retained Earnings 237,969 237,709 237,276 237,679 237,471

Accumulated Other
Comprehensive Loss, Net of
Tax (15,290) (15,060) (15,717) (15,751) (13,817)
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Shareowners' Equity 260,925 260,544 259,278 259,019 260,689
---------------------------- ----------- ----------- ----------- ----------- -----------

Total Liabilities and
Shareowners' Equity 2,523,972 2,599,258 2,662,494 2,622,053 2,579,996
---------------------------- ----------- ----------- ----------- ----------- -----------

OTHER BALANCE SHEET DATA
Earning Assets 2,157,124 2,215,098 2,297,525 2,269,185 2,225,955
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 318 378 437 742 1,248
Other 462 510 558 606 653

Interest Bearing Liabilities 1,614,954 1,709,518 1,806,450 1,763,635 1,789,037
---------------------------- ----------- ----------- ----------- ----------- -----------

Book Value Per Diluted Share 15.20 15.20 15.13 15.15 15.25

Tangible Book Value Per
Diluted Share 10.21 10.21 10.13 10.11 10.18
---------------------------- ----------- ----------- ----------- ----------- -----------

Actual Basic Shares
Outstanding 17,157 17,127 17,127 17,100 17,095

Actual Diluted Shares
Outstanding 17,172 17,139 17,136 17,101 17,096
---------------------------- ----------- ----------- ----------- ----------- -----------

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

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

Nine Months Ended
---------------------

2011 2011 2011 2010 2010 2011 2010
--------- --------- --------- --------- --------- --------- ----------

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

INTEREST INCOME
Interest and Fees on Loans $ 23,777 $ 24,305 $ 23,947 $ 25,656 $ 26,418 $ 72,029 $ 80,054
Investment Securities 978 1,017 1,071 1,080 1,014 3,066 3,118

Funds Sold 136 145 171 95 144 452 492
-------------------------- --------- --------- --------- --------- --------- --------- ----------

Total Interest Income 24,891 25,467 25,189 26,831 27,576 75,547 83,664
-------------------------- --------- --------- --------- --------- --------- --------- ----------

INTEREST EXPENSE
Deposits 907 1,083 1,258 1,524 1,820 3,248 7,121
Short-Term Borrowings 78 110 111 99 31 299 60
Subordinated Notes Payable 339 343 340 342 376 1,022 1,666

Other Long-Term Borrowings 467 492 494 508 565 1,453 1,642
-------------------------- --------- --------- --------- --------- --------- --------- ----------

Total Interest Expense 1,791 2,028 2,203 2,473 2,792 6,022 10,489
-------------------------- --------- --------- --------- --------- --------- --------- ----------
Net Interest Income 23,100 23,439 22,986 24,358 24,784 69,525 73,175

Provision for Loan Losses 3,718 3,545 4,133 3,783 5,668 11,396 20,041
-------------------------- --------- --------- --------- --------- --------- --------- ----------

Net Interest Income after
Provision for Loan Losses 19,382 19,894 18,853 20,575 19,116 58,129 53,134
-------------------------- --------- --------- --------- --------- --------- --------- ----------

NONINTEREST INCOME
Service Charges on Deposit
Accounts 6,629 6,309 5,983 6,434 6,399 18,921 20,066
Data Processing Fees 749 764 974 880 911 2,487 2,730
Asset Management Fees 1,080 1,080 1,080 1,095 1,040 3,240 3,140
Retail Brokerage Fees 807 939 729 738 671 2,475 2,082
Gain on Sale of Investment
Securities -- -- -- -- 3 -- 8
Mortgage Banking Fees 645 568 617 1,027 772 1,830 1,921
Interchange Fees (1) 1,420 1,443 1,360 1,285 1,291 4,223 3,792
ATM/Debit Card Fees (1) 1,170 1,115 1,136 1,051 1,036 3,421 3,072

Other 1,693 2,230 4,455 2,225 1,326 8,378 5,279
-------------------------- --------- --------- --------- --------- --------- --------- ----------

Total Noninterest Income 14,193 14,448 16,334 14,735 13,449 44,975 42,090
-------------------------- --------- --------- --------- --------- --------- --------- ----------

NONINTEREST EXPENSE
Salaries and Associate
Benefits 15,805 16,000 16,577 15,389 15,003 48,382 47,366
Occupancy, Net 2,495 2,447 2,396 2,406 2,611 7,338 7,604
Furniture and Equipment 2,118 2,117 2,226 2,268 2,288 6,461 6,661
Intangible Amortization 108 107 353 553 709 568 2,129
Other Real Estate 2,542 3,033 3,677 4,709 3,306 9,252 10,213

Other 7,579 7,463 8,102 8,215 8,446 23,144 26,403
-------------------------- --------- --------- --------- --------- --------- --------- ----------

Total Noninterest Expense 30,647 31,167 33,331 33,540 32,363 95,145 100,376
-------------------------- --------- --------- --------- --------- --------- --------- ----------

OPERATING PROFIT(LOSS) 2,928 3,175 1,856 1,770 202 7,959 (5,152)

Provision for Income Taxes 951 1,030 546 (148) (199) 2,527 (2,821)
-------------------------- --------- --------- --------- --------- --------- --------- ----------

NET INCOME (LOSS) $ 1,977 $ 2,145 $ 1,310 $ 1,918 $ 401 $ 5,432 $ (2,331)
-------------------------- --------- --------- --------- --------- --------- --------- ----------

PER SHARE DATA
Basic Earnings $ 0.12 $ 0.12 $ 0.08 $ 0.12 $ 0.02 $ 0.32 $ (0.14)
Diluted Earnings $ 0.12 $ 0.12 $ 0.08 $ 0.12 $ 0.02 $ 0.32 $ (0.14)
Cash Dividends 0.100 0.100 0.100 0.100 0.100 0.300 0.390
AVERAGE SHARES
Basic 17,152 17,127 17,122 17,095 17,087 17,134 17,069

Diluted 17,167 17,139 17,130 17,096 17,088 17,143 17,070
-------------------------- --------- --------- --------- --------- --------- --------- ----------

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

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

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

2011 2011 2011 2010 2010
(Dollars in thousands, except Third Second First Fourth Third
per share data) Quarter Quarter Quarter Quarter Quarter
------------------------------ ---------- ---------- ---------- ---------- ----------

ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 31,080 $ 33,873 $ 35,436 $ 37,720 $ 38,442
Provision for Loan Losses 3,718 3,545 4,133 3,783 5,668

Net Charge-Offs $ 5,140 $ 6,338 $ 5,696 $ 6,067 $ 6,390
------------------------------ ---------- ---------- ---------- ---------- ----------

Balance at End of Period 29,658 31,080 33,873 35,436 37,720
------------------------------ ---------- ---------- ---------- ---------- ----------
As a % of Loans 1.79% 1.84% 1.98% 2.01% 2.10%
As a % of Nonperforming Loans 36.26% 36.71% 34.57% 40.57% 39.94%

As a % of Nonperforming Assets 20.74% 21.34% 22.09% 24.39% 25.90%
------------------------------ ---------- ---------- ---------- ---------- ----------

CHARGE-OFFS
Commercial, Financial and
Agricultural $ 186 $ 301 $ 721 $ 629 $ 242
Real Estate - Construction 75 14 -- 234 701
Real Estate - Commercial 1,031 2,808 430 1,469 1,741
Real Estate - Residential 3,867 3,315 4,445 3,629 3,175

Consumer 832 606 620 582 1,057
------------------------------ ---------- ---------- ---------- ---------- ----------

Total Charge-Offs $ 5,991 $ 7,044 $ 6,216 $ 6,543 $ 6,916
------------------------------ ---------- ---------- ---------- ---------- ----------

RECOVERIES
Commercial, Financial and
Agricultural $ 33 $ 43 $ 63 $ 48 $ 65
Real Estate - Construction -- 5 9 -- --
Real Estate - Commercial 37 115 12 55 6
Real Estate - Residential 379 170 96 7 181

Consumer 402 373 340 366 274
------------------------------ ---------- ---------- ---------- ---------- ----------

Total Recoveries $ 851 $ 706 $ 520 $ 476 $ 526
------------------------------ ---------- ---------- ---------- ---------- ----------

NET CHARGE-OFFS $ 5,140 $ 6,338 $ 5,696 $ 6,067 $ 6,390
------------------------------ ---------- ---------- ---------- ---------- ----------

Net Charge-Offs as a % of
Average Loans(1) 1.22% 1.49% 1.33% 1.35% 1.40%
------------------------------ ---------- ---------- ---------- ---------- ----------

RISK ELEMENT ASSETS
Nonaccruing Loans $ 53,396 $ 61,076 $ 73,954 $ 65,700 $ 74,168

Restructured Loans 28,404 23,582 24,028 21,649 20,267
------------------------------ ---------- ---------- ---------- ---------- ----------
Total Nonperforming Loans 81,800 84,658 97,982 87,349 94,435

Other Real Estate 61,196 61,016 55,364 57,937 51,208
------------------------------ ---------- ---------- ---------- ---------- ----------

Total Nonperforming Assets $ 142,996 $ 145,674 $ 153,346 $ 145,286 $ 145,643
------------------------------ ---------- ---------- ---------- ---------- ----------

Past Due Loans 30-89 Days $ 17,053 $ 18,103 $ 19,391 $ 24,193 $ 24,904

Past Due Loans 90 Days or More $ 26 $ 271 $ -- $ 159 $ --
------------------------------ ---------- ---------- ---------- ---------- ----------

Nonperforming Loans as a % of
Loans 4.93% 5.02% 5.71% 4.97% 5.24%
Nonperforming Assets as a % of
Loans and Other Real Estate 8.32% 8.33% 8.66% 8.00% 7.86%
Nonperforming Assets as a % of
Capital(2) 49.21% 49.95% 52.31% 49.34% 48.81%

Nonperforming Assets as a % of
Total Assets 5.67% 5.60% 5.76% 5.54% 5.65%
------------------------------ ---------- ---------- ---------- ---------- ----------

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

AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited

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

Third Quarter 2011 Second Quarter 2011 First 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 $ 1,667,720 $ 23,922 5.69% $ 1,704,348 $ 24,465 5.76% $ 1,730,330 $ 24,101 5.65%

Investment
Securities
Taxable
Investment
Securities 248,138 828 1.32% 244,487 825 1.35% 231,153 851 1.48%

Tax-Exempt
Investment
Securities 55,388 231 1.67% 60,963 297 1.95% 74,226 337 1.81%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Investment
Securities 303,526 1,059 1.39% 305,450 1,122 1.47% 305,379 1,188 1.56%

Funds Sold 231,681 136 0.23% 249,133 145 0.23% 242,893 171 0.28%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Earning
Assets 2,202,927 $ 25,117 4.52% $ 25,732 4.57% $ 25,460 4.53%
--------- ------- 2,258,931 --------- ------- 2,278,602 --------- -------

Cash and Due
From Banks 47,252 47,465 50,942
Allowance for
Loan Losses (30,969) (32,993) (34,822)

Other Assets 344,041 344,884 348,295
---------------- ------------ ------------ ------------

Total Assets $ 2,563,251 $ 2,618,287 $ 2,643,017
---------------- ------------ ------------ ------------

LIABILITIES:
Interest Bearing
Deposits
NOW Accounts $ 726,652 $ 222 0.12% $ 782,698 $ 259 0.13% $ 786,939 $ 261 0.13%
Money Market
Accounts 282,378 95 0.13% 284,411 136 0.19% 278,562 131 0.19%
Savings Accounts 153,748 19 0.05% 152,599 16 0.04% 144,623 18 0.05%

Time Deposits 324,951 571 0.70% 338,723 672 0.80% 360,575 848 0.95%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------
Total Interest
Bearing
Deposits 1,487,729 907 0.24% 1,558,431 1,083 0.28% 1,570,699 1,258 0.32%

Short-Term
Borrowings 64,160 78 0.48% 76,754 110 0.58% 87,267 111 0.52%
Subordinated
Notes Payable 62,887 339 2.11% 62,887 343 2.16% 62,887 340 2.16%

Other Long-Term
Borrowings 46,435 467 3.99% 49,650 492 3.97% 50,345 494 3.98%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Total Interest
Bearing
Liabilities 1,661,211 $ 1,791 0.43% $ 2,028 0.47% $ 2,203 0.50%
--------- ------- 1,747,722 --------- ------- 1,771,198 --------- -------

Noninterest
Bearing
Deposits 574,184 548,870 554,680

Other
Liabilities 63,954 59,324 55,536
---------------- ------------ ------------ ------------

Total
Liabilities 2,299,349 2,355,916 2,381,414

SHAREOWNERS'
EQUITY: $ 263,902 $ 262,371 $ 261,603
---------------- ------------ ------------ ------------

Total
Liabilities and
Shareowners'
Equity $ 2,563,251 $ 2,618,287 $ 2,643,017
---------------- ------------ ------------ ------------

Interest Rate
Spread $ 23,326 4.09% $ 23,704 4.10% $ 23,257 4.03%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Interest Income
and Rate
Earned(1) 25,117 4.52% 25,732 4.57% 25,460 4.53%

Interest Expense
and Rate
Paid(2) 1,791 0.32% 2,028 0.36% 2,203 0.39%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

Net Interest
Margin $ 23,326 4.20% $ 23,704 4.21% $ 23,257 4.14%
---------------- ------------ --------- ------- ------------ --------- ------- ------------ --------- -------

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

Fourth Quarter 2010 Third Quarter 2010
-------------------------------- --------------------------------

Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
--------------------------- ------------ --------- ------- ------------ --------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,782,916 $ 25,799 5.74% $ 1,807,483 $ 26,568 5.83%

Investment Securities
Taxable Investment
Securities 178,926 799 1.78% 124,625 674 2.15%

Tax-Exempt Investment
Securities 83,469 434 2.08% 88,656 521 2.35%
--------------------------- ------------ --------- ------- ------------ --------- -------

Total Investment Securities 262,395 1,233 1.87% 213,281 1,195 2.23%

Funds Sold 172,738 95 0.24% 252,434 144 0.22%
--------------------------- ------------ --------- ------- ------------ --------- -------

Total Earning Assets 2,218,049 $ 27,127 4.85% $ 27,907 4.87%
--------- ------- 2,273,198 --------- -------

Cash and Due From Banks 51,030 50,942
Allowance for Loan Losses (37,713) (39,584)

Other Assets 345,427 342,202
--------------------------- ------------ ------------

Total Assets $ 2,576,793 $ 2,626,758
--------------------------- ------------ ------------

LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 837,625 $ 296 0.14% $ 871,158 $ 326 0.15%
Money Market Accounts 282,887 134 0.19% 293,424 145 0.20%
Savings Accounts 136,276 16 0.05% 133,690 17 0.05%

Time Deposits 382,870 1,078 1.12% 402,880 1,332 1.31%
--------------------------- ------------ --------- ------- ------------ --------- -------
Total Interest Bearing
Deposits 1,639,658 1,524 0.37% 1,701,152 1,820 0.42%

Short-Term Borrowings 34,706 99 1.14% 23,388 31 0.54%
Subordinated Notes Payable 62,887 342 2.13% 62,887 376 2.34%

Other Long-Term Borrowings 50,097 508 4.02% 54,258 565 4.13%
--------------------------- ------------ --------- ------- ------------ --------- -------

Total Interest Bearing
Liabilities 1,787,348 $ 2,473 0.55% $ 2,792 0.60%
--------- ------- 1,841,685 --------- -------

Noninterest Bearing
Deposits 476,209 471,013

Other Liabilities 50,614 50,318
--------------------------- ------------ ------------

Total Liabilities 2,314,171 2,363,016

SHAREOWNERS' EQUITY: $ 262,622 $ 263,742
--------------------------- ------------ ------------

Total Liabilities and
Shareowners' Equity $ 2,576,793 $ 2,626,758
--------------------------- ------------ ------------

Interest Rate Spread $ 24,654 4.30% $ 25,115 4.27%
--------------------------- ------------ --------- ------- ------------ --------- -------

Interest Income and Rate
Earned(1) 27,127 4.85% 27,907 4.87%

Interest Expense and Rate
Paid(2) 2,473 0.44% 2,792 0.49%
--------------------------- ------------ --------- ------- ------------ --------- -------

Net Interest Margin $ 24,654 4.41% $ 25,115 4.38%
--------------------------- ------------ --------- ------- ------------ --------- -------

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

September 2011 YTD September 2010 YTD
-------------------------------- --------------------------------

Average Average Average Average
(Dollars in thousands) Balance Interest Rate Balance Interest Rate
---------------------------- ------------ --------- ------- ------------ --------- -------
ASSETS:
Loans, Net of Unearned
Interest $ 1,700,570 $ 72,488 5.70% $ 1,844,788 $ 80,543 5.84%

Investment Securities
Taxable Investment
Securities 241,321 2,504 1.40% 108,268 1,882 2.32%

Tax-Exempt Investment
Securities 63,457 865 1.82% 92,672 1,898 2.73%
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Investment Securities 304,778 3,369 1.47% 200,940 3,780 2.51%

Funds Sold 241,195 452 0.25% 274,245 492 0.24%
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Earning Assets 2,246,543 $ 76,309 4.54% $ 84,815 4.89%
--------- ------- 2,319,973 --------- -------

Cash and Due From Banks 48,539 52,170
Allowance for Loan Losses (32,914) (41,729)

Other Assets 345,725 337,212
---------------------------- ------------ ------------

Total Assets $ 2,607,893 $ 2,667,626
---------------------------- ------------ ------------

LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 765,209 $ 742 0.13% $ 872,512 $ 1,110 0.17%
Money Market Accounts 281,798 362 0.17% 333,558 1,165 0.47%
Savings Accounts 150,357 53 0.05% 130,485 49 0.05%

Time Deposits 341,286 2,091 0.82% 423,726 4,797 1.51%
---------------------------- ------------ --------- ------- ------------ --------- -------
Total Interest Bearing
Deposits 1,538,650 3,248 0.28% 1,760,281 7,121 0.54%

Short-Term Borrowings 75,976 299 0.53% 25,558 60 0.31%
Subordinated Notes Payable 62,887 1,022 2.14% 62,887 1,666 3.49%

Other Long-Term Borrowings 48,795 1,453 3.98% 52,330 1,642 4.20%
---------------------------- ------------ --------- ------- ------------ --------- -------

Total Interest Bearing
Liabilities 1,726,308 $ 6,022 0.47% $ 10,489 0.74%
--------- ------- 1,901,056 --------- -------

Noninterest Bearing Deposits 559,316 457,807

Other Liabilities 59,635 43,391
---------------------------- ------------ ------------

Total Liabilities 2,345,259 2,402,254

SHAREOWNERS' EQUITY: $ 262,634 $ 265,372
---------------------------- ------------ ------------

Total Liabilities and
Shareowners' Equity $ 2,607,893 $ 2,667,626
---------------------------- ------------ ------------

Interest Rate Spread $ 70,287 4.07% $ 74,326 4.15%
---------------------------- ------------ --------- ------- ------------ --------- -------

Interest Income and Rate
Earned(1) 76,309 4.54% 84,815 4.89%

Interest Expense and Rate
Paid(2) 6,022 0.36% 10,489 0.60%
---------------------------- ------------ --------- ------- ------------ --------- -------

Net Interest Margin $ 70,287 4.18% $ 74,326 4.29%
---------------------------- ------------ --------- ------- ------------ --------- -------

(1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal
tax rate.
(2) Rate calculated based on average earning assets.

CONTACT: J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820


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