TALLAHASSEE, Fla., Oct. 23, 2018 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $6.0 million, or $0.35 per diluted share for the third quarter of 2018 compared to net income of $6.0 million, or $0.35 per diluted share for the second quarter of 2018, and $4.6 million, or $0.27 per diluted share for the third quarter of 2017. Net income for the third quarter of 2018 included a tax benefit of $0.4 million, or $0.02 per diluted share related to a 2017 plan year pension contribution made during the quarter as well as a non-routine operating loss of $0.2 million, or $0.01 per diluted share.
For the first nine months of 2018, net income totaled $17.8 million, or $1.04 per diluted share, compared to net income of $10.9 million, or $0.64 per diluted share for the same period of 2017. Net income for 2018 included tax benefits totaling $3.3 million, or $0.19 per diluted share related to 2017 plan year pension contributions made during 2018.
HIGHLIGHTS
- Net interest income up 3.7% sequentially and 10.8% over prior year
- Net interest margin of 3.72%, up 14 basis points over prior quarter
- Period-end loan growth of $49 million, or 2.8% over prior quarter
- Year-to-date net charge-offs at 12 basis points continues to reflect the quality of our loan portfolio
- Tangible capital ratio of 7.80%, up 33 basis points over prior quarter
“The third quarter was a continuation of trends we have seen in recent quarters and represented an improvement in our overall performance”, said William G. Smith, Jr., Chairman, President and CEO. “Rising rates, loan growth and a phenomenal core deposit base are all contributing to higher net interest income. Credit quality remains strong and the strength of our Florida and Georgia economies is driving continued improvement in our market demographics. Lowering our efficiency ratio is a top priority and we have multiple strategies in place to grow revenues and manage expenses. There is more to be done, but I am pleased with our progress as we remain focused on strategies that produce long-term value for our shareowners.”
Compared to the second quarter of 2018, the $1.2 million increase in operating profit reflected a $0.8 million increase in net interest income and higher noninterest income of $0.8 million, partially offset by higher noninterest expense of $0.3 million and a $0.1 million increase in the loan loss provision.
Compared to the third quarter of 2017, the $0.3 million increase in operating profit was attributable to higher net interest income of $2.4 million and higher noninterest income of $0.3 million, partially offset by a $2.0 million increase in noninterest expense and a $0.4 million increase in the loan loss provision.
The increase in operating profit of $2.6 million for the first nine months of 2018 versus the comparable period of 2017 was attributable to higher net interest income of $6.7 million, partially offset by lower noninterest income of $0.5 million, higher noninterest expense of $2.5 million, and $1.1 million increase in the loan loss provision.
Our return on average assets (“ROA”) was 0.84% and our return on average equity (“ROE”) was 7.98% for the third quarter of 2018. These metrics were 0.84% and 8.25% for the second quarter of 2018, respectively, and 0.65% and 6.33% for the third quarter of 2017, respectively. For the first nine months of 2018, our ROA was 0.83% and our ROE was 8.12% compared to 0.52% and 5.15%, respectively, for the same period of 2017.
Discussion of Operating Results
Tax-equivalent net interest income for the third quarter of 2018 was $23.8 million compared to $22.9 million for the second quarter of 2018 and $21.6 million for the third quarter of 2017. The increase in tax-equivalent net interest income compared to both prior periods reflected higher interest rates and a favorable shift in the earning asset mix. Higher rates were earned on overnight funds, investment securities and variable rate loans, partially offset by a higher cost on our negotiated rate deposits. For the first nine months of 2018, tax-equivalent net interest income totaled $68.6 million compared to $62.4 million for the comparable period of 2017. The year-over-year increase was driven by growth in the loan and investment portfolios, coupled with higher short-term rates, partially offset by a higher rate paid on our negotiated rate deposits.
The federal funds target rate has been increased eight times since December 2015 to 2.25% at the end of the third quarter of 2018, which positively affected our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these increases have resulted in higher rates paid on our negotiated rate deposit products, we continue to prudently manage our overall cost of funds, which was 28 basis points for the third quarter of 2018 compared to 26 basis points for the second quarter of 2018. In conjunction with our overall balance sheet management, we continue to review our deposit board rates to determine whether rate increases are appropriate. Various deposit products have been developed and are available to assist in attracting new clients or maintaining existing relationships that are seeking higher returns on their deposit balances. While rising rates and client expectations will result in a higher cost of funds, we will continue to prudently manage the mix and costs of our deposit base as we have done in the past.
Our net interest margin for the third quarter of 2018 was 3.72%, an increase of 14 basis points over the second quarter of 2018 and an increase of 24 basis points over the third quarter of 2017. For the first nine months of 2018, the net interest margin increased 24 basis points to 3.58% compared to the same period of 2017. The increase in the margin as compared to all prior periods reflects rising interest rates and a favorable shift in our earning asset mix, which has produced higher net interest income in each period.
The provision for loan losses for the third quarter of 2018 was $0.9 million compared to $0.8 million for the second quarter of 2018 and $0.5 million for the third quarter of 2017. For the first nine months of 2018, the loan loss provision was $2.5 million compared to $1.4 million in 2017. The higher provision in 2018 reflected growth in the loan portfolio. At September 30, 2018, the allowance for loan losses of $14.2 million represented 0.80% of outstanding loans (net of overdrafts) and provided coverage of 207% of nonperforming loans compared to 0.78% and 236%, respectively, at June 30, 2018 and 0.80% and 186%, respectively, at December 31, 2017.
Noninterest income for the third quarter of 2018 totaled $13.3 million, an increase of $0.8 million, or 6.1%, over the second quarter of 2018 and $0.3 million, or 2.4%, over the third quarter of 2017. Compared to the second quarter of 2018, the increase was primarily due to higher deposit fees, wealth management fees, mortgage banking fees and other income. A higher level of deposit fees, bank card fees, and other income drove the increase over the third quarter of 2017. For the first nine months of 2018, noninterest income totaled $38.3 million, a $0.5 million, or 1.3%, decrease from the same period of 2017, primarily due to lower mortgage banking fees of $0.7 million partially offset by higher wealth management fees of $0.3 million. The lower level of mortgage banking fees was due to a slowdown in secondary market loan production as adjustable rate loan production has picked up momentum and is being retained in our loan portfolio instead of sold on the secondary market. Total residential loan production (secondary market sales and portfolio) during the first nine months of 2018 was comparable to the prior year. The increase in wealth management was attributable to higher trust fees and reflected growth in assets under management.
Noninterest expense for the third quarter of 2018 totaled $28.7 million, an increase of $0.3 million, or 1.1%, over the second quarter of 2018 and $2.0 million, or 7.5%, over the third quarter of 2017. For the first nine months of 2018, noninterest expense totaled $85.0 million, a $2.5 million, or 3.0%, increase over the same period of 2017. Compared to the second quarter of 2018, the increase was primarily attributable to a non-routine operating loss. The increase over the three and nine month periods of 2017 was mostly attributable to an increase in other expense, primarily professional fees, but higher compensation, other real estate owned (“OREO”) expense and a non-routine operating loss also contributed to the increase. The higher level of professional fees reflected costs associated with several consulting projects, including both profit enhancements projects and the upgrading of ancillary systems, all of which were essentially complete at the end of the third quarter. The increase in compensation expense reflected higher incentive plan expense driven by improved financial performance. The increase in OREO expense reflected a $0.7 million decline in property sale gains which spiked in the third quarter of 2017.
For the first nine months of 2018, we realized income tax expense of $1.3 million, which reflected three discrete tax benefit items totaling $3.3 million resulting from the effect of federal tax reform, enacted in December 2017, specifically related to pension plan contributions made in 2018 for the plan year 2017. The discrete tax items for 2018 totaled $1.5 million for the first quarter, $1.4 million for the second quarter and $0.4 million for the third quarter. Absent these discrete items, our effective tax rate was approximately 24%.
Discussion of Financial Condition
Average earning assets were $2.535 billion for the third quarter of 2018, a decrease of $30.7 million, or 1.2%, from the second quarter of 2018, and an increase of $23.3 million, or 0.9%, over the fourth quarter of 2017. The change in average earning assets compared to the second quarter 2018 was attributable to a decrease in short-term investments, primarily due to a decline in seasonal public fund balances and certificates of deposit. The change in average earning assets over the fourth quarter 2017 was attributable to growth in the loan and investment portfolios primarily funded by increases in noninterest bearing deposits and savings accounts.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $63.6 million during the third quarter of 2018 compared to an average net overnight funds sold position of $158.7 million in the second quarter of 2018 and $174.6 million in the fourth quarter of 2017. The decrease in average net overnight funds compared to all prior periods reflected growth in our loan and investment portfolios. Additionally, part of the decrease compared to the second quarter of 2018 was attributable to the decline in our public deposits and certificates of deposit.
Average loans increased $55.8 million, or 3.3% compared to the second quarter of 2018, and have grown $106.4 million, or 6.5% compared to the fourth quarter of 2017. The increase compared to both prior periods reflected growth in all loans types except home equity loans. Over the course of 2018, we have purchased both adjustable rate residential loans and fixed and adjustable rate commercial real estate loan pools totaling $25.1 million based on principal balances at the time of purchase.
We continue to make minor modifications on some of our lending programs to try to mitigate the impact that consumer and business deleveraging has had on our portfolio. These programs, coupled with economic improvements in our anchor markets, have helped to increase overall loan growth. In this rising rate environment, our fixed rate pricing is reviewed frequently and rate increases are implemented as appropriate.
Nonperforming assets (nonaccrual loans and OREO) totaled $9.6 million at September 30, 2018, representing an increase of $0.5 million, or 5.2%, over June 30, 2018, and a decrease of $1.5 million, or 13.6%, from December 31, 2017. Nonaccrual loans totaled $6.9 million at September 30, 2018, a $1.1 million increase over June 30, 2018 and a $0.3 million decrease from December 31, 2017. The balance of OREO totaled $2.7 million at September 30, 2018, a decrease of $0.6 million from June 30, 2018 and a decrease of $1.2 million from December 31, 2017. For the third quarter of 2018, we added properties totaling $0.4 million, sold properties totaling $0.9 million and recorded valuation adjustments totaling $0.2 million.
Average total deposits were $2.392 billion for the third quarter of 2018, a decrease of $39.7 million, or 1.6%, from the second quarter of 2018, and an increase of $13.9 million, or 0.6%, over the fourth quarter of 2017. The decline in deposits compared to the second quarter of 2018 reflected lower public fund and certificates of deposit balances, partially offset by increases in noninterest bearing and savings accounts. The increase in deposits when compared to the fourth quarter of 2017 reflected growth in all deposit products except public fund, regular NOW accounts and certificates of deposit. Average public fund balances typically peak in the first quarter and trend downward through the middle of the fourth quarter due to the cycle of tax receipts.
Deposit levels continue to be closely monitored and managed in conjunction with runoff from the investment portfolio. We monitor deposit rates on an ongoing basis as a prudent pricing discipline remains the key to managing our mix of deposits.
Average borrowings for the third quarter 2018 increased $5.9 million compared to the second quarter 2018, and increased $2.9 million compared to the fourth quarter of 2017. Increases occurred in short-term borrowings, partially offset by declines in long-term borrowings. We utilized short-term funding from the Federal Home Loan Bank to fund a small portion of the $55.8 million in average loan growth during the third quarter as we awaited maturities and cash flow back from the investment portfolio.
Shareowners’ equity was $298.0 million at September 30, 2018, compared to $293.6 million at June 30, 2018 and $284.2 million at December 31, 2017. At September 30, 2018, our common stock had a book value of $17.40 per diluted share compared to $17.15 at June 30, 2018 and $16.65 at December 31, 2017. Book value is impacted through other comprehensive income by the net unrealized gains and losses in our available for sale investment portfolio. At September 30, 2018, the net after tax unrealized loss was $3.4 million compared to $3.0 million at June 30, 2018 and $1.7 million at December 31, 2017. Book value is also impacted by the recording of our unfunded pension liability through other comprehensive income. At September 30, 2018, the net after tax pension liability reflected in accumulated other comprehensive loss was $30.3 million. This liability is re-measured annually on December 31st based on an actuarial calculation of our pension liability. Significant assumptions used in calculating the liability are discussed in our 2017 Form 10-K “Critical Accounting Policies” and include the weighted average discount rate used to measure the present value of the pension liability, the weighted-average expected long-term rate of return on pension plan assets, and the assumed rate of annual compensation increases, all of which will vary when re-measured. The discount rate assumption used to calculate the pension liability is subject to long-term corporate bond rates at December 31st. The estimated impact to the pension liability based on a 25 basis point increase or decrease in long-term corporate bond rates used to discount the pension obligation would decrease or increase the pension liability by approximately $5.3 million (after-tax) using the balances from the December 31, 2017 measurement date.
At September 30, 2018, our leverage ratio was 10.99% compared to 10.69% and 10.47% at June 30, 2018 and December 31, 2017, respectively. Further, our risk-adjusted capital ratio was 16.94%, 17.00%, and 17.10% on these respective dates. Our common equity tier 1 ratio was 13.43% at September 30, 2018, compared to 13.46% at June 30, 2018 and 13.42% at December 31, 2017. All of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $2.8 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 59 banking offices and 73 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes, and the ability to repay and qualified mortgage standards; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and our 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 we assume no obligation to update forward-looking statements or the reasons why actual results could differ.
USE OF NON-GAAP FINANCIAL MEASURES
We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. The GAAP to non-GAAP reconciliation is provided below.
| (Dollars in Thousands) | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
| Shareowners' Equity (GAAP) | $ | 298,016 | $ | 293,571 | $ | 288,360 | $ | 284,210 | $ | 285,201 | ||||||
| Less: Goodwill (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||
| Tangible Shareowners' Equity (non-GAAP) | A | 213,205 | 208,760 | 203,549 | 199,399 | 200,390 | ||||||||||
| Total Assets (GAAP) | 2,819,190 | 2,880,278 | 2,924,832 | 2,898,794 | 2,790,842 | |||||||||||
| Less: Goodwill (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||
| Tangible Assets (non-GAAP) | B | $ | 2,734,379 | $ | 2,795,467 | $ | 2,840,021 | $ | 2,813,983 | $ | 2,706,031 | |||||
| Tangible Common Equity Ratio (non-GAAP) | A/B | 7.80 | % | 7.47 | % | 7.17 | % | 7.09 | % | 7.41 | % | |||||
| Actual Diluted Shares Outstanding (GAAP) | C | 17,127,846 | 17,114,380 | 17,088,419 | 17,071,107 | 17,045,326 | ||||||||||
| Tangible Book Value per Diluted Share (non-GAAP) | A/C | $ | 12.45 | $ | 12.20 | $ | 11.91 | $ | 11.68 | $ | 11.76 | |||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||
| EARNINGS HIGHLIGHTS | |||||||||||||||
| Unaudited | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| (Dollars in thousands, except per share data) | Sep 30, 2018 | Jun 30, 2018 | Sep 30, 2017 | Sep 30, 2018 | Sep 30, 2017 | ||||||||||
| EARNINGS | |||||||||||||||
| Net Income | $ | 5,990 | $ | 6,003 | $ | 4,555 | $ | 17,766 | $ | 10,860 | |||||
| Net Income Per Common Share | $ | 0.35 | $ | 0.35 | $ | 0.27 | $ | 1.04 | $ | 0.64 | |||||
| PERFORMANCE | |||||||||||||||
| Return on Average Assets | 0.84 | % | 0.84 | % | 0.65 | % | 0.83 | % | 0.52 | % | |||||
| Return on Average Equity | 7.98 | % | 8.25 | % | 6.33 | % | 8.12 | % | 5.15 | % | |||||
| Net Interest Margin | 3.72 | % | 3.58 | % | 3.48 | % | 3.58 | % | 3.34 | % | |||||
| Noninterest Income as % of Operating Revenue | 36.04 | % | 35.52 | % | 37.94 | % | 35.99 | % | 38.72 | % | |||||
| Efficiency Ratio | 77.37 | % | 80.07 | % | 77.21 | % | 79.46 | % | 81.53 | % | |||||
| CAPITAL ADEQUACY | |||||||||||||||
| Tier 1 Capital Ratio | 16.17 | % | 16.25 | % | 16.19 | % | 16.17 | % | 16.19 | % | |||||
| Total Capital Ratio | 16.94 | % | 17.00 | % | 16.96 | % | 16.94 | % | 16.96 | % | |||||
| Tangible Common Equity Ratio | 7.80 | % | 7.47 | % | 7.41 | % | 7.80 | % | 7.41 | % | |||||
| Leverage Ratio | 10.99 | % | 10.69 | % | 10.48 | % | 10.99 | % | 10.48 | % | |||||
| Common Equity Tier 1 Ratio | 13.43 | % | 13.46 | % | 13.26 | % | 13.43 | % | 13.26 | % | |||||
| Equity to Assets | 10.57 | % | 10.19 | % | 10.22 | % | 10.57 | % | 10.22 | % | |||||
| ASSET QUALITY | |||||||||||||||
| Allowance as % of Non-Performing Loans | 207.06 | % | 236.25 | % | 203.39 | % | 207.06 | % | 203.39 | % | |||||
| Allowance as a % of Loans | 0.80 | % | 0.78 | % | 0.82 | % | 0.80 | % | 0.82 | % | |||||
| Net Charge-Offs as % of Average Loans | 0.06 | % | 0.12 | % | 0.10 | % | 0.12 | % | 0.12 | % | |||||
| Nonperforming Assets as % of Loans and ORE | 0.54 | % | 0.52 | % | 0.76 | % | 0.54 | % | 0.76 | % | |||||
| Nonperforming Assets as % of Total Assets | 0.34 | % | 0.32 | % | 0.45 | % | 0.34 | % | 0.45 | % | |||||
| STOCK PERFORMANCE | |||||||||||||||
| High | $ | 25.91 | $ | 25.99 | $ | 24.58 | $ | 26.50 | $ | 24.58 | |||||
| Low | 23.19 | 22.28 | 19.60 | 22.28 | 17.68 | ||||||||||
| Close | $ | 23.34 | $ | 23.63 | $ | 24.01 | $ | 23.34 | $ | 24.01 | |||||
| Average Daily Trading Volume | 16,500 | 25,246 | 29,551 | 20,957 | 25,362 | ||||||||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | |||||||||||||||
| Unaudited | |||||||||||||||
| 2018 | 2017 | ||||||||||||||
| (Dollars in thousands) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | ||||||||||
| ASSETS | |||||||||||||||
| Cash and Due From Banks | $ | 48,423 | $ | 56,573 | $ | 47,804 | $ | 58,419 | $ | 50,420 | |||||
| Funds Sold and Interest Bearing Deposits | 26,839 | 107,066 | 250,821 | 227,023 | 140,694 | ||||||||||
| Total Cash and Cash Equivalents | 75,262 | 163,639 | 298,625 | 285,442 | 191,114 | ||||||||||
| Investment Securities Available for Sale | 484,243 | 493,662 | 471,836 | 480,911 | 510,846 | ||||||||||
| Investment Securities Held to Maturity | 227,923 | 236,764 | 225,552 | 216,679 | 184,262 | ||||||||||
| Total Investment Securities | 712,166 | 730,426 | 697,388 | 697,590 | 695,108 | ||||||||||
| Loans Held for Sale | 8,297 | 8,246 | 4,845 | 4,817 | 7,800 | ||||||||||
| Loans, Net of Unearned Interest | |||||||||||||||
| Commercial, Financial, & Agricultural | 239,044 | 222,406 | 198,775 | 218,166 | 215,963 | ||||||||||
| Real Estate - Construction | 87,672 | 88,169 | 80,236 | 77,966 | 67,813 | ||||||||||
| Real Estate - Commercial | 596,391 | 575,993 | 551,309 | 535,707 | 527,331 | ||||||||||
| Real Estate - Residential | 333,896 | 320,296 | 307,050 | 308,159 | 306,272 | ||||||||||
| Real Estate - Home Equity | 212,942 | 218,851 | 223,994 | 229,513 | 228,499 | ||||||||||
| Consumer | 294,040 | 285,599 | 284,356 | 278,622 | 273,670 | ||||||||||
| Other Loans | 8,167 | 11,648 | 14,988 | 3,747 | 9,311 | ||||||||||
| Overdrafts | 1,602 | 1,513 | 1,187 | 1,612 | 1,479 | ||||||||||
| Total Loans, Net of Unearned Interest | 1,773,754 | 1,724,475 | 1,661,895 | 1,653,492 | 1,630,338 | ||||||||||
| Allowance for Loan Losses | (14,219 | ) | (13,563 | ) | (13,258 | ) | (13,307 | ) | (13,339 | ) | |||||
| Loans, Net | 1,759,535 | 1,710,912 | 1,648,637 | 1,640,185 | 1,616,999 | ||||||||||
| Premises and Equipment, Net | 89,567 | 90,000 | 90,939 | 91,698 | 92,345 | ||||||||||
| Goodwill | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | ||||||||||
| Other Real Estate Owned | 2,720 | 3,373 | 3,330 | 3,941 | 5,987 | ||||||||||
| Other Assets | 86,832 | 88,871 | 96,257 | 90,310 | 96,678 | ||||||||||
| Total Other Assets | 263,930 | 267,055 | 275,337 | 270,760 | 279,821 | ||||||||||
| Total Assets | $ | 2,819,190 | $ | 2,880,278 | $ | 2,924,832 | $ | 2,898,794 | $ | 2,790,842 | |||||
| LIABILITIES | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest Bearing Deposits | $ | 934,146 | $ | 937,241 | $ | 890,482 | $ | 874,583 | $ | 870,644 | |||||
| NOW Accounts | 713,967 | 778,131 | 859,704 | 877,820 | 749,816 | ||||||||||
| Money Market Accounts | 254,099 | 257,965 | 257,422 | 239,212 | 249,964 | ||||||||||
| Regular Savings Accounts | 352,508 | 354,156 | 353,996 | 335,140 | 329,742 | ||||||||||
| Certificates of Deposit | 126,496 | 131,697 | 137,280 | 143,122 | 147,451 | ||||||||||
| Total Deposits | 2,381,216 | 2,459,190 | 2,498,884 | 2,469,877 | 2,347,617 | ||||||||||
| Short-Term Borrowings | 16,644 | 7,021 | 4,893 | 7,480 | 6,777 | ||||||||||
| Subordinated Notes Payable | 52,887 | 52,887 | 52,887 | 52,887 | 52,887 | ||||||||||
| Other Long-Term Borrowings | 12,456 | 12,897 | 13,333 | 13,967 | 15,047 | ||||||||||
| Other Liabilities | 57,971 | 54,712 | 66,475 | 70,373 | 83,313 | ||||||||||
| Total Liabilities | 2,521,174 | 2,586,707 | 2,636,472 | 2,614,584 | 2,505,641 | ||||||||||
| SHAREOWNERS' EQUITY | |||||||||||||||
| Common Stock | 171 | 171 | 171 | 170 | 170 | ||||||||||
| Additional Paid-In Capital | 38,325 | 37,932 | 37,343 | 36,674 | 35,892 | ||||||||||
| Retained Earnings | 293,254 | 288,800 | 283,990 | 279,410 | 275,013 | ||||||||||
| Accumulated Other Comprehensive Loss, Net of Tax | (33,734 | ) | (33,332 | ) | (33,144 | ) | (32,044 | ) | (25,874 | ) | |||||
| Total Shareowners' Equity | 298,016 | 293,571 | 288,360 | 284,210 | 285,201 | ||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,819,190 | $ | 2,880,278 | $ | 2,924,832 | $ | 2,898,794 | $ | 2,790,842 | |||||
| OTHER BALANCE SHEET DATA | |||||||||||||||
| Earning Assets | $ | 2,521,056 | $ | 2,570,213 | $ | 2,614,949 | $ | 2,582,922 | $ | 2,473,940 | |||||
| Interest Bearing Liabilities | 1,529,057 | 1,594,754 | 1,679,515 | 1,669,628 | 1,551,684 | ||||||||||
| Book Value Per Diluted Share | $ | 17.40 | $ | 17.15 | $ | 16.87 | $ | 16.65 | $ | 16.73 | |||||
| Tangible Book Value Per Diluted Share | 12.45 | 12.20 | 11.91 | 11.68 | 11.76 | ||||||||||
| Actual Basic Shares Outstanding | 17,059 | 17,056 | 17,044 | 16,989 | 16,966 | ||||||||||
| Actual Diluted Shares Outstanding | 17,128 | 17,114 | 17,088 | 17,071 | 17,045 | ||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||
| Unaudited | ||||||||||||||||
| Nine Months Ended | ||||||||||||||||
| 2018 | 2017 | September 30, | ||||||||||||||
| (Dollars in thousands, except per share data) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2018 | 2017 | |||||||||
| INTEREST INCOME | ||||||||||||||||
| Interest and Fees on Loans | $ | 21,618 | $ | 20,533 | $ | 19,535 | $ | 19,513 | $ | 19,479 | $ | 61,686 | $ | 56,204 | ||
| Investment Securities | 3,472 | 3,156 | 2,762 | 2,520 | 2,416 | 9,390 | 6,627 | |||||||||
| Funds Sold | 302 | 730 | 917 | 594 | 446 | 1,949 | 1,472 | |||||||||
| Total Interest Income | 25,392 | 24,419 | 23,214 | 22,627 | 22,341 | 73,025 | 64,303 | |||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Deposits | 1,068 | 995 | 868 | 590 | 530 | 2,931 | 1,199 | |||||||||
| Short-Term Borrowings | 41 | 8 | 8 | 5 | 15 | 57 | 77 | |||||||||
| Subordinated Notes Payable | 568 | 552 | 475 | 431 | 420 | 1,595 | 1,203 | |||||||||
| Other Long-Term Borrowings | 92 | 94 | 100 | 112 | 115 | 286 | 331 | |||||||||
| Total Interest Expense | 1,769 | 1,649 | 1,451 | 1,138 | 1,080 | 4,869 | 2,810 | |||||||||
| Net Interest Income | 23,623 | 22,770 | 21,763 | 21,489 | 21,261 | 68,156 | 61,493 | |||||||||
| Provision for Loan Losses | 904 | 815 | 745 | 826 | 490 | 2,464 | 1,389 | |||||||||
| Net Interest Income after Provision for Loan Losses | 22,719 | 21,955 | 21,018 | 20,663 | 20,771 | 65,692 | 60,104 | |||||||||
| NONINTEREST INCOME | ||||||||||||||||
| Deposit Fees | 5,207 | 4,842 | 4,872 | 5,040 | 5,153 | 14,921 | 15,295 | |||||||||
| Bank Card Fees | 2,828 | 2,909 | 2,811 | 2,830 | 2,688 | 8,548 | 8,361 | |||||||||
| Wealth Management Fees | 2,181 | 2,037 | 2,173 | 2,172 | 2,197 | 6,391 | 6,112 | |||||||||
| Mortgage Banking Fees | 1,343 | 1,206 | 1,057 | 1,410 | 1,480 | 3,606 | 4,344 | |||||||||
| Other | 1,749 | 1,548 | 1,564 | 1,445 | 1,478 | 4,861 | 4,737 | |||||||||
| Total Noninterest Income | 13,308 | 12,542 | 12,477 | 12,897 | 12,996 | 38,327 | 38,849 | |||||||||
| NONINTEREST EXPENSE | ||||||||||||||||
| Compensation | 15,891 | 15,797 | 15,911 | 15,102 | 15,711 | 47,599 | 47,211 | |||||||||
| Occupancy, Net | 4,645 | 4,503 | 4,551 | 4,400 | 4,501 | 13,699 | 13,437 | |||||||||
| Other Real Estate, Net | 347 | 248 | 626 | 355 | (118 | ) | 1,221 | 780 | ||||||||
| Other | 7,816 | 7,845 | 6,818 | 7,040 | 6,613 | 22,479 | 21,122 | |||||||||
| Total Noninterest Expense | 28,699 | 28,393 | 27,906 | 26,897 | 26,707 | 84,998 | 82,550 | |||||||||
| OPERATING PROFIT | 7,328 | 6,104 | 5,589 | 6,663 | 7,060 | 19,021 | 16,403 | |||||||||
| Income Tax Expense (Benefit) | 1,338 | 101 | (184 | ) | 6,660 | 2,505 | 1,255 | 5,543 | ||||||||
| NET INCOME | $ | 5,990 | $ | 6,003 | $ | 5,773 | $ | 3 | $ | 4,555 | $ | 17,766 | $ | 10,860 | ||
| PER SHARE DATA | ||||||||||||||||
| Basic Net Income | $ | 0.35 | $ | 0.35 | $ | 0.34 | $ | 0.00 | $ | 0.27 | $ | 1.04 | $ | 0.64 | ||
| Diluted Net Income | 0.35 | 0.35 | 0.34 | 0.00 | 0.27 | 1.04 | 0.64 | |||||||||
| Cash Dividend | $ | 0.09 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.23 | $ | 0.17 | ||
| AVERAGE SHARES | ||||||||||||||||
| Basic | 17,056 | 17,045 | 17,028 | 16,967 | 16,965 | 17,043 | 16,946 | |||||||||
| Diluted | 17,125 | 17,104 | 17,073 | 17,050 | 17,044 | 17,102 | 17,009 | |||||||||
| CAPITAL CITY BANK GROUP, INC. | |||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||
| AND RISK ELEMENT ASSETS | |||||||||||||||||||||
| Unaudited | |||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||
| 2018 | 2017 | September 30, | |||||||||||||||||||
| (Dollars in thousands, except per share data) | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | Third Quarter | 2018 | 2017 | ||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||
| Balance at Beginning of Period | $ | 13,563 | $ | 13,258 | $ | 13,307 | $ | 13,339 | $ | 13,242 | $ | 13,307 | $ | 13,431 | |||||||
| Provision for Loan Losses | 904 | 815 | 745 | 826 | 490 | 2,464 | 1,389 | ||||||||||||||
| Net Charge-Offs | 248 | 510 | 794 | 858 | 393 | 1,552 | 1,481 | ||||||||||||||
| Balance at End of Period | $ | 14,219 | $ | 13,563 | $ | 13,258 | $ | 13,307 | $ | 13,339 | $ | 14,219 | $ | 13,339 | |||||||
| As a % of Loans | 0.80 | % | 0.78 | % | 0.80 | % | 0.80 | % | 0.82 | % | 0.80 | % | 0.82 | % | |||||||
| As a % of Nonperforming Loans | 207.06 | % | 236.25 | % | 181.26 | % | 185.87 | % | 203.39 | % | 207.06 | % | 203.39 | % | |||||||
| CHARGE-OFFS | |||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 268 | $ | 141 | $ | 182 | $ | 664 | $ | 276 | $ | 591 | $ | 693 | |||||||
| Real Estate - Construction | - | - | 7 | - | - | 7 | - | ||||||||||||||
| Real Estate - Commercial | 25 | - | 290 | 42 | 94 | 315 | 643 | ||||||||||||||
| Real Estate - Residential | 106 | 456 | 107 | 126 | 125 | 669 | 285 | ||||||||||||||
| Real Estate - Home Equity | 112 | 157 | 158 | 48 | 50.00 | 427 | 142 | ||||||||||||||
| Consumer | 463 | 509 | 695 | 577 | 455 | 1,667 | 1,616 | ||||||||||||||
| Total Charge-Offs | $ | 974 | $ | 1,263 | $ | 1,439 | $ | 1,457 | $ | 1,000 | $ | 3,676 | $ | 3,379 | |||||||
| RECOVERIES | |||||||||||||||||||||
| Commercial, Financial and Agricultural | $ | 78 | $ | 87 | $ | 166 | $ | 113 | $ | 79 | $ | 331 | $ | 200 | |||||||
| Real Estate - Construction | - | - | 1 | - | 50 | 1 | 50 | ||||||||||||||
| Real Estate - Commercial | 222 | 15 | 123 | 24 | 69 | 360 | 150 | ||||||||||||||
| Real Estate - Residential | 107 | 346 | 84 | 141 | 60 | 537 | 475 | ||||||||||||||
| Real Estate - Home Equity | 47 | 22 | 61 | 67 | 84 | 130 | 152 | ||||||||||||||
| Consumer | 272 | 283 | 210 | 254 | 265 | 765 | 871 | ||||||||||||||
| Total Recoveries | $ | 726 | $ | 753 | $ | 645 | $ | 599 | $ | 607 | $ | 2,124 | $ | 1,898 | |||||||
| NET CHARGE-OFFS | $ | 248 | $ | 510 | $ | 794 | $ | 858 | $ | 393 | $ | 1,552 | $ | 1,481 | |||||||
| Net Charge-Offs as a % of Average Loans (1) | 0.06 | % | 0.12 | % | 0.20 | % | 0.21 | % | 0.10 | % | 0.12 | % | 0.12 | % | |||||||
| RISK ELEMENT ASSETS | |||||||||||||||||||||
| Nonaccruing Loans | $ | 6,867 | $ | 5,741 | $ | 7,314 | $ | 7,159 | $ | 6,558 | |||||||||||
| Other Real Estate Owned | 2,720 | 3,373 | 3,330 | 3,941 | 5,987 | ||||||||||||||||
| Total Nonperforming Assets | $ | 9,587 | $ | 9,114 | $ | 10,644 | $ | 11,100 | $ | 12,545 | |||||||||||
| Past Due Loans 30-89 Days | $ | 3,684 | $ | 3,472 | $ | 4,268 | $ | 4,543 | $ | 5,687 | |||||||||||
| Past Due Loans 90 Days or More (accruing) | 126 | - | - | 36 | - | ||||||||||||||||
| Classified Loans | 27,039 | 29,583 | 31,709 | 31,002 | 36,545 | ||||||||||||||||
| Performing Troubled Debt Restructurings | $ | 28,661 | $ | 29,981 | $ | 31,472 | $ | 32,164 | $ | 33,427 | |||||||||||
| Nonperforming Loans as a % of Loans | 0.39 | % | 0.33 | % | 0.44 | % | 0.43 | % | 0.40 | % | |||||||||||
| Nonperforming Assets as a % of Loans and | |||||||||||||||||||||
| Other Real Estate | 0.54 | % | 0.52 | % | 0.64 | % | 0.67 | % | 0.76 | % | |||||||||||
| Nonperforming Assets as a % of Total Assets | 0.34 | % | 0.32 | % | 0.36 | % | 0.38 | % | 0.45 | % | |||||||||||
| (1) Annualized | |||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE BALANCE AND INTEREST RATES(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Third Quarter 2018 | Second Quarter 2018 | First Quarter 2018 | Fourth Quarter 2017 | Third Quarter 2017 | Sep 2018 YTD | Sep 2017 YTD | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||||||||||||||||||
| ASSETS: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, Net of Unearned Interest | $ | 1,747,093 | 21,733 | 4.94 | % | $ | 1,691,287 | 20,625 | 4.89 | % | $ | 1,647,612 | 19,636 | 4.83 | % | $ | 1,640,738 | 19,696 | 4.76 | % | $ | 1,638,578 | 19,672 | 4.76 | % | $ | 1,695,695 | 61,994 | 4.89 | % | $ | 1,611,117 | 56,689 | 4.70 | % | |||||||||||||||||||||
| Investment Securities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable Investment Securities | 663,639 | 3,290 | 1.98 | 643,516 | 2,945 | 1.83 | 619,137 | 2,523 | 1.64 | 602,353 | 2,263 | 1.50 | 588,518 | 2,150 | 1.45 | 642,260 | 8,758 | 1.82 | 593,579 | 5,832 | 1.31 | |||||||||||||||||||||||||||||||||||
| Tax-Exempt Investment Securities | 60,952 | 229 | 1.50 | 72,478 | 266 | 1.47 | 84,800 | 318 | 1.50 | 94,329 | 393 | 1.67 | 98,463 | 407 | 1.65 | 72,656 | 813 | 1.49 | 99,059 | 1,217 | 1.64 | |||||||||||||||||||||||||||||||||||
| Total Investment Securities | 724,591 | 3,519 | 1.94 | 715,994 | 3,211 | 1.79 | 703,937 | 2,841 | 1.62 | 696,682 | 2,656 | 1.52 | 686,981 | 2,557 | 1.48 | 714,916 | 9,571 | 1.79 | 692,638 | 7,049 | 1.36 | |||||||||||||||||||||||||||||||||||
| Funds Sold | 63,608 | 302 | 1.88 | 158,725 | 730 | 1.84 | 240,916 | 917 | 1.54 | 174,565 | 594 | 1.35 | 140,728 | 446 | 1.26 | 153,767 | 1,949 | 1.69 | 195,189 | 1,472 | 1.01 | |||||||||||||||||||||||||||||||||||
| Total Earning Assets | 2,535,292 | $ | 25,554 | 4.00 | % | 2,566,006 | $ | 24,566 | 3.84 | % | 2,592,465 | $ | 23,394 | 3.66 | % | 2,511,985 | $ | 22,946 | 3.63 | % | 2,466,287 | $ | 22,675 | 3.65 | % | 2,564,378 | $ | 73,514 | 3.83 | % | 2,498,944 | $ | 65,210 | 3.49 | % | |||||||||||||||||||||
| Cash and Due From Banks | 49,493 | 50,364 | 52,711 | 51,235 | 51,880 | 50,844 | 51,043 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for Loan Losses | (14,146 | ) | (13,521 | ) | (13,651 | ) | (13,524 | ) | (13,542 | ) | (13,774 | ) | (13,547 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Other Assets | 256,285 | 258,255 | 260,595 | 272,755 | 275,335 | 258,363 | 277,514 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,826,924 | $ | 2,861,104 | $ | 2,892,120 | $ | 2,822,451 | $ | 2,779,960 | $ | 2,859,811 | $ | 2,813,954 | ||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing Deposits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOW Accounts | $ | 733,255 | $ | 773 | 0.42 | % | $ | 790,335 | $ | 725 | 0.37 | % | $ | 863,175 | $ | 659 | 0.31 | % | $ | 782,133 | $ | 400 | 0.20 | % | $ | 755,620 | $ | 339 | 0.18 | % | $ | 795,112 | $ | 2,157 | 0.36 | % | $ | 813,858 | $ | 694 | 0.11 | % | ||||||||||||||
| Money Market Accounts | 254,440 | 190 | 0.30 | 255,143 | 166 | 0.26 | 246,576 | 103 | 0.17 | 249,953 | 80 | 0.13 | 262,486 | 80 | 0.12 | 252,082 | 459 | 0.24 | 261,118 | 172 | 0.09 | |||||||||||||||||||||||||||||||||||
| Savings Accounts | 352,833 | 43 | 0.05 | 351,664 | 43 | 0.05 | 343,987 | 42 | 0.05 | 333,703 | 41 | 0.05 | 327,675 | 40 | 0.05 | 349,527 | 128 | 0.05 | 320,634 | 118 | 0.05 | |||||||||||||||||||||||||||||||||||
| Time Deposits | 129,927 | 62 | 0.19 | 134,171 | 61 | 0.18 | 140,359 | 64 | 0.18 | 145,622 | 69 | 0.19 | 148,652 | 71 | 0.19 | 134,781 | 187 | 0.19 | 153,215 | 215 | 0.19 | |||||||||||||||||||||||||||||||||||
| Total Interest Bearing Deposits | 1,470,455 | 1,068 | 0.30 | % | 1,531,313 | 995 | 0.27 | % | 1,594,097 | 868 | 0.23 | % | 1,511,411 | 590 | 0.16 | % | 1,494,433 | 530 | 0.14 | % | 1,531,502 | 2,931 | 0.27 | % | 1,548,825 | 1,199 | 0.11 | % | ||||||||||||||||||||||||||||
| Short-Term Borrowings | 12,949 | 41 | 1.24 | % | 6,633 | 8 | 0.49 | % | 8,869 | 8 | 0.37 | % | 8,074 | 5 | 0.25 | % | 9,920 | 15 | 0.59 | % | 9,499 | 57 | 0.80 | % | 10,552 | 77 | 0.97 | % | ||||||||||||||||||||||||||||
| Subordinated Notes Payable | 52,887 | 568 | 4.20 | 52,887 | 552 | 4.13 | 52,887 | 475 | 3.60 | 52,887 | 431 | 3.19 | 52,887 | 420 | 3.11 | 52,887 | 1,595 | 3.98 | 52,887 | 1,203 | 3.00 | |||||||||||||||||||||||||||||||||||
| Other Long-Term Borrowings | 12,729 | 92 | 2.87 | 13,151 | 94 | 2.88 | 13,787 | 100 | 2.93 | 14,726 | 112 | 3.01 | 15,427 | 115 | 2.95 | 13,218 | 286 | 2.89 | 15,324 | 331 | 2.89 | |||||||||||||||||||||||||||||||||||
| Total Interest Bearing Liabilities | 1,549,020 | $ | 1,769 | 0.47 | % | 1,603,984 | $ | 1,649 | 0.43 | % | 1,669,640 | $ | 1,451 | 0.37 | % | 1,587,098 | $ | 1,138 | 0.29 | % | 1,572,667 | $ | 1,080 | 0.28 | % | 1,607,106 | $ | 4,869 | 0.42 | % | 1,627,588 | $ | 2,810 | 0.24 | % | |||||||||||||||||||||
| Noninterest Bearing Deposits | 921,817 | 900,643 | 862,009 | 867,000 | 834,729 | 895,042 | 820,843 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities | 58,330 | 64,671 | 72,969 | 80,309 | 87,268 | 65,270 | 83,683 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 2,529,167 | 2,569,298 | 2,604,618 | 2,534,407 | 2,494,664 | 2,567,418 | 2,532,114 | |||||||||||||||||||||||||||||||||||||||||||||||||
| SHAREOWNERS' EQUITY: | 297,757 | 291,806 | 287,502 | 288,044 | 285,296 | 292,393 | 281,840 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareowners' Equity | $ | 2,826,924 | $ | 2,861,104 | $ | 2,892,120 | $ | 2,822,451 | $ | 2,779,960 | $ | 2,859,811 | $ | 2,813,954 | ||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Spread | $ | 23,785 | 3.53 | % | $ | 22,917 | 3.41 | % | $ | 21,943 | 3.29 | % | $ | 21,808 | 3.33 | % | $ | 21,595 | 3.37 | % | $ | 68,645 | 3.41 | % | $ | 62,400 | 3.25 | % | ||||||||||||||||||||||||||||
| Interest Income and Rate Earned(1) | 25,554 | 4.00 | 24,566 | 3.84 | 23,394 | 3.66 | 22,946 | 3.63 | 22,675 | 3.65 | 73,514 | 3.83 | 65,210 | 3.49 | ||||||||||||||||||||||||||||||||||||||||||
| Interest Expense and Rate Paid(2) | 1,769 | 0.28 | 1,649 | 0.26 | 1,451 | 0.23 | 1,138 | 0.18 | 1,080 | 0.17 | 4,869 | 0.25 | 2,810 | 0.15 | ||||||||||||||||||||||||||||||||||||||||||
| Net Interest Margin | $ | 23,785 | 3.72 | % | $ | 22,917 | 3.58 | % | $ | 21,943 | 3.43 | % | $ | 21,808 | 3.45 | % | $ | 21,595 | 3.48 | % | $ | 68,645 | 3.58 | % | $ | 62,400 | 3.34 | % | ||||||||||||||||||||||||||||
| (1) Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate for 2018 and a 35% Federal tax rate for 2017. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Rate calculated based on average earning assets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For Information Contact:
J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820