Capital City Bank Group, Inc. Reports Third Quarter 2013 Results

TALLAHASSEE, Fla., Oct. 29, 2013 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.6 million, or $0.09 per diluted share for the third quarter of 2013 compared to net income of $0.8 million, or $0.05 per diluted share for the second quarter of 2013, and net income of $1.1 million, or $0.07 per diluted share, for the third quarter of 2012. For the first nine months of 2013, the Company reported net income of $3.3 million, or $0.19 per diluted share, compared to a net loss of $1.8 million, or $0.10 per diluted share for the same period in 2012.

Compared to the second quarter of 2013, performance reflects a lower loan loss provision of $0.9 million, an increase in noninterest income of $0.5 million and a decrease in noninterest expense of $0.1 million, partially offset by lower net interest income of $0.4 million and higher income taxes of $0.3 million.

Compared to the third quarter of 2012, the increase in earnings was due to a lower loan loss provision of $2.3 million and higher noninterest income of $0.7 million, partially offset by lower net interest income of $1.8 million, an increase in noninterest expense of $0.2 million and higher income taxes of $0.5 million.

The increase in earnings for the first nine months of 2013 versus the comparable period in 2012 is attributable to a lower loan loss provision of $10.3 million, an increase in noninterest income of $0.7 million and a decrease in noninterest expense of $2.9 million, partially offset by a reduction in net interest income of $5.0 million and higher income taxes of $3.8 million.

"We continue to make progress as improving credit quality has led to lower credit costs and expense management initiatives are resulting in lower operating costs," said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. "Our credit metrics continue to improve with nonperforming assets declining for the seventh consecutive quarter, reaching their lowest level since the third quarter of 2008. Past due loans are also at the lowest level we've seen since this cycle began. Our retail strategy for the disposition of OREO continues to produce strong results, and we remain committed to this approach as we believe it generates the best economic outcome for our shareowners. While improving credit costs have been the greatest contributor, year-to-date earnings have also benefited from higher fee income and lower operating expenses. Although choppy, we are making steady progress, and I am encouraged about the future."

The Return on Average Assets was 0.25% and the Return on Average Equity was 2.51% for the third quarter of 2013. These metrics were 0.13% and 1.35% for the second quarter of 2013, and 0.17% and 1.77% for the third quarter of 2012, respectively.

For the first nine months of 2013, the Return on Average Assets was 0.17% and the Return on Average Equity was 1.75% compared to -0.09% and -0.93%, respectively, for the same period in 2012.

Discussion of Financial Condition

Average earning assets were $2.201 billion for the third quarter of 2013, a decrease of $5.3 million, or 0.2%, from the second of 2013 and an increase of $22.4 million, or 1.0%, over the fourth quarter of 2012. The change in earning assets from the prior quarter reflects a decline in the overnight funds position reflecting a lower level of deposits. The increase compared to the fourth quarter of 2012 primarily reflects a higher level of public fund deposits.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $412.1 million during the third quarter of 2013 compared to an average net overnight funds sold position of $419.0 million in the second quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012. The lower balance when compared to the second quarter of 2013 primarily reflects the decline in deposits. Additionally, a shift in earning asset mix continued to occur due to growth in the investment portfolio while the loan portfolio declined. The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio and a higher level of public funds, partially offset by an increase in the investment portfolio.

Economic uncertainty and deleveraging by our clients continues to generate a historically high level of liquidity, which, given the current operating environment, is difficult to profitably deploy without taking inordinate risks. Where practical we are working to lower the level of overnight funds by adding to our investment portfolio with short-duration securities and reducing deposit balances. We continue to use a fully-insured money market account which is offered by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.

When compared to the second quarter of 2013 and fourth quarter of 2012, average loans declined by $20.9 million and $82.2 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate categories. Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production.

New loan production has improved over the past four quarters as our efforts to stimulate loan growth are ongoing. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try and mitigate the significant impact that consumer and business deleveraging is having on our portfolio.

Nonperforming assets (nonaccrual loans and OREO) totaled $94.7 million at the end of the third quarter of 2013, a decrease of $2.0 million from the second quarter of 2013 and $22.9 million from the fourth quarter of 2012. Nonaccrual loans totaled $41.7 million at the end of the third quarter of 2013, a slight increase of $0.1 million over the second quarter of 2013 and a decrease of $22.5 million from the fourth quarter of 2012. Nonaccrual loan additions totaled $11.1 million in the third quarter of 2013 and $29.6 million for the first nine months of 2013, which compares to $48.5 million in the first nine months of 2012. The balance of OREO totaled $53.0 million at the end of the third quarter of 2013, a decrease of $2.1 million from the second quarter of 2013 and $0.4 million from the fourth quarter of 2012. For the third quarter of 2013 we added properties totaling $3.7 million, sold properties totaling $5.2 million, and recorded valuation adjustments totaling $0.6 million. For the first nine months of 2013, we have added properties totaling $21.0 million, sold properties totaling $18.5 million, and recorded valuation adjustments totaling $2.9 million. Nonperforming assets represented 3.77% of total assets at both September 30, 2013 and June 30, 2013, and 4.47% at December 31, 2012.

Average total deposits were $2.059 billion for the third quarter of 2013, a decrease of $8.1 million, or 0.4%, from the second quarter of 2013 and higher by $8.4 million, or 0.4%, over the fourth quarter of 2012. The decrease in deposits when compared to the second quarter of 2013 resulted primarily from the reduction in the level of public funds and money market accounts, partially offset by higher noninterest bearing demand and savings accounts. When compared to the fourth quarter of 2012, the increase was a result of higher public funds and savings accounts, partially offset by lower certificates of deposit and regular NOWs.

Core deposits experienced growth when compared to both periods as the Bank continues to expand relationships and grow the client base. The seasonal inflow of public funds will begin late in the fourth quarter of 2013 and continue into the first quarter of 2014. Both events are anticipated to increase the overnight funds position during the fourth quarter.

Our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts. Prudent pricing discipline will continue to be the key to managing our mix of deposits. Therefore, we do not attempt to compete with higher rate paying competitors for deposits.

Average borrowings decreased by $2.6 million when compared to the second quarter of 2013 as a result of payoff/amortization of FHLB advances and lower repurchase agreement balances. Borrowings increased by $2.2 million when compared to the fourth quarter of 2012, primarily a result of higher repurchase agreement balances, partially offset by FHLB advance payoffs/amortization.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2013 was $19.4 million compared to $19.7 million for the second quarter of 2013 and $21.2 million for the third quarter of 2012. The decrease in tax equivalent net interest income compared to the prior periods was due to a reduction in loan income primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans. The lower interest expense is attributable to favorable repricing on FHLB advances and certificates of deposit, which reflects both lower balances and favorable repricing. For the nine months ended September 30, 2013, tax equivalent net interest income totaled $59.2 million compared to $64.3 million for the same period of 2012.

Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment. Loans have declined by approximately $102 million since the third quarter of 2012. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

Lowering our cost of funds, to the extent we can, and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and repricing, although the impact is expected to be minimal.

The net interest margin for the third quarter of 2013 was 3.49%, a decrease of ten basis points from the second quarter of 2013, and a decline of 33 basis points from the third quarter of 2012. The decrease in the margin for both 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 third quarter of 2013 was $0.6 million compared to $1.4 million in the second quarter of 2013 and $2.9 million for the third quarter of 2012. For the nine month period ended September 30, 2013, the loan loss provision totaled $3.1 million compared to $13.4 million for the same period in 2012. The decrease compared to the second quarter of 2013 reflects continued improvement in key credit metrics, including our level of classified loans which declined noticeably during the quarter. The reduction in the provision from both of the prior year periods was due to a significant decline in loan losses, a reduced level of problem loan inflow, and overall improvement in key credit metric trends. Net charge-offs for the third quarter of 2013 totaled $2.8 million, or 0.78% (annualized), of average loans compared to $2.0 million, or 0.54%, for the second quarter of 2013 and $2.6 million, or 0.66%, in the third quarter of 2012. For the first nine months of 2013, net charge-offs totaled $7.2 million, or 0.66% (annualized), of average loans compared to $14.2 million, or 1.21%, for the same period of 2012. Lower charge-offs in our residential real estate and commercial real estate portfolios drove the decrease in loan losses comparing 2013 to 2012. At September 30, 2013, the allowance for loan losses of $25.0 million was 1.75% of outstanding loans (net of overdrafts) and provided coverage of 60% of nonperforming loans compared to 1.89% and 66%, respectively, at June 30, 2013, and 1.93% and 45%, respectively, at December 31, 2012.

Noninterest income for the third quarter of 2013 totaled $14.3 million, an increase of $0.5 million, or 3.3%, over the second quarter of 2013 and $0.7 million, or 5.4%, over the third quarter of 2012. The increase over the second quarter of 2013 was driven by higher deposit fees of $0.3 million and wealth management fees of $0.2 million. The increase in deposit fees was due to higher overdraft fees and the increase in wealth management primarily reflects an increase in retail brokerage fees due to increased client trading activity. Compared to the third quarter of 2012, the increase was due to higher wealth management fees driven by an increase in retail brokerage fees reflective of increased client trading activity and growth in new accounts. For the nine month period ended September 30, 2013, noninterest income totaled $41.7 million, a $0.7 million increase over the same period in 2012 due to higher wealth management fees of $0.6 million and mortgage banking fees of $0.2 million. Wealth management fees increased due to higher retail brokerage fees reflective of increased client trading activity and growth in new account openings. The increase in mortgage fees was attributable to a higher margin for sold loans.

Noninterest expense for the third quarter of 2013 totaled $30.4 million, a decrease of $0.1 million, or 0.5%, from the second quarter of 2013 attributable to lower compensation expense of $0.5 million and OREO expense of $0.3 million, partially offset by higher occupancy expense of $0.3 million and other expense of $0.4 million. Compensation expense declined primarily due to a reduction in pension expense reflective of a lower required 2013 expense upon finalization of actuarial work. Lower stock compensation also contributed to the decrease. The decrease in OREO expense was due to a reduction in the level of property valuation adjustments. The increase in occupancy expense was driven by a higher level of premises maintenance activity as well as utility costs. Higher advertising costs and professional fees drove the increase in the other expense category. Compared to the third quarter of 2012, noninterest expense increased by $0.2 million, or 0.8%, primarily reflective of higher compensation expense of $0.6 million that was partially offset by lower OREO expense of $0.5 million. Higher pension expense and stock compensation expense drove the increase in compensation. The reduction in OREO expense reflects a reduced level of property valuation adjustments as well as property carrying costs. For the nine month period ended September 30, 2013, noninterest expense totaled $92.2 million, a decrease of $2.9 million, or 3.0%, from the same period of 2012 attributable to lower occupancy expense of $0.6 million, OREO expense of $2.1 million, intangible amortization expense of $0.2 million, and other expense of $1.1 million, partially offset by higher compensation expense of $1.1 million. Declines were realized in most of the occupancy expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. The reduction in OREO expense was primarily attributable to a lower level of losses from the sale of properties and to a lesser extent reduction in carrying costs for properties. The decrease in intangible amortization reflects the full amortization of our remaining core deposit intangible asset in early 2013. The other expense category declined due to reduction in legal fees, professional fees, postage costs, and printing/supplies expense. Higher compensation expense reflects an increase in our pension plan expense of $0.8 million, stock compensation expense of $0.8 million, and associate insurance expense of $0.2 million that was partially offset by lower salary expense of $0.7 million.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded bank holding 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 63 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the Company's need and our ability to incur additional debt or equity financing; the accuracy of the Company's financial statement estimates and assumptions, including the estimate used for the Company's loan loss provision and deferred tax valuation allowance; a decrease to the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company's loans; 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; 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 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; 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; 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, 2012, 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.

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended Nine Months Ended
(Dollars in thousands, except per share data) Sep 30, 2013 Jun 30, 2013 Sep 30, 2012 Sep 30, 2013 Sep 30, 2012
EARNINGS
Net Income (Loss) $ 1,591 $ 843 $ 1,121 $ 3,273 $ (1,767)
Net Income (Loss) Per Common Share $ 0.09 $ 0.05 $ 0.07 $ 0.19 $ (0.10)
PERFORMANCE
Return on Average Assets 0.25% 0.13% 0.17% 0.17% -0.09%
Return on Average Equity 2.51% 1.35% 1.77% 1.75% -0.93%
Net Interest Margin 3.49% 3.59% 3.82% 3.57% 3.81%
Noninterest Income as % of Operating Revenue 42.82% 41.68% 39.31% 41.71% 39.28%
Efficiency Ratio 90.42% 91.07% 86.89% 91.39% 90.06%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 15.60% 15.36% 14.43% 15.60% 14.43%
Total Capital Ratio 16.97% 16.73% 15.80% 16.97% 15.80%
Tangible Common Equity Ratio 6.84% 6.64% 6.86% 6.84% 6.86%
Leverage Ratio 10.16% 10.07% 9.83% 10.16% 9.83%
Equity to Assets 9.99% 9.73% 10.04% 9.99% 10.04%
ASSET QUALITY
Allowance as % of Non-Performing Loans 60.00% 65.66% 40.80% 60.00% 40.80%
Allowance as a % of Loans 1.75% 1.89% 1.97% 1.75% 1.97%
Net Charge-Offs as % of Average Loans 0.78% 0.54% 0.66% 0.66% 1.21%
Nonperforming Assets as % of Loans and ORE 6.38% 6.44% 8.02% 6.38% 8.02%
Nonperforming Assets as % of Total Assets 3.77% 3.77% 5.10% 3.77% 5.10%
STOCK PERFORMANCE
High $ 13.08 $ 12.64 $ 10.96 $ 13.08 $ 10.96
Low 11.06 10.12 7.00 10.12 6.35
Close 11.78 11.53 10.64 11.78 10.64
Average Daily Trading Volume $ 18,380 $ 16,366 $ 23,737 $ 19,334 $ 28,826
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2013 2012
(Dollars in thousands) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
ASSETS
Cash and Due From Banks $ 51,136 $ 67,811 $ 52,677 $ 66,238 $ 53,076
Funds Sold and Interest Bearing Deposits 358,869 391,457 461,714 443,494 314,318
Total Cash and Cash Equivalents 410,005 459,268 514,391 509,732 367,394
Investment Securities - Available-for-Sale 271,838 350,614 307,502 296,985 288,166
Investment Securities - Held-to-Maturity 97,309 0 0 0 0
Total Investment Securities 369,147 350,614 307,502 296,985 288,166
Loans Held for Sale 13,822 15,362 11,422 14,189 16,527
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 123,253 126,931 125,905 139,850 135,939
Real Estate - Construction 31,454 35,823 37,948 37,512 39,537
Real Estate - Commercial 570,736 581,501 599,517 613,625 609,671
Real Estate - Residential 305,811 302,254 304,786 310,439 328,258
Real Estate - Home Equity 230,212 232,530 233,205 236,263 239,446
Consumer 148,321 142,620 146,043 150,728 154,389
Other Loans 5,220 5,904 5,187 11,547 6,891
Overdrafts 2,835 2,554 2,307 7,149 2,637
Total Loans, Net of Unearned Interest 1,417,842 1,430,117 1,454,898 1,507,113 1,516,768
Allowance for Loan Losses (25,010) (27,294) (27,803) (29,167) (30,222)
Loans, Net 1,392,832 1,402,823 1,427,096 1,477,946 1,486,546
Premises and Equipment, Net 103,702 104,743 105,883 107,092 109,003
Intangible Assets 84,891 84,937 84,985 85,053 85,161
Other Real Estate Owned 53,018 55,087 58,421 53,426 53,172
Other Assets 87,055 89,024 95,613 89,561 87,815
Total Other Assets 328,666 333,791 344,902 335,132 335,151
Total Assets $ 2,514,472 $ 2,561,858 $ 2,605,313 $ 2,633,984 $ 2,493,784
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 626,114 $ 644,739 $ 616,017 $ 609,235 $ 596,660
NOW Accounts 668,240 706,101 765,030 842,435 703,327
Money Market Accounts 283,338 287,340 299,118 267,766 285,084
Regular Savings Accounts 211,174 204,594 200,492 184,541 181,523
Certificates of Deposit 228,020 228,349 233,325 241,019 254,000
Total Deposits 2,016,886 2,071,123 2,113,982 2,144,996 2,020,594
Short-Term Borrowings 51,918 46,081 50,682 47,435 42,388
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 40,244 41,251 41,224 46,859 38,126
Other Liabilities 91,369 91,227 87,930 84,918 79,427
Total Liabilities 2,263,304 2,312,569 2,356,705 2,387,095 2,243,422
SHAREOWNERS' EQUITY
Common Stock 173 173 173 172 172
Additional Paid-In Capital 40,481 40,210 39,580 38,707 38,493
Retained Earnings 240,842 239,251 238,408 237,569 235,694
Accumulated Other Comprehensive Loss, Net of Tax (30,328) (30,345) (29,553) (29,559) (23,997)
Total Shareowners' Equity 251,168 249,289 248,608 246,889 250,362
Total Liabilities and Shareowners' Equity $ 2,514,472 $ 2,561,858 $ 2,605,313 $ 2,633,984 $ 2,493,784
OTHER BALANCE SHEET DATA
Earning Assets $ 2,159,680 $ 2,187,549 $ 2,235,537 $ 2,261,781 $ 2,135,779
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits -- -- -- 19 79
Other 80 126 174 223 271
Interest Bearing Liabilities 1,545,821 1,576,601 1,652,758 1,692,942 1,567,335
Book Value Per Diluted Share $ 14.44 $ 14.36 $ 14.35 $ 14.31 $ 14.54
Tangible Book Value Per Diluted Share 9.56 9.47 9.44 9.38 9.59
Actual Basic Shares Outstanding 17,336 17,336 17,319 17,232 17,223
Actual Diluted Shares Outstanding 17,396 17,372 17,326 17,259 17,223
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Nine Months Ended
2013 2012 September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2013 2012
INTEREST INCOME
Interest and Fees on Loans $ 19,264 $ 19,709 $ 20,154 $ 20,756 $ 21,274 $ 59,127 $ 64,638
Investment Securities 717 710 704 808 798 2,131 2,532
Funds Sold 269 279 270 223 254 818 723
Total Interest Income 20,250 20,698 21,128 21,787 22,326 62,076 67,893
INTEREST EXPENSE
Deposits 335 367 415 429 480 1,117 1,679
Short-Term Borrowings 46 61 82 69 71 189 127
Subordinated Notes Payable 339 342 339 351 372 1,020 1,126
Other Long-Term Borrowings 330 333 347 383 372 1,010 1,204
Total Interest Expense 1,050 1,103 1,183 1,232 1,295 3,336 4,136
Net Interest Income 19,200 19,595 19,945 20,555 21,031 58,740 63,757
Provision for Loan Losses 555 1,450 1,070 2,766 2,864 3,075 13,400
Net Interest Income after Provision for Loan Losses 18,645 18,145 18,875 17,789 18,167 55,665 50,357
NONINTEREST INCOME
Deposit Fees 6,474 6,217 6,165 6,764 6,406 18,856 19,028
Bank Card Fees 2,715 2,754 2,661 2,612 2,616 8,130 8,171
Wealth Management Fees 2,130 1,901 1,915 1,818 1,686 5,946 5,363
Mortgage Banking Fees 869 968 1,043 910 978 2,880 2,690
Data Processing Fees 662 670 653 671 687 1,985 2,042
Other 1,456 1,339 1,151 1,343 1,202 3,946 3,773
Total Noninterest Income 14,306 13,849 13,588 14,118 13,575 41,743 41,067
NONINTEREST EXPENSE
Compensation 16,158 16,647 16,739 15,772 15,510 49,544 48,470
Occupancy, Net 4,403 4,161 4,418 4,429 4,590 12,982 13,626
Intangible Amortization 46 48 68 108 108 162 323
Other Real Estate 2,148 2,408 2,884 1,900 2,603 7,440 9,528
Other 7,678 7,318 7,091 7,259 7,390 22,087 23,144
Total Noninterest Expense 30,433 30,582 31,200 29,468 30,201 92,215 95,091
OPERATING PROFIT (LOSS) 2,518 1,412 1,263 2,439 1,541 5,193 (3,667)
Income Tax Expense (Benefit) 927 569 424 564 420 1,920 (1,900)
NET INCOME (LOSS) $ 1,591 $ 843 $ 839 $ 1,875 $ 1,121 $ 3,273 $ (1,767)
PER SHARE DATA
Basic Income (Loss) $ 0.09 $ 0.05 $ 0.05 $ 0.11 $ 0.07 $ 0.19 $ (0.10)
Diluted Income (Loss) $ 0.09 $ 0.05 $ 0.05 $ 0.11 $ 0.07 $ 0.19 $ (0.10)
AVERAGE SHARES
Basic 17,336 17,319 17,302 17,229 17,215 17,319 17,196
Diluted 17,396 17,355 17,309 17,256 17,228 17,381 17,196
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2013 2013 2013 2012 2012
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 27,294 $ 27,803 $ 29,167 $ 30,222 $ 29,929
Provision for Loan Losses 555 1,450 1,070 2,766 2,864
Net Charge-Offs 2,839 1,959 2,434 3,821 2,571
Balance at End of Period $ 25,010 $ 27,294 $ 27,803 $ 29,167 $ 30,222
As a % of Loans 1.75% 1.89% 1.90% 1.93% 1.97%
As a % of Nonperforming Loans 60.00% 65.66% 61.17% 45.42% 40.80%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 138 $ 119 $ 154 $ 166 $ 331
Real Estate - Construction 278 110 610 227 127
Real Estate - Commercial 882 1,050 1,043 468 512
Real Estate - Residential 1,178 1,053 683 2,877 981
Real Estate - Home Equity 362 322 113 745 834
Consumer 674 351 296 488 355
Total Charge-Offs $ 3,512 $ 3,005 $ 2,899 $ 4,971 $ 3,140
RECOVERIES
Commercial, Financial and Agricultural $ 87 $ 38 $ 51 $ 87 $ 53
Real Estate - Construction 1 -- -- 7 9
Real Estate - Commercial 167 144 38 468 34
Real Estate - Residential 167 396 96 83 76
Real Estate - Home Equity 13 224 18 250 15
Consumer 238 244 262 255 382
Total Recoveries $ 673 $ 1,046 $ 465 $ 1,150 $ 569
NET CHARGE-OFFS $ 2,839 $ 1,959 $ 2,434 $ 3,821 $ 2,571
Net Charge-Offs as a % of Average Loans(1) 0.78% 0.54% 0.66% 1.00% 0.66%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 41,682 $ 41,566 $ 45,448 $ 64,222 $ 74,075
Other Real Estate Owned 53,018 55,087 58,421 53,426 53,172
Total Nonperforming Assets $ 94,700 $ 96,653 $ 103,869 $ 117,648 $ 127,247
Past Due Loans 30-89 Days $ 8,427 $ 9,017 $ 9,274 $ 9,934 $ 12,923
Past Due Loans 90 Days or More 0 0 0 0 0
Performing Troubled Debt Restructuring's $ 50,692 $ 52,729 $ 53,108 $ 47,474 $ 45,973
Nonperforming Loans as a % of Loans 2.91% 2.88% 3.10% 4.22% 4.83%
Nonperforming Assets as a % of
Loans and Other Real Estate 6.38% 6.44% 6.81% 7.47% 8.02%
Nonperforming Assets as a % of Total Assets 3.77% 3.77% 3.99% 4.47% 5.10%
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Third Quarter 2013 Second Quarter 2013 First Quarter 2013 Fourth Quarter 2012 Third Quarter 2012
(Dollars in thousands) Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
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Balance

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Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,436,039 19,342 5.34% $ 1,456,904 19,790 5.45% $ 1,496,432 20,228 5.48% $ 1,518,280 20,837 5.46% $ 1,541,262 21,366 5.51%
Investment Securities
Taxable Investment Securities 232,094 571 0.95 225,770 578 1.02 215,087 590 1.10 219,985 697 1.26 214,431 691 1.28
Tax-Exempt Investment Securities 121,119 223 0.73 104,981 200 0.76 80,946 174 0.86 74,647 172 0.92 67,446 163 0.97
Total Investment Securities 353,213 794 0.89 330,751 778 0.94 296,033 764 1.04 294,632 869 1.17 281,877 854 1.21
Funds Sold 412,138 269 0.26 419,039 279 0.27 448,424 270 0.24 366,034 223 0.24 386,027 254 0.26
Total Earning Assets 2,201,390 $ 20,405 3.68% 2,206,694 $ 20,847 3.79% 2,240,889 $ 21,262 3.85% 2,178,946 $ 21,929 4.00% 2,209,166 $ 22,474 4.05%
Cash and Due From Banks 51,640 49,081 50,679 51,344 47,207
Allowance for Loan Losses (27,636) (29,012) (30,467) (30,605) (30,260)
Other Assets 333,001 337,765 337,579 334,326 340,126
Total Assets $ 2,558,395 $ 2,564,528 $ 2,598,680 $ 2,534,011 $ 2,566,239
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 676,855 $ 107 0.06% $ 716,459 $ 124 0.07% $ 788,660 $ 156 0.08% $ 714,682 $ 131 0.07% $ 740,178 $ 144 0.08%
Money Market Accounts 284,920 53 0.07 289,637 54 0.07 282,847 54 0.08 275,458 57 0.08 287,250 60 0.08
Savings Accounts 207,631 26 0.05 202,784 25 0.05 193,033 23 0.05 182,760 23 0.05 179,445 23 0.05
Time Deposits 231,490 149 0.26 231,134 164 0.29 238,441 182 0.31 247,679 218 0.35 263,007 253 0.38
Total Interest Bearing Deposits 1,400,896 335 0.09% 1,440,014 367 0.10% 1,502,981 415 0.11% 1,420,579 429 0.12% 1,469,880 480 0.13%
Short-Term Borrowings 49,919 46 0.37% 52,399 61 0.47% 55,255 82 0.60% 45,893 69 0.59% 59,184 71 0.48%
Subordinated Notes Payable 62,887 339 2.11 62,887 342 2.15 62,887 339 2.15 62,887 351 2.19 62,887 372 2.31
Other Long-Term Borrowings 40,832 330 3.21 40,942 333 3.26 42,898 347 3.29 42,673 383 3.57 38,494 372 3.85
Total Interest Bearing Liabilities 1,554,534 $ 1,050 0.27% 1,596,242 $ 1,103 0.28% 1,664,021 $ 1,183 0.29% 1,572,032 $ 1,232 0.31% 1,630,445 $ 1,295 0.32%
Noninterest Bearing Deposits 658,602 627,633 599,986 630,520 605,602
Other Liabilities 93,642 90,168 85,116 78,442 78,446
Total Liabilities 2,306,778 2,314,043 2,349,123 2,280,994 2,314,493
SHAREOWNERS' EQUITY: 251,617 250,485 249,557 253,017 251,746
Total Liabilities and Shareowners' Equity $ 2,558,395 $ 2,564,528 $ 2,598,680 $ 2,534,011 $ 2,566,239
Interest Rate Spread $ 19,355 3.41% $ 19,744 3.51% $ 20,079 3.56% $ 20,697 3.69% $ 21,179 3.73%
Interest Income and Rate Earned(1) 20,405 3.68 20,847 3.79 21,262 3.85 21,929 4.00 22,474 4.05
Interest Expense and Rate Paid(2) 1,050 0.19 1,103 0.20 1,183 0.21 1,232 0.22 1,295 0.23
Net Interest Margin $ 19,355 3.49% $ 19,744 3.59% $ 20,079 3.64% $ 20,697 3.78% $ 21,179 3.82%
(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.
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Sept 2013 YTD Sept 2012 YTD
(Dollars in thousands) Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,462,904 $ 59,361 5.43% $ 1,569,420 $ 64,943 5.53%
Investment Securities
Taxable Investment Securities 224,379 1,739 0.99 224,584 2,215 1.33
Tax-Exempt Investment Securities 102,496 596 0.77 62,509 486 1.04
Total Investment Securities 326,875 2,335 0.95 287,093 2,701 1.25
Funds Sold 426,401 818 0.26 390,122 723 0.25
Total Earning Assets 2,216,180 $ 62,514 3.77% 2,246,635 $ 68,367 4.06%
Cash and Due From Banks 50,470 48,112
Allowance for Loan Losses (29,028) (31,077)
Other Assets 336,098 345,361
Total Assets $ 2,573,720 $ 2,609,031
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 726,915 $ 388 0.07% $ 790,733 $ 503 0.08%
Money Market Accounts 285,809 161 0.08 281,746 198 0.09
Savings Accounts 201,203 74 0.05 173,346 64 0.05
Time Deposits 233,663 494 0.28 273,838 914 0.45
Total Interest Bearing Deposits 1,447,590 1,117 0.10% 1,519,663 1,679 0.15%
Short-Term Borrowings 52,505 189 0.48% 54,289 127 0.31%
Subordinated Notes Payable 62,887 1,020 2.14 62,887 1,126 2.35
Other Long-Term Borrowings 41,550 1,010 3.25 41,123 1,204 3.91
Total Interest Bearing Liabilities 1,604,532 $ 3,336 0.28% 1,677,962 $ 4,136 0.33%
Noninterest Bearing Deposits 628,955 604,333
Other Liabilities 89,673 73,795
Total Liabilities 2,323,160 2,356,090
SHAREOWNERS' EQUITY: 250,560 252,941
Total Liabilities and Shareowners' Equity $ 2,573,720 $ 2,609,031
Interest Rate Spread $ 59,178 3.49% $ 64,231 3.73%
Interest Income and Rate Earned(1) 62,514 3.77 68,367 4.06
Interest Expense and Rate Paid(2) 3,336 0.20 4,136 0.26
Net Interest Margin $ 59,178 3.57% $ 64,231 3.81%
(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: For Information Contact: J. Kimbrough Davis Executive Vice President and Chief Financial Officer 850.402.7820Source:Capital City Bank Group, Inc.