Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

TALLAHASSEE, Fla., Jan. 28, 2014 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $2.8 million, or $0.16 per diluted share for the fourth quarter of 2013, compared to net income of $1.6 million, or $0.09 per diluted share for the third quarter of 2013, and net income of $1.9 million, or $0.11 per diluted share, for the fourth quarter of 2012. For the full year 2013, the Company reported net income of $6.0 million, or $0.35 per diluted share, compared to net income of $0.1 million, or $0.01 per diluted share in 2012.

Compared to the third quarter of 2013, the increase in earnings reflects a lower loan loss provision of $0.2 million, an increase in noninterest income of $0.4 million, and lower income taxes of $0.9 million, partially offset by lower net interest income of $0.2 million and higher noninterest expense of $0.1 million. Compared to the fourth quarter of 2012, the increase in earnings was due to a lower loan loss provision of $2.4 million, higher noninterest income of $0.5 million, and lower income taxes of $0.6 million, partially offset by lower net interest income of $1.6 million and an increase in noninterest expense of $1.0 million.

For the full year 2013, the increase in earnings was driven by a lower loan loss provision of $12.7 million, higher noninterest income of $1.2 million, and lower noninterest expense of $1.8 million, partially offset by a reduction in net interest income of $6.6 million and higher income taxes of $3.2 million.

"Capital City finished the year strong with another quarter of consistent financial performance," said William G. Smith, Chairman, President, and CEO of Capital City Bank Group. "While there is still work to be done, I am pleased with our continued progress. We reduced our nonperforming assets by 28%, grew earnings to $0.35 per share – up from $0.01 per share in 2012 – and rescinded our informal board resolutions, which are discussed further herein. Additionally, as of December 31, 2013, all deferred interest on our trust preferred securities was brought current. It is gratifying to know that we managed through this cycle without taking TARP or diluting our shareowners. Improving our credit quality will remain a primary area of focus in our 2014 strategy, as will continued efforts to right-size our expense base and identify new revenue opportunities. While the economic environment is improving, it is at a slow pace and we anticipate loan growth will remain challenging. Our team has a lot of work ahead of us, but I am proud of our accomplishments and like our momentum as we head into 2014."

The Return on Average Assets was 0.43% and the Return on Average Equity was 4.33% for the fourth quarter of 2013. These metrics were 0.25% and 2.51% for the third quarter of 2013, and 0.29% and 2.95% for the fourth quarter of 2012, respectively.

For the full year of 2013, the Return on Average Assets was 0.24% and the Return on Average Equity was 2.40% compared to 0.00% and 0.04%, respectively, for 2012.

Discussion of Financial Condition

Average earning assets were $2.206 billion for the fourth quarter of 2013, an increase of $4.9 million, or 0.2%, from the third quarter of 2013 and an increase of $27.3 million, or 1.3%, over the fourth quarter of 2012. The change in earning assets reflects an increase in short-term borrowings and a decline in other assets, partially offset by problem loan resolutions and lower deposits.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $411.6 million during the fourth quarter of 2013 compared to an average net overnight funds sold position of $412.1 million in the third quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012. The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio, 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 third quarter of 2013 and fourth quarter of 2012, average loans declined by $21.1 million and $103.4 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 payoffs that have outpaced our new loan production.

New loan production for 2013 was higher than 2012 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 other real estate ("OREO") totaled $85.0 million at year-end 2013, a decrease of $9.7 million, or 10.2% from the third quarter of 2013 and $32.6 million, or 27.7% from year-end 2012. Nonaccrual loans totaled $37.0 million at year-end 2013, a decrease of $4.7 million from the third quarter of 2013 and a decrease of $27.3 million from year-end 2012. Nonaccrual loan additions totaled $14.5 million in the fourth quarter of 2013 and $44.1 million for the full year 2013, which compares to $12.5 million and $61.1 million, respectively, for the same periods of 2012. The balance of OREO totaled $48.1 million at year-end 2013, a decrease of $4.9 million from the third quarter of 2013 and $5.4 million from year-end 2012. For the fourth quarter of 2013 we added properties totaling $3.5 million, sold properties totaling $7.4 million, recorded valuation adjustments totaling $0.8 million, and realized miscellaneous reductions totaling $0.2 million. For the full year 2013, we added properties totaling $24.5 million, sold properties totaling $25.9 million, recorded valuation adjustments totaling $3.6 million, and realized miscellaneous adjustments totaling $0.3 million. Nonperforming assets represented 3.26% of total assets at December 31, 2013, 3.77% at September 30, 2013, and 4.47% at December 31, 2012.

Average total deposits were $2.051 billion for the fourth quarter of 2013, a decrease of $8.6 million, or 0.4%, from the third quarter of 2013 and $0.2 million, or 0.01%, over the fourth quarter of 2012. The decrease in deposits when compared to the third quarter of 2013 resulted primarily from the reduction in noninterest bearing demand accounts and money market accounts, partially offset by higher public funds and savings accounts. When compared to the fourth quarter of 2012, the slight decrease was a result of lower certificates of deposit and regular NOWs, partially offset by higher public funds and savings accounts.

The seasonal inflow of public funds started in the fourth quarter of 2013 and will continue through the first quarter of 2014. This is anticipated to increase the overnight funds position during the first 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. Our strategy is to manage the mix of our deposits rather than compete on rate, which enables us to maintain an exceptionally low cost of funds – 19 basis points in the fourth quarter and 20 basis points for the year 2013.

When compared to the third quarter of 2013 and fourth quarter of 2012, average borrowings increased by $7.1 million and $9.2 million, respectively, primarily as a result of higher repurchase agreement balances, partially offset by FHLB advance payoffs/amortization.

Equity capital was $276.4 million as of December 31, 2013, compared to $251.2 million as of September 30, 2013 and $246.9 million as of December 31, 2012. Our leverage ratio was 10.46%, 10.16%, and 9.90%, respectively, for these periods. Further, our risk-adjusted capital ratio of 17.94% at December 31, 2013 compares to 15.72% at December 31, 2012, and significantly exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At December 31, 2013, our tangible common equity ratio was 7.58%, compared to 6.84% at September 30, 2013 and 6.35% at December 31, 2012. The increase in our tangible common equity ratio in the fourth quarter of 2013 was due to earnings and a favorable adjustment in the pension component of our other comprehensive income. The favorable adjustment in the pension component reflects (1) an increase in the plan discount rate, which drives a reduction in pension liabilities, and (2) an increase in the market value of plan assets.

Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2013 was $19.2 million compared to $19.4 million for the third quarter of 2013 and $20.7 million for the fourth 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 lower level of foregone interest on loans and higher loan fees. For the full year 2013, tax equivalent net interest income totaled $78.3 million compared to $85.0 million for 2012 with the decline attributable to the factors mentioned above, partially offset by a reduction in the cost of funds.

Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment. Period end loan balances have declined by approximately $121.6 million since the fourth 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 fourth quarter of 2013 was 3.45%, a decrease of four basis points from the third quarter of 2013, and a decline of 33 basis points from the fourth quarter of 2012. The decrease in the margin for both comparable periods was attributable to the shift in our earning asset mix and unfavorable asset repricing. The average cost of funds was lower in the fourth quarter of 2013 when compared to the fourth quarter of 2012 by three basis points and remained unchanged from the third quarter of 2013.

The provision for loan losses for the fourth quarter of 2013 was $0.4 million compared to $0.6 million in the third quarter of 2013 and $2.8 million for the fourth quarter of 2012. For the full year 2013, the loan loss provision totaled $3.5 million compared to $16.2 million for 2012. The lower level of provision reflects continued favorable problem loan migration, lower loan losses, and overall improvement in key credit metrics. Net charge-offs for the fourth quarter of 2013 totaled $2.3 million, or 0.65% (annualized), of average loans compared to $2.8 million, or 0.78% (annualized), for the third quarter of 2013 and $3.8 million, or 1.00% (annualized), in the fourth quarter of 2012. For the full year 2013, net charge-offs totaled $9.5 million, or 0.66%, of average loans compared to $18.0 million, or 1.16%, 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 December 31, 2013, the allowance for loan losses of $23.1 million was 1.65% of outstanding loans (net of overdrafts) and provided coverage of 62% of nonperforming loans compared to 1.75% and 60%, respectively, at September 30, 2013, and 1.93% and 45%, respectively, at December 31, 2012.

Noninterest income for the fourth quarter of 2013 totaled $14.7 million, an increase of $0.4 million, or 2.6%, over the third quarter of 2013. The increase over the third quarter of 2013 reflects higher other income of $0.6 million and an increase in wealth management fees of $0.1 million, partially offset by lower mortgage banking fees of $0.2 million and deposit fees of $0.1 million. The increase in other income was driven by gains from the sale of OREO properties and the increase in wealth management fees was primarily due to improved account values for managed accounts on which fees are based. Mortgage banking fees declined due to a reduction in refinancing volume, which is attributable to the higher rate environment. The reduction in deposit fees was attributable to a slightly lower level of overdraft fees. Compared to the fourth quarter of 2012, noninterest income increased $0.6 million, or 3.9%, due to higher wealth management fees of $0.4 million, other income of $0.7 million, and bank card fees of $0.1 million, partially offset by lower deposit fees of $0.4 million and mortgage banking fees of $0.2 million. The increase in wealth management fees reflects increased retail client trading activity and growth in new accounts. A higher level of gains from the sale of OREO properties drove the increase in other income. Slightly higher spend volume drove the increase in bank card fees. The reduction in deposit fees was attributable to lower overdraft fees that were partially offset by a reduction in checking account losses. Mortgage banking fees declined due to a slowdown in refinancing volume that was partially offset by an increase in margin from sold loans. For the full year 2013, noninterest income totaled $56.4 million, a $1.2 million, or 2.2%, increase over 2012 due to higher wealth management fees of $1.0 million and other income of $0.9 million, partially offset by lower deposit fees of $0.5 million and mortgage banking fees of $0.1 million. Wealth management fees increased due to higher retail brokerage fees reflective of increased client trading activity and growth in new account openings. A higher level of gains from the sale of OREO properties drove the increase in other income. Deposit fees declined due to a lower level of overdraft fees, partially offset by higher business account analysis fees. Mortgage banking fees declined due to a slowdown in refinancing volume that was partially offset by an increase in margin from sold loans.

Noninterest expense for the fourth quarter of 2013 totaled $30.5 million, an increase of $0.1 million, or 0.2%, over the third quarter of 2013 attributable to higher compensation expense of $0.4 million, partially offset by lower other expense of $0.3 million. The increase in compensation was attributable to higher pension plan expense of $0.3 million and stock compensation expense of $0.1 million. The reduction in other expense was due to lower professional fees of $0.2 million and advertising fees of $0.1 million. The higher level of pension expense reflects a cumulative adjustment made in the third quarter to reduce year-to-date pension expense to reflect the final numbers as provided by our actuaries. Stock compensation expense increased due to a higher level of performance for our stock award plans. The reduction in professional fees reflects a decrease in internal audit fees and consulting engagement fees. Higher costs in the third quarter due to the roll-out of our mobile remote deposit capture product drove the favorable variance in advertising fees. Compared to the fourth quarter of 2012, noninterest expense increase by $1.0 million, or 3.5%, primarily attributable to higher compensation expense of $0.8 million and OREO expense of $0.2 million. The increase in compensation reflects a $0.4 million increase in expense for cash based incentive plans, and higher pension plan expense of $0.3 million and stock compensation expense of $0.1 million. A higher level of valuation adjustments for OREO properties drove the increase in OREO expense. The increase in pension plan expense reflects the utilization of a lower discount rate assumption for our pension plans and the increase in stock compensation was driven by a higher level of company performance. For the full year 2013, noninterest expense totaled $122.7 million, a decrease of $1.8 million, or 1.5% from 2012, reflective of declines in OREO expense of $1.9 million, other expense of $0.9 million, occupancy of $0.7 million, and intangible amortization expense of $0.2 million, partially offset by higher compensation of $1.9 million. OREO expense decreased due to lower carrying costs and valuation adjustments reflecting improving property values in our markets. Lower legal fees supporting loan collection as well as a decline in professional fees drove the reduction in other expense. Declines were realized in most of the occupancy expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. The decrease in intangible amortization reflects the full amortization of our remaining core deposit intangible asset in early 2013. The higher level of compensation expense was attributable to an increase in our pension plan expense of $1.0 million and stock compensation expense of $0.9 million, both due to the same aforementioned reasons.

We realized income tax expense of $5,000 in the fourth quarter of 2013 compared to $0.9 million for the third quarter of 2013 and $0.6 million for the fourth quarter of 2012. The resolution of certain tax contingencies in the fourth quarter of 2013 and 2012 favorably impacted income tax expense. For the full year 2013, we realized income tax expense of $1.9 million compared to an income tax benefit of $1.3 million for 2012. The increase in the tax provision year over year was driven by higher operating profits.

Regulatory Matter

During the fourth quarter of 2013, the Company rescinded the informal board resolution adopted by the Company's Board of Directors in February 2010 at the request of the Federal Reserve. In addition, the informal board resolution previously adopted by Capital City Bank's Board of Directors in April 2012, at the request of the Federal Reserve, was also rescinded. These sets of board resolutions had restricted Capital City Bank's ability to declare or pay dividends to the Company and had restricted the Company's ability to incur any new debt or refinance existing debt, declare any dividends on its common stock, make payments on its trust preferred securities, and redeem shares of its common stock. By rescinding both sets of board resolutions, the Company and the Capital City Bank are no longer operating under these restrictions. While we remain committed to resuming dividend payments to our shareowners, our Board of Directors has not made any decision as to when dividend payments will resume.

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 $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 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 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; 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; 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; the Company's need and our ability to incur additional debt or equity financing; a decrease to the market value of the Company that could result in an impairment of goodwill; 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 Twelve Months Ended
(Dollars in thousands, except per share data) Dec 31, 2013 Sep 30, 2013 Dec 31, 2012 Dec 31, 2013 Dec 31, 2012
EARNINGS
Net Income $ 2,772 $ 1,591 $ 1,874 $ 6,045 $ 108
Net Income Per Common Share $ 0.16 $ 0.09 $ 0.11 $ 0.35 $ 0.01
PERFORMANCE
Return on Average Assets 0.43% 0.25% 0.29% 0.24% 0.00%
Return on Average Equity 4.33% 2.51% 2.95% 2.40% 0.04%
Net Interest Margin 3.45% 3.49% 3.78% 3.54% 3.81%
Noninterest Income as % of Operating Revenue 43.85% 42.82% 40.81% 42.25% 39.66%
Efficiency Ratio 90.22% 90.42% 84.68% 91.09% 88.72%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.56% 15.60% 14.35% 16.56% 14.35%
Total Capital Ratio 17.94% 16.97% 15.72% 17.94% 15.72%
Tangible Common Equity Ratio 7.58% 6.84% 6.35% 7.58% 6.35%
Leverage Ratio 10.46% 10.16% 9.90% 10.46% 9.90%
Equity to Assets 10.58% 9.99% 9.37% 10.58% 9.37%
ASSET QUALITY
Allowance as % of Non-Performing Loans 62.48% 60.00% 45.42% 62.48% 45.42%
Allowance as a % of Loans 1.65% 1.75% 1.93% 1.65% 1.93%
Net Charge-Offs as % of Average Loans 0.65% 0.78% 1.00% 0.66% 1.16%
Nonperforming Assets as % of Loans and ORE 5.87% 6.38% 7.47% 5.87% 7.47%
Nonperforming Assets as % of Total Assets 3.26% 3.77% 4.47% 3.26% 4.47%
STOCK PERFORMANCE
High $ 12.69 $ 13.08 $ 11.91 $ 13.08 $ 11.91
Low 11.33 11.06 9.04 10.12 6.35
Close 11.77 11.78 11.37 11.77 11.37
Average Daily Trading Volume $ 28,682 $ 18,380 $ 20,045 $ 21,708 $ 26,622
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2013 2012
(Dollars in thousands) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
ASSETS
Cash and Due From Banks $ 55,209 $ 51,136 $ 67,811 $ 52,677 $ 66,238
Funds Sold and Interest Bearing Deposits 474,719 358,869 391,457 461,714 443,494
Total Cash and Cash Equivalents 529,928 410,005 459,268 514,391 509,732
Investment Securities - Available-for-Sale 251,420 271,838 350,614 307,502 296,985
Investment Securities - Held-to-Maturity 148,211 97,309 0 0 0
Total Investment Securities 399,631 369,147 350,614 307,502 296,985
Loans Held for Sale 11,065 13,822 15,362 11,422 14,189
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 126,607 123,253 126,931 125,905 139,850
Real Estate - Construction 31,012 31,454 35,823 37,948 37,512
Real Estate - Commercial 533,871 570,736 581,501 599,517 613,625
Real Estate - Residential 303,618 305,811 302,254 304,786 310,439
Real Estate - Home Equity 227,922 230,212 232,530 233,205 236,263
Consumer 156,718 148,321 142,620 146,043 150,728
Other Loans 6,074 5,220 5,904 5,187 11,547
Overdrafts 2,782 2,835 2,554 2,307 7,149
Total Loans, Net of Unearned Interest 1,388,604 1,417,842 1,430,117 1,454,898 1,507,113
Allowance for Loan Losses (23,095) (25,010) (27,294) (27,803) (29,167)
Loans, Net 1,365,509 1,392,832 1,402,823 1,427,096 1,477,946
Premises and Equipment, Net 103,385 103,702 104,743 105,883 107,092
Intangible Assets 84,843 84,891 84,937 84,985 85,053
Other Real Estate Owned 48,071 53,018 55,087 58,421 53,426
Other Assets 69,471 87,055 89,024 95,613 89,561
Total Other Assets 305,770 328,666 333,791 344,902 335,132
Total Assets $ 2,611,903 $ 2,514,472 $ 2,561,858 $ 2,605,313 $ 2,633,984
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 641,463 $ 626,114 $ 644,739 $ 616,017 $ 609,235
NOW Accounts 794,746 668,240 706,101 765,030 842,435
Money Market Accounts 268,449 283,338 287,340 299,118 267,766
Regular Savings Accounts 211,668 211,174 204,594 200,492 184,541
Certificates of Deposit 219,922 228,020 228,349 233,325 241,019
Total Deposits 2,136,248 2,016,886 2,071,123 2,113,982 2,144,996
Short-Term Borrowings 51,321 51,918 46,081 50,682 47,435
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 38,043 40,244 41,251 41,224 46,859
Other Liabilities 47,004 91,369 91,227 87,930 84,918
Total Liabilities 2,335,503 2,263,304 2,312,569 2,356,705 2,387,095
SHAREOWNERS' EQUITY
Common Stock 174 173 173 173 172
Additional Paid-In Capital 41,152 40,481 40,210 39,580 38,707
Retained Earnings 243,614 240,842 239,251 238,408 237,569
Accumulated Other Comprehensive Loss, Net of Tax (8,540) (30,328) (30,345) (29,553) (29,559)
Total Shareowners' Equity 276,400 251,168 249,289 248,608 246,889
Total Liabilities and Shareowners' Equity $ 2,611,903 $ 2,514,472 $ 2,561,858 $ 2,605,313 $ 2,633,984
OTHER BALANCE SHEET DATA
Earning Assets $ 2,274,019 $ 2,159,680 $ 2,187,549 $ 2,235,537 $ 2,261,781
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits 0 0 0 0 19
Other 32 80 126 174 223
Interest Bearing Liabilities 1,647,036 1,545,821 1,576,601 1,652,758 1,692,942
Book Value Per Diluted Share $ 15.85 $ 14.44 $ 14.36 $ 14.35 $ 14.31
Tangible Book Value Per Diluted Share 10.98 9.56 9.47 9.44 9.38
Actual Basic Shares Outstanding 17,361 17,336 17,336 17,319 17,232
Actual Diluted Shares Outstanding 17,443 17,396 17,372 17,326 17,259
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Twelve Months Ended
2013 2012 December 31,
(Dollars in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter 2013 2012
INTEREST INCOME
Interest and Fees on Loans $ 19,057 $ 19,264 $ 19,709 $ 20,154 $ 20,756 $ 78,184 $ 85,394
Investment Securities 760 717 710 704 808 2,891 3,340
Funds Sold 259 269 279 270 223 1,077 946
Total Interest Income 20,076 20,250 20,698 21,128 21,787 82,152 89,680
INTEREST EXPENSE
Deposits 314 335 367 415 429 1,431 2,108
Short-Term Borrowings 46 46 61 82 69 235 196
Subordinated Notes Payable 400 339 342 339 351 1,420 1,477
Other Long-Term Borrowings 320 330 333 347 383 1,330 1,587
Total Interest Expense 1,080 1,050 1,103 1,183 1,232 4,416 5,368
Net Interest Income 18,996 19,200 19,595 19,945 20,555 77,736 84,312
Provision for Loan Losses 397 555 1,450 1,070 2,766 3,472 16,166
Net Interest Income after Provision for Loan Losses 18,599 18,645 18,145 18,875 17,789 74,264 68,146
NONINTEREST INCOME
Deposit Fees 6,398 6,474 6,217 6,165 6,764 25,254 25,792
Bank Card Fees 2,656 2,715 2,754 2,661 2,612 10,786 10,783
Wealth Management Fees 2,233 2,130 1,901 1,915 1,818 8,179 7,181
Mortgage Banking Fees 654 869 968 1,043 910 3,534 3,600
Data Processing Fees 689 662 670 653 671 2,674 2,713
Securities Transactions 3 0 0 0 0 3 0
Other 2,040 1,456 1,339 1,151 1,343 5,986 5,116
Total Noninterest Income 14,673 14,306 13,849 13,588 14,118 56,416 55,185
NONINTEREST EXPENSE
Compensation 16,583 16,158 16,647 16,739 15,772 66,127 64,242
Occupancy, Net 4,349 4,403 4,161 4,418 4,429 17,331 18,055
Intangible Amortization 48 46 48 68 108 210 431
Other Real Estate 2,099 2,148 2,408 2,884 1,900 9,539 11,428
Other 7,416 7,678 7,318 7,091 7,259 29,503 30,403
Total Noninterest Expense 30,495 30,433 30,582 31,200 29,468 122,710 124,559
OPERATING PROFIT (LOSS) 2,777 2,518 1,412 1,263 2,439 7,970 (1,228)
Income Tax Expense (Benefit) 5 927 569 424 564 1,925 (1,336)
NET INCOME $ 2,772 $ 1,591 $ 843 $ 839 $ 1,875 $ 6,045 $ 108
PER SHARE DATA
Basic Income $ 0.16 $ 0.09 $ 0.05 $ 0.05 $ 0.11 $ 0.35 $ 0.01
Diluted Income $ 0.16 $ 0.09 $ 0.05 $ 0.05 $ 0.11 $ 0.35 $ 0.01
AVERAGE SHARES
Basic 17,341 17,336 17,319 17,302 17,229 17,325 17,205
Diluted 17,423 17,396 17,355 17,309 17,256 17,399 17,220
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2013 2013 2013 2013 2012
(Dollars in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 25,010 $ 27,294 $ 27,803 $ 29,167 $ 30,222
Provision for Loan Losses 397 555 1,450 1,070 2,766
Net Charge-Offs 2,312 2,839 1,959 2,434 3,821
Balance at End of Period $ 23,095 $ 25,010 $ 27,294 $ 27,803 $ 29,167
As a % of Loans 1.65% 1.75% 1.89% 1.90% 1.93%
As a % of Nonperforming Loans 62.48% 60.00% 65.66% 61.17% 45.42%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 337 $ 138 $ 119 $ 154 $ 166
Real Estate - Construction 72 278 110 610 227
Real Estate - Commercial 676 882 1,050 1,043 468
Real Estate - Residential 921 1,178 1,053 683 2,877
Real Estate - Home Equity 362 362 322 113 745
Consumer 430 674 351 296 488
Total Charge-Offs $ 2,798 $ 3,512 $ 3,005 $ 2,899 $ 4,971
RECOVERIES
Commercial, Financial and Agricultural $ 33 $ 87 $ 38 $ 51 $ 87
Real Estate - Construction -- 1 -- -- 7
Real Estate - Commercial 14 167 144 38 468
Real Estate - Residential 179 167 396 96 83
Real Estate - Home Equity 39 13 224 18 250
Consumer 221 238 244 262 255
Total Recoveries $ 486 $ 673 $ 1,046 $ 465 $ 1,150
NET CHARGE-OFFS $ 2,312 $ 2,839 $ 1,959 $ 2,434 $ 3,821
Net Charge-Offs as a % of Average Loans(1) 0.65% 0.78% 0.54% 0.66% 1.00%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 36,964 $ 41,682 $ 41,566 $ 45,448 $ 64,222
Other Real Estate Owned 48,071 53,018 55,087 58,421 53,426
Total Nonperforming Assets $ 85,035 $ 94,700 $ 96,653 $ 103,869 $ 117,648
Past Due Loans 30-89 Days $ 7,746 $ 8,427 $ 9,017 $ 9,274 $ 9,934
Past Due Loans 90 Days or More 0 0 0 0 0
Performing Troubled Debt Restructuring's $ 44,764 $ 50,692 $ 52,729 $ 53,108 $ 47,474
Nonperforming Loans as a % of Loans 2.64% 2.91% 2.88% 3.10% 4.22%
Nonperforming Assets as a % of
Loans and Other Real Estate 5.87% 6.38% 6.44% 6.81% 7.47%
Nonperforming Assets as a % of Total Assets 3.26% 3.77% 3.77% 3.99% 4.47%
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Fourth Quarter 2013 Third Quarter 2013 Second Quarter 2013 First Quarter 2013 Fourth 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
Average
Balance

Interest
Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,414,909 19,121 5.36% $ 1,436,039 19,345 5.34% $ 1,456,904 19,790 5.45% $ 1,496,432 20,228 5.48% $ 1,518,280 20,837 5.46%
Investment Securities
Taxable Investment Securities 255,298 608 0.86 232,094 568 0.95 225,770 578 1.02 215,087 590 1.10 219,985 697 1.26
Tax-Exempt Investment Securities 124,501 233 0.74 121,119 223 0.73 104,981 200 0.76 80,946 174 0.86 74,647 172 0.92
Total Investment Securities 379,799 841 0.88 353,213 791 0.89 330,751 778 0.94 296,033 764 1.04 294,632 869 1.17
Funds Sold 411,578 259 0.25 412,138 269 0.26 419,039 279 0.27 448,424 270 0.24 366,034 223 0.24
Total Earning Assets 2,206,286 $ 20,221 3.64% 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%
Cash and Due From Banks 48,519 51,640 49,081 50,679 51,344
Allowance for Loan Losses (25,612) (27,636) (29,012) (30,467) (30,605)
Other Assets 324,460 333,001 337,765 337,579 334,326
Total Assets $ 2,553,653 $ 2,558,395 $ 2,564,528 $ 2,598,680 $ 2,534,011
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 697,468 $ 95 0.05% $ 676,855 $ 107 0.06% $ 716,459 $ 124 0.07% $ 788,660 $ 156 0.08% $ 714,682 $ 131 0.07%
Money Market Accounts 279,608 50 0.07 284,920 53 0.07 289,637 54 0.07 282,847 54 0.08 275,458 57 0.08
Savings Accounts 211,761 27 0.05 207,631 26 0.05 202,784 25 0.05 193,033 23 0.05 182,760 23 0.05
Time Deposits 224,500 142 0.25 231,490 149 0.26 231,134 164 0.29 238,441 182 0.31 247,679 218 0.35
Total Interest Bearing Deposits 1,413,337 314 0.09% 1,400,896 335 0.09% 1,440,014 367 0.10% 1,502,981 415 0.11% 1,420,579 429 0.12%
Short-Term Borrowings 58,126 46 0.31% 49,919 46 0.37% 52,399 61 0.47% 55,255 82 0.60% 45,893 69 0.59%
Subordinated Notes Payable 62,887 400 2.49 62,887 339 2.11 62,887 342 2.15 62,887 339 2.15 62,887 351 2.19
Other Long-Term Borrowings 39,676 320 3.19 40,832 330 3.21 40,942 333 3.26 42,898 347 3.29 42,673 383 3.57
Total Interest Bearing Liabilities 1,574,026 $ 1,080 0.27% 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%
Noninterest Bearing Deposits 637,533 658,602 627,633 599,986 630,520
Other Liabilities 88,095 93,642 90,168 85,116 78,442
Total Liabilities 2,299,654 2,306,778 2,314,043 2,349,123 2,280,994
SHAREOWNERS' EQUITY: 253,999 251,617 250,485 249,557 253,017
Total Liabilities and Shareowners' Equity $ 2,553,653 $ 2,558,395 $ 2,564,528 $ 2,598,680 $ 2,534,011
Interest Rate Spread $ 19,141 3.36% $ 19,355 3.41% $ 19,744 3.51% $ 20,079 3.56% $ 20,697 3.69%
Interest Income and Rate Earned(1) 20,221 3.64 20,405 3.68 20,847 3.79 21,262 3.85 21,929 4.00
Interest Expense and Rate Paid(2) 1,080 0.19 1,050 0.19 1,103 0.20 1,183 0.21 1,232 0.22
Net Interest Margin $ 19,141 3.45% $ 19,355 3.49% $ 19,744 3.59% $ 20,079 3.64% $ 20,697 3.78%
(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
Dec 2013 YTD Dec 2012 YTD
(Dollars in thousands) Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,450,806 $ 78,484 5.41% $ 1,556,565 $ 85,780 5.51%
Investment Securities
Taxable Investment Securities 232,173 2,344 0.94 223,429 2,912 1.27
Tax-Exempt Investment Securities 108,042 830 0.76 65,560 658 1.00
Total Investment Securities 340,215 3,174 0.93 288,989 3,570 1.23
Funds Sold 422,665 1,077 0.25 384,067 946 0.25
Total Earning Assets 2,213,686 $ 82,735 3.74% 2,229,621 $ 90,296 4.05%
Cash and Due From Banks 49,978 48,924
Allowance for Loan Losses (28,167) (30,959)
Other Assets 333,165 342,587
Total Assets $ 2,568,662 $ 2,590,173
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 719,493 $ 482 0.07% $ 771,617 $ 634 0.08%
Money Market Accounts 284,245 211 0.07 280,165 255 0.09
Savings Accounts 203,864 101 0.05 175,712 87 0.05
Time Deposits 231,354 637 0.28 267,263 1,132 0.42
Total Interest Bearing Deposits 1,438,956 1,431 0.10% 1,494,757 2,108 0.14%
Short-Term Borrowings 53,922 235 0.44% 52,178 196 0.38%
Subordinated Notes Payable 62,887 1,420 2.23 62,887 1,477 2.31
Other Long-Term Borrowings 41,077 1,330 3.24 41,513 1,587 3.82
Total Interest Bearing Liabilities 1,596,842 $ 4,416 0.28% 1,651,335 $ 5,368 0.33%
Noninterest Bearing Deposits 631,117 610,915
Other Liabilities 89,276 74,963
Total Liabilities 2,317,235 2,337,213
SHAREOWNERS' EQUITY: 251,427 252,960
Total Liabilities and Shareowners' Equity $ 2,568,662 $ 2,590,173
Interest Rate Spread $ 78,319 3.46% $ 84,928 3.72%
Interest Income and Rate Earned(1) 82,735 3.74 90,296 4.05
Interest Expense and Rate Paid(2) 4,416 0.20 5,368 0.24
Net Interest Margin $ 78,319 3.54% $ 84,928 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.