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Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2014 Results

TALLAHASSEE, Fla., Jan. 27, 2015 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.9 million, or $0.11 per diluted share for the fourth quarter of 2014, compared to net income of $2.1 million, or $0.12 per diluted share for the third quarter of 2014, and net income of $2.8 million, or $0.16 per diluted share, for the fourth quarter of 2013. For the full year 2014, the Company reported net income of $9.3 million, or $0.53 per diluted share, compared to net income of $6.0 million, or $0.35 per diluted share in 2013.

2014 HIGHLIGHTS

  • Margin expansion driven by four consecutive quarters of loan growth and increased deployment of liquidity into the investment portfolio.
  • Loan balances grew at an annual rate of 3% reflective of improved loan demand and calling efforts.
  • 38% reduction in nonperforming assets -- improvement in credit quality favorably impacted credit costs.
  • Core operating costs (excluding OREO) declined 5% year over year.
  • CCBG stock price of $15.54 at December 31, 2014, increased 15 percent from the prior quarter and 32 percent from the prior year.

"2014 was a great year for Capital City," said William G. Smith, Jr., Chairman, President and CEO. "We made meaningful progress across all aspects of our business – nonperforming assets declined 38%, loans grew 3.0% reflecting four consecutive quarters of growth, our margin stabilized, we reinstated the dividend and our stock price rose 32% year over year. These improvements have been accomplished through the hard work of our associates and by staying focus on those initiatives that add value to our shareowners. We leave 2014 with a great deal of momentum and look forward to both the challenges and opportunities of 2015."

Compared to the third quarter of 2014, performance reflects a $0.3 million decrease in noninterest income, an increase in the loan loss provision of $0.2 million, and higher income taxes of $0.1 million that were partially offset by higher net interest income of $0.1 million and lower noninterest expense of $0.3 million.

Compared to the fourth quarter of 2013, the decrease in earnings was due to a $0.8 million reduction in noninterest income, a $0.2 million increase in the loan loss provision, and higher income taxes of $1.2 million, partially offset by lower noninterest expense of $1.3 million.

For the full year 2014, the increase in earnings was attributable to lower noninterest expense of $7.0 million, a lower loan loss provision of $1.6 million, and lower income taxes of $0.3 million, partially offset by lower net interest income of $3.1 million and noninterest income of $2.6 million.

The Return on Average Assets was 0.30% and the Return on Average Equity was 2.66% for the fourth quarter of 2014. These metrics were 0.33% and 2.95% for the third quarter of 2014, and 0.43% and 4.33% for the fourth quarter of 2013, respectively. For the full year of 2014, the Return on Average Assets was 0.36% and the Return on Average Equity was 3.27% compared to 0.24% and 2.40%, respectively, for 2013.

Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2014 was $19.1 million compared to $19.0 million for the third quarter of 2014 and $19.1 million for the fourth quarter of 2013. The fourth quarter of 2014 when compared to both prior periods reflects a positive shift in earning asset mix due to growth in the investment and loan portfolios and a slight reduction in interest expense. Unfavorable asset repricing continued to be experienced during the current quarter. For the full year 2014, tax equivalent net interest income totaled $75.1 million compared to $78.3 million for 2013 with the decline attributable to an unfavorable shift in earning asset mix (relative to the comparable prior year period)) and unfavorable asset repricing, partially offset by a reduction in the cost of funds.

Net interest income increased for the third straight quarter and was slightly higher than the fourth quarter of 2013. Historically low interest rates and increased competition for loans continue to put pressure on loan yields, partially offsetting the favorable impact attributable to growth in the loan and investment portfolios.

The net interest margin for the fourth quarter of 2014 was 3.43%, an increase of one basis point over the third quarter of 2014 and a decline of two basis points from the fourth quarter of 2013. Growth in our investment and loan portfolios helped to improve our margin from the third to fourth quarter, while the decrease in the margin from the comparable prior year quarter was attributable to unfavorable asset repricing, partially offset by a lower average cost of funds. For the full year 2014, the tax equivalent net interest margin was 3.36%, compared to 3.54% for 2013 with the decline primarily attributable to an unfavorable shift in the earning asset mix and asset repricing.

The provision for loan losses for the fourth quarter of 2014 was $0.6 million compared to $0.4 million for the third quarter of 2014 and $0.4 million for the fourth quarter of 2013. For the full year 2014, the loan loss provision totaled $1.9 million compared to $3.5 million for 2013. The increase in the provision over the third quarter of 2014 was due to a higher level of loan charge-offs. The lower level of provision for the full year 2014 reflects continued favorable problem loan migration and improvement in key credit metrics. Net charge-offs for the fourth quarter of 2014 totaled $2.2 million, or 0.61% (annualized) of average loans, compared to $1.9 million, or 0.52% (annualized), for the third quarter of 2014 and $2.3 million, or 0.65% (annualized), for the fourth quarter of 2013. For the full year 2014, net charge-offs totaled $7.5 million, or 0.53% of average loans, compared to $9.5 million, or 0.66%, for 2013. At December 31, 2014, the allowance for loan losses of $17.5 million was 1.22% of outstanding loans (net of overdrafts) and provided coverage of 105% of nonperforming loans compared to 1.34% and 81%, respectively, at September 30, 2014 and 1.65% and 62%, respectively, at December 31, 2013.

Noninterest income for the fourth quarter of 2014 totaled $13.1 million, a $0.3 million, or 2.2%, decrease from the third quarter of 2014 and a decrease of $0.8 million, or 5.6%, from the fourth quarter of 2013. The decrease in noninterest income from the third quarter of 2014 reflects lower deposit fees of $0.2 million, wealth management fees of $0.1 million, mortgage banking fees of $0.1 million, and data processing fees of $0.1 million that were partially offset by higher other income of $0.2 million. Deposit fees declined due to a lower level of overdraft fees. Lower trade activity by our retail brokerage clients drove the reduction in wealth management fees. The decrease in mortgage banking fees was generally attributable to a seasonal slowdown in home purchase activity in our markets. The reduction in data processing fees is related to the loss of a government processing contract during 2014. Higher bank owned life insurance income and working capital finance fees drove the increase in other income. Compared to the fourth quarter of 2013, the decrease was attributable to a $0.4 million reduction in deposit fees, a $0.4 million decline in data processing fees, and lower wealth management fees of $0.2 million, partially offset by higher mortgage banking fees of $0.2 million. Lower overdraft fees and to a lesser extent a higher level of charged off checking accounts drove the decline in deposit fees. The decrease in data processing fees was primarily due to a lower level of fees from a government processing contract that ended early in the second quarter of 2014. Wealth management fees declined due to a lower level of new retail investment product sales which were very strong in the fourth quarter of 2013. A higher level of new loan production as well as a higher margin realized on sold loans drove the increase in mortgage banking fees.

For the full year 2014, noninterest income totaled $52.5 million, a $2.6 million, or 4.7%, decrease from 2013 reflective of lower deposit fees of $0.9 million, data processing fees of $1.1 million, wealth management fees of $0.4 million and mortgage banking fees of $0.5 million, partially offset by higher bank card fees of $0.1 million and other income of $0.2 million. The decrease in deposit fees was due to a lower level of overdraft fees generally reflective of improved financial management by our clients. A lower level of refinancing activity drove the reduction in mortgage banking fees. The decline in wealth management fees was attributable to lower fees from our retail brokerage business generally reflective of lower client trading activity. Data processing fees declined due to the aforementioned government processing contract that ended during the second quarter of 2014. Higher card spend drove the increase in bank card fees. A higher level of bank owned life insurance income and miscellaneous recoveries drove the increase in other income.

Noninterest expense for the fourth quarter of 2014 totaled $28.3 million, a decrease of $0.3 million, or 1.0%, from the third quarter of 2014 reflective of lower OREO expense of $0.4 million, occupancy expense of $0.2 million and other expense of $0.2 million, partially offset by a higher compensation expense of $0.5 million. The decline in OREO expense was primarily attributable lower property carrying costs. Lower maintenance and repair costs for our premises and lower utility costs drove the reduction in occupancy expense. The reduction in other expense was primarily attributable to a decline in legal fees and advertising costs. The higher level of compensation expense was primarily attributable to an increase in stock compensation expense reflective of a higher level of performance for our stock incentive plans. Compared to the fourth quarter of 2013, noninterest expense decreased by $1.3 million, or 4.5%, attributable to lower compensation expense of $0.7 million and other expense of $0.8 million, partially offset by higher OREO expense of $0.1 million and occupancy expense of $0.1 million. The decline in compensation expense was due to lower pension expense that was partially offset by higher stock compensation expense. The decrease in other expense reflects lower FDIC insurance fees of $0.3 million, legal fees of $0.3 million, professional fees of $0.1 million, and printing/supplies of $0.1 million. A reduction in gains from the sale of properties drove the increase in OREO expense. Higher building maintenance costs and property taxes drove the increase in occupancy expense.

For the full year 2014, noninterest expense totaled $114.4 million, a decrease of $7.0 million, or 5.8%, from 2013 attributable to lower compensation expense of $3.9 million, OREO expense of $1.4 million, other expense of $2.0 million and intangible expense of $0.2 million, partially offset by higher occupancy expense of $0.5 million. The reduction in compensation expense was attributable to lower pension plan expense partially offset by higher incentive expense for both cash and stock plans. The lower level of pension expense was attributable to the utilization of a higher discount rate (attributable to higher long-term rates at the end of 2013) for determining pension plan liabilities. Improved company performance drove the higher level of incentive plan expense. Lower property carrying costs as well as a reduction in property valuation adjustments were the primary reasons for the reduction in OREO expense. The reduction in other expense was primarily attributable to lower FDIC insurance fees reflective of a favorable premium adjustment and reductions in both legal and professional fees. The decline in intangible amortization expense reflects the full amortization of our remaining intangible in early 2014. The increase in occupancy expense was due to higher maintenance contract costs reflective of security and technology upgrades. Higher building maintenance costs, partially attributable to non-recurring expenditures, also contributed to the increase, but to a lesser extent.

We realized income tax expense of $1.2 million for the fourth quarter of 2014 compared to $1.1 million for the third quarter of 2014 and $5,000 for the fourth quarter of 2013. The resolution of certain tax contingencies favorably impacted income tax expense for the fourth quarter of 2013. For the full year 2014, we realized income tax expense of $1.7 million compared to income tax expense of $1.9 million for 2013. Income taxes for 2014 were favorably impacted by a $2.2 million state tax benefit realized in the first quarter of 2014 attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters.

Discussion of Financial Condition

Average earning assets were $2.213 billion for the fourth quarter of 2014, an increase of $3.4 million, or 0.2%, over the third quarter of 2014 and $6.5 million, or 0.3%, over the fourth quarter of 2013. The change in earning assets from both periods reflects a higher level of total deposits. Additionally, growth in both the loan and investment portfolios led to a more favorable earning asset mix.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $288.6 million during the fourth quarter of 2014 compared to an average net overnight funds sold position of $317.6 million in the third quarter of 2014 and an average overnight funds sold position of $411.6 million in the fourth quarter of 2013. The decrease relative to prior periods reflects growth in both the loan and investment portfolios.

Although we have experienced loan growth in 2014, we continue to work on lowering the level of overnight funds by adding to our investment portfolio with short-duration, high quality securities and reducing deposit balances. We offer to our clients a fully-insured money market account which is provided 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 better deploy our overnight fund balances.

When compared to the fourth quarter of 2013, average loans have increased by $11.8 million, or 0.8% and period end loans have increased in each of the last four quarters, which resulted in an annual growth rate of 3.0%. The improvement in loans continues to be driven primarily by the consumer portfolio while the commercial real estate portfolio declined.

Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business (commercial real estate and consumer portfolios) to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio. These programs, coupled with economic improvements in our anchor markets, have helped to increase overall production.

Nonperforming assets (nonaccrual loans and OREO) totaled $52.4 million at year-end 2014, a decrease of $12.8 million from the third quarter of 2014 and $32.6 million from the fourth quarter of 2013. Nonaccrual loans totaled $16.8 million at year-end 2014, a decrease of $6.7 million from the third quarter of 2014 and $20.2 million from the fourth quarter of 2013. Nonaccrual loan additions totaled $5.8 million in the fourth quarter of 2014 and $22.5 million for the full year 2014, which compares to $14.5 million and $44.1 million respectively, for the same periods of 2013. The balance of OREO totaled $35.7 million at year-end 2014, representing decreases of $6.0 million from the third quarter of 2014 and $12.4 million from year-end 2013. For the fourth quarter of 2014, we added properties totaling $3.2 million, sold properties totaling $7.9 million, recorded valuation adjustments totaling $0.9 million, and realized miscellaneous adjustments of $0.4 million. For the full year 2014, we added properties totaling $15.3 million, sold properties totaling $23.8 million, recorded valuation adjustments totaling $3.1 million, and realized miscellaneous adjustments of $0.7 million. Nonperforming assets represented 2.00% of total assets at December 31, 2014 compared to 2.61% at September 30, 2014 and 3.26% at December 31, 2013.

Average total deposits were $2.077 billion for the fourth quarter of 2014, an increase of $14.5 million, or 0.7%, over the third quarter of 2014 and $26.5 million, or 1.3%, over the fourth quarter of 2013. The higher level of deposits when compared to both periods reflects higher noninterest bearing deposits and savings accounts, partially offset by declines in money markets and certificates of deposit. The seasonal inflow of public funds started in the fourth quarter of 2014 and will continue through the first quarter of 2015. Deposit levels remain strong and 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.

When compared to the third quarter of 2014, average borrowings increased by $4.0 million attributable to higher repurchase agreement balances. When compared to the fourth quarter of 2013, average borrowings declined by $20.2 million, primarily as a result of lower repurchase agreement balances and FHLB advance payoffs/amortization.

Equity capital was $272.5 million as of December 31, 2014, compared to $283.3 million as of September 30, 2014 and $276.4 million as of December 31, 2013. Our leverage ratio was 10.99%, 10.97%, and 10.46%, respectively, for these periods. Further, our risk-adjusted capital ratio of 17.76% at December 31, 2014 compares to 18.08% at September 30, 2014 and 17.94% at December 31, 2013, and significantly exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At December 31, 2014, our tangible common equity ratio was 7.38%, compared to 8.22% at September 30, 2014 and 7.58% at December 31, 2013. The decline in equity and certain capital ratios in the fourth quarter of 2014 were due to an unfavorable adjustment in the pension component of our other comprehensive income. The unfavorable adjustment reflects (1) a decrease in the plan discount rate (attributable to lower long-term rates at the end of 2014), which drives an increase in pension liabilities, and (2) the incorporation of recent changes to the mortality tables used to calculate pension liabilities. In the first quarter of 2014, our Board of Directors authorized the repurchase of up to 1,500,000 shares of our outstanding common stock. During 2014, we repurchased 19,600 shares of our common stock at an average price of $13.69 per share.

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 $2.6 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; 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 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, 2013, 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, 2014 Sep 30, 2014 Dec 31, 2013 Dec 31, 2014 Dec 31, 2013
EARNINGS
Net Income $ 1,921 $ 2,115 $ 2,772 $ 9,260 $ 6,045
Net Income Per Common Share $ 0.11 $ 0.12 $ 0.16 $ 0.53 $ 0.35
PERFORMANCE
Return on Average Assets 0.30% 0.33% 0.43% 0.36% 0.24%
Return on Average Equity 2.66% 2.95% 4.33% 3.27% 2.40%
Net Interest Margin 3.43% 3.42% 3.45% 3.36% 3.54%
Noninterest Income as % of Operating Revenue 41.64% 41.78% 43.85% 41.94% 42.25%
Efficiency Ratio 88.16% 88.44% 90.22% 89.68% 91.09%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.67% 16.88% 16.56% 16.67% 16.56%
Total Capital Ratio 17.76% 18.08% 17.94% 17.76% 17.94%
Tangible Common Equity Ratio 7.38% 8.22% 7.58% 7.38% 7.58%
Leverage Ratio 10.99% 10.97% 10.46% 10.99% 10.46%
Equity to Assets 10.37% 11.33% 10.58% 10.37% 10.58%
ASSET QUALITY
Allowance as % of Non-Performing Loans 104.60% 81.31% 62.48% 104.60% 62.48%
Allowance as a % of Loans 1.22% 1.34% 1.65% 1.22% 1.65%
Net Charge-Offs as % of Average Loans 0.61% 0.52% 0.65% 0.53% 0.66%
Nonperforming Assets as % of Loans and ORE 3.55% 4.45% 5.87% 3.55% 5.87%
Nonperforming Assets as % of Total Assets 2.00% 2.61% 3.26% 2.00% 3.26%
STOCK PERFORMANCE
High $ 16.00 $ 14.98 $ 12.69 $ 16.00 $ 13.08
Low 13.00 13.26 11.33 11.56 10.12
Close $ 15.54 $ 13.54 $ 11.77 $ 15.54 $ 11.77
Average Daily Trading Volume 24,128 16,889 28,682 26,219 21,708
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2014 2013
(Dollars in thousands) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
ASSETS
Cash and Due From Banks $ 55,467 $ 50,049 $ 63,956 $ 59,288 $ 55,209
Funds Sold and Interest Bearing Deposits 329,589 253,974 354,233 468,805 474,719
Total Cash and Cash Equivalents 385,056 304,023 418,189 528,093 529,928
Investment Securities - Available-for-Sale 341,548 322,297 275,082 229,615 251,420
Investment Securities - Held-to-Maturity 163,581 173,188 180,393 191,645 148,211
Total Investment Securities 505,129 495,485 455,475 421,260 399,631
Loans Held for Sale 10,688 8,700 13,040 12,313 11,065
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 136,925 133,756 134,833 138,664 126,607
Real Estate - Construction 41,596 38,121 34,244 36,454 31,012
Real Estate - Commercial 510,120 501,863 518,580 522,019 533,871
Real Estate - Residential 289,952 302,791 298,647 297,842 303,618
Real Estate - Home Equity 229,572 228,968 228,232 226,411 227,922
Consumer 214,758 200,363 181,209 163,768 156,718
Other Loans 6,017 5,504 7,182 7,270 6,074
Overdrafts 2,434 3,009 2,664 2,349 2,782
Total Loans, Net of Unearned Interest 1,431,374 1,414,375 1,405,591 1,394,777 1,388,604
Allowance for Loan Losses (17,539) (19,093) (20,543) (22,110) (23,095)
Loans, Net 1,413,835 1,395,282 1,385,048 1,372,667 1,365,509
Premises and Equipment, Net 101,899 102,546 102,141 102,655 103,385
Intangible Assets 84,811 84,811 84,811 84,811 84,843
Other Real Estate Owned 35,680 41,726 42,579 44,036 48,071
Other Assets 90,071 67,044 66,209 67,205 69,471
Total Other Assets 312,461 296,127 295,740 298,707 305,770
Total Assets $ 2,627,169 $ 2,499,617 $ 2,567,492 $ 2,633,040 $ 2,611,903
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 659,115 $ 667,616 $ 689,844 $ 657,548 $ 641,463
NOW Accounts 804,337 665,493 712,385 775,439 794,746
Money Market Accounts 254,149 270,131 272,255 292,923 268,449
Regular Savings Accounts 233,612 231,301 227,470 225,481 211,668
Certificates of Deposit 195,581 199,037 206,496 212,322 219,922
Total Deposits 2,146,794 2,033,578 2,108,450 2,163,713 2,136,248
Short-Term Borrowings 49,425 42,586 36,732 48,733 51,321
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 31,097 32,305 33,282 33,971 38,043
Other Liabilities 64,426 45,008 44,561 43,856 47,004
Total Liabilities 2,354,629 2,216,364 2,285,912 2,353,160 2,335,503
SHAREOWNERS' EQUITY
Common Stock 174 174 174 174 174
Additional Paid-In Capital 42,569 41,637 41,628 41,220 41,152
Retained Earnings 251,306 249,907 248,142 247,017 243,614
Accumulated Other Comprehensive Loss, Net of Tax (21,509) (8,465) (8,364) (8,531) (8,540)
Total Shareowners' Equity 272,540 283,253 281,580 279,880 276,400
Total Liabilities and Shareowners' Equity $ 2,627,169 $ 2,499,617 $ 2,567,492 $ 2,633,040 $ 2,611,903
OTHER BALANCE SHEET DATA
Earning Assets $ 2,276,781 $ 2,172,535 $ 2,228,339 $ 2,297,154 $ 2,274,019
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Other 0 0 0 0 32
Interest Bearing Liabilities 1,631,088 1,503,740 1,551,507 1,651,756 1,647,036
Book Value Per Diluted Share $ 15.53 $ 16.18 $ 16.08 $ 16.02 $ 15.85
Tangible Book Value Per Diluted Share 10.70 11.33 11.24 11.17 10.98
Actual Basic Shares Outstanding 17,447 17,433 17,449 17,427 17,361
Actual Diluted Shares Outstanding 17,544 17,512 17,510 17,466 17,443
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Twelve Months Ended
2014 2013 December 31,
(Dollars in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter 2014 2013
INTEREST INCOME
Interest and Fees on Loans $ 18,624 $ 18,528 $ 18,152 $ 18,098 $ 19,057 $ 73,402 $ 78,184
Investment Securities 1,066 1,034 939 847 760 3,886 2,891
Funds Sold 181 204 257 291 259 933 1,077
Total Interest Income 19,871 19,766 19,348 19,236 20,076 78,221 82,152
INTEREST EXPENSE
Deposits 243 255 293 308 314 1,099 1,431
Short-Term Borrowings 24 17 17 20 46 78 235
Subordinated Notes Payable 333 333 331 331 400 1,328 1,420
Other Long-Term Borrowings 252 263 269 291 320 1,075 1,330
Total Interest Expense 852 868 910 950 1,080 3,580 4,416
Net Interest Income 19,019 18,898 18,438 18,286 18,996 74,641 77,736
Provision for Loan Losses 623 424 499 359 397 1,905 3,472
Net Interest Income after Provision for Loan Losses 18,396 18,474 17,939 17,927 18,599 72,736 74,264
NONINTEREST INCOME
Deposit Fees 6,027 6,211 6,213 5,869 6,398 24,320 25,254
Bank Card Fees 2,658 2,707 2,820 2,707 2,656 10,892 10,786
Wealth Management Fees 1,988 2,050 1,852 1,918 2,233 7,808 8,179
Mortgage Banking Fees 808 911 738 625 654 3,082 3,534
Data Processing Fees 278 336 388 541 689 1,543 2,674
Securities Transactions 1 -- -- -- 3 1 3
Other 1,293 1,136 1,336 1,125 1,192 4,890 4,681
Total Noninterest Income 13,053 13,351 13,347 12,785 13,825 52,536 55,111
NONINTEREST EXPENSE
Compensation 15,850 15,378 15,206 15,781 16,583 62,215 66,127
Occupancy, Net 4,440 4,575 4,505 4,298 4,349 17,818 17,331
Intangible Amortization -- -- -- 32 48 32 210
Other Real Estate 1,353 1,783 2,276 1,399 1,251 6,811 8,234
Other 6,666 6,871 7,089 6,856 7,416 27,482 29,503
Total Noninterest Expense 28,309 28,607 29,076 28,366 29,647 114,358 121,405
OPERATING PROFIT (LOSS) 3,140 3,218 2,210 2,346 2,777 10,914 7,970
Income Tax Expense (Benefit) 1,219 1,103 737 (1,405) 5 1,654 1,925
NET INCOME $ 1,921 $ 2,115 $ 1,473 $ 3,751 $ 2,772 $ 9,260 $ 6,045
PER SHARE DATA
Basic Income $ 0.11 $ 0.12 $ 0.08 $ 0.22 $ 0.16 $ 0.53 $ 0.35
Diluted Income 0.11 0.12 0.08 0.22 0.16 0.53 0.35
Cash Dividend $ 0.03 $ 0.02 $ 0.02 $ 0.02 $ -- $ 0.09 $ --
AVERAGE SHARES
Basic 17,433 17,440 17,427 17,399 17,341 17,425 17,325
Diluted 17,530 17,519 17,488 17,439 17,423 17,488 17,399
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2014 2014 2014 2014 2013
(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 $ 19,093 $ 20,543 $ 22,110 $ 23,095 $ 25,010
Provision for Loan Losses 623 424 499 359 397
Net Charge-Offs 2,177 1,874 2,066 1,344 2,312
Balance at End of Period $ 17,539 $ 19,093 $ 20,543 $ 22,110 $ 23,095
As a % of Loans 1.22% 1.34% 1.45% 1.57% 1.65%
As a % of Nonperforming Loans 104.60% 81.31% 80.03% 63.98% 62.48%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 688 $ 86 $ 86 $ 11 $ 337
Real Estate - Construction 28 -- -- -- 72
Real Estate - Commercial 957 1,208 1,029 594 676
Real Estate - Residential 522 212 695 731 921
Real Estate - Home Equity (20) 621 375 403 362
Consumer 608 386 421 405 430
Total Charge-Offs $ 2,783 $ 2,513 $ 2,606 $ 2,144 $ 2,798
RECOVERIES
Commercial, Financial and Agricultural $ 66 $ 28 $ 45 $ 75 $ 33
Real Estate - Construction 2 2 1 4 --
Real Estate - Commercial 76 213 152 27 14
Real Estate - Residential 212 93 52 395 179
Real Estate - Home Equity 28 37 65 11 39
Consumer 222 266 225 288 221
Total Recoveries $ 606 $ 639 $ 540 $ 800 $ 486
NET CHARGE-OFFS $ 2,177 $ 1,874 $ 2,066 $ 1,344 $ 2,312
Net Charge-Offs as a % of Average Loans(1) 0.61% 0.52% 0.59% 0.39% 0.65%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 16,769 $ 23,482 $ 25,670 $ 34,558 $ 36,964
Other Real Estate Owned 35,680 41,726 42,579 44,036 48,071
Total Nonperforming Assets $ 52,449 $ 65,208 $ 68,249 $ 78,594 $ 85,035
Past Due Loans 30-89 Days $ 6,792 $ 4,726 $ 5,092 $ 4,902 $ 7,746
Past Due Loans 90 Days or More -- 62 -- -- --
Classified Loans 83,137 89,850 95,037 107,420 115,630
Performing Troubled Debt Restructuring's $ 44,409 $ 43,578 $ 45,440 $ 46,249 $ 44,764
Nonperforming Loans as a % of Loans 1.16% 1.65% 1.81% 2.46% 2.64%
Nonperforming Assets as a % of
Loans and Other Real Estate 3.55% 4.45% 4.67% 5.42% 5.87%
Nonperforming Assets as a % of Total Assets 2.00% 2.61% 2.66% 2.98% 3.26%
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Fourth Quarter 2014 Third Quarter 2014 Second Quarter 2014 First Quarter 2014 Fourth Quarter 2013
(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 $ 1,426,756 18,670 5.19% $ 1,421,327 18,590 5.19% $ 1,411,988 18,216 5.17% $ 1,395,506 18,161 5.28% $ 1,414,909 19,121 5.36%
Investment Securities
Taxable Investment Securities 423,136 964 0.90 387,966 929 0.95 345,798 822 0.95 290,942 709 0.88 255,298 608 0.86
Tax-Exempt Investment Securities 74,276 161 0.87 82,583 165 0.80 94,431 182 0.77 114,542 213 0.74 124,501 233 0.74
Total Investment Securities 497,412 1,125 0.90 470,549 1,094 0.92 440,229 1,004 0.91 405,484 922 0.91 379,799 841 0.88
Funds Sold 288,613 181 0.25 317,553 204 0.25 408,668 257 0.25 467,330 291 0.25 411,578 259 0.25
Total Earning Assets 2,212,781 $ 19,976 3.58% 2,209,429 $ 19,888 3.57% 2,260,885 $ 19,477 3.46% 2,268,320 $ 19,374 3.46% 2,206,286 $ 20,221 3.64%
Cash and Due From Banks 45,173 44,139 44,115 48,084 48,519
Allowance for Loan Losses (19,031) (20,493) (22,255) (23,210) (25,612)
Other Assets 310,813 297,496 296,248 305,113 324,460
Total Assets $ 2,549,736 $ 2,530,571 $ 2,578,993 $ 2,598,307 $ 2,553,653
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 689,572 $ 57 0.03% $ 680,154 $ 66 0.04% $ 724,635 $ 91 0.05% $ 770,302 $ 104 0.05% $ 697,468 $ 95 0.05%
Money Market Accounts 267,703 46 0.07 270,133 46 0.07 280,619 50 0.07 274,015 48 0.07 279,608 50 0.07
Savings Accounts 233,161 29 0.05 228,741 29 0.05 227,960 28 0.05 218,825 26 0.05 211,761 27 0.05
Time Deposits 197,129 111 0.22 202,802 114 0.22 209,558 124 0.24 215,291 130 0.24 224,500 142 0.25
Total Interest Bearing Deposits 1,387,565 243 0.07% 1,381,830 255 0.07% 1,442,772 293 0.08% 1,478,433 308 0.08% 1,413,337 314 0.09%
Short-Term Borrowings 46,055 24 0.21% 40,782 17 0.17% 44,473 17 0.15% 46,343 20 0.18% 58,126 46 0.31%
Subordinated Notes Payable 62,887 333 2.07 62,887 333 2.07 62,887 331 2.08 62,887 331 2.10 62,887 400 2.49
Other Long-Term Borrowings 31,513 252 3.17 32,792 263 3.20 33,619 269 3.21 37,055 291 3.18 39,676 320 3.19
Total Interest Bearing Liabilities 1,528,020 $ 852 0.22% 1,518,291 $ 868 0.23% 1,583,751 $ 910 0.23% 1,624,718 $ 950 0.24% 1,574,026 $ 1,080 0.27%
Noninterest Bearing Deposits 689,800 681,051 666,791 646,527 637,533
Other Liabilities 45,887 47,099 46,105 47,333 88,095
Total Liabilities 2,263,707 2,246,441 2,296,647 2,318,578 2,299,654
SHAREOWNERS' EQUITY: 286,029 284,130 282,346 279,729 253,999
Total Liabilities and Shareowners' Equity $ 2,549,736 $ 2,530,571 $ 2,578,993 $ 2,598,307 $ 2,553,653
Interest Rate Spread $ 19,124 3.36% $ 19,020 3.34% $ 18,567 3.22% $ 18,424 3.23% $ 19,141 3.36%
Interest Income and Rate Earned(1) 19,976 3.58 19,888 3.57 19,477 3.46 19,374 3.46 20,221 3.64
Interest Expense and Rate Paid(2) 852 0.15 868 0.16 910 0.16 950 0.18 1,080 0.18
Net Interest Margin $ 19,124 3.43% $ 19,020 3.42% $ 18,567 3.29% $ 18,424 3.29% $ 19,141 3.45%
(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 2014 YTD Dec 2013 YTD
(Dollars in thousands) Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,414,000 73,637 5.21% $ 1,450,806 78,484 5.41%
Investment Securities
Taxable Investment Securities 362,393 3,423 0.91 232,172 2,344 0.94
Tax-Exempt Investment Securities 91,324 722 0.79 108,043 830 0.76
Total Investment Securities 453,717 4,145 0.91 340,215 3,174 0.93
Funds Sold 369,906 933 0.25 422,665 1,077 0.25
Total Earning Assets 2,237,623 $ 78,715 3.52% 2,213,686 $ 82,735 3.74%
Cash and Due From Banks 45,367 49,978
Allowance for Loan Losses (21,234) (28,167)
Other Assets 302,420 333,165
Total Assets $ 2,564,176 $ 2,568,662
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 715,846 $ 318 0.04% $ 719,493 $ 482 0.07%
Money Market Accounts 273,092 190 0.07 284,245 211 0.07
Savings Accounts 227,215 112 0.05 203,864 101 0.05
Time Deposits 206,136 479 0.23 231,354 637 0.28
Total Interest Bearing Deposits 1,422,289 1,099 0.08% 1,438,956 1,431 0.10%
Short-Term Borrowings 44,403 78 0.18% 53,922 235 0.44%
Subordinated Notes Payable 62,887 1,328 2.08 62,887 1,420 2.23
Other Long-Term Borrowings 33,727 1,075 3.19 41,077 1,330 3.24
Total Interest Bearing Liabilities 1,563,306 $ 3,580 0.23% 1,596,842 $ 4,416 0.28%
Noninterest Bearing Deposits 671,188 631,117
Other Liabilities 46,603 89,276
Total Liabilities 2,281,097 2,317,235
SHAREOWNERS' EQUITY: 283,079 251,427
Total Liabilities and Shareowners' Equity $ 2,564,176 $ 2,568,662
Interest Rate Spread $ 75,135 3.29% $ 78,319 3.46%
Interest Income and Rate Earned(1) 78,715 3.52 82,735 3.74
Interest Expense and Rate Paid(2) 3,580 0.16 4,416 0.20
Net Interest Margin $ 75,135 3.36% $ 78,319 3.54%
(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.