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Capital City Bank Group, Inc. Reports Third Quarter 2015 Results

TALLAHASSEE, Fla., Oct. 20, 2015 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.7 million, or $0.09 per diluted share for the third quarter of 2015 compared to net income of $3.8 million, or $0.22 per diluted share for the second quarter of 2015, and $2.1 million, or $0.12 per diluted share, for the third quarter of 2014. For the first nine months of 2015, the Company reported net income of $6.5 million, or $0.37 per diluted share, compared to net income of $7.3 million, or $0.42 per diluted share for the same period in 2014.

HIGHLIGHTS

  • 16% reduction in nonperforming assets sequentially and 27% from year-end 2014
  • Continued loan growth of 0.7% sequentially and 4.2% year to date
  • Growth in tax-equivalent net interest income driven by improved earning asset mix – 0.4% sequentially and 1.7% over prior year
  • Strong fee income from residential mortgage loan sales, up 9% sequentially and 54% over prior year


“Loan growth, efficiency and credit quality continue to be major areas of focus,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “Although our annual true-up of pension expense combined with the write-off of some state tax credits adversely impacted this quarter’s earnings by $0.04 per share, the underlying fundamentals continue to trend positively. We’ve experienced seven consecutive quarters of loan growth and, in recent quarters, that growth has been broader based. Credit quality continues to improve as total NPAs declined 16% quarter over quarter, 41% year over year, and equaled 1.47% of assets as of September 30, 2015. Although we did not raise capital during the financial crisis, our capital levels remain strong and we have repurchased 428,828, or 2.5% of our outstanding shares since February 2014. While there is still much work to be done, I continue to be pleased with our progress,” said Smith.

Compared to the second quarter of 2015, performance reflects lower noninterest income of $1.6 million and higher noninterest expense of $0.7 million that was partially offset by a $0.1 million increase in net interest income and lower income taxes of $0.1 million.

Compared to the third quarter of 2014, the decrease in earnings reflects higher noninterest expense of $0.6 million and a $0.1 million decrease in noninterest income partially offset by higher net interest income of $0.2 million and lower income taxes of $0.1 million.

The decrease in earnings for the first nine months of 2015 versus the comparable period in 2014 was attributable to higher noninterest expense of $0.9 million and an increase in income tax expense of $2.4 million that was partially offset by higher net interest income of $0.9 million, noninterest income of $1.4 million, and a lower loan loss provision of $0.2 million.

The Return on Average Assets was 0.25% and the Return on Average Equity was 2.43% for the third quarter of 2015 as compared to 0.58% and 5.62% for the second quarter of 2015, and 0.33% and 2.95% for the third quarter of 2014, respectively. For the first nine months of 2015, the Return on Average Assets was 0.33% and the Return on Average Equity was 3.17% compared to 0.38% and 3.48%, respectively, for the same period in 2014.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2015 was $19.3 million compared to $19.1 million for the second quarter of 2015 and $19.0 million for the third quarter of 2014. The increase in tax equivalent net interest income compared to the second quarter 2015 reflects one additional calendar day and a positive shift in earning asset mix due to growth in the investment and loan portfolios, partially offset by a decline in yields. The increase in tax equivalent net interest income compared to the third quarter of 2014 also reflects a positive shift in earning asset mix due to growth in the loan and investment portfolios, partially offset by a decline in loan yields. For the nine months ended September 30, 2015, tax equivalent net interest income totaled $57.0 million compared to $56.0 million for the same period in 2014.

Pressure on net interest income continues primarily as a result of the low rate environment. Despite an increase in both the loan and investment portfolios, the low rate environment continues to negatively impact the loan yields and, going forward, will have minimal to no impact on cost of funds. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

The net interest margin for the third quarter of 2015 was 3.31%, an increase of two basis points over the second quarter of 2015, and a decrease of 11 basis points from the third quarter of 2014. The increase in the margin compared to the second quarter of 2015 was attributable to growth in our investment portfolio and a reduction in foregone interest. For the nine months ended September 30, 2015, the net interest margin declined four basis points to 3.29% compared to the same period of 2014, primarily attributable to a decline in loan yields.

The provision for loan losses for the third quarter of 2015 was $0.4 million comparable to both the second quarter of 2015 and the third quarter of 2014. For the first nine months of 2015, the loan loss provision totaled $1.1 million compared to $1.3 million for the same period in 2014. The lower level of the year-to-date provision reflects continued favorable problem loan migration and improvement in key credit metrics partially offset by growth in the loan portfolio. Net charge-offs for the third quarter of 2015 totaled $0.9 million, or 0.24% (annualized), of average loans compared to $1.2 million, or 0.33% (annualized) for the second quarter of 2015 and $1.9 million, or 0.50% (annualized) for the third quarter of 2014. For the first nine months of 2015, net charge-offs totaled $3.9 million, or 0.35% (annualized) of average loans compared to $5.3 million, or 0.50% (annualized) for the same period in 2014. At quarter-end, the allowance for loan losses of $14.7 million was 0.99% of outstanding loans (net of overdrafts) and provided coverage of 112% of nonperforming loans compared to 1.03% and 99%, respectively, at June 30, 2015 and 1.22% and 105%, respectively, at December 31, 2014.

Noninterest income for the third quarter of 2015 totaled $13.2 million, a decrease of $1.6 million, or 10.6%, from the second quarter of 2015 and $0.1 million, or 0.9%, from the third quarter of 2014. The decrease from the second quarter of 2015 reflects bank owned life insurance (“BOLI”) proceeds of $1.7 million that are reflected in other income for the second quarter. Mortgage banking fees increased $0.1 million over the second quarter of 2015. The decrease from the third quarter of 2014 was attributable to lower deposit fees of $0.5 million and wealth management fees of $0.2 million, partially offset by higher mortgage banking fees of $0.4 million and bank card fees of $0.1 million. The reduction in deposit fees was driven by lower overdraft fees reflecting lower utilization of our overdraft service. Lower client trading activity drove the reduction in wealth management fees. The increase in mortgage fees was driven by continued strong new home purchase originations. The increase in bank card fees was attributable to higher card spend by our clients.

For the first nine months of 2015, noninterest income totaled $40.9 million, a $1.4 million increase over the same period of 2014, primarily attributable to higher other income of $1.6 million (reflecting the receipt of BOLI proceeds) and mortgage banking fees of $1.2 million, partially offset by lower deposit fees of $1.3 million. The year-to-date variances are attributable to the same factors as noted above for the third quarter.

Noninterest expense for the third quarter of 2015 totaled $29.2 million, an increase of $0.7 million, or 2.5%, over the second quarter of 2015 attributable to higher other real estate owned (“OREO”) expense of $0.4 million, compensation expense of $0.2 million, and occupancy expense of $0.2 million, partially offset by a $0.1 million decrease in other expense. A higher level of net losses from the sale of properties drove the increase in OREO expense and was primarily attributable to a higher level of gains realized in the second quarter of 2015. Compensation expense increased primarily due to a higher level of required 2015 pension expense partially offset by lower salary expense. The increase in occupancy expense reflects a seasonal increase in utility expense and an increase in our property/tangible tax expense. Other expense decreased due to lower legal and professional fees.

Compared to the third quarter of 2014, noninterest expense increased by $0.6 million or 1.9% attributable to higher compensation expense of $1.3 million partially offset by lower OREO expense of $0.5 million, occupancy expense of $0.1 million, and other expense of $0.1 million. The increase in compensation expense reflects higher pension plan expense, partially offset by a reduction in salary expense. The reduction in OREO expense was primarily attributable to lower carrying costs and a reduction in valuation adjustments reflecting both the disposition of larger operating properties as well as improvement in property values. The lower level of occupancy expense reflects non-routine maintenance expenses realized in the third quarter of 2014. Lower legal fees drove the decrease in other expense and reflect a lower level of support needed for problem loan resolutions.

For the first nine months of 2015, noninterest expense totaled $87.0 million, an increase of $0.9 million, or 1.1%, over the same period of 2014 attributable to higher compensation expense of $3.2 million, partially offset by lower OREO expense of $1.7 million, occupancy expense of $0.3 million, and other expense of $0.3 million. The increase in compensation expense reflects higher pension plan expense of $2.8 million and commissions of $0.4 million. The increase in our pension plan expense compared to both the three and nine-month prior year periods is primarily attributable to the utilization of a lower discount rate in 2015 for determining plan liabilities reflective of a decrease in long-term bond interest rates. A revision to the mortality tables used to calculate pension liabilities also contributed to the increase, but to a lesser extent. The reduction in OREO expense was primarily attributable to lower property carrying costs and valuation adjustments and to a lesser extent lower net losses from the sale of properties. Lower technology equipment costs and maintenance costs for premises/FF&E drove the decrease in occupancy expense. The decrease in other expense reflects lower legal fees, printing and supply costs, and postage costs, partially offset by higher processing costs.

We realized income tax expense of $1.0 million (38% effective rate) for the third quarter of 2015 compared to $1.1 million (23% effective rate) for the second quarter of 2015 and $1.1 million (34% effective rate) for the third quarter of 2014. Income tax expense for the third quarter of 2015 includes a $0.2 million valuation reserve for state tax credits that we expect to expire unused. For the first nine months of 2015, income tax expense totaled $2.8 million. The proceeds from the aforementioned discrete BOLI transaction realized in the second quarter of 2015 were tax-exempt, therefore income tax expense for the nine-months of 2015 was favorably impacted. Income taxes for the nine-months of 2014 were favorably impacted by a $2.2 million state tax benefit that was recognized in the first quarter of 2014 and was attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters. Absent future discrete events, we anticipate our effective income tax rate will normalize within a range of 34%-35%.

Discussion of Financial Condition

Average earning assets were $2.311 billion for the third quarter of 2015, a decrease of $17.2 million, or 0.7%, from the second quarter of 2015 and an increase of $98.0 million, or 4.4%, over the fourth quarter of 2014. The change in earning assets from the second quarter 2015 reflects a reduction in short-term investments reflecting lower levels of public fund deposits. The increase compared to the fourth quarter of 2014 reflects growth of $138.8 million in the investment portfolio and $56.9 million in loans, which was funded by deposit growth and a reduction in short-term investments.

We maintained average net short-term investments (deposits with banks plus fed funds sold less fed funds purchased) of $190.9 million during the third quarter of 2015 compared to average net short-term investments of $237.1 million in the second quarter of 2015 and $288.6 million in the fourth quarter of 2014. The decrease in net short-term investments compared to the second quarter of 2015 reflects growth in both the investment and loan portfolios and lower public fund balances. The decrease relative to the fourth quarter of 2014 is primarily attributable to growth in both the loan and investment portfolios, partially offset by an increase in average deposits.

We continue to work on lowering the level of short-term investments (i.e. funds sold) by investing in short duration, high quality securities for our investment portfolio and reducing our non-core deposit balances. We offer 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 short-term investments.

Average loans increased $9.7 million, or 0.7%, when compared to the second quarter of 2015, and have grown $56.9 million, or 4.0% compared to the fourth quarter of 2014. During 2014, the growth in loans was driven primarily by auto loans, whereas in recent quarters the growth has been broader based, including commercial, tax-free, construction, home equity as well as consumer.

Although we have experienced loan growth in 2014 and into the first nine months of 2015, signs of slowing growth were seen late in the third quarter. Without compromising our credit standards or taking on inordinate interest rate risk, we continue to make minor modifications to some of our lending programs 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 $38.4 million at the end of the third quarter of 2015, a decrease of $7.1 million from the second quarter of 2015 and $14.1 million from the fourth quarter of 2014. Nonaccrual loans totaled $13.1 million at the end of the third quarter of 2015, a decrease of $2.2 million from the second quarter of 2015 and $3.6 million from the fourth quarter of 2014. Nonaccrual loan additions totaled $1.9 million in the third quarter of 2015 and $12.1 million for the first nine months of 2015, which compares to $16.7 million for the same period in 2014. The balance of OREO totaled $25.2 million at the end of the third quarter of 2015, a decrease of $4.9 million and $10.5 million, respectively, from the second quarter of 2015 and fourth quarter of 2014. For the third quarter of 2015, we added properties totaling $1.2 million, sold properties totaling $5.9 million, and recorded valuation adjustments totaling $0.2 million. For the first nine months of 2015, we added properties totaling $4.1 million, sold properties totaling $12.7 million, recorded valuation adjustments totaling $1.6 million, and realized miscellaneous adjustments of $0.3 million. Nonperforming assets represented 1.47% of total assets at September 30, 2015 compared to 1.71% at June 30, 2015 and 2.00% at December 31, 2014.

Average total deposits were $2.137 billion for the third quarter of 2015, a decrease of $41.0 million, or 1.9%, over the second quarter of 2015, and an increase of $60.1 million, or 2.9%, over the fourth quarter of 2014. The decrease in deposits when compared to the prior period primarily reflects lower levels of public fund deposits, and to a lesser degree, certificates of deposit. The higher level of deposits when compared to the fourth quarter of 2014 is primarily attributable to increased balances of noninterest bearing, public fund NOW, and savings accounts, partially offset by a decline in money market accounts and certificates of deposit. The seasonal inflows of public funds began in the fourth quarter of 2014, peaked in the second quarter of 2015, and are expected to decline into the fourth 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 second quarter of 2015 and fourth quarter of 2014, average borrowings increased by $6.6 million and $13.4 million, respectively, attributable to higher levels of repurchase agreement balances, partially offset by FHLB advance pay downs.

Equity capital was $273.7 million as of September 30, 2015, compared to $272.0 million as of June 30, 2015 and $272.5 million as of December 31, 2014. Our leverage ratio was 10.71%, 10.53%, and 10.99%, respectively, for these periods. Further, as of September 30, 2015, our risk-adjusted capital ratio was 17.24% compared to 16.72% and 17.76% at June 30, 2015 and December 31, 2014, respectively. Our common equity tier 1 ratio was 12.76% as of September 30, 2015 compared to 12.34% as of June 30, 2015. All of our capital ratios significantly exceed the threshold to be designated as “well-capitalized” under the Basel III capital standards. The reduction in our regulatory capital ratios in 2015 reflects the implementation of Basel III and the repurchase of common stock. During 2015, we have repurchased approximately 405,228 shares of our common stock at an average price of $14.73 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, mortgage banking, asset management, trust, 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, Basel III, and the ability to repay and qualified mortgage standards; 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 or fraud related to debit card products; 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, 2014, 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, 2015 Jun 30, 2015 Sep 30, 2014 Sep 30, 2015 Sep 30, 2014
EARNINGS
Net Income$ 1,684 $ 3,845 $ 2,115 $ 6,514 $ 7,339
Net Income Per Common Share$ 0.09 $ 0.22 $ 0.12 $ 0.37 $ 0.42
PERFORMANCE
Return on Average Assets 0.25% 0.58% 0.33% 0.33% 0.38%
Return on Average Equity 2.43% 5.62% 2.95% 3.17% 3.48%
Net Interest Margin 3.31% 3.29% 3.42% 3.29% 3.33%
Noninterest Income as % of Operating Revenue 40.96% 43.80% 41.40% 41.95% 41.52%
Efficiency Ratio 89.79% 83.85% 88.37% 88.90% 90.11%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.36% 15.83% 16.88% 16.36% 16.88%
Total Capital Ratio 17.24% 16.72% 18.08% 17.24% 18.08%
Tangible Common Equity Ratio 7.46% 7.29% 8.22% 7.46% 8.22%
Leverage Ratio 10.71% 10.53% 10.97% 10.71% 10.97%
Common Equity Tier 1 Ratio 12.76% 12.34% - 12.76% -
Equity to Assets 10.46% 10.25% 11.33% 10.46% 11.33%
ASSET QUALITY
Allowance as % of Non-Performing Loans 112.17% 99.46% 81.31% 112.17% 81.31%
Allowance as a % of Loans 0.99% 1.03% 1.34% 0.99% 1.34%
Net Charge-Offs as % of Average Loans 0.24% 0.33% 0.52% 0.35% 0.50%
Nonperforming Assets as % of Loans and ORE 2.54% 3.00% 4.45% 2.54% 4.45%
Nonperforming Assets as % of Total Assets 1.47% 1.71% 2.61% 1.47% 2.61%
STOCK PERFORMANCE
High $ 15.75 $ 16.32 $ 14.98 $ 16.33 $ 14.98
Low 14.39 13.94 13.26 13.16 11.56
Close 14.92 15.27 13.54 14.92 13.54
Average Daily Trading Volume 16,134 33,514 16,889 21,609 26,931

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Unaudited
2015 2014
(Dollars in thousands) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
ASSETS
Cash and Due From Banks$ 42,917 $ 61,484 $ 51,948 $ 55,467 $ 50,049
Funds Sold and Interest Bearing Deposits 167,787 185,572 296,888 329,589 253,974
Total Cash and Cash Equivalents 210,704 247,056 348,836 385,056 304,023
Investment Securities - Available-for-Sale 444,071 433,688 404,887 341,548 322,297
Investment Securities - Held-to-Maturity 193,964 201,805 183,489 163,581 173,188
Total Investment Securities 638,035 635,493 588,376 505,129 495,485
Loans Held for Sale 10,960 10,991 13,334 10,688 8,700
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 169,588 151,116 143,951 136,925 133,756
Real Estate - Construction 49,475 44,216 41,595 41,596 38,121
Real Estate - Commercial 491,734 510,962 507,681 510,120 501,863
Real Estate - Residential 280,690 284,333 287,481 289,952 302,791
Real Estate - Home Equity 232,254 230,388 228,171 229,572 228,968
Consumer 238,884 238,599 230,984 214,758 200,363
Other Loans 10,094 12,048 9,243 6,017 5,504
Overdrafts 2,464 2,603 2,348 2,434 3,009
Total Loans, Net of Unearned Interest 1,475,183 1,474,265 1,451,454 1,431,374 1,414,375
Allowance for Loan Losses (14,737) (15,236) (16,090) (17,539) (19,093)
Loans, Net 1,460,446 1,459,029 1,435,364 1,413,835 1,395,282
Premises and Equipment, Net 98,218 99,108 100,038 101,899 102,546
Goodwill 84,811 84,811 84,811 84,811 84,811
Other Real Estate Owned 25,219 30,167 33,835 35,680 41,726
Other Assets 86,701 87,489 89,121 90,071 67,044
Total Other Assets 294,949 301,575 307,805 312,461 296,127
Total Assets$ 2,615,094 $ 2,654,144 $ 2,693,715 $ 2,627,169 $ 2,499,617
LIABILITIES
Deposits:
Noninterest Bearing Deposits$ 720,824 $ 723,866 $ 707,470 $ 659,115 $ 667,616
NOW Accounts 688,491 734,237 801,037 804,337 665,493
Money Market Accounts 261,050 264,475 257,684 254,149 270,131
Regular Savings Accounts 262,843 255,185 250,862 233,612 231,301
Certificates of Deposit 181,775 186,881 192,961 195,581 199,037
Total Deposits 2,114,983 2,164,644 2,210,014 2,146,794 2,033,578
Short-Term Borrowings 65,355 53,698 49,488 49,425 42,586
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 29,042 29,733 30,418 31,097 32,305
Other Liabilities 69,168 71,144 66,821 64,426 45,008
Total Liabilities 2,341,435 2,382,106 2,419,628 2,354,629 2,216,364
SHAREOWNERS' EQUITY
Common Stock 171 172 175 174 174
Additional Paid-In Capital 37,738 37,625 42,941 42,569 41,637
Retained Earnings 256,265 255,096 251,765 251,306 249,907
Accumulated Other Comprehensive Loss, Net of Tax (20,515) (20,855) (20,794) (21,509) (8,465)
Total Shareowners' Equity 273,659 272,038 274,087 272,540 283,253
Total Liabilities and Shareowners' Equity$ 2,615,094 $ 2,654,144 $ 2,693,715 $ 2,627,169 $ 2,499,617
OTHER BALANCE SHEET DATA
Earning Assets$ 2,291,966 $ 2,306,322 $ 2,350,052 $ 2,276,781 $ 2,172,535
Interest Bearing Liabilities 1,551,443 1,587,096 1,645,337 1,631,088 1,503,740
Book Value Per Diluted Share$ 15.91 $ 15.80 $ 15.59 $ 15.53 $ 16.18
Tangible Book Value Per Diluted Share 10.98 10.87 10.77 10.70 11.33
Actual Basic Shares Outstanding 17,144 17,154 17,533 17,447 17,433
Actual Diluted Shares Outstanding 17,223 17,216 17,579 17,544 17,512

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Nine Months Ended
2015 2014 September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2015 2014
INTEREST INCOME
Interest and Fees on Loans$18,214$18,231$17,863$18,624$18,528$54,308$54,778
Investment Securities 1,540 1,451 1,294 1,066 1,034 4,285 2,820
Funds Sold 123 151 189 181 204 463 752
Total Interest Income 19,877 19,833 19,346 19,871 19,766 59,056 58,350
INTEREST EXPENSE
Deposits 220 259 246 243 255 725 856
Short-Term Borrowings 14 15 21 24 17 50 54
Subordinated Notes Payable 344 338 332 333 333 1,014 995
Other Long-Term Borrowings 233 237 240 252 263 710 823
Total Interest Expense 811 849 839 852 868 2,499 2,728
Net Interest Income 19,066 18,984 18,507 19,019 18,898 56,557 55,622
Provision for Loan Losses 413 375 293 623 424 1,081 1,282
Net Interest Income after Provision for Loan Losses18,653 18,609 18,214 18,396 18,474 55,476 54,340
NONINTEREST INCOME
Deposit Fees 5,721 5,682 5,541 6,027 6,211 16,944 18,293
Bank Card Fees 2,826 2,844 2,742 2,658 2,707 8,412 8,234
Wealth Management Fees 1,818 1,776 2,046 1,988 2,050 5,640 5,820
Mortgage Banking Fees 1,306 1,203 987 808 911 3,496 2,274
Data Processing Fees 400 364 373 278 336 1,137 1,265
Other 1,157 2,925 1,159 1,294 1,136 5,241 3,597
Total Noninterest Income 13,228 14,794 12,848 13,053 13,351 40,870 39,483
NONINTEREST EXPENSE
Compensation 16,653 16,404 16,524 15,850 15,378 49,581 46,365
Occupancy, Net 4,446 4,258 4,396 4,440 4,575 13,100 13,378
Other Real Estate, Net 1,302 931 1,497 1,353 1,783 3,730 5,458
Other 6,763 6,846 6,973 6,666 6,871 20,582 20,848
Total Noninterest Expense 29,164 28,439 29,390 28,309 28,607 86,993 86,049
OPERATING PROFIT 2,717 4,964 1,672 3,140 3,218 9,353 7,774
Income Tax Expense 1,034 1,119 686 1,219 1,103 2,839 435
NET INCOME$1,683$3,845$986$1,921$2,115$6,514$7,339
PER SHARE DATA
Basic Income$0.10$0.22$0.06$0.11$0.12$0.38$0.42
Diluted Income 0.09 0.22 0.06 0.11 0.12 0.37 0.42
Cash Dividend$ 0.03$0.03$0.03$ 0.03$ 0.02$ 0.09$ 0.06
AVERAGE SHARES
Basic 17,150 17,296 17,508 17,433 17,440 17,317 17,422
Diluted 17,229 17,358 17,555 17,530 17,519 17,379 17,482

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2015 2015 2015 2014 2014
(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$ 15,236 $ 16,090 $ 17,539 $ 19,093 $ 20,543
Provision for Loan Losses 413 375 293 623 424
Net Charge-Offs 912 1,229 1,742 2,177 1,874
Balance at End of Period$ 14,737 $ 15,236 $ 16,090 $ 17,539 $ 19,093
As a % of Loans 0.99% 1.03% 1.10% 1.22% 1.34%
As a % of Nonperforming Loans 112.17% 99.46% 95.83% 104.60% 81.31%
CHARGE-OFFS
Commercial, Financial and Agricultural$ 365 $ 239 $ 290 $ 688 $ 86
Real Estate - Construction - - - 28 -
Real Estate - Commercial (26) 285 904 957 1,208
Real Estate - Residential 476 484 305 522 212
Real Estate - Home Equity 370 454 182 (20) 621
Consumer 318 351 576 608 386
Total Charge-Offs$ 1,503 $ 1,813 $ 2,257 $ 2,783 $ 2,513
RECOVERIES
Commercial, Financial and Agricultural$ 45 $ 82 $ 55 $ 66 $ 28
Real Estate - Construction - - - 2 2
Real Estate - Commercial 86 54 30 76 213
Real Estate - Residential 193 200 48 212 93
Real Estate - Home Equity 42 33 24 28 37
Consumer 225 215 358 222 266
Total Recoveries$ 591 $ 584 $ 515 $ 606 $ 639
NET CHARGE-OFFS$ 912 $ 1,229 $ 1,742 $ 2,177 $ 1,874
Net Charge-Offs as a % of Average Loans(1) 0.24% 0.33% 0.49% 0.61% 0.52%
RISK ELEMENT ASSETS
Nonaccruing Loans$ 13,138 $ 15,320 $ 16,790 $ 16,769 $ 23,482
Other Real Estate Owned 25,219 30,167 33,835 35,680 41,726
Total Nonperforming Assets$ 38,357 $ 45,487 $ 50,625 $ 52,449 $ 65,208
Past Due Loans 30-89 Days $ 4,335 $ 5,858 $ 3,689 $ 6,792 $ 4,726
Past Due Loans 90 Days or More - - - - 62
Classified Loans 61,411 69,152 74,247 83,137 89,850
Performing Troubled Debt Restructuring's$ 35,961 $ 41,632 $ 42,590 $ 44,409 $ 43,578
Nonperforming Loans as a % of Loans 0.88% 1.03% 1.15% 1.16% 1.65%
Nonperforming Assets as a % of
Loans and Other Real Estate 2.54% 3.00% 3.38% 3.55% 4.45%
Nonperforming Assets as a % of Total Assets 1.47% 1.71% 1.88% 2.00% 2.61%
(1) Annualized

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCES AND INTEREST RATES(1)
Unaudited
Third Quarter 2015 Second Quarter 2015 First Quarter 2015 Fourth Quarter 2014 Third Quarter 2014 Sept 2015 YTD Sept 2014 YTD
(Dollars in thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest$ 1,483,657 18,290 4.89%$ 1,473,954 18,285 4.98%$ 1,448,617 17,909 5.01%$ 1,426,756 18,670 5.19%$ 1,421,327 18,590 5.19%$ 1,468,871 $ 54,484 4.96%$ 1,409,701 $ 54,967 5.21%
Investment Securities
Taxable Investment Securities 543,550 1,347 0.98 540,735 1,313 0.97 491,637 1,198 0.98 423,136 964 0.90 387,966 929 0.95 525,498 3,858 0.98 341,924 2,459 0.96
Tax-Exempt Investment Securities 92,685 304 1.31 76,191 219 1.15 63,826 154 0.96 74,276 161 0.87 82,583 165 0.80 77,673 677 1.16 97,068 561 0.77
Total Investment Securities 636,235 1,651 1.03 616,926 1,532 0.99 555,463 1,352 0.98 497,412 1,125 0.90 470,549 1,094 0.92 603,171 4,535 1.00 438,992 3,020 0.92
Funds Sold 190,931 123 0.26 237,132 151 0.26 302,405 189 0.25 288,613 181 0.25 317,553 204 0.25 243,081 463 0.26 397,302 752 0.25
Total Earning Assets 2,310,823 $20,064 3.45% 2,328,012 $19,968 3.44% 2,306,485 $19,450 3.42% 2,212,781 $19,976 3.58% 2,209,429 $19,888 3.57% 2,315,123 $59,482 3.43% 2,245,995 $58,739 3.50%
Cash and Due From Banks 45,872 52,473 48,615 45,173 44,139 48,977 45,432
Allowance for Loan Losses (15,403) (16,070) (17,340) (19,031) (20,493) (16,264) (21,976)
Other Assets 298,400 306,286 310,791 310,813 297,496 305,113 299,591
Total Assets$ 2,639,692 $ 2,670,701 $ 2,648,551 $ 2,549,736 $ 2,530,571 $ 2,652,949 $ 2,569,042
LIABILITIES:
Interest Bearing Deposits
NOW Accounts$ 709,130 $ 60 0.03%$ 761,388 $ 64 0.03%$ 794,308 $ 68 0.03%$ 689,572 $ 57 0.03%$ 680,154 $ 66 0.04%$ 754,630 $ 192 0.03%$ 724,700 $ 261 0.05%
Money Market Accounts 261,749 31 0.05 256,265 32 0.05 254,483 41 0.07 267,703 46 0.07 270,133 46 0.07 257,525 104 0.05 274,908 144 0.07
Savings Accounts 258,752 32 0.05 253,808 31 0.05 242,256 30 0.05 233,161 29 0.05 228,741 29 0.05 251,666 93 0.05 225,212 83 0.05
Time Deposits 183,976 97 0.21 189,213 132 0.28 194,655 107 0.22 197,129 111 0.22 202,802 114 0.22 189,242 336 0.24 209,171 368 0.24
Total Interest Bearing Deposits 1,413,607 220 0.06% 1,460,674 259 0.07% 1,485,702 246 0.07% 1,387,565 243 0.07% 1,381,830 255 0.07% 1,453,063 725 0.07% 1,433,991 856 0.08%
Short-Term Borrowings 61,548 14 0.09% 54,237 15 0.11% 49,809 21 0.17% 46,055 24 0.21% 40,782 17 0.17% 55,241 50 0.12% 43,846 54 0.17%
Subordinated Notes Payable 62,887 344 2.14 62,887 338 2.13 62,887 332 2.11 62,887 333 2.07 62,887 333 2.07 62,887 1,014 2.13 62,887 995 2.09
Other Long-Term Borrowings 29,383 233 3.15 30,067 237 3.16 30,751 240 3.16 31,513 252 3.17 32,792 263 3.20 30,062 710 3.16 34,473 823 3.19
Total Interest Bearing Liabilities 1,567,425 $811 0.21% 1,607,865 $849 0.21% 1,629,149 $839 0.21% 1,528,020 $852 0.22% 1,518,291 $868 0.23% 1,601,253 $2,499 0.21% 1,575,197 $2,728 0.23%
Noninterest Bearing Deposits 723,826 717,725 677,674 689,800 681,051 706,578 664,916
Other Liabilities 73,485 70,690 66,424 45,887 47,099 70,226 46,844
Total Liabilities 2,364,736 2,396,280 2,373,247 2,263,707 2,246,441 2,378,057 2,286,957
SHAREOWNERS' EQUITY: 274,956 274,421 275,304 286,029 284,130 274,892 282,085
Total Liabilities and Shareowners' Equity$ 2,639,692 $ 2,670,701 $ 2,648,551 $ 2,549,736 $ 2,530,571 $ 2,652,949 $ 2,569,042
Interest Rate Spread $19,253 3.24% $19,119 3.23% $18,611 3.21% $19,124 3.36% $19,020 3.34% $56,983 3.23% $56,011 3.26%
Interest Income and Rate Earned(1) 20,064 3.45 19,968 3.44 19,450 3.42 19,976 3.58 19,888 3.57 59,482 3.43 58,739 3.50
Interest Expense and Rate Paid(2) 811 0.14 849 0.15 839 0.15 852 0.15 868 0.16 2,499 0.14 2,728 0.16
Net Interest Margin $19,253 3.31% $19,119 3.29% $18,611 3.27% $19,124 3.43% $19,020 3.42% $56,983 3.29% $56,011 3.33%
(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 850.402.7820

Source:Capital City Bank Group, Inc.