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Capital City Bank Group, Inc. Reports First Quarter 2016 Results

TALLAHASSEE, Fla., April 25, 2016 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $1.6 million, or $0.10 per diluted share for the first quarter of 2016, compared to net income of $2.6 million, or $0.16 per diluted share for the fourth quarter of 2015, and net income of $1.0 million, or $0.06 per diluted share, for the first quarter of 2015.

HIGHLIGHTS

  • Continued broad based loan growth -- 1.0% sequentially and 4.1% over prior year
  • Small business and commercial real estate pipelines are building
  • Nonperforming asset reduction of 10% sequentially and 48% from prior year
  • Steady growth in net interest income – up 3.8% over prior year driven by improved earning asset mix -- very well positioned for rising rates
  • Continued focus on noninterest expense reduction -- down 1.6% from prior year

“Our first quarter performance showed meaningful progress year over year, and our fundamentals continue to improve,” said William G. Smith, Jr., Chairman, President and CEO. “Despite a challenging environment, I am encouraged by our past performance and remain optimistic that the strategies we have in place will continue to produce positive results. We remain focused on loan growth, prudent expense management and problem asset resolution, and I am pleased with how each of these areas is trending. Across all levels of the enterprise, our bankers are working hard to seek out new business opportunities in our markets that will contribute to our profitability while maintaining a keen focus on risk management. We are steadfast in our decision to value long-term profitability over short-term gains.”

Compared to the fourth quarter of 2015, performance reflects lower net interest income of $0.6 million, noninterest income of $0.5 million, and higher noninterest expense of $0.7 million, partially offset by lower income taxes of $0.8 million.

Compared to the first quarter of 2015, the increase in earnings was due to higher net interest income of $0.7 million and lower noninterest expense of $0.5 million, partially offset by lower noninterest income of $0.2 million, a $0.2 million increase in the loan loss provision, and higher income taxes of $0.2 million.

The Return on Average Assets was 0.24% and the Return on Average Equity was 2.39% for the first quarter of 2016, compared to 0.39% and 3.74%, respectively, for the fourth quarter of 2015, and 0.15% and 1.45%, respectively, for the first quarter in 2015.

Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2016 was $19.4 million compared to $20.0 million for the fourth quarter of 2015 and $18.6 million for the first quarter of 2015. The decrease in tax equivalent net interest income compared to the fourth quarter of 2015 reflects an interest recovery in the fourth quarter for a paid off loan, partially offset by higher income on overnight funds and prime-based loans. The increase in tax equivalent net interest income compared to the first quarter of 2015 reflects a positive shift in earning asset mix due to growth in the loan and investment portfolios, partially offset by unfavorable loan fees.

Despite favorable volume variance in both the loan and investment portfolios, the low rate environment continues to negatively impact loan yields. Aggressive lending competition in all markets has also unfavorably impacted the pricing for loans. The recent 25 basis point increase in the Federal Reserve’s target rate had a favorable impact on net interest income as our overnight funds and prime-based loans repriced higher with no corresponding increase in our deposit costs.

The net interest margin for the first quarter of 2016 was 3.20%, a decrease of 17 basis points from the fourth quarter of 2015, and a decrease of seven basis points from the first quarter of 2015. The decrease in the margin compared to the fourth quarter of 2015 was primarily attributable to aforementioned interest recovery. The decrease in the margin compared to the first quarter of 2015 was primarily attributable to overall growth in earning assets and a decline in loan yields.

The provision for loan losses for the first quarter of 2016 was $0.5 million compared to $0.5 million for the fourth quarter of 2015 and $0.3 million for the first quarter of 2015. We continue to realize favorable problem loan migration and improvement in key credit metrics. The slight increase in the provision compared to the first quarter of 2015 primarily reflects growth in the loan portfolio. Net charge-offs for the first quarter of 2016 totaled $0.8 million, or 0.21% (annualized) of average loans, compared to $1.3 million, or 0.34% (annualized), for the fourth quarter of 2015 and $1.7 million, or 0.49% (annualized), for the first quarter of 2015. At March 31, 2016, the allowance for loan losses was $13.6 million, or 0.90% of outstanding loans (net of overdrafts) and provided coverage of 150% of nonperforming loans compared to 0.93% and 135%, respectively, at December 31, 2015, and 1.10% and 96%, respectively, at March 31, 2015.

Noninterest income for the first quarter of 2016 totaled $12.7 million, a decrease of $0.5 million, or 4.1%, from the fourth quarter of 2015 primarily attributable to lower deposit fees of $0.3 million and wealth management fees of $0.1 million. The decrease in deposit fees primarily reflects lower utilization of our overdraft protection service during the first quarter as clients receive tax refunds. The reduction in wealth management fees reflects lower fees from our trust business which had a very strong fourth quarter due to higher estate management fees. Compared to the first quarter of 2015, noninterest income decreased $0.2 million, or 1.3%, reflective of a $0.2 million decrease in wealth management fees and a $0.1 million decrease in deposit fees, partially offset by higher bank card fees of $0.1 million. The reduction in wealth management fees generally reflects a lower level of assets under management. An increase in charged off checking accounts drove the reduction in deposit fees. Higher debit card activity and average ticket amount drove the increase in bank card fees.

Noninterest expense for the first quarter of 2016 totaled $28.9 million, an increase of $0.7 million, or 2.3%, over the fourth quarter of 2015. The increase reflects higher compensation expense of $0.4 million, other real estate expense of $0.2 million, and other expense of $0.3 million, partially offset by lower occupancy expense of $0.2 million. The increase in compensation expense was primarily due to higher payroll tax expense reflecting the reset of social security taxes. A higher level of property valuation adjustments drove the increase in other real estate expense. The increase in other expense was primarily attributable to higher legal fees and processing fees. The increase in legal fees reflects a higher level of legal support needed for problem asset resolutions and the increase in processing fees reflects a fourth quarter volume credit received from our debit card processor. Depending on specific activity during the quarter, legal fees can be volatile but have been trending down for the last four years. Lower furniture, fixtures, and equipment (“FF&E”) maintenance agreement expense and FF&E maintenance/repairs drove the reduction in occupancy expense. Compared to the first quarter of 2015, noninterest expense decreased $0.5 million, or 1.6%, attributable to lower compensation expense of $0.3 million and other expense of $0.2 million. A higher level of deferred loan cost partially offset by higher pension plan expense drove the reduction in compensation. The decrease in other expense reflects a lower level of consulting fees.

We realized income tax expense of $0.8 million (34.3% effective rate) for the first quarter of 2016 compared to $1.6 million (38.4% effective rate) for the fourth quarter of 2015 and $0.6 million (41.0% effective rate) for the first quarter of 2015. Income taxes for the fourth quarter of 2015 and the first quarter of 2015 include deferred tax write-offs of $0.1 million and $0.2 million, respectively, related to forfeited/expired stock awards. Absent future discrete events, we anticipate our effective income tax rate to remain in the range of 34%-35%.

Discussion of Financial Condition

Average earning assets were $2.441 billion for the first quarter of 2016, an increase of $87.0 million, or 3.7%, over the fourth quarter of 2015 and an increase of $134.2 million, or 5.8%, over the first quarter of 2015. The growth in earning assets over the fourth quarter of 2015 reflects a higher level of public fund deposits. The increase compared to the first quarter of 2015 reflects deposit growth, primarily noninterest bearing and savings accounts.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $286.2 million during the first quarter of 2016 compared to an average net overnight funds sold position of $222.8 million in the fourth quarter of 2015 and an average net overnight funds sold position of $302.4 million in the first quarter of 2015. The increase in net overnight funds compared to the fourth quarter of 2015 reflects higher levels of all deposit products except money market accounts and certificates of deposit, partially offset by growth in both the investment and loan portfolios. The decrease relative to the first quarter of 2015 is primarily attributable to growth in both the loan and investment portfolios, partially offset by an increase in average deposits.

Average loans increased $15.0 million, or 1.0% when compared to the fourth quarter of 2015, and have grown $58.9 million, or 4.1% compared to the first quarter of 2015. Growth over both prior periods has been experienced in all loan products, with the exception of commercial mortgages. Without compromising our credit standards or taking on inordinate interest rate risk, we continue to make minor modifications on 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 $26.5 million at the end of the first quarter of 2016, a decrease of $3.1 million from the fourth quarter of 2015 and $24.1 million from the first quarter of 2015. Nonaccrual loans totaled $9.0 million at the end of the first quarter of 2016, a $1.3 million decrease from the fourth quarter of 2015 and a decrease of $7.7 million from the first quarter of 2015. Nonaccrual loan additions in the first quarter of 2016 totaled $3.8 million compared to $3.6 million and $5.8 million for the fourth and first quarters of 2015, respectively. The balance of OREO totaled $17.4 million at the end of the first quarter of 2016, a decrease of $1.8 million and $16.4 million, respectively, from the fourth and first quarters of 2015. For the first quarter of 2016, we added properties totaling $1.2 million, sold properties totaling $2.2 million, and recorded valuation adjustments totaling $0.8 million. Nonperforming assets represented 0.95% of total assets at March 31, 2016, compared to 1.06% at December 31, 2015 and 1.88% at March 31, 2015.

Average total deposits were $2.259 billion for the first quarter of 2016, an increase of $83.9 million, or 3.9%, over the fourth quarter of 2015, and an increase of $95.2 million, or 4.4%, over the first quarter of 2015. The increase in deposits when compared to the fourth quarter of 2015 primarily reflects higher levels of public fund NOW and savings accounts, partially offset by a decline in money market accounts and certificates of deposit. The increase in deposits, when compared to the first quarter of 2015, is attributable to higher levels of noninterest bearing and savings accounts. The seasonal inflows of public funds most likely peaked in the first quarter of 2016, and are expected to decline into the fourth quarter of 2016.

Deposit levels remain strong, particularly given the recent increase in the fed funds rate. Although competitive rates will be closely monitored given this change, we do not attempt to compete with higher rate paying competitors for deposits. Prudent pricing discipline will continue to be the key to managing our mix of deposits.

When compared to the fourth quarter of 2015, average borrowings decreased $2.0 million primarily due to a decline in repurchase agreements. Compared to the first quarter of 2015, average borrowings increased by $14.1 million, attributable to higher levels of repurchase agreement balances, partially offset by pay downs of FHLB advances.

Equity capital was $276.8 million as of March 31, 2016, compared to $274.4 million as of December 31, 2015 and $274.1 million as of March 31, 2015. Our leverage ratio was 10.34%, 10.65%, and 10.73%, respectively, for these periods. Further, as of March 31, 2016, our risk-adjusted capital ratio was 17.20% compared to 17.25% and 17.11% as of December 31, 2015 and March 31, 2015, respectively. Our common equity tier 1 ratio was 12.82% as of March 31, 2016, compared to 12.84% and 12.57% as of December 31, 2015 and March 31, 2015, respectively. All of our capital ratios significantly exceed the threshold to be designated as “well-capitalized” under the Basel III capital standards.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $2.8 billion in assets. 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 61 banking 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; fluctuations in inflation, interest rates, or monetary policies; 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; 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; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and 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, 2015, 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
(Dollars in thousands, except per share data) Mar 31, 2016 Dec 31, 2015 Mar 31, 2015
EARNINGS
Net Income$1,647 $2,602 $986
Net Income Per Common Share$0.10 $0.16 $0.06
PERFORMANCE
Return on Average Assets 0.24% 0.39% 0.15%
Return on Average Equity 2.39% 3.74% 1.45%
Net Interest Margin 3.20% 3.37% 3.27%
Noninterest Income as % of Operating Revenue39.76% 40.05% 40.98%
Efficiency Ratio 90.13% 85.11% 93.42%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.39% 16.42% 16.16%
Total Capital Ratio 17.20% 17.25% 17.11%
Tangible Common Equity Ratio 7.09% 6.99% 7.26%
Leverage Ratio 10.34% 10.65% 10.73%
Common Equity Tier 1 Ratio 12.82% 12.84% 12.57%
Equity to Assets 9.91% 9.81% 10.18%
ASSET QUALITY
Allowance as % of Non-Performing Loans 150.44% 135.40% 95.83%
Allowance as a % of Loans 0.90% 0.93% 1.10%
Net Charge-Offs as % of Average Loans 0.21% 0.34% 0.49%
Nonperforming Assets as % of Loans and ORE 1.73% 1.94% 3.38%
Nonperforming Assets as % of Total Assets 0.95% 1.06% 1.88%
STOCK PERFORMANCE
High$15.88 $16.05 $16.33
Low 12.83 13.56 13.16
Close$14.59 $15.35 $16.25
Average Daily Trading Volume 14,207 19,500 15,058

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2016 2015
(Dollars in thousands) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
ASSETS
Cash and Due From Banks$ 45,914 $ 51,288 $ 42,917 $ 61,484 $ 51,948
Funds Sold and Interest Bearing Deposits 304,908 327,617 167,787 185,572 296,888
Total Cash and Cash Equivalents 350,822 378,905 210,704 247,056 348,836
Investment Securities Available for Sale 462,444 451,028 444,071 433,688 404,887
Investment Securities Held to Maturity 187,079 187,892 193,964 201,805 183,489
Total Investment Securities 649,523 638,920 638,035 635,493 588,376
Loans Held for Sale 10,475 11,632 10,960 10,991 13,334
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 183,681 179,816 169,588 151,116 143,951
Real Estate - Construction 42,538 46,484 49,475 44,216 41,595
Real Estate - Commercial 503,259 499,813 491,734 510,962 507,681
Real Estate - Residential 285,772 285,748 280,690 284,333 287,481
Real Estate - Home Equity 234,128 233,901 232,254 230,388 228,171
Consumer 245,197 240,434 238,884 238,599 230,984
Other Loans 10,297 4,837 10,094 12,048 9,243
Overdrafts 1,963 1,242 2,464 2,603 2,348
Total Loans, Net of Unearned Interest 1,506,835 1,492,275 1,475,183 1,474,265 1,451,454
Allowance for Loan Losses (13,613) (13,953) (14,737) (15,236) (16,090)
Loans, Net 1,493,222 1,478,322 1,460,446 1,459,029 1,435,364
Premises and Equipment, Net 98,029 98,819 98,218 99,108 100,038
Goodwill 84,811 84,811 84,811 84,811 84,811
Other Real Estate Owned 17,450 19,290 25,219 30,167 33,835
Other Assets 87,854 87,161 86,701 87,489 89,121
Total Other Assets 288,144 290,081 294,949 301,575 307,805
Total Assets$ 2,792,186 $ 2,797,860 $ 2,615,094 $ 2,654,144 $ 2,693,715
LIABILITIES
Deposits:
Noninterest Bearing Deposits$ 790,040 $ 758,283 $ 720,824 $ 723,866 $ 707,470
NOW Accounts 786,432 848,330 688,491 734,237 801,037
Money Market Accounts 254,682 248,367 261,050 264,475 257,684
Regular Savings Accounts 286,807 269,162 262,843 255,185 250,862
Certificates of Deposit 173,447 178,707 181,775 186,881 192,961
Total Deposits 2,291,408 2,302,849 2,114,983 2,164,644 2,210,014
Short-Term Borrowings 62,922 61,058 65,355 53,698 49,488
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 27,062 28,265 29,042 29,733 30,418
Other Liabilities 71,074 68,449 69,168 71,144 66,821
Total Liabilities 2,515,353 2,523,508 2,341,435 2,382,106 2,419,628
SHAREOWNERS' EQUITY
Common Stock 172 172 171 172 175
Additional Paid-In Capital 38,671 38,256 37,738 37,625 42,941
Retained Earnings 259,139 258,181 256,265 255,096 251,765
Accumulated Other Comprehensive Loss, Net of Tax (21,149) (22,257) (20,515) (20,855) (20,794)
Total Shareowners' Equity 276,833 274,352 273,659 272,038 274,087
Total Liabilities and Shareowners' Equity$ 2,792,186 $ 2,797,860 $ 2,615,094 $ 2,654,144 $ 2,693,715
OTHER BALANCE SHEET DATA
Earning Assets$ 2,471,741 $ 2,470,445 $ 2,291,966 $ 2,306,322 $ 2,350,052
Core Deposits 0 0 0 0 0
Other 0 0 0 0 0
Interest Bearing Liabilities 1,654,239 1,696,776 1,551,443 1,587,096 1,645,337
Book Value Per Diluted Share$ 16.04 $ 15.93 $ 15.91 $ 15.80 $ 15.59
Tangible Book Value Per Diluted Share 11.13 11.00 10.98 10.87 10.77
Actual Basic Shares Outstanding 17,222 17,157 17,144 17,154 17,533
Actual Diluted Shares Outstanding 17,254 17,226 17,223 17,216 17,579

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
2016 2015
(Dollars in thousands, except per share data) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
INTEREST INCOME
Interest and Fees on Loans$18,045$18,861$18,214$18,231$17,863
Investment Securities 1,637 1,572 1,540 1,451 1,294
Funds Sold 362 169 123 151 189
Total Interest Income 20,044 20,602 19,877 19,833 19,346
INTEREST EXPENSE
Deposits 221 219 220 259 246
Short-Term Borrowings 10 9 14 15 21
Subordinated Notes Payable 387 354 344 338 332
Other Long-Term Borrowings 216 226 233 237 240
Total Interest Expense 834 808 811 849 839
Net Interest Income 19,210 19,794 19,066 18,984 18,507
Provision for Loan Losses 452 513 413 375 293
Net Interest Income after Provision for Loan Losses18,758 19,281 18,653 18,609 18,214
NONINTEREST INCOME
Deposit Fees 5,400 5,664 5,721 5,682 5,541
Bank Card Fees 2,853 2,866 2,826 2,844 2,742
Wealth Management Fees 1,792 1,893 1,818 1,776 2,046
Mortgage Banking Fees 1,030 1,043 1,306 1,203 987
Data Processing Fees 347 335 400 364 373
Other 1,255 1,420 1,157 2,925 1,159
Total Noninterest Income 12,677 13,221 13,228 14,794 12,848
NONINTEREST EXPENSE
Compensation 16,241 15,833 16,653 16,404 16,524
Occupancy, Net 4,459 4,638 4,446 4,258 4,396
Other Real Estate, Net 1,425 1,241 1,302 931 1,497
Other 6,805 6,568 6,763 6,846 6,973
Total Noninterest Expense 28,930 28,280 29,164 28,439 29,390
OPERATING PROFIT 2,505 4,222 2,717 4,964 1,672
Income Tax Expense 858 1,620 1,034 1,119 686
NET INCOME$1,647$2,602$1,683$3,845$986
PER SHARE DATA
Basic Income$0.10$0.16$0.09$0.22$0.06
Diluted Income 0.10 0.16 0.09 0.22 0.06
Cash Dividend$0.04$0.04$0.03$0.03$0.03
AVERAGE SHARES
Basic 17,202 17,145 17,150 17,296 17,508
Diluted 17,235 17,214 17,229 17,358 17,555

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND RISK ELEMENT ASSETS
Unaudited
2016 2015 2015 2015 2015
(Dollars in thousands, except per share data) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period$ 13,953 $ 14,737 $ 15,236 $ 16,090 $ 17,539
Provision for Loan Losses 452 513 413 375 293
Net Charge-Offs 792 1,297 912 1,229 1,742
Balance at End of Period$ 13,613 $ 13,953 $ 14,737 $ 15,236 $ 16,090
As a % of Loans 0.90% 0.93% 0.99% 1.03% 1.10%
As a % of Nonperforming Loans 150.44% 135.40% 112.17% 99.46% 95.83%
CHARGE-OFFS
Commercial, Financial and Agricultural$ 37 $ 135 $ 365 $ 239 $ 290
Real Estate - Construction - - - - -
Real Estate - Commercial 274 87 (26) 285 904
Real Estate - Residential 478 587 476 484 305
Real Estate - Home Equity 215 397 370 454 182
Consumer 439 656 318 351 576
Total Charge-Offs$ 1,443 $ 1,862 $ 1,503 $ 1,813 $ 2,257
RECOVERIES
Commercial, Financial and Agricultural$ 39 $ 57 $ 45 $ 82 $ 55
Real Estate - Construction - - - - -
Real Estate - Commercial 81 13 86 54 30
Real Estate - Residential 236 264 193 200 48
Real Estate - Home Equity 59 37 42 33 24
Consumer 236 194 225 215 358
Total Recoveries$ 651 $ 565 $ 591 $ 584 $ 515
NET CHARGE-OFFS$ 792 $ 1,297 $ 912 $ 1,229 $ 1,742
Net Charge-Offs as a % of Average Loans(1) 0.21% 0.34% 0.24% 0.33% 0.49%
RISK ELEMENT ASSETS
Nonaccruing Loans$ 9,049 $ 10,305 $ 13,138 $ 15,320 $ 16,790
Other Real Estate Owned 17,450 19,290 25,219 30,167 33,835
Total Nonperforming Assets$ 26,499 $ 29,595 $ 38,357 $ 45,487 $ 50,625
Past Due Loans 30-89 Days$ 3,599 $ 5,775 $ 4,335 $ 5,858 $ 3,689
Past Due Loans 90 Days or More - - - - -
Classified Loans 49,780 53,551 61,411 69,152 74,247
Performing Troubled Debt Restructurings$ 36,700 $ 35,634 $ 35,961 $ 41,632 $ 42,590
Nonperforming Loans as a % of Loans 0.60% 0.69% 0.88% 1.03% 1.15%
Nonperforming Assets as a % of
Loans and Other Real Estate 1.73% 1.94% 2.54% 3.00% 3.38%
Nonperforming Assets as a % of Total Assets 0.95% 1.06% 1.47% 1.71% 1.88%
(1) Annualized

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
First Quarter 2016 Fourth Quarter 2015 Third Quarter 2015 Second Quarter 2015 First Quarter 2015
(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$ 1,507,508 18,141 4.84%$ 1,492,521 18,952 5.04%$ 1,483,657 18,290 4.89%$ 1,473,954 18,285 4.98%$ 1,448,617 17,909 5.01%
Investment Securities
Taxable Investment Securities 552,092 1,420 1.03 544,542 1,365 0.99 543,550 1,347 0.98 540,735 1,313 0.97 491,637 1,198 0.98
Tax-Exempt Investment Securities 94,951 332 1.40 93,838 328 1.40 92,685 304 1.31 76,191 219 1.15 63,826 154 0.96
Total Investment Securities 647,043 1,752 1.09 638,380 1,693 1.05 636,235 1,651 1.03 616,926 1,532 0.99 555,463 1,352 0.98
Funds Sold 286,167 362 0.51 222,828 169 0.30 190,931 123 0.26 237,132 151 0.26 302,405 189 0.25
Total Earning Assets 2,440,718 $20,255 3.34% 2,353,729 $20,814 3.51% 2,310,823 $20,064 3.45% 2,328,012 $19,968 3.44% 2,306,485 $19,450 3.42%
Cash and Due From Banks 47,834 45,875 45,872 52,473 48,615
Allowance for Loan Losses (13,999) (14,726) (15,403) (16,070) (17,340)
Other Assets 289,193 293,336 298,400 306,286 310,791
Total Assets$ 2,763,746 $ 2,678,214 $ 2,639,692 $ 2,670,701 $ 2,648,551
LIABILITIES:
Interest Bearing Deposits
NOW Accounts$ 798,996 $69 0.03%$ 725,538 $62 0.03%$ 709,130 $60 0.03%$ 761,388 $64 0.03%$ 794,308 $68 0.03%
Money Market Accounts 252,446 29 0.05 259,091 30 0.05 261,749 31 0.05 256,265 32 0.05 254,483 41 0.07
Savings Accounts 277,745 34 0.05 266,468 33 0.05 258,752 32 0.05 253,808 31 0.05 242,256 30 0.05
Time Deposits 177,057 89 0.20 180,124 94 0.21 183,976 97 0.21 189,213 132 0.28 194,655 107 0.22
Total Interest Bearing Deposits 1,506,244 221 0.06% 1,431,221 219 0.06% 1,413,607 220 0.06% 1,460,674 259 0.07% 1,485,702 246 0.07%
Short-Term Borrowings 66,938 10 0.06% 68,093 9 0.06% 61,548 14 0.09% 54,237 15 0.11% 49,809 21 0.17%
Subordinated Notes Payable 62,887 387 2.43 62,887 354 2.20 62,887 344 2.14 62,887 338 2.13 62,887 332 2.11
Other Long-Term Borrowings 27,769 216 3.12 28,618 226 3.14 29,383 233 3.15 30,067 237 3.16 30,751 240 3.16
Total Interest Bearing Liabilities 1,663,838 $834 0.20% 1,590,819 $808 0.20% 1,567,425 $811 0.21% 1,607,865 $849 0.21% 1,629,149 $839 0.21%
Noninterest Bearing Deposits 752,356 743,497 723,826 717,725 677,674
Other Liabilities 70,088 68,005 73,485 70,690 66,424
Total Liabilities 2,486,282 2,402,321 2,364,736 2,396,280 2,373,247
SHAREOWNERS' EQUITY: 277,464 275,893 274,956 274,421 275,304
Total Liabilities and Shareowners' Equity$ 2,763,746 $ 2,678,214 $ 2,639,692 $ 2,670,701 $ 2,648,551
Interest Rate Spread $19,421 3.14% $20,006 3.31% $19,253 3.24% $19,119 3.23% $18,611 3.21%
Interest Income and Rate Earned(1) 20,255 3.34 20,814 3.51 20,064 3.45 19,968 3.44 19,450 3.42
Interest Expense and Rate Paid(2) 834 0.14 808 0.14 811 0.14 849 0.15 839 0.15
Net Interest Margin $19,421 3.20% $20,006 3.37% $19,253 3.31% $19,119 3.29% $18,611 3.27%
(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.

For Information Contact: J. Kimbrough Davis Executive Vice President and Chief Financial Officer 850.402.7820

Source:Capital City Bank Group, Inc.