×

Capital City Bank Group, Inc. Reports Second Quarter 2017 Results

TALLAHASSEE, Fla., July 25, 2017 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $3.6 million, or $0.21 per diluted share for the second quarter of 2017 compared to net income of $2.7 million, or $0.16 per diluted share for the first quarter of 2017, and $3.9 million, or $0.22 per diluted share, for the second quarter of 2016. For the first six months of 2017, net income totaled $6.3 million, or $0.37 per diluted share, compared to net income of $5.6 million, or $0.32 per diluted share for the same period in 2016.

HIGHLIGHTS

  • Earnings per share grew 31% sequentially and 16% over prior year
  • Net interest income grew 3.9% sequentially and 4.3% over prior year
  • Strong period-end loan growth of 2.3% sequentially and 6.3% over prior year
  • Continued progress in reducing noninterest expense, which declined 3.1% from prior year
  • NPAs down 10% sequentially and 17% from year-end 2016

“Our year-to-date performance reflects continued improvement in most all aspects of our business,” said William G. Smith, Jr., Chairman, President and CEO. “Rising interest rates coupled with our asset sensitive balance sheet and loan growth are having a positive impact on our margin. Credit quality and expense management continued their favorable trends. Our team is focused on creating a positive client experience and executing on those initiatives that add value to our shareowners. I look forward to the opportunities and challenges that lie ahead.”

Compared to the first quarter of 2017, performance reflected higher net interest income of $0.8 million and a $0.4 million increase in noninterest income, partially offset by a $0.3 million increase in the loan loss provision.

Compared to the second quarter of 2016, the decrease in earnings reflected lower noninterest income of $2.0 million and a $0.7 million increase in the loan loss provision, partially offset by higher net interest income of $1.1 million, a $0.8 million reduction in noninterest expense, and lower incomes taxes of $0.5 million.

The increase in earnings for the first six months of 2017 versus the comparable period in 2016 was attributable to higher net interest income of $1.6 million and a $1.7 million reduction in noninterest expense, partially offset by a $0.5 million increase in the loan loss provision, lower noninterest income of $2.0 million, and a $0.1 million increase in income taxes.

Our return on average assets (“ROA”) was 0.51% and our return on average equity (“ROE”) was 5.07% for the second quarter of 2017. These metrics were 0.39% and 4.00% for the first quarter of 2017, respectively, and 0.57% and 5.65% for the second quarter of 2016, respectively. For the first six months of 2017, our ROA was 0.45% and our ROE was 4.54% compared to 0.41% and 4.03%, respectively, for the same period in 2016.

Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2017 was $20.8 million compared to $20.0 million for the first quarter of 2017 and $19.6 million for the second quarter of 2016. The increase in tax equivalent net interest income compared to the first quarter of 2017 reflects a favorable shift in the earning asset mix, one additional calendar day, and higher short-term rates, partially offset by higher rates paid on negotiated rate deposits. The increase in tax equivalent net interest income compared to the second quarter of 2016 reflects growth in the loan portfolio, and higher short-term rates, partially offset by a higher rate paid on negotiated rate deposits. For the first six months of 2017, tax equivalent net interest income totaled $40.8 million compared to $39.0 million for the comparable period in 2016. The year over year increase was driven by growth in the loan and investment portfolios, coupled with higher short-term rates, partially offset by a higher rate paid on negotiated rate deposits and one less calendar day.

The overnight funds rate has increased four times since December 2015, from a range of 0.00%-0.25% to a range of 1.00% to 1.25%. These increases have positively affected our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these rate increases have also resulted in higher rates paid on our negotiated rate products, we continue to monitor and manage our overall cost of funds, which was 15 basis points in the second quarter of 2017. Despite highly competitive loan pricing across most markets, the yield of the overall loan portfolio increased quarter-over-quarter.

Our net interest margin for the second quarter of 2017 was 3.33%, an increase of 12 basis points over the first quarter of 2017 and an increase of 11 basis points over the second quarter of 2016. For the first six months of 2017, the net interest margin increased six basis points to 3.27% compared to the same period of 2016. The increase in the margin as compared to all respective periods reflects rising interest rates and a favorable shift in our earning asset mix, which has produced higher net interest income in each period.

The provision for loan losses for the second quarter of 2017 was $0.6 million compared to $0.3 million for the first quarter of 2017 and negative $0.1 million for the second quarter of 2016. For the first six months of 2017, the loan loss provision totaled $0.9 million compared to $0.4 million for the same period of 2016. The increase in the loan loss provision compared to all prior periods was primarily attributable to growth in the loan portfolio. At June 30, 2017, the allowance for loan losses was $13.2 million, or 0.81% of outstanding loans (net of overdrafts) and provided coverage of 166% of nonperforming loans compared to 0.84% and 161%, respectively, at March 31, 2017 and 0.86% and 157%, respectively, at December 31, 2016.

Noninterest income for the second quarter of 2017 totaled $13.1 million, an increase of $0.4 million, or 3.3%, over the first quarter of 2017 due to higher wealth management fees of $0.2 million and mortgage banking fees of $0.2 million. Compared to the second quarter of 2016, noninterest income decreased $2.0 million, or 13.7%, due to a $2.5 million decrease in other income and lower deposit fees of $0.2 million, partially offset by higher wealth management fees of $0.4 million and mortgage banking fees of $0.3 million. The reduction in other income was due to a $2.5 million gain from the partial retirement of our trust preferred securities (“TRUPs”) in the second quarter of 2016. For the first six months of 2017, noninterest income totaled $25.9 million, a $2.0 million, or 7.3%, decrease from the same period of 2016, due to lower other income of $2.4 million related to the aforementioned TRUPs gain and to a lesser extent lower deposit fees of $0.6 million that were partially offset by higher wealth management fees of $0.4 million and mortgage banking fees of $0.6 million. Strong home sales in our markets and a growing market share of residential loan production continues to enhance our mortgage banking fees and improved sales efforts have resulted in strong growth in wealth management fees during 2017.

Noninterest expense for the second quarter of 2017 totaled $27.9 million comparable to the first quarter of 2017 as lower compensation expense of $0.2 million and other real estate owned (“OREO”) expense of $0.3 million were offset by higher occupancy expense of $0.2 million and other expense of $0.3 million. Compared to the second quarter of 2016, noninterest expense decreased $0.8 million, or 2.7%, primarily due to lower OREO expense. For the first six months of 2017, noninterest expense totaled $55.8 million, a decrease of $1.8 million, or 3.1%, from the same period of 2016 primarily attributable to lower OREO expense of $1.6 million and other expense of $0.6 million that was partially offset by higher compensation expense of $0.5 million. OREO expense continues to decline as we liquidate our remaining properties. Further reduction in legal expense and FDIC insurance expense drove the reduction in other expense. The increase in compensation expense was primarily due to higher stock compensation expense related to higher pay-out values reflective of improving financial performance.

We realized income tax expense of $1.6 million (30% effective rate) for the second quarter of 2017 compared to $1.5 million (35% effective rate) for the first quarter of 2017 and $2.1 million (34% effective rate) for the second quarter of 2016. The lower effective tax rate for the second quarter of 2017 reflects income tax benefits realized in connection with stock based compensation awards. For the first six months of 2017, income tax expense totaled $3.0 million (33% effective rate) compared to $2.9 million (34% effective rate) for the comparable period of 2016.

Discussion of Financial Condition

Average earning assets were $2.502 billion for the second quarter of 2017, a decrease of $27.2 million, or 1.1%, from the first quarter of 2017, and an increase of $78.6 million, or 3.2%, over the fourth quarter of 2016. The change in earning assets in each of the respective periods is attributable to increases/decreases in our short-term investments and growth in our loan portfolio. Changes in the level of our short-term investments (which consists primarily of overnight funds) are partially attributable to the seasonality of our public fund deposits.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $200.8 million during the second quarter of 2017 compared to an average net overnight funds sold position of $245.2 million in the first quarter of 2017 and $145.5 million in the fourth quarter of 2016. The decrease in net overnight funds compared to the first quarter of 2017 reflected growth in our loan portfolio and declines in public fund balances. The increase in net overnight funds compared to the fourth quarter of 2016 primarily reflected higher levels of all deposit products other than certificates of deposit, partially offset by growth in the loan portfolio.

Average loans increased $23.1 million, or 1.5% compared to the first quarter of 2017, and have grown $35.4 million, or 2.3% compared to the fourth quarter of 2016. The increase compared to the prior quarter reflected growth in all loans types except commercial loans and home equity loans. Growth over the fourth quarter of 2016 was experienced in all loan products except institutional loans and home equity loans. Although having a minimal impact on this quarters’ average balance, a $16.4 million pool of fixed and adjustable rate commercial real estate loans was purchased in late June.

We continue to make minor modifications on some of our lending programs to try to mitigate the impact that consumer and business deleveraging has had 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 $15.9 million at the end of the second quarter of 2017, a decrease of $1.9 million, or 10%, from the first quarter of 2017 and $3.2 million, or 17%, from the fourth quarter of 2016. Nonaccrual loans totaled $7.9 million at the end of the second quarter of 2017, a $0.3 million decrease from the first quarter of 2017 and a $0.6 million decrease from the fourth quarter of 2016. The balance of OREO totaled $8.0 million at the end of the second quarter of 2017, a decrease of $1.6 million from the first quarter of 2017 and $2.7 million from the fourth quarter of 2016. Nonperforming assets represented 0.57% of total assets as of June 30, 2017 compared to 0.61% at March 31, 2017 and 0.67% at December 31, 2016.

Average total deposits were $2.373 billion for the second quarter of 2017, a decrease of $33.9 million, or 1.4%, from the first quarter of 2017, and an increase of $66.5 million, or 2.9% over the fourth quarter of 2016. The decline in deposits compared to the first quarter of 2017 reflected lower public NOW account and certificates of deposit balances, partially offset by increases in all other deposit types. The increase in deposits when compared to the fourth quarter of 2016 reflected growth in all deposit products except certificates of deposit. The seasonal inflows of public funds peaked in the first quarter of 2017 for this cycle, and are expected to decline into the fourth quarter of 2017.

Deposit levels remain strong, as the seasonal decline in public NOW accounts was partially offset by increases in all other nonmaturity deposits during the quarter. Average core deposits continue to experience growth as rates have increased from historical lows. We continue to monitor our overall liquidity position and deposit rates as we believe that a prudent pricing discipline remains the key to managing our mix of deposits.

Compared to the first quarter of 2017, average borrowings decreased $2.3 million due to a decline in short-term borrowings, partially offset by an increase in average long-term borrowings. Compared to the fourth quarter of 2016, average borrowings decreased by $7.2 million due to a $1.1 million reduction in repurchase agreements, with the remaining $6.1 million decline resulting from FHLB pay-downs of matched funded advances.

Shareowners’ equity was $281.5 million at June 30, 2017, compared to $278.1 million at March 31, 2017 and $275.2 million at December 31, 2016. Our leverage ratio was 10.20%, 9.95%, and 10.23%, respectively, for these periods. Further, at June 30, 2017, our risk-adjusted capital ratio was 16.32% compared to 16.44% and 16.28% at March 31, 2017 and December 31, 2016, respectively. Our common equity tier 1 ratio was 12.72% at June 30, 2017, compared to 12.77% at March 31, 2017 and 12.61% at December 31, 2016. All of our capital ratios exceeded 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. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 60 banking offices and 74 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, 2016, 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.

USE OF NON-GAAP FINANCIAL MEASURES

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. The GAAP to non-GAAP reconciliation is provided below.

(Dollars in Thousands) Jun 30, 2017Mar 31, 2017Dec 31, 2016Sep 30, 2016Jun 30, 2016
Shareowners' Equity (GAAP) $281,513 $278,059 $275,168 $276,624 $274,824
Less: Goodwill (GAAP) 84,811 84,811 84,811 84,811 84,811
Tangible Shareowners' Equity (non-GAAP)A 196,702 193,248 190,357 191,813 190,013
Total Assets (GAAP) 2,814,843 2,895,531 2,845,197 2,753,154 2,767,636
Less: Goodwill (GAAP) 84,811 84,811 84,811 84,811 84,811
Tangible Assets (non-GAAP)B$2,730,032 $2,810,720 $2,760,386 $2,668,343 $2,682,825
Tangible Common Equity Ratio (non-GAAP)A/B 7.21% 6.88% 6.90% 7.19% 7.08%
Actual Diluted Shares Outstanding (GAAP)C 17,025 16,979 16,949 16,874 16,855
Tangible Book Value per Diluted Share (non-GAAP) A/C $11.55 $11.38 $11.23 $11.37 $11.27


CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2017 Mar 31, 2017 Jun 30, 2016 Jun 30, 2017 Jun 30, 2016
EARNINGS
Net Income$3,561 $2,744 $3,930 $6,305 $5,577
Net Income Per Common Share$0.21 $0.16 $0.22 $0.37 $0.32
PERFORMANCE
Return on Average Assets 0.51% 0.39% 0.57% 0.45% 0.41%
Return on Average Equity 5.07% 4.00% 5.65% 4.54% 4.03%
Net Interest Margin 3.33% 3.21% 3.22% 3.27% 3.21%
Noninterest Income as % of Operating Revenue 39.05% 39.19% 43.99% 39.12% 41.96%
Efficiency Ratio 82.28% 85.33% 82.40% 83.78% 86.11%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 15.58% 15.68% 15.63% 15.58% 15.63%
Total Capital Ratio 16.32% 16.44% 16.44% 16.32% 16.44%
Tangible Common Equity Ratio 7.21% 6.88% 7.08% 7.21% 7.08%
Leverage Ratio 10.20% 9.95% 9.88% 10.20% 9.88%
Common Equity Tier 1 Ratio 12.72% 12.77% 12.65% 12.72% 12.65%
Equity to Assets 10.00% 9.60% 9.93% 10.00% 9.93%
ASSET QUALITY
Allowance as % of Non-Performing Loans 166.23% 160.70% 166.50% 166.23% 166.50%
Allowance as a % of Loans 0.81% 0.84% 0.89% 0.81% 0.89%
Net Charge-Offs as % of Average Loans 0.17% 0.10% (0.04)% 0.14% 0.08%
Nonperforming Assets as % of Loans and ORE 0.97% 1.11% 1.48% 0.97% 1.48%
Nonperforming Assets as % of Total Assets 0.57% 0.61% 0.83% 0.57% 0.83%
STOCK PERFORMANCE
High$22.39 $21.79 $15.96 $22.39 $15.96
Low 17.68 19.22 13.16 17.68 12.83
Close$20.42 $21.39 $13.92 $20.42 $13.92
Average Daily Trading Volume 23,349 23,150 20,192 23,251 21,426


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2017 2016
(Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ASSETS
Cash and Due From Banks$72,801 $47,650 $48,268 $79,608 $51,766
Funds Sold and Interest Bearing Deposits 162,377 290,897 247,779 144,576 220,719
Total Cash and Cash Equivalents 235,178 338,547 296,047 224,184 272,485
Investment Securities Available for Sale 529,686 541,102 522,734 500,139 485,848
Investment Securities Held to Maturity 157,074 158,515 177,365 189,928 204,474
Total Investment Securities 686,760 699,617 700,099 690,067 690,322
Loans Held for Sale 8,213 7,498 10,886 10,510 12,046
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 213,544 214,595 216,404 223,278 207,105
Real Estate - Construction 67,331 59,938 58,443 54,107 46,930
Real Estate - Commercial 519,140 503,868 503,978 497,775 485,329
Real Estate - Residential 302,072 295,406 272,895 276,193 280,015
Real Estate - Home Equity 230,995 231,300 236,512 235,433 235,394
Consumer 269,539 268,921 262,735 258,173 252,347
Other Loans 17,057 9,586 8,614 10,875 11,177
Overdrafts 1,518 1,345 1,708 1,678 2,177
Total Loans, Net of Unearned Interest 1,621,196 1,584,959 1,561,289 1,557,512 1,520,474
Allowance for Loan Losses (13,242) (13,335) (13,431) (13,744) (13,677)
Loans, Net 1,607,954 1,571,624 1,547,858 1,543,768 1,506,797
Premises and Equipment, Net 92,495 93,755 95,476 96,499 97,313
Goodwill 84,811 84,811 84,811 84,811 84,811
Other Real Estate Owned 7,968 9,501 10,638 12,738 14,622
Other Assets 91,464 90,178 99,382 90,577 89,240
Total Other Assets 276,738 278,245 290,307 284,625 285,986
Total Assets$2,814,843 $2,895,531 $2,845,197 $2,753,154 $2,767,636
LIABILITIES
Deposits:
Noninterest Bearing Deposits$842,314 $836,011 $791,182 $801,671 $798,219
NOW Accounts 787,090 882,605 904,014 793,363 804,263
Money Market Accounts 265,032 263,080 252,800 257,004 259,813
Regular Savings Accounts 327,560 321,160 304,680 298,682 294,432
Certificates of Deposit 149,937 156,449 159,610 164,387 168,079
Total Deposits 2,371,933 2,459,305 2,412,286 2,315,107 2,324,806
Short-Term Borrowings 6,105 7,603 12,749 12,113 9,609
Subordinated Notes Payable 52,887 52,887 52,887 52,887 52,887
Other Long-Term Borrowings 15,631 16,460 14,881 21,368 26,401
Other Liabilities 86,774 81,217 77,226 75,055 79,109
Total Liabilities 2,533,330 2,617,472 2,570,029 2,476,530 2,492,812
SHAREOWNERS' EQUITY
Common Stock 170 170 168 168 168
Additional Paid-In Capital 35,522 34,859 34,188 33,152 32,855
Retained Earnings 271,646 268,934 267,037 264,581 262,380
Accumulated Other Comprehensive Loss, Net of Tax (25,825) (25,904) (26,225) (21,277) (20,579)
Total Shareowners' Equity 281,513 278,059 275,168 276,624 274,824
Total Liabilities and Shareowners' Equity$2,814,843 $2,895,531 $2,845,197 $2,753,154 $2,767,636
OTHER BALANCE SHEET DATA
Earning Assets$2,478,546 $2,582,971 $2,520,053 $2,402,664 $2,443,561
Interest Bearing Liabilities 1,604,242 1,700,244 1,701,621 1,599,804 1,615,484
Book Value Per Diluted Share$16.54 $16.38 $16.23 $16.39 $16.31
Tangible Book Value Per Diluted Share 11.55 11.38 11.23 11.37 11.27
Actual Basic Shares Outstanding 16,964 16,954 16,845 16,807 16,804
Actual Diluted Shares Outstanding 17,025 16,979 16,949 16,874 16,855


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Six Months Ended
2017 2016 June 30,
(Dollars in thousands, except per share data) Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
2017 2016
INTEREST INCOME
Interest and Fees on Loans$18,720 $18,005 $18,671 $18,046 $18,105 $36,725 $36,150
Investment Securities 2,169 2,042 1,949 1,846 1,751 4,211 3,388
Funds Sold 533 493 212 212 318 1,026 680
Total Interest Income 21,422 20,540 20,832 20,104 20,174 41,962 40,218
INTEREST EXPENSE
Deposits 388 281 224 223 211 669 432
Short-Term Borrowings 17 45 57 43 38 62 48
Subordinated Notes Payable 404 379 363 341 343 783 730
Other Long-Term Borrowings 117 99 129 177 206 216 422
Total Interest Expense 926 804 773 784 798 1,730 1,632
Net Interest Income 20,496 19,736 20,059 19,320 19,376 40,232 38,586
Provision for Loan Losses 589 310 464 - (97) 899 355
Net Interest Income after Provision for
Loan Losses
19,907 19,426 19,595 19,320 19,473 39,333 38,231
NONINTEREST INCOME
Deposit Fees 5,052 5,090 5,238 5,373 5,321 10,142 10,721
Bank Card Fees 2,870 2,803 2,754 2,759 2,855 5,673 5,708
Wealth Management Fees 2,073 1,842 1,773 1,774 1,690 3,915 3,482
Mortgage Banking Fees 1,556 1,308 1,392 1,503 1,267 2,864 2,297
Other 1,584 1,675 1,621 1,602 4,082 3,259 5,684
Total Noninterest Income 13,135 12,718 12,778 13,011 15,215 25,853 27,892
NONINTEREST EXPENSE
Compensation 16,292 16,496 16,699 15,993 16,051 32,788 32,292
Occupancy, Net 4,555 4,381 4,519 4,734 4,584 8,936 9,043
Other Real Estate, Net 315 583 343 821 1,060 898 2,485
Other 6,759 6,462 5,999 6,474 7,007 13,221 13,812
Total Noninterest Expense 27,921 27,922 27,560 28,022 28,702 55,843 57,632
OPERATING PROFIT 5,121 4,222 4,813 4,309 5,986 9,343 8,491
Income Tax Expense 1,560 1,478 1,517 1,436 2,056 3,038 2,914
NET INCOME$3,561 $2,744 $3,296 $2,873 $3,930 $6,305 $5,577
PER SHARE DATA
Basic Net Income$0.21 $0.16 $0.20 $0.18 $0.22 $0.37 $0.32
Diluted Net Income 0.21 0.16 0.20 0.17 0.22 0.37 0.32
Cash Dividend$0.05 $0.05 $0.05 $0.04 $0.04 $0.10 $0.08
AVERAGE SHARES
Basic 16,955 16,919 16,809 16,804 17,144 16,937 17,173
Diluted 17,016 16,944 16,913 16,871 17,196 16,993 17,215


CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND RISK ELEMENT ASSETS
Unaudited
Six Months Ended
2017
2016
June 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2017
2016
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period$13,335 $13,431 $13,744 $13,677 $13,613 $13,431 $13,953
Provision for Loan Losses 589 310 464 - (97) 899 355
Net Charge-Offs 682 406 777 (67) (161) 1,088 631
Balance at End of Period$13,242 $13,335 $13,431 $13,744 $13,677 $13,242 $13,677
As a % of Loans 0.81% 0.84% 0.86% 0.88% 0.89% 0.81% 0.89%
As a % of Nonperforming Loans 166.23% 160.70% 157.40% 159.56% 166.50% 166.23% 166.50%
CHARGE-OFFS
Commercial, Financial and Agricultural$324 $93 $377 $143 $304 $417 $341
Real Estate - Construction - - - - - - -
Real Estate - Commercial 478 71 70 5 - 549 274
Real Estate - Residential 44 116 120 96 205 160 683
Real Estate - Home Equity - 92 38 51 146 92 361
Consumer 537 624 771 479 438 1,161 877
Total Charge-Offs$1,383 $996 $1,376 $774 $1,093 $2,379 $2,536
RECOVERIES
Commercial, Financial and Agricultural$40 $81 $50 $199 $49 $121 $88
Real Estate - Construction - - - - - - -
Real Estate - Commercial 58 23 45 45 237 81 318
Real Estate - Residential 202 213 277 139 579 415 815
Real Estate - Home Equity 39 29 32 237 81 68 140
Consumer 362 244 195 221 308 606 544
Total Recoveries$701 $590 $599 $841 $1,254 $1,291 $1,905
NET CHARGE-OFFS$682 $406 $777 $(67)$(161)$1,088 $631
Net Charge-Offs as a % of Average Loans (1) 0.17% 0.10% 0.20% (0.02)% (0.04)% 0.14% 0.08%
RISK ELEMENT ASSETS
Nonaccruing Loans$7,966 $8,298 $8,533 $8,614 $8,214
Other Real Estate Owned 7,968 9,501 10,638 12,738 14,622
Total Nonperforming Assets$15,934 $17,799 $19,171 $21,352 $22,836
Past Due Loans 30-89 Days$3,789 $3,263 $6,438 $5,667 $3,872
Past Due Loans 90 Days or More - - - - -
Classified Loans 41,322 40,978 41,507 43,228 45,058
Performing Troubled Debt Restructuring's$35,436 $36,555 $38,233 $35,046 $35,526
Nonperforming Loans as a % of Loans 0.49% 0.52% 0.54% 0.55% 0.54%
Nonperforming Assets as a % of Loans and
Other Real Estate 0.97% 1.11% 1.21% 1.35% 1.48%
Nonperforming Assets as a % of Total Assets 0.57% 0.61% 0.67% 0.78% 0.83%
(1) Annualized


CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Second Quarter 2017 First Quarter 2017 Fourth Quarter 2016 Third Quarter 2016 Second Quarter 2016 Jun 2017 YTD Jun 2016 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$1,608,629 18,880 4.71%$1,585,561 18,137 4.64%$1,573,264 18,827 4.76%$1,555,889 18,216 4.66%$1,531,777 18,233 4.79%$1,597,159 37,017 4.67%$1,519,642 36,374 4.81%
Investment Securities
Taxable Investment Securities 591,825 1,898 1.28 600,528 1,784 1.20 614,560 1,726 1.12 606,606 1,632 1.07 571,343 1,539 1.08 596,153 3,682 1.24 561,718 2,959 1.03
Tax-Exempt Investment Securities 100,742 414 1.64 97,965 396 1.62 90,046 343 1.52 89,241 327 1.47 90,030 325 1.44 99,361 810 1.63 92,490 657 1.42
Total Investment Securities 692,567 2,312 1.34 698,493 2,180 1.26 704,606 2,069 1.17 695,847 1,959 1.12 661,373 1,864 1.13 695,514 4,492 1.30 654,208 3,616 1.11
Funds Sold 200,834 533 1.06 245,153 493 0.81 145,518 212 0.58 166,207 212 0.51 254,627 318 0.50 222,871 1,026 0.93 270,397 680 0.51
Total Earning Assets 2,502,030 $21,725 3.48% 2,529,207 $20,810 3.33% 2,423,388 $21,108 3.47% 2,417,943 $20,387 3.35% 2,447,777 $20,415 3.35% 2,515,544 $42,535 3.41% 2,444,247 $40,670 3.35%
Cash and Due From Banks 52,312 48,906 50,207 45,139 46,605 50,618 47,220
Allowance for Loan Losses (13,662) (13,436) (14,017) (14,052) (14,254) (13,550) (14,127)
Other Assets 276,799 280,463 283,885 285,435 287,726 278,621 288,460
Total Assets$2,817,479 $2,845,140 $2,743,463 $2,734,465 $2,767,854 $2,831,233 $2,765,800
LIABILITIES:
Interest Bearing Deposits
NOW Accounts$806,621 $222 0.11%$880,707 $134 0.06%$782,518 $78 0.04%$774,899 $78 0.04%$762,667 $67 0.04%$843,459 $356 0.09%$780,832 $136 0.03%
Money Market Accounts 261,726 57 0.09 259,106 35 0.06 257,398 31 0.05 258,183 30 0.05 257,000 30 0.05 260,423 92 0.07 254,723 59 0.05
Savings Accounts 322,833 39 0.05 311,212 38 0.05 303,006 37 0.05 297,172 37 0.05 291,210 36 0.05 317,055 77 0.05 284,477 70 0.05
Time Deposits 152,811 70 0.18 158,289 74 0.19 161,859 78 0.19 165,324 78 0.19 170,837 78 0.19 155,535 144 0.19 173,947 167 0.19
Total Interest Bearing Deposits 1,543,991 388 0.10% 1,609,314 281 0.07% 1,504,781 224 0.06% 1,495,578 223 0.06% 1,481,714 211 0.06% 1,576,472 669 0.09% 1,493,979 432 0.06%
Short-Term Borrowings 8,957 17 0.75% 12,810 45 1.43% 14,768 57 1.54% 12,162 43 1.39% 53,691 38 0.28% 10,873 62 1.15% 60,315 48 0.16%
Subordinated Notes Payable 52,887 404 3.02 52,887 379 2.86 52,887 363 2.68 52,887 341 2.52 54,316 343 2.50 52,887 783 2.94 58,601 730 2.47
Other Long-Term Borrowings 16,065 117 2.93 14,468 99 2.77 17,473 129 2.93 23,629 177 2.98 26,721 206 3.11 15,271 216 2.85 27,245 422 3.11
Total Interest Bearing Liabilities 1,621,900 $926 0.23% 1,689,479 $804 0.20% 1,589,909 $773 0.20% 1,584,256 $784 0.20% 1,616,442 $798 0.20% 1,655,503 $1,730 0.22% 1,640,140 $1,632 0.20%
Noninterest Bearing Deposits 829,432 797,964 802,136 793,163 794,839 813,785 773,597
Other Liabilities 84,486 79,208 72,475 79,639 77,041 81,861 73,565
Total Liabilities 2,535,818 2,566,651 2,464,520 2,457,058 2,488,322 2,551,149 2,487,302
SHAREOWNERS' EQUITY: 281,661 278,489 278,943 277,407 279,532 280,084 278,498
Total Liabilities and Shareowners' Equity$2,817,479 $2,845,140 $2,743,463 $2,734,465 $2,767,854 $2,831,233 $2,765,800
Interest Rate Spread $20,799 3.25% $20,006 3.14% $20,335 3.27% $19,603 3.15% $19,617 3.15% $40,805 3.19% $39,038 3.14%
Interest Income and Rate Earned(1) 21,725 3.48 20,810 3.33 21,108 3.47 20,387 3.35 20,415 3.35 42,535 3.41 40,670 3.35
Interest Expense and Rate Paid(2) 926 0.15 804 0.13 773 0.13 784 0.13 798 0.13 1,730 0.14 1,632 0.13
Net Interest Margin $20,799 3.33% $20,006 3.21% $20,335 3.34% $19,603 3.23% $19,617 3.22% $40,805 3.27% $39,038 3.21%
(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.