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

TALLAHASSEE, Fla., Oct. 24, 2017 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $4.6 million, or $0.27 per diluted share for the third quarter of 2017 compared to net income of $3.6 million, or $0.21 per diluted share for the second quarter of 2017, and $2.9 million, or $0.17 per diluted share, for the third quarter of 2016. For the first nine months of 2017, net income totaled $10.9 million, or $0.64 per diluted share, compared to net income of $8.4 million, or $0.49 per diluted share for the same period in 2016.

HIGHLIGHTS

  • Earnings per share grew 29% sequentially and 31% over prior year to date
  • Significant improvement in operating leverage driven by margin expansion and expense reduction
    • Net interest income up 3.7% sequentially and 6.2% over prior year to date
    • Average loan growth of 1.9% sequentially and 5.2% over prior year to date
    • Noninterest expense down 4.3% sequentially and 3.6% from prior year to date
  • NPAs down 21% sequentially and 35% from year-end 2016

“We delivered another quarter of strong results through a persistent focus on growing our loan portfolio and managing expenses,” said William G. Smith, Jr., Chairman President and Chief Executive Officer of Capital City Bank Group. Given our asset-sensitive balance sheet, the higher rate environment has produced strong growth in our margin. We continue to manage our credit risk in line with our commitment to responsible growth in the markets we serve. Lower expenses reflect our sustained focus on streamlining our operations. The possibilities for the future are exciting as we execute on initiatives that provide shareowner value and enhance performance.”

Compared to the second quarter of 2017, the increase in earnings reflected higher net interest income of $0.8 million, a $1.2 million decrease in noninterest expense, and a $0.1 million reduction in the loan loss provision, partially offset by higher income taxes of $1.0 million and a $0.1 million decrease in noninterest income.

Compared to the third quarter of 2016, performance reflected higher net interest income of $1.9 million and a $1.3 million decrease in noninterest expense, partially offset by higher income taxes of $1.1 million and a $0.4 million increase in the loan loss provision.

The increase in earnings for the first nine months of 2017 versus the comparable period in 2016 was attributable to higher net interest income of $3.6 million and a $3.1 million reduction in noninterest expense, partially offset by lower noninterest income of $2.0 million, a $1.2 million increase in income taxes, and a $1.0 million increase in the loan loss provision.

Our return on average assets (“ROA”) was 0.65% and our return on average equity (“ROE”) was 6.33% for the third quarter of 2017. These metrics were 0.51% and 5.07% for the second quarter of 2017, respectively, and 0.42% and 4.12% for the third quarter of 2016, respectively. For the first nine months of 2017, our ROA was 0.52% and our ROE was 5.15% compared to 0.41% and 4.06%, respectively, for the same period in 2016.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2017 was $21.6 million compared to $20.8 million for the second quarter of 2017 and $19.6 million for the third quarter of 2016. The increase in tax equivalent net interest income compared to both prior periods reflected a favorable shift in the earning asset mix and improved yields, partially offset by higher rates paid on negotiated rate deposits. Also, as compared to the second quarter of 2017, there was one additional calendar day. For the first nine months of 2017, tax equivalent net interest income totaled $62.4 million compared to $58.6 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 as 2016 was a Leap Year.

The overnight funds rate has increased four times since December 2015, positively affecting 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 deposit products, we continue to monitor and manage our overall cost of funds, which was 17 basis points in the third quarter of 2017, and 15 basis points for the full year. Despite highly competitive loan pricing across most markets, the yield of the overall loan portfolio has increased quarter-over-quarter.

Our net interest margin for the third quarter of 2017 was 3.48%, an increase of 15 basis points over the second quarter of 2017 and an increase of 25 basis points over the third quarter of 2016. For the first nine months of 2017, the net interest margin increased 12 basis points to 3.34% compared to the same period in 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 third quarter of 2017 was $0.5 million compared to $0.6 million for the second quarter of 2017 and no provision for the third quarter of 2016. For the first nine months of 2017, the loan loss provision totaled $1.4 million compared to $0.4 million for the same period in 2016. The increase in the loan loss provision compared to the prior year was primarily attributable to growth in the loan portfolio. At September 30, 2017, the allowance for loan losses was $13.3 million, or 0.82% of outstanding loans (net of overdrafts) and provided coverage of 203% of nonperforming loans compared to 0.81% and 166%, respectively, at June 30, 2017 and 0.86% and 157%, respectively, at December 31, 2016.

Noninterest income for the third quarter of 2017 totaled $13.0 million, a decrease of $0.1 million, or 1.1%, from the second quarter of 2017, and unchanged from the third quarter of 2016. For the first nine months of 2017, noninterest income totaled $38.8 million, a $2.0 million, or 5.0%, decrease from the same period in 2016, primarily due to lower other income of $2.5 million and deposit fees of $0.8 million, partially offset by higher wealth management fees of $0.9 million and mortgage banking fees of $0.5 million. The decrease in other income was attributable to a $2.5 million gain from the partial retirement of our trust preferred securities (“TRUPs”) in the second quarter of 2016. Growth in assets under management as well as improved sales efforts have resulted in strong growth in wealth management fees. Third quarter 2017 wealth management fees reflected a large account booked during the quarter that contributed $0.2 million in gross fees. Continued strong home sales in our markets and a growing market share of residential loan production have driven the improvement in mortgage banking fees.

Noninterest expense for the third quarter of 2017 totaled $26.7 million, a decrease of $1.2 million, or 4.3%, from the second quarter of 2017, and a $1.3 million, or 4.7%, decline from the third quarter of 2016. Lower other real estate owned (“OREO”) expense and other expense drove the reduction from both prior periods. The reduction in OREO expense reflected a higher level of gains recognized on the sale of OREO properties. The decrease in other expense was attributable to lower advertising expense, legal expense, professional fees, and processing fees. For the first nine months of 2017, noninterest expense totaled $82.6 million, a decrease of $3.1 million, or 3.6%, from the same period in 2016 primarily attributable to lower OREO expense of $2.5 million, other expense of $1.1 million, and occupancy expense of $0.3 million that was partially offset by higher compensation expense of $0.8 million. All OREO expense categories (gain/loss on sale, carrying costs, and valuation adjustments) continue to improve as we liquidate our remaining properties. Continued reduction in legal expense and FDIC insurance expense drove the decline in other expense. The decrease in occupancy expense reflected our continuing efforts to optimize our banking office structure. The increase in compensation expense was primarily due to higher stock compensation expense related to higher pay-out values reflective of improving financial performance. Higher pension plan expense contributed to a lesser extent and was attributable to utilization of a lower discount rate for plan liabilities.

We realized income tax expense of $2.5 million (35% effective rate) for the third quarter of 2017 compared to $1.6 million (30% effective rate) for the second quarter of 2017 and $1.4 million (33% effective rate) for the third quarter of 2016. The lower effective tax rate for the second quarter of 2017 reflected income tax benefits realized in connection with stock based compensation awards. For the first nine months of 2017, income tax expense totaled $5.5 million (34% effective rate) compared to $4.3 million (34% effective rate) for the comparable period in 2016.

Discussion of Financial Condition

Average earning assets were $2.466 billion for the third quarter of 2017, a decrease of $35.7 million, or 1.4%, from the second quarter of 2017, and an increase of $42.9 million, or 1.8%, over the fourth quarter of 2016. The decline in earning assets compared to the second quarter 2017 was attributable to decreases in our short-term investments, partially offset by growth in our loan portfolio. The increase in earning assets compared to the fourth quarter 2016 was primarily due to growth in the loan portfolio, partially offset by a decline in total investment securities. The decline in the level of our short-term investments (which consists primarily of overnight funds) during the third quarter was mostly 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 $140.7 million during the third quarter of 2017 compared to an average net overnight funds sold position of $200.8 million in the second quarter of 2017 and $145.5 million in the fourth quarter of 2016. The decrease in net overnight funds compared to the second quarter of 2017 reflected growth in our loan portfolio and declines in public fund balances. The decrease in net overnight funds compared to the fourth quarter of 2016 primarily reflected higher levels of loan growth, partially offset by increases in noninterest bearing deposits and savings accounts.

Average loans increased $29.9 million, or 1.9% compared to the second quarter of 2017, and have grown $65.3 million, or 4.2% compared to the fourth quarter of 2016. Increases over both prior periods reflected growth in all loans types except commercial loans and home equity loans. We have acquired three loan pools during 2017, including $18.3 million of adjustable rate residential loans in the first quarter, $16.4 million of fixed and adjustable commercial real estate loans in the second quarter, and $8.5 million of adjustable residential real estate loans in the third quarter. The loans were individually reviewed and evaluated in accordance with our credit underwriting standards.

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 $12.5 million at September 30, 2017, a decrease of $3.4 million, or 21%, from June 30, 2017 and $6.6 million, or 35%, from December 31, 2016. Nonaccrual loans totaled $6.6 million at September 30, 2017, a $1.4 million decrease from June 30, 2017 and a $2.0 million decrease from December 31, 2016. The balance of OREO totaled $6.0 million at September 30, 2017, a decrease of $2.0 million from June 30, 2017 and $4.6 million from December 31, 2016. Nonperforming assets represented 0.45% of total assets at September 30, 2017 compared to 0.57% at June 30, 2017 and 0.67% at December 31, 2016.

Average total deposits were $2.329 billion for the third quarter of 2017, a decrease of $44.3 million, or 1.9%, from the second quarter of 2017, and an increase of $22.2 million, or 1.0% over the fourth quarter of 2016. The decline in average deposits compared to the second quarter of 2017 reflected lower public NOW account and certificates of deposit balances, partially offset by increases in all other deposit types. The increase over the fourth quarter 2016 reflects higher levels of noninterest bearing deposits, savings accounts, and money market accounts, partially offset by declines in public NOW accounts and 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 non-maturity 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 second quarter of 2017, average borrowings increased $0.3 million due to an increase in the balance of repurchase agreements, partially offset by a decline in long-term borrowings. Compared to the fourth quarter of 2016, average borrowings decreased by $6.9 million primarily driven by FHLB pay-downs of matched funded advances.

Shareowners’ equity was $285.2 million at September 30, 2017, compared to $281.5 million at June 30, 2017 and $275.2 million at December 31, 2016. Our leverage ratio was 10.48%, 10.20%, and 10.23%, respectively, for these periods. Further, at September 30, 2017, our risk-adjusted capital ratio was 16.96% compared to 16.32% and 16.28% at June 30, 2017 and December 31, 2016, respectively. Our common equity tier 1 ratio was 13.26% at September 30, 2017, compared to 12.72% at June 30, 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 73 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) Sep 30, 2017
Jun 30, 2017 Mar 31, 2017
Dec 31, 2016 Sep 30, 2016
Shareowners' Equity (GAAP) $285,201 $281,513 $278,059 $275,168 $276,624
Less: Goodwill (GAAP) 84,811 84,811 84,811 84,811 84,811
Tangible Shareowners' Equity (non-GAAP) A 200,390 196,702 193,248 190,357 191,813
Total Assets (GAAP) 2,790,842 2,814,843 2,895,531 2,845,197 2,753,154
Less: Goodwill (GAAP) 84,811 84,811 84,811 84,811 84,811
Tangible Assets (non-GAAP) B $2,706,031 $2,730,032 $2,810,720 $2,760,386 $2,668,343
Tangible Common Equity Ratio (non-GAAP) A/B 7.41% 7.21% 6.88% 6.90% 7.19%
Actual Diluted Shares Outstanding (GAAP) C 17,045 17,025 16,979 16,949 16,874
Tangible Book Value per Diluted Share (non-GAAP) A/C $11.76 $11.55 $11.38 $11.23 $11.37


CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended Nine Months Ended
(Dollars in thousands, except per share data) Sep 30, 2017 Jun 30, 2017 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016
EARNINGS
Net Income $4,555 $3,561 $2,873 $10,860 $8,450
Net Income Per Common Share $0.27 $0.21 $0.17 $0.64 $0.49
PERFORMANCE
Return on Average Assets 0.65% 0.51% 0.42% 0.52 % 0.41%
Return on Average Equity 6.33% 5.07% 4.12% 5.15 % 4.06%
Net Interest Margin 3.48% 3.33% 3.23% 3.34 % 3.22%
Noninterest Income as % of Operating Revenue 37.94% 39.05% 40.24% 38.72 % 41.40%
Efficiency Ratio 77.21% 82.28% 85.92% 81.53 % 86.05%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.19% 15.58% 15.48% 16.19 % 15.48%
Total Capital Ratio 16.96% 16.32% 16.28% 16.96 % 16.28%
Tangible Common Equity Ratio 7.41% 7.21% 7.19% 7.41 % 7.19%
Leverage Ratio 10.48% 10.20% 10.12% 10.48 % 10.12%
Common Equity Tier 1 Ratio 13.26% 12.72% 12.55% 13.26 % 12.55%
Equity to Assets 10.22% 10.00% 10.05% 10.22 % 10.05%
ASSET QUALITY
Allowance as % of Non-Performing Loans 203.39% 166.23% 159.56% 203.39 % 159.56%
Allowance as a % of Loans 0.82% 0.81% 0.88% 0.82 % 0.88%
Net Charge-Offs as % of Average Loans 0.10% 0.17% (0.02)% 0.12 % 0.05%
Nonperforming Assets as % of Loans and ORE 0.76% 0.97% 1.35% 0.76 % 1.35%
Nonperforming Assets as % of Total Assets 0.45% 0.57% 0.78% 0.45 % 0.78%
STOCK PERFORMANCE
High $24.58 $22.39 $15.35 $24.58 $15.96
Low 19.60 17.68 13.32 17.68 12.83
Close $24.01 $20.42 $14.77 $24.01 $14.77
Average Daily Trading Volume 29,551 23,349 19,696 25,362 20,840


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2017 2016
(Dollars in thousands) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
ASSETS
Cash and Due From Banks$50,420 $72,801 $47,650 $48,268 $79,608
Funds Sold and Interest Bearing Deposits 140,694 162,377 290,897 247,779 144,576
Total Cash and Cash Equivalents 191,114 235,178 338,547 296,047 224,184
Investment Securities Available for Sale 510,846 529,686 541,102 522,734 500,139
Investment Securities Held to Maturity 184,262 157,074 158,515 177,365 189,928
Total Investment Securities 695,108 686,760 699,617 700,099 690,067
Loans Held for Sale 7,800 8,213 7,498 10,886 10,510
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 215,963 213,544 214,595 216,404 223,278
Real Estate - Construction 67,813 67,331 59,938 58,443 54,107
Real Estate - Commercial 527,331 519,140 503,868 503,978 497,775
Real Estate - Residential 306,272 302,072 295,406 272,895 276,193
Real Estate - Home Equity 228,499 230,995 231,300 236,512 235,433
Consumer 273,670 269,539 268,921 262,735 258,173
Other Loans 9,311 17,057 9,586 8,614 10,875
Overdrafts 1,479 1,518 1,345 1,708 1,678
Total Loans, Net of Unearned Interest 1,630,338 1,621,196 1,584,959 1,561,289 1,557,512
Allowance for Loan Losses (13,339) (13,242) (13,335) (13,431) (13,744)
Loans, Net 1,616,999 1,607,954 1,571,624 1,547,858 1,543,768
Premises and Equipment, Net 92,345 92,495 93,755 95,476 96,499
Goodwill 84,811 84,811 84,811 84,811 84,811
Other Real Estate Owned 5,987 7,968 9,501 10,638 12,738
Other Assets 96,678 91,464 90,178 99,382 90,577
Total Other Assets 279,821 276,738 278,245 290,307 284,625
Total Assets$2,790,842 $2,814,843 $2,895,531 $2,845,197 $2,753,154
LIABILITIES
Deposits:
Noninterest Bearing Deposits$870,644 $842,314 $836,011 $791,182 $801,671
NOW Accounts 749,816 787,090 882,605 904,014 793,363
Money Market Accounts 249,964 265,032 263,080 252,800 257,004
Regular Savings Accounts 329,742 327,560 321,160 304,680 298,682
Certificates of Deposit 147,451 149,937 156,449 159,610 164,387
Total Deposits 2,347,617 2,371,933 2,459,305 2,412,286 2,315,107
Short-Term Borrowings 6,777 6,105 7,603 12,749 12,113
Subordinated Notes Payable 52,887 52,887 52,887 52,887 52,887
Other Long-Term Borrowings 15,047 15,631 16,460 14,881 21,368
Other Liabilities 83,313 86,774 81,217 77,226 75,055
Total Liabilities 2,505,641 2,533,330 2,617,472 2,570,029 2,476,530
SHAREOWNERS' EQUITY
Common Stock 170 170 170 168 168
Additional Paid-In Capital 35,892 35,522 34,859 34,188 33,152
Retained Earnings 275,013 271,646 268,934 267,037 264,581
Accumulated Other Comprehensive Loss, Net of Tax (25,874) (25,825) (25,904) (26,225) (21,277)
Total Shareowners' Equity 285,201 281,513 278,059 275,168 276,624
Total Liabilities and Shareowners' Equity$2,790,842 $2,814,843 $2,895,531 $2,845,197 $2,753,154
OTHER BALANCE SHEET DATA
Earning Assets$2,473,940 $2,478,546 $2,582,971 $2,520,053 $2,402,664
Interest Bearing Liabilities 1,551,684 1,604,242 1,700,244 1,701,621 1,599,804
Book Value Per Diluted Share$16.73 $16.54 $16.38 $16.23 $16.39
Tangible Book Value Per Diluted Share 11.76 11.55 11.38 11.23 11.37
Actual Basic Shares Outstanding 16,966 16,964 16,954 16,845 16,807
Actual Diluted Shares Outstanding 17,045 17,025 16,979 16,949 16,874


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Nine Months Ended
2017 2016 September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2017 2016
INTEREST INCOME
Interest and Fees on Loans$19,479 $18,720$18,005 $18,671$18,046 $56,204$54,196
Investment Securities 2,416 2,169 2,042 1,949 1,846 6,627 5,234
Funds Sold 446 533 493 212 212 1,472 892
Total Interest Income 22,341 21,422 20,540 20,832 20,104 64,303 60,322
INTEREST EXPENSE
Deposits 530 388 281 224 223 1,199 655
Short-Term Borrowings 15 17 45 57 43 77 91
Subordinated Notes Payable 420 404 379 363 341 1,203 1,071
Other Long-Term Borrowings 115 117 99 129 177 331 599
Total Interest Expense 1,080 926 804 773 784 2,810 2,416
Net Interest Income 21,261 20,496 19,736 20,059 19,320 61,493 57,906
Provision for Loan Losses 490 589 310 464 - 1,389 355
Net Interest Income after Provision for
Loan Losses
20,771 19,907 19,426 19,595 19,320 60,104 57,551
NONINTEREST INCOME
Deposit Fees 5,153 5,052 5,090 5,238 5,373 15,295 16,094
Bank Card Fees 2,688 2,870 2,803 2,754 2,759 8,361 8,467
Wealth Management Fees 2,197 2,073 1,842 1,773 1,774 6,112 5,256
Mortgage Banking Fees 1,480 1,556 1,308 1,392 1,503 4,344 3,800
Other 1,478 1,584 1,675 1,621 1,602 4,737 7,286
Total Noninterest Income 12,996 13,135 12,718 12,778 13,011 38,849 40,903
NONINTEREST EXPENSE
Compensation 16,349 16,292 16,496 16,699 15,993 49,137 48,285
Occupancy, Net 4,501 4,555 4,381 4,519 4,734 13,437 13,777
Other Real Estate, Net (118) 315 583 343 821 780 3,306
Other 5,975 6,759 6,462 5,999 6,474 19,196 20,286
Total Noninterest Expense 26,707 27,921 27,922 27,560 28,022 82,550 85,654
OPERATING PROFIT 7,060 5,121 4,222 4,813 4,309 16,403 12,800
Income Tax Expense 2,505 1,560 1,478 1,517 1,436 5,543 4,350
NET INCOME$4,555 $3,561$2,744 $3,296$2,873 $10,860$8,450
PER SHARE DATA
Basic Net Income$0.27 $0.21$0.16 $0.20$0.18 $0.64$0.50
Diluted Net Income 0.27 0.21 0.16 0.20 0.17 0.64 0.49
Cash Dividend$0.07 $0.05$0.05 $0.05$0.04 $0.17$0.12
AVERAGE SHARES
Basic 16,965 16,955 16,919 16,809 16,804 16,946 17,049
Diluted 17,044 17,016 16,944 16,913 16,871 17,009 17,100


CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND RISK ELEMENT ASSETS
Unaudited
Nine Months Ended
2017 2016 September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2017 2016
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period$13,242 $13,335 $13,431 $13,744 $13,677 $13,431 $13,953
Provision for Loan Losses 490 589 310 464 0 1,389 355
Net Charge-Offs 393 682 406 777 (67) 1,481 564
Balance at End of Period$13,339 $13,242 $13,335 $13,431 $13,744 $13,339 $13,744
As a % of Loans 0.82% 0.81% 0.84% 0.86% 0.88% 0.82% 0.88%
As a % of Nonperforming Loans 203.39% 166.23% 160.70% 157.40% 159.56% 203.39% 159.56%
CHARGE-OFFS
Commercial, Financial and Agricultural$276 $324 $93 $377 $143 $693 $484
Real Estate - Construction - - - - - - -
Real Estate - Commercial 94 478 71 70 5.00 643 279
Real Estate - Residential 125 44 116 120 96 285 779
Real Estate - Home Equity 50 - 92 38 51 142 412
Consumer 455 537 624 771 479 1,616 1,356
Total Charge-Offs$1,000 $1,383 $996 $1,376 $774 $3,379 $3,310
RECOVERIES
Commercial, Financial and Agricultural$79 $40 $81 $50 $199 $200 $287
Real Estate - Construction 50 - - - - 50 -
Real Estate - Commercial 69 58 23 45 45 150 363
Real Estate - Residential 60 202 213 277 139 475 954
Real Estate - Home Equity 84 39 29 32 237 152 377
Consumer 265 362 244 195 221 871 765
Total Recoveries$607 $701 $590 $599 $841 $1,898 $2,746
NET CHARGE-OFFS$393 $682 $406 $777 $(67) $1,481 $564
Net Charge-Offs as a % of Average Loans (1) 0.10% 0.17% 0.10% 0.20% (0.02)% 0.12% 0.05%
RISK ELEMENT ASSETS
Nonaccruing Loans$6,558 $7,966 $8,298 $8,533 $8,614
Other Real Estate Owned 5,987 7,968 9,501 10,638 12,738
Total Nonperforming Assets$12,545 $15,934 $17,799 $19,171 $21,352
Past Due Loans 30-89 Days$5,687 $3,789 $3,263 $6,438 $5,667
Past Due Loans 90 Days or More - - - - -
Classified Loans 36,545 41,322 40,978 41,507 43,228
Performing Troubled Debt Restructuring's$33,427 $35,436 $36,555 $38,233 $35,046
Nonperforming Loans as a % of Loans 0.40% 0.49% 0.52% 0.54% 0.55%
Nonperforming Assets as a % of Loans and
Other Real Estate 0.76% 0.97% 1.11% 1.21% 1.35%
Nonperforming Assets as a % of Total Assets 0.45% 0.57% 0.61% 0.67% 0.78%
(1) Annualized


CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Third Quarter 2017 Second Quarter 2017 First Quarter 2017 Fourth Quarter 2016 Third Quarter 2016 Sep 2017 YTD Sep 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$1,638,578 19,672 4.76% $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% $1,611,117 56,689 4.70% $1,531,813 54,590 4.76%
Investment Securities
Taxable Investment Securities 588,518 2,150 1.45 591,825 1,898 1.28 600,528 1,784 1.20 614,560 1,726 1.12 606,606 1,632 1.07 593,579 5,832 1.31 576,790 4,591 1.03
Tax-Exempt Investment Securities 98,463 407 1.65 100,742 414 1.64 97,965 396 1.62 90,046 343 1.52 89,241 327 1.47 99,059 1,217 1.64 91,399 984 1.44
Total Investment Securities 686,981 2,557 1.48 692,567 2,312 1.34 698,493 2,180 1.26 704,606 2,069 1.17 695,847 1,959 1.12 692,638 7,049 1.36 668,189 5,575 1.11
Funds Sold 140,728 446 1.26 200,834 533 1.06 245,153 493 0.81 145,518 212 0.58 166,207 212 0.51 195,189 1,472 1.01 235,414 892 0.51
Total Earning Assets 2,466,287 $22,675 3.65% 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% 2,498,944 $65,210 3.49% 2,435,416 $61,057 3.35%
Cash and Due From Banks 51,880 52,312 48,906 50,207 45,139 51,043 46,521
Allowance for Loan Losses (13,542) (13,662) (13,436) (14,017) (14,052) (13,547) (14,102)
Other Assets 275,335 276,799 280,463 283,885 285,435 277,514 287,444
Total Assets$2,779,960 $2,817,479 $2,845,140 $2,743,463 $2,734,465 $2,813,954 $2,755,279
LIABILITIES:
Interest Bearing Deposits
NOW Accounts$755,620 $339 0.18% $806,621 $222 0.11% $880,707 $134 0.06% $782,518 $78 0.04% $774,899 $78 0.04% $813,858 $694 0.11% $778,840 $214 0.04%
Money Market Accounts 262,486 80 0.12 261,726 57 0.09 259,106 35 0.06 257,398 31 0.05 258,183 30 0.05 261,118 172 0.09 255,885 89 0.05
Savings Accounts 327,675 40 0.05 322,833 39 0.05 311,212 38 0.05 303,006 37 0.05 297,172 37 0.05 320,634 118 0.05 288,740 107 0.05
Time Deposits 148,652 71 0.19 152,811 70 0.18 158,289 74 0.19 161,859 78 0.19 165,324 78 0.19 153,215 215 0.19 171,052 245 0.19
Total Interest Bearing Deposits 1,494,433 530 0.14% 1,543,991 388 0.10% 1,609,314 281 0.07% 1,504,781 224 0.06% 1,495,578 223 0.06% 1,548,825 1,199 0.11% 1,494,517 655 0.06%
Short-Term Borrowings 9,920 15 0.59% 8,957 17 0.75% 12,810 45 1.43% 14,768 57 1.54% 12,162 43 1.39% 10,552 77 0.97% 44,147 91 0.28%
Subordinated Notes Payable 52,887 420 3.11 52,887 404 3.02 52,887 379 2.86 52,887 363 2.68 52,887 341 2.52 52,887 1,203 3.00 56,683 1,071 2.48
Other Long-Term Borrowings 15,427 115 2.95 16,065 117 2.93 14,468 99 2.77 17,473 129 2.93 23,629 177 2.98 15,324 331 2.89 26,031 599 3.07
Total Interest Bearing Liabilities 1,572,667 $1,080 0.28% 1,621,900 $926 0.23% 1,689,479 $804 0.20% 1,589,909 $773 0.20% 1,584,256 $784 0.20% 1,627,588 $2,810 0.24% 1,621,378 $2,416 0.20%
Noninterest Bearing Deposits 834,729 829,432 797,964 802,136 793,163 820,843 780,167
Other Liabilities 87,268 84,486 79,208 72,475 79,639 83,683 75,603
Total Liabilities 2,494,664 2,535,818 2,566,651 2,464,520 2,457,058 2,532,114 2,477,148
SHAREOWNERS' EQUITY: 285,296 281,661 278,489 278,943 277,407 281,840 278,131
Total Liabilities and Shareowners' Equity$2,779,960 $2,817,479 $2,845,140 $2,743,463 $2,734,465 $2,813,954 $2,755,279
Interest Rate Spread $21,595 3.37% $20,799 3.25% $20,006 3.14% $20,335 3.27% $19,603 3.15% $62,400 3.25% $58,641 3.15%
Interest Income and Rate Earned(1) 22,675 3.65 21,725 3.48 20,810 3.33 21,108 3.47 20,387 3.35 65,210 3.49 61,057 3.35
Interest Expense and Rate Paid(2) 1,080 0.17 926 0.15 804 0.13 773 0.13 784 0.13 2,810 0.15 2,416 0.13
Net Interest Margin $21,595 3.48% $20,799 3.33% $20,006 3.21% $20,335 3.34% $19,603 3.23% $62,400 3.34% $58,641 3.22%
(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