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Capital City Bank Group, Inc. Reports Second Quarter 2013 Results

TALLAHASSEE, Fla., July 23, 2013 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $0.8 million, or $0.05 per diluted share for the second quarter of 2013 compared to net income of $0.8 million, or $0.05 per diluted share for the first quarter of 2013, and a net loss of $1.7 million, or $0.10 per diluted share, for the second quarter of 2012. For the first six months of 2013, the Company reported net income of $1.7 million, or $0.10 per diluted share, compared to a net loss of $2.9 million, or $0.17 per diluted share for the same period in 2012.

Compared to the first quarter of 2013, performance reflects lower noninterest expense of $0.6 million that was partially offset by a higher loan loss provision of $0.4 million, a $0.1 million decline in operating revenues, and a $0.1 million increase in income taxes.

Compared to the second quarter of 2012, the increase in earnings was due to a lower loan loss provision of $4.3 million and a $1.7 million decrease in noninterest expense, partially offset by lower operating revenues of $1.6 million and higher income taxes of $1.9 million.

The increase in earnings for the first half of 2013 versus the comparable period in 2012 is attributable to a lower loan loss provision of $8.0 million and a decrease in noninterest expense of $3.1 million, partially offset by lower operating revenues of $3.2 million and higher income taxes of $3.3 million.

"The business environment is still challenging, but there have been some notable improvements," stated William G. Smith, Jr., chairman, president and CEO of Capital City Bank Group. "Property values are stabilizing and disposition of our other real estate owned ("OREO") continues at a brisk pace. Recent financials suggests our clients had a better 2012 than 2011, and leading indicators such as past due loans and gross additions to our non-accrual loan portfolio are at or near their lowest levels so far in this cycle. Unemployment in our larger markets is improving, and state workers in Florida received raises for the first time in six years. In the first half of 2013, nonperforming assets ("NPAs") are down 18% in addition to the 14% decrease we achieved in 2012, reflecting the slowdown in problem loan inflow and brisk ORE sales. We remain committed to our retail strategy for the disposition of OREO and believe it provides the best economic outcome for our shareowners. Economic uncertainty and deleveraging by consumers and businesses have adversely impacted loan growth, which continues to place pressure on our net interest margin. However, as the economy improves this trend should reverse. Although choppy, we are making steady progress, and I am encouraged about the future," said Smith.

The Return on Average Assets was 0.13% and the Return on Average Equity was 1.35% for the second quarter of 2013. These metrics were 0.13% and 1.36% for the first quarter of 2013, and -0.26% and -2.75% for the second quarter of 2012, respectively.

For the first half of 2013, the Return on Average Assets was 0.13% and the Return on Average Equity was 1.36% compared to -0.22% and -2.29%, respectively, for the first half of 2012.

Discussion of Financial Condition

Average earning assets were $2.206 billion for the second quarter of 2013, a decrease of $34.2 million, or 1.5%, from the first quarter of 2013 and an increase of $27.7 million, or 1.4%, over the fourth quarter of 2012. The change in earning assets from the prior quarter reflects a decline in the overnight funds position resulting from a lower level of public fund deposits. The increase compared to the fourth quarter of 2012 primarily reflects the higher level of deposits resulting from an increase in the public funds. The change in both quarters reflects the seasonal fluctuation in public fund deposits as the fourth quarter generally reflects the seasonal low while the first quarter the seasonal high.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $419.0 million during the second quarter of 2013 compared to an average net overnight funds sold position of $448.4 million in the first quarter of 2013 and an average overnight funds sold position of $366.0 million in the fourth quarter of 2012. The lower balance when compared to the first quarter of 2013 primarily reflects the decline in public funds and higher investment portfolio, partially offset by a lower level of loans. The increase when compared to the fourth quarter of 2012 reflects the declining loan portfolio and a higher level of public funds, partially offset by an increase in the investment portfolio.

Economic uncertainty and deleveraging by our clients continues to generate historically high levels of liquidity, which, given the current operating environment, are difficult to profitability deploy without taking inordinate risks. Where practical we are working to lower the level of overnight funds by adding to our investment portfolio with short-duration securities and reducing deposit balances. One strategy we are using to lower deposit balances is a fully-insured money market account which is offered by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.

When compared to the first quarter of 2013 and fourth quarter of 2012, average loans declined by $39.5 million and $61.4 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate categories. Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production. New loan production is impacted by weak loan demand attributable to the trend toward consumers and businesses deleveraging, lack of consumer confidence and a persistently sluggish economy.

Efforts to stimulate new loan growth are ongoing. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try and mitigate the significant impact that consumer and business deleveraging is having on our portfolio.

Nonperforming assets (nonaccrual loans and OREO) totaled $96.7 million at the end of the second quarter of 2013, a decrease of $7.2 million from the first quarter of 2013 and $20.9 million from the fourth quarter of 2012. Nonaccrual loans totaled $41.6 million at the end of the second quarter of 2013, a decrease of $3.8 million from the first quarter of 2013 and $22.6 million from the fourth quarter of 2012. Nonaccrual loan additions totaled $10.8 million in the second quarter of 2013 and $18.5 million for the first six months of 2013, which compares to $33.0 million in the first half of 2012. The balance of OREO totaled $55.1 million at the end of the second quarter of 2013, a decrease of $3.3 million from the first quarter of 2013 and an increase of $1.7 million over the fourth quarter of 2012. For the second quarter of 2013 we added properties totaling $4.4 million, sold properties totaling $6.6 million, and recorded valuation adjustments totaling $1.1 million. For the first six months of 2013, we have added properties totaling $17.3 million, sold properties totaling $13.4 million, and recorded valuation adjustments totaling $2.2 million. Nonperforming assets represented 3.77% of total assets at June 30, 2013 compared to 3.99% at March 31, 2013 and 4.47% at December 31, 2012.

Average total deposits were $2.068 billion for the second quarter of 2013, a decrease of $35.3 million, or 1.7%, from the first quarter of 2013 and higher by $16.5 million, or 0.8%, from the fourth quarter of 2012. The decrease in deposits when compared to the first quarter of 2013 resulted primarily from the reduction in the level of public funds and certificates of deposit. When compared to the fourth quarter of 2012, the increase was a result of higher public funds and savings accounts, partially offset by lower certificates of deposit and regular NOWs.

Our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts. Prudent pricing discipline will continue to be the key to managing our mix of deposits. Therefore, we do not attempt to compete with higher rate paying competitors for deposits.

Average borrowings decreased by $4.8 million when compared to the first quarter of 2013 as a result of payoff/amortization of FHLB advances, and increased by $4.8 million when compared to the fourth quarter of 2012, primarily a result of higher repurchase agreement balances.

Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2013 was $19.7 million compared to $20.1 million for the first quarter of 2013 and $21.2 million for the second quarter of 2012. The decrease in tax equivalent net interest income compared to the prior periods was due to a reduction in loan income primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans. The lower interest expense is attributable to favorable repricing on FHLB advances and certificates of deposit, which reflects both lower balances and favorable repricing. For the six months ended June 30, 2013, tax equivalent net interest income totaled $39.8 million compared to $43.1 million for the same period of 2012.

Pressure on net interest income continues primarily as a result of the declining loan portfolio and the low rate environment. Loans have declined by approximately $110 million since the second quarter of 2012. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

Lowering our cost of funds, to the extent we can, and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and repricing, although the impact is expected to be minimal.

The net interest margin for the second quarter of 2013 was 3.59%, a decrease of five basis points from the first quarter of 2013, and a decline of 18 basis points from the second quarter of 2012. The decrease in the margin for both comparable periods is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds.

The provision for loan losses for the second quarter of 2013 was $1.4 million compared to $1.1 million in the first quarter of 2013 and $5.7 million for the second quarter of 2012. For the first six months of 2013, the loan loss provision totaled $2.5 million compared to $10.5 million for the same period in 2012. The increase compared to the first quarter of 2013 was primarily due to a reserve addition for one existing impaired loan. The reduction from both of the prior year periods reflects a declining trend in loan losses as well as a much slower inflow of problem loans as evidenced by a lower level of loan delinquencies, classified loans and impaired loans. Net charge-offs for the second quarter of 2013 totaled $2.0 million, or 0.54% (annualized), of average loans compared to $2.4 million, or 0.66%, for the first quarter of 2013 and $7.0 million, or 1.80%, in the second quarter of 2012. For the first half of 2013, net charge-offs totaled $4.4 million, or 0.60% (annualized), of average loans compared to $11.6 million, or 1.48%, for the same period of 2012. Lower charge-offs in our residential real estate and commercial real estate portfolios drove the decrease in loan losses comparing 2013 to 2012. Charge-offs for the first half of 2012 reflect the resolution of higher loss exposure construction and land loans. At quarter-end, the allowance for loan losses of $27.3 million was 1.89% of outstanding loans (net of overdrafts) and provided coverage of 66% of nonperforming loans compared to 1.90% and 61%, respectively, at March 31, 2013, and 1.93% and 45%, respectively, at December 31, 2012.

Noninterest income for the second quarter of 2013 totaled $13.9 million, an increase of $0.3 million, or 1.9%, over the first quarter of 2013 and a decrease of $0.1 million, or 0.4%, from the second quarter of 2012. The increase over the first quarter of 2013 was driven by higher other income of $0.2 million and bank card fees of $0.1 million. A higher level of gains from the sale of OREO properties and an increase in miscellaneous income drove the increase in other income. Bank card fees increased due to a higher level of card activity. Compared to the second quarter of 2012, the decrease was primarily due to lower deposit fees attributable to a higher level of charged-off checking accounts. For the first six months of 2013, noninterest income totaled $27.4 million, a $0.1 million decrease from the same period of 2012 reflective of lower deposit fees of $0.2 million, bank card fees of $0.1 million, and other income of $0.1 million, partially offset by higher mortgage banking fees of $0.3 million and wealth management fees of $0.1 million. The decline in deposit fees reflects a higher level of charged-off checking accounts. Bank card fees declined due to a change in transaction mix yielding a lower interchange rate. The decrease in other income reflects a lower level of gains from the sale of OREO properties. Increased client trading activity drove the improvement in wealth management fees, specifically retail brokerage fees. The increase in mortgage fees was attributable to a higher level of loans funded and a higher margin for sold loans.

Noninterest expense for the second quarter of 2013 totaled $30.6 million, a decrease of $0.6 million, or 2.0%, from the first quarter of 2013 attributable to lower OREO expense of $0.5 million and reductions in premises expense of $0.1 million and furniture/equipment expense of $0.1 million. The decrease in OREO expense was due to a reduction in losses from the sale of properties. Declines were realized in most of the premises and furniture/equipment expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. Compared to the second quarter of 2012, noninterest expense decreased by $1.7 million, or 5.3%, reflective of a decline in OREO expense of $1.0 million, a reduction in both premises and furniture expense totaling $0.4 million, and lower other expense of $0.8 million, partially offset by higher compensation expense of $0.5 million. For the first six months of 2013, noninterest expense totaled $61.8 million, a decrease of $3.1 million, or 4.8%, from the same period of 2012 attributable to lower OREO expense of $1.6 million, declines in both premises and furniture/equipment expense totaling $0.4 million, and lower other expense of $1.3 million, partially offset by higher compensation expense of $0.4 million. The reduction in OREO expense from both prior year periods was attributable to a lower level of losses from the sale of properties and lower valuation adjustments. Lower carrying costs for properties also contributed to the reduction for the six month period. Compared to both prior year periods declines were realized in most of the premises and furniture/equipment expense categories and were generally driven by stronger cost controls and other cost reduction initiatives. Reductions in legal fees, professional fees, advertising costs, and postage costs drove the decline in other expense from both prior year periods. Severance costs recorded in the second quarter of 2012 related to the closing of banking offices and outsourcing of our items processing function also contributed to the favorable variance in other expense. Higher stock compensation expense and pension expense partially offset by lower salary expense drove the increases in compensation expense from both prior year periods.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded bank holding companies headquartered in Florida and has approximately $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 63 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the Company's need and our ability to incur additional debt or equity financing; the accuracy of the Company's financial statement estimates and assumptions, including the estimate used for the Company's loan loss provision and deferred tax valuation allowance; a decrease to the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company's loans; restrictions on our operations, including the inability to pay dividends without our regulators' consent; the effects of the health and soundness of other financial institutions; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, 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 Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2013 Mar 31, 2013 Jun 30, 2012 Jun 30, 2013 Jun 30, 2012
EARNINGS
Net Income (Loss) $ 843 $ 839 $ (1,726) $ 1,682 $ (2,888)
Net Income (Loss) Per Common Share $ 0.05 $ 0.05 $ (0.10) $ 0.10 $ (0.17)
PERFORMANCE
Return on Average Assets 0.13% 0.13% -0.26% 0.13% -0.22%
Return on Average Equity 1.35% 1.36% -2.75% 1.36% -2.29%
Net Interest Margin 3.59% 3.64% 3.77% 3.61% 3.82%
Noninterest Income as % of Operating Revenue 41.68% 40.62% 39.88% 41.15% 39.26%
Efficiency Ratio 91.07% 92.67% 91.18% 91.87% 91.61%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 15.36% 14.95% 14.17% 15.36% 14.17%
Total Capital Ratio 16.73% 16.32% 15.54% 16.73% 15.54%
Tangible Common Equity Ratio 6.64% 6.49% 6.40% 6.64% 6.40%
Leverage Ratio 10.07% 9.81% 9.60% 10.07% 9.60%
Equity to Assets 9.73% 9.54% 9.41% 9.73% 9.41%
ASSET QUALITY
Allowance as % of Non-Performing Loans 65.66% 61.17% 40.03% 65.66% 40.03%
Allowance as a % of Loans 1.89% 1.90% 1.93% 1.89% 1.93%
Net Charge-Offs as % of Average Loans 0.54% 0.66% 1.80% 0.60% 1.48%
Nonperforming Assets as % of Loans and ORE 6.44% 6.81% 8.23% 6.44% 8.23%
Nonperforming Assets as % of Total Assets 3.77% 3.99% 5.02% 3.77% 5.02%
STOCK PERFORMANCE
High $ 12.64 $ 12.54 $ 8.73 $ 12.64 $ 9.91
Low 10.12 10.95 6.35 10.12 6.35
Close 11.53 12.35 7.37 11.53 7.37
Average Daily Trading Volume $ 16,366 $ 23,519 $ 37,926 $ 19,827 $ 31,391
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2013 2012
(Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ASSETS
Cash and Due From Banks $ 67,811 $ 52,677 $ 66,238 $ 53,076 $ 57,477
Funds Sold and Interest Bearing Deposits 391,457 461,714 443,494 314,318 434,814
Total Cash and Cash Equivalents 459,268 514,391 509,732 367,394 492,291
Investment Securities, Available-for-Sale 350,614 307,502 296,985 288,166 280,753
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 126,931 125,905 139,850 135,939 136,736
Real Estate - Construction 40,726 42,968 43,740 43,278 46,803
Real Estate - Commercial 581,501 599,517 613,625 609,671 605,819
Real Estate - Residential 312,714 311,189 318,400 341,044 353,198
Real Estate - Home Equity 232,530 233,205 236,263 239,446 242,929
Consumer 142,620 146,043 150,728 154,389 162,899
Other Loans 5,904 5,187 11,547 6,891 5,638
Overdrafts 2,554 2,307 7,149 2,637 2,214
Total Loans, Net of Unearned Interest 1,445,479 1,466,321 1,521,302 1,533,295 1,556,236
Allowance for Loan Losses (27,294) (27,803) (29,167) (30,222) (29,929)
Loans, Net 1,418,185 1,438,518 1,492,135 1,503,073 1,526,307
Premises and Equipment, Net 104,743 105,883 107,092 109,003 110,302
Intangible Assets 84,937 84,985 85,053 85,161 85,269
Other Real Estate Owned 55,087 58,421 53,426 53,172 58,059
Other Assets 89,024 95,613 89,561 87,815 92,869
Total Other Assets 333,791 344,902 335,132 335,151 346,499
Total Assets $ 2,561,858 $ 2,605,313 $ 2,633,984 $ 2,493,784 $ 2,645,850
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 644,739 $ 616,017 $ 609,235 $ 596,660 $ 623,130
NOW Accounts 706,101 765,030 842,435 703,327 789,103
Money Market Accounts 287,340 299,118 267,766 285,084 288,352
Regular Savings Accounts 204,594 200,492 184,541 181,523 178,388
Certificates of Deposit 228,349 233,325 241,019 254,000 271,413
Total Deposits 2,071,123 2,113,982 2,144,996 2,020,594 2,150,386
Short-Term Borrowings 46,081 50,682 47,435 42,388 69,449
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 41,251 41,224 46,859 38,126 38,846
Other Liabilities 91,227 87,930 84,918 79,427 75,260
Total Liabilities 2,312,569 2,356,705 2,387,095 2,243,422 2,396,828
SHAREOWNERS' EQUITY
Common Stock 173 173 172 172 172
Additional Paid-In Capital 40,210 39,580 38,707 38,493 38,260
Retained Earnings 239,251 238,408 237,569 235,694 234,573
Accumulated Other Comprehensive Loss, Net of Tax (30,345) (29,553) (29,559) (23,997) (23,983)
Total Shareowners' Equity 249,289 248,608 246,889 250,362 249,022
Total Liabilities and Shareowners' Equity $ 2,561,858 $ 2,605,313 $ 2,633,984 $ 2,493,784 $ 2,645,850
OTHER BALANCE SHEET DATA
Earning Assets $ 2,187,549 $ 2,235,537 $ 2,261,781 $ 2,135,779 $ 2,271,803
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits -- -- 19 79 139
Other 126 174 223 271 319
Interest Bearing Liabilities 1,576,601 1,652,758 1,692,942 1,567,335 1,698,438
Book Value Per Diluted Share $ 14.36 $ 14.35 $ 14.31 $ 14.54 $ 14.48
Tangible Book Value Per Diluted Share 9.47 9.44 9.38 9.59 9.52
Actual Basic Shares Outstanding 17,336 17,319 17,232 17,223 17,198
Actual Diluted Shares Outstanding 17,372 17,326 17,259 17,223 17,198
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
Six Months Ended
2013 2012 June 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2013 2012
INTEREST INCOME
Interest and Fees on Loans $ 19,709 $ 20,154 $ 20,756 $ 21,274 $ 21,359 $ 39,863 $ 43,364
Investment Securities 710 704 808 798 834 1,414 1,734
Funds Sold 279 270 223 254 244 549 468
Total Interest Income 20,698 21,128 21,787 22,326 22,437 41,826 45,567
INTEREST EXPENSE
Deposits 367 415 429 480 556 782 1,199
Short-Term Borrowings 61 82 69 71 48 143 56
Subordinated Notes Payable 342 339 351 372 372 681 754
Other Long-Term Borrowings 333 347 383 372 396 680 832
Total Interest Expense 1,103 1,183 1,232 1,295 1,372 2,286 2,841
Net Interest Income 19,595 19,945 20,555 21,031 21,065 39,540 42,726
Provision for Loan Losses 1,450 1,070 2,766 2,864 5,743 2,520 10,536
Net Interest Income after Provision for Loan Losses 18,145 18,875 17,789 18,167 15,322 37,020 32,190
NONINTEREST INCOME
Deposit Fees 6,217 6,165 6,764 6,406 6,313 12,382 12,622
Data Processing Fees 670 653 671 687 680 1,323 1,355
Wealth Management Fees 1,901 1,915 1,818 1,686 1,904 3,816 3,677
Mortgage Banking Fees 968 1,043 910 978 864 2,011 1,712
Bank Card Fees 2,754 2,661 2,612 2,616 2,784 5,415 5,555
Other 1,339 1,151 1,343 1,202 1,361 2,490 2,571
Total Noninterest Income 13,849 13,588 14,118 13,575 13,906 27,437 27,492
NONINTEREST EXPENSE
Compensation 16,647 16,739 15,772 15,510 16,117 33,386 32,960
Premises 2,149 2,265 2,217 2,345 2,303 4,414 4,590
Furniture and Equipment 2,012 2,153 2,212 2,245 2,245 4,165 4,446
Intangible Amortization 48 68 108 108 107 116 215
Other Real Estate 2,408 2,884 1,900 2,603 3,432 5,292 6,925
Other 7,318 7,091 7,259 7,390 8,089 14,409 15,754
Total Noninterest Expense 30,582 31,200 29,468 30,201 32,293 61,782 64,890
OPERATING PROFIT (LOSS) 1,412 1,263 2,439 1,541 (3,065) 2,675 (5,208)
Income Tax Expense (Benefit) 569 424 564 420 (1,339) 993 (2,320)
NET INCOME (LOSS) $ 843 $ 839 $ 1,875 $ 1,121 $ (1,726) $ 1,682 $ (2,888)
PER SHARE DATA
Basic Income (Loss) $ 0.05 $ 0.05 $ 0.11 $ 0.07 $ (0.10) $ 0.10 $ (0.17)
Diluted Income (Loss) $ 0.05 $ 0.05 $ 0.11 $ 0.07 $ (0.10) $ 0.10 $ (0.17)
AVERAGE SHARES
Basic 17,319 17,302 17,229 17,215 17,192 17,311 17,187
Diluted 17,355 17,309 17,256 17,228 17,192 17,364 17,187
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
2013 2013 2012 2012 2012
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 27,803 $ 29,167 $ 30,222 $ 29,929 $ 31,217
Provision for Loan Losses 1,450 1,070 2,766 2,864 5,743
Net Charge-Offs 1,959 2,434 3,821 2,571 7,031
Balance at End of Period $ 27,294 $ 27,803 $ 29,167 $ 30,222 $ 29,929
As a % of Loans 1.89% 1.90% 1.93% 1.97% 1.93%
As a % of Nonperforming Loans 65.66% 61.17% 45.42% 40.80% 40.03%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 119 $ 154 $ 166 $ 331 $ 57
Real Estate - Construction 110 610 227 127 275
Real Estate - Commercial 1,050 1,043 468 512 3,519
Real Estate - Residential 1,053 683 2,877 981 3,894
Real Estate - Home Equity 322 113 745 834 425
Consumer 351 296 488 355 550
Total Charge-Offs $ 3,005 $ 2,899 $ 4,971 $ 3,140 $ 8,720
RECOVERIES
Commercial, Financial and Agricultural 38 51 87 53 83
Real Estate - Construction -- -- 7 9 27
Real Estate - Commercial 144 38 468 34 42
Real Estate - Residential 396 96 83 76 969
Real Estate - Home Equity 224 18 250 15 116
Consumer 244 262 255 382 452
Total Recoveries $ 1,046 $ 465 $ 1,150 $ 569 $ 1,689
NET CHARGE-OFFS $ 1,959 $ 2,434 $ 3,821 $ 2,571 $ 7,031
Net Charge-Offs as a % of Average Loans(1) 0.54% 0.66% 1.00% 0.66% 1.80%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 41,566 $ 45,448 $ 64,222 $ 74,075 $ 74,770
Other Real Estate Owned 55,087 58,421 53,426 53,172 58,059
Total Nonperforming Assets $ 96,653 $ 103,869 $ 117,648 $ 127,247 $ 132,829
Past Due Loans 30-89 Days $ 9,017 $ 9,274 $ 9,934 $ 12,923 $ 16,695
Past Due Loans 90 Days or More -- -- -- -- --
Performing Troubled Debt Restructuring's $ 52,729 $ 53,108 $ 47,474 $ 45,973 $ 38,734
Nonperforming Loans as a % of Loans 2.88% 3.10% 4.22% 4.83% 4.80%
Nonperforming Assets as a % of Loans and Other Real Estate 6.44% 6.81% 7.47% 8.02% 8.23%
Nonperforming Assets as a % of Total Assets 3.77% 3.99% 4.47% 5.10% 5.02%
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Second Quarter 2013 First Quarter 2013 Fourth Quarter 2012 Third Quarter 2012 Second Quarter 2012
(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 $ 1,456,904 19,790 5.45% $ 1,496,432 20,228 5.48% $ 1,518,280 20,837 5.46% $ 1,541,262 21,366 5.51% $ 1,570,827 21,456 5.49%
Investment Securities
Taxable Investment Securities 225,770 578 1.02 215,087 590 1.10 219,985 697 1.26 214,431 691 1.28 216,952 730 1.35
Tax-Exempt Investment Securities 104,981 200 0.76 80,946 174 0.86 74,647 172 0.92 67,446 163 0.97 63,715 161 1.01
Total Investment Securities 330,751 778 0.94 296,033 764 1.04 294,632 869 1.17 281,877 854 1.21 280,667 891 1.27
Funds Sold 419,039 279 0.27 448,424 270 0.24 366,034 223 0.24 386,027 254 0.26 411,353 244 0.24
Total Earning Assets 2,206,694 $ 20,847 3.79% 2,240,889 $ 21,262 3.85% 2,178,946 $ 21,929 4.00% 2,209,166 $ 22,474 4.05% 2,262,847 $ 22,591 4.01%
Cash and Due From Banks 49,081 50,679 51,344 47,207 47,711
Allowance for Loan Losses (29,012) (30,467) (30,605) (30,260) (31,599)
Other Assets 337,765 337,579 334,326 340,126 345,458
Total Assets $ 2,564,528 $ 2,598,680 $ 2,534,011 $ 2,566,239 $ 2,624,417
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 716,459 $ 124 0.07% $ 788,660 $ 156 0.08% $ 714,682 $ 131 0.07% $ 740,178 $ 144 0.08% $ 809,172 $ 167 0.08%
Money Market Accounts 289,637 54 0.07 282,847 54 0.08 275,458 57 0.08 287,250 60 0.08 280,371 63 0.09
Savings Accounts 202,784 25 0.05 193,033 23 0.05 182,760 23 0.05 179,445 23 0.05 174,923 21 0.05
Time Deposits 231,134 164 0.29 238,441 181 0.31 247,679 218 0.35 263,007 253 0.38 274,497 305 0.45
Total Interest Bearing Deposits 1,440,014 367 0.10% 1,502,981 414 0.11% 1,420,579 429 0.12% 1,469,880 480 0.13% 1,538,963 556 0.15%
Short-Term Borrowings 52,399 61 0.47% 55,255 82 0.60% 45,893 69 0.59% 59,184 71 0.48% 57,983 48 0.33%
Subordinated Notes Payable 62,887 342 2.15 62,887 339 2.15 62,887 351 2.19 62,887 372 2.31 62,887 372 2.34
Other Long-Term Borrowings 40,942 333 3.26 42,898 348 3.29 42,673 383 3.57 38,494 372 3.85 40,617 396 3.92
Total Interest Bearing Liabilities 1,596,242 $ 1,103 0.28% 1,664,021 $ 1,183 0.29% 1,572,032 $ 1,232 0.31% 1,630,445 $ 1,295 0.32% 1,700,450 $ 1,372 0.32%
Noninterest Bearing Deposits 627,633 599,986 630,520 605,602 596,690
Other Liabilities 90,168 85,116 78,442 78,446 74,633
Total Liabilities 2,314,043 2,349,123 2,280,994 2,314,493 2,371,773
SHAREOWNERS' EQUITY: 250,485 249,557 253,017 251,746 252,644
Total Liabilities and Shareowners' Equity $ 2,564,528 $ 2,598,680 $ 2,534,011 $ 2,566,239 $ 2,624,417
Interest Rate Spread $ 19,744 3.51% $ 20,079 3.56% $ 20,697 3.69% $ 21,179 3.73% $ 21,219 3.69%
Interest Income and Rate Earned(1) 20,847 3.79 21,262 3.85 21,929 4.00 22,474 4.05 22,591 4.01
Interest Expense and Rate Paid(2) 1,103 0.20 1,183 0.21 1,232 0.22 1,295 0.23 1,372 0.24
Net Interest Margin $ 19,744 3.59% $ 20,079 3.64% $ 20,697 3.78% $ 21,179 3.82% $ 21,219 3.77%
(1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.
(2) Rate calculated based on average earning assets.
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Jun 2013 YTD Jun 2012 YTD
(Dollars in thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,476,559 $ 40,018 5.47% $ 1,583,654 $ 43,577 5.53%
Investment Securities
Taxable Investment Securities 220,458 1,168 1.03 229,716 1,524 1.35
Tax-Exempt Investment Securities 93,030 374 0.80 60,014 323 1.08
Total Investment Securities 313,488 1,542 0.98 289,730 1,847 1.28
Funds Sold 433,650 549 0.26 392,193 469 0.24
Total Earning Assets 2,223,697 $ 42,109 3.82% 2,265,577 $ 45,893 4.07%
Cash and Due From Banks 49,875 48,569
Allowance for Loan Losses (29,735) (31,491)
Other Assets 337,673 348,007
Total Assets $ 2,581,510 $ 2,630,662
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 752,360 $ 280 0.08% $ 816,289 $ 359 0.09%
Money Market Accounts 286,261 108 0.08 278,964 137 0.10
Savings Accounts 197,935 48 0.05 170,263 42 0.05
Time Deposits 234,768 346 0.30 279,314 661 0.48
Total Interest Bearing Deposits 1,471,324 782 0.11% 1,544,830 1,199 0.16%
Short-Term Borrowings 53,819 143 0.54% 51,814 56 0.22%
Subordinated Notes Payable 62,887 681 2.15 62,887 754 2.37
Other Long-Term Borrowings 41,915 680 3.27 42,451 832 3.94
Total Interest Bearing Liabilities 1,629,945 $ 2,286 0.28% 1,701,982 $ 2,841 0.34%
Noninterest Bearing Deposits 613,886 603,691
Other Liabilities 87,656 71,444
Total Liabilities 2,331,487 2,377,117
SHAREOWNERS' EQUITY: 250,023 253,545
Total Liabilities and Shareowners' Equity $ 2,581,510 $ 2,630,662
Interest Rate Spread $ 39,823 3.54% $ 43,052 3.73%
Interest Income and Rate Earned(1) 42,109 3.82 45,893 4.07
Interest Expense and Rate Paid(2) 2,286 0.21 2,841 0.25
Net Interest Margin $ 39,823 3.61% $ 43,052 3.82%
(1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.
(2) Rate calculated based on average earning assets.

CONTACT: J. Kimbrough Davis Executive Vice President and Chief Financial Officer 850.402.7820Source:Capital City Bank Group, Inc.