Financial News

Capital City Bank Group, Inc. Reports Second Quarter 2020 Results

TALLAHASSEE, Fla., July 21, 2020 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $9.1 million, or $0.55 per diluted share for the second quarter of 2020 compared to net income of $4.3 million, or $0.25 per diluted share for the first quarter of 2020, and $7.3 million, or $0.44 per diluted share for the second quarter of 2019.  For the first six months of 2020, net income totaled $13.4 million, or $0.80 per diluted share, compared to net income of $13.8 million, or $0.82 per diluted share, for the same period of 2019.

QUARTER HIGHLIGHTS

  • Return on assets improved to 1.10% and efficiency ratio to 67%
  • Diversified revenue and strong balance sheet continue to buffer impact of pandemic and lower interest rates
  • Strong performance by Capital City Home Loans (“CCHL”) contributed significantly ($0.20/share)
  • Pandemic related stimulus programs contributed $190 million in loan growth and deposit balances totaling $243 million

“Though the second quarter presented a challenging environment, I am pleased with our financial performance and how we responded to the COVID-19 pandemic,” said William G. Smith, Jr., Chairman, President and CEO. “We issued $190 million in Paycheck Protection Program (PPP) loans to assist our small business clients and took critical precautions to protect the health and welfare of our associates and clients as we reopened our offices for routine lobby service. Despite a challenged economy, the mortgage market has been robust, and our recent alliance with CCHL contributed $0.20 per share during the second quarter. Earnings from CCHL and SBA/PPP fees helped mitigate the adverse impacts of a lower interest rate environment and reserve build attributable to the adoption of CECL and COVID-19. I anticipate the second half of 2020 will remain challenging but am hopeful it will bring improvement. We have taken a prudent and measured approach to managing through this ongoing crisis and continue to focus on our commitments to our associates, clients, communities, and shareowners. I remain optimistic about the long-term outlook for Capital City and appreciate your continued support.”

COVID-19 Update

  • Lobby access has been re-opened for 56 of our 57 banking offices and operations are subject to national guidelines and local safety ordinances to protect both clients and associates – we will continue to monitor changing conditions with the pandemic and its impact on client and associate interactions within our banking offices
  • Most operational associates returned to work in early June, but we have extended some remote work arrangements on a case-by-case basis
  • Enhanced digital access options are available for banking products and access to sales associates
  • Continue to monitor COVID-19 case count trends in our markets and respond appropriately to help ensure client and associate safety
  • Continued support of clients with the Small Business Administration Payment Protection Program (“SBA PPP”) - we will actively assist our clients with the forgiveness process in coming quarters
  • We continued to assist our clients and communities in the second quarter by processing a total of 2,217 loan extensions ($330 million, or 16% of loan balances at June 30, 2020).

Discussion of Operating Results

Summary Overview

Compared to the first quarter of 2020, the $11.1 million increase in operating profit was attributable to a $14.7 million increase in noninterest income (primarily mortgage banking revenues) and a $3.0 million decrease in the provision for credit losses, partially offset by higher noninterest expense of $6.3 million and lower net interest income of $0.3 million. 

Compared to the second quarter of 2019, the $6.6 million increase in operating profit was attributable to a $17.4 million increase in noninterest income, partially offset by a higher noninterest expense of $8.9 million, a $1.4 million increase in the provision for credit losses and lower net interest income of $0.5 million. 

The $3.4 million increase in operating profit for the first six months of 2020 versus the comparable period of 2019 was attributable to higher noninterest income of $20.4 million and net interest income of $0.3 million, partially offset by a $5.6 million increase in the provision for credit losses and higher noninterest expense of $11.7 million.  

The aforementioned period over period variances reflect the acquisition of a 51% membership interest and consolidation of CCHL late in the first quarter of 2020.

Our return on average assets (“ROA”) was 1.10% and our return on average equity (“ROE”) was 11.03% for the second quarter of 2020.  These metrics were 0.57% and 5.20% for the first quarter of 2020, respectively, and 0.98% and 9.37% for the second quarter of 2019, respectively.  For the first six months of 2020, our ROA was 0.85% and our ROE was 8.12% compared to 0.92% and 8.94%, respectively, for the same period of 2019. 

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the second quarter of 2020 was $25.6 million compared to $25.9 million for the first quarter of 2020 and $26.1 million for the second quarter of 2019.  The decrease compared to both prior periods reflected lower rates earned on overnight funds, investment securities and variable rate loans, partially offset by lower cost for our negotiated rate deposits.  For the first six months of 2020, tax-equivalent net interest income totaled $51.4 million compared to $51.2 million in 2019.  The increase was primarily due to loan growth and a reduction in the cost of our negotiated rate deposits, partially offset by lower rates on our earning assets.

The federal funds target rate ended the second quarter of 2020 in a range of 0.00%-0.25%, unchanged from the end of the first quarter of 2020.  However, since 150 basis points of rate cuts were made late in the first quarter of 2020, we experienced lower repricing of our variable/adjustable rate earning assets and investment securities during the second quarter 2020.  We continue to prudently manage our deposit mix and overall cost of funds, which was 14 basis points for the second quarter of 2020 compared to 23 basis points for the first quarter of 2020.  Due to highly competitive fixed-rate loan pricing in our markets, we continue to review our loan pricing and make adjustments where we believe appropriate and prudent.     

Our net interest margin for the second quarter of 2020 was 3.41%, a decrease of 37 basis points from the first quarter of 2020 and 44 basis points from the second quarter of 2019.  For the first six months of 2020, the net interest margin decreased 21 basis points to 3.59%.  The decrease compared to all prior periods was attributable to lower rates on our variable and adjustable rate earning assets, partially offset by a lower cost of funds.  Our net interest margin for the second quarter of 2020 excluding the impact of SBA PPP loans was 3.46%.  We discuss the effect of the pandemic related stimulus programs on our balance sheet in more detail below under Discussion of Financial Condition.

Provision for Credit Loss

The provision for credit losses for the second quarter of 2020 was $2.0 million compared to $5.0 million for the first quarter of 2020 and $0.6 million for the second quarter of 2019.  For the first six months of 2020, the provision was $7.0 million compared to $1.4 million in 2019.  The higher provision in 2020 reflected expected losses due to deterioration in economic conditions related to COVID-19.  We discuss this exposure further below.

Noninterest Income and Noninterest Expense

CCHL’s mortgage banking operations impacted our noninterest income and noninterest expense for the three and six month periods ended June 30, 2020, and thus, the period over period comparisons reflect the impact of the CCHL consolidation, which occurred late in the first quarter 2020.  The table below provides an overview of CCHL’s impact on our noninterest income and noninterest expense for 2020.

Noninterest income for the second quarter of 2020 totaled $30.2 million compared to $15.5 million for the first quarter of 2020 and $12.8 million for the second quarter of 2019.  The increase over both periods was driven by higher mortgage banking fees and other income (loan origination fees) at CCHL, partially offset by lower deposit fees (overdraft fees).  Deposit fees decreased $1.3 million, or 25.1% compared to the first quarter of 2020 and reflected slower consumer spending and the impact of stimulus payments in the second quarter related to the COVID-19 pandemic.

Noninterest expense for the second quarter of 2020 totaled $37.3 million compared to $31.0 million for the first quarter of 2020 and $28.4 million for the second quarter of 2019.  The increase over the first quarter of 2020 was attributable to higher compensation expense of $4.2 million, occupancy expense of $0.8 million, and other real estate (“ORE”) expense of $1.1 million.  The increase in compensation and occupancy expense was primarily due to the integration of CCHL late in the first quarter of 2020.  We also realized approximately $0.8 million in expenses in the second quarter related to SBA PPP loan origination activities and pandemic related costs.  Approximately $0.3 million were one-time SBA PPP expenses and the remainder are pandemic related and will phase out over time.  The increase in ORE expense reflected a $1.0 million gain on the sale of a banking office in the first quarter of 2020.  For the first six months of 2020, noninterest expense totaled $68.3 million compared to $56.6 million for the same period of 2019 with the increase driven primarily by the same aforementioned factors. 

Overall, CCHL contributed significantly to the improvement in our efficiency ratio for the second quarter of 2020.

                     
  Three Months Ended Six Months Ended
  Jun 30, 2020 Mar 31, 2020 Jun 30, 2019 Jun 30, 2020 Jun 30, 2019
(Dollars in thousands) Core CCBG CCHL Core CCBG CCHL Core CCBG CCHL Core CCBG CCHL Core CCBG CCHL
Deposit Fees$3,756 -$5,015$-$4,756$-$8,771$-$9,531$-
Bank Card Fees 3,142 - 3,051 - 3,036 - 6,193 - 5,891 -
Wealth Management Fees 2,554 - 2,604 - 2,404 - 5,158 - 4,727 -
Mortgage Banking Fees 241 17,573 1,138 1,892 1,199 - 1,379 19,465 2,192 -
Other 1,147 1,786 1,459 319 1,375 - 2,606 2,105 2,981 -
Total Noninterest Income$10,840$19,359$13,267$2,211$12,770$-$24,107$21,570$25,322$-
                     
Salaries$11,596$8,381$13,488$2,242$12,496$-$25,085$10,623$24,781$-
Other Associate Benefits 3,477 204 3,957 49 3,941 - 7,433 253 8,005 -
Total Compensation 15,073 8,585 17,445 2,291 16,437 - 32,518 10,876 32,786 -
                     
Occupancy, Net 5,030 768 4,748 231 4,537 - 9,778 999 9,046 -
Other 6,599 1,248 5,797 457 7,422 - 12,396 1,705 14,762 -
Total Noninterest Expense$26,702$10,601$27,990$2,979$28,396$-$54,692$13,580$56,594$-
                     

Income Taxes

We realized income tax expense of $2.9 million (effective rate of 18%) for the second quarter of 2020 compared to $1.3 million (effective rate of 24%) for the first quarter of 2020 and $2.4 million (effective rate of 25%) for the second quarter of 2019.  For the first six months of 2020, we realized income tax expense of $4.2 million (effective rate of 20%) compared to $4.4 million (effective rate of 24%) for the same period of 2019.  The decrease in our effective tax rate for the three and six month periods ended June 30, 2020 reflected the impact of converting CCHL to a partnership for tax purposes in the second quarter of 2020.  Absent discrete items, we expect our annual effective tax rate to approximate 19%-20%. 

Discussion of Financial Condition

Earning Assets

Average earning assets were $3.017 billion for the second quarter of 2020, an increase of $264.9 million, or 9.6% over the first quarter of 2020, and an increase of $322.1 million, or 12.0% over the fourth quarter of 2019.  The increase over both prior periods was primarily driven by higher deposit balances which funded growth in the loan portfolio and overnight funds sold.  The impact of pandemic related stimulus programs on our balance sheet in the second quarter of 2020 is discussed in further detail below.       

We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $351.5 million during the second quarter of 2020 compared to an average net overnight funds sold position of $234.4 million in the first quarter of 2020 and $228.1 million in the fourth quarter of 2019.  The increase compared to both prior periods was primarily driven by pandemic related stimulus programs (see below – Funding). 

Average loans held for investment (“HFI”) increased $135.2 million, or 7.3%, over the first quarter of 2020 and $148.9 million, or 8.1%, over the fourth quarter of 2019.  Period-end HFI loans increased $159.8, or 8.6%, over the first quarter of 2020 and $186.2 million, or 10.1%, over the fourth quarter of 2019.  Demand from the SBA PPP was strong with SBA PPP loans (reflected in commercial loans) averaging $133.8 million in the second quarter of 2020 and totaling $190 million at June 30, 2020.  In total, we funded 2,208 loans for $193 million under the SBA PPP, all from current balance sheet liquidity.  To date, our borrowers have submitted a nominal level of forgiveness applications, but these applications are expected to accelerate in the second half of the year.  We received 100% of our SBA PPP loan fees totaling approximately $6.3 million (net) late in the second quarter.  Amortized SBA PPP loan fees totaled approximately $0.4 million for the second quarter of 2020.

Allowance for Credit Losses

At June 30, 2020, the allowance for credit losses totaled $22.5 million compared to $21.1 million at March 31, 2020 and $13.9 million at December 31, 2019.  At June 30, 2020, the allowance represented 1.11% of outstanding loans held for investment (HFI) and provided coverage of 322% of nonperforming loans compared to 1.13% and 433%, respectively, at March 31, 2020 and 0.75% and 311%, respectively, at December 31, 2019.  At June 30, 2020, excluding SBA PPP loans (100% government guaranteed), the allowance represented 1.23% of loans held for investment.

The adoption of ASC 326 (“CECL”) on January 1, 2020 had an impact of $4.0 million ($3.3 million increase in the allowance for credit losses and $0.7 million increase in the allowance for unfunded loan commitments (other liability account)).  The $5.7 million build (provision of $7.0 million less net charge-offs of $1.3 million) in the allowance for credit losses for the first six months of 2020 reflected a higher forecasted rate of unemployment due to stressed economic conditions related the COVID-19 pandemic.   

Credit Quality/COVID-19 Exposure

Nonperforming assets (nonaccrual loans and OREO) totaled $8.0 million at June 30, 2020, a $1.7 million increase over March 31, 2020, and a $2.6 million increase over December 31, 2019.  Nonaccrual loans totaled $7.0 million at June 30, 2020, a $2.1 million increase over March 31, 2020 and a $2.5 million increase over December 31, 2019.  The balance of OREO totaled $1.1 million at June 30, 2020, a decrease of $0.4 million from March 31, 2020 and a $0.1 million increase over December 31, 2019.

We continue to analyze our loan portfolio for segments that have been affected by the stressed economic and business conditions caused by the pandemic.  Certain at-risk segments total 8% of our loan balances at June 30, 2020, including hotel (3%), restaurant (1%), retail and shopping centers (3%), and other (1%).  The other segment includes churches, non-profits, education, and recreational.  To assist our clients, in mid-March of 2020, we began allowing short term 60 to 90 day loan extensions for affected borrowers.  A roll-forward of loan extension activity is provided in the table below.  Approximately 83% of these loans were for commercial borrowers and 17% for consumer borrowers.

       % Loans Extended
At July 9, 2020 (Dollars in thousands) # Loans  Loan Amount # Loans $ Loans
Loans Extended 2,217  $330,406     
Loans Resuming Payments (1,708)  (234,610) 77% 71%
Loans Still on Extension 509  $95,796  23% 29%
          
Still on Extension: From First Extension 382  $60,237  17% 18%
Still on Extension: From Second Extension 127  $35,559  6% 11%
              

Funding (Deposits/Debt)

Average total deposits were $2.783 billion for the second quarter of 2020, an increase of $230.8 million, or 9.0% over the first quarter of 2020, and an increase of $258.5 million, or 10.2% over the fourth quarter of 2019.  The estimated deposit inflows, related to the two pandemic related stimulus programs, were $179 million (SBA PPP) and $64 million (Economic Impact Payment stimulus checks).  Period end deposit balances grew $409 million and $310 million over the first quarter of 2020 and fourth quarter of 2019, respectively, indicating strong growth in core deposit balances.  Given these large increases, the potential exists for our deposit levels to be volatile over the coming quarters due to the uncertain timing of the outflows of the stimulus related deposits and the economic recovery.  It is anticipated that current liquidity levels will remain robust due to our strong overnight funds sold position, in addition to cash flow generated from the investment portfolio.  We monitor deposit rates on an ongoing basis and adjust if necessary, as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings increased $39.9 million over the first quarter of 2020 and $65.0 million over the fourth quarter of 2019 as short-term borrowings (warehouse lines used to support HFS loans) were added as part of the CCHL integration. 

Capital

Shareowners’ equity was $335.1 million at June 30, 2020 compared to $328.5 million at March 31, 2020 and $327.0 million at December 31, 2019.  For the first six months of 2020, shareowners’ equity was positively impacted by net income of $13.4 million, a $3.0 million increase in the unrealized gain on investment securities, net adjustments totaling $0.7 million related to transactions under our stock compensation plans, and stock compensation accretion of $0.4 million.  Shareowners’ equity was reduced by common stock dividends of $4.7 million ($0.28 per share), a $3.1 million (net of tax) adjustment to retained earnings for the adoption of ASC 326 (“CECL”), and share repurchases of $1.6 million (76,952 shares).

At June 30, 2020, our total risk-based capital ratio was 17.81% compared to 17.19% at March 31, 2020 and 17.90% at December 31, 2019.  Our common equity tier 1 capital ratio was 14.21%, 13.55%, and 14.47%, respectively, on these dates.  Our leverage ratio was 10.24%, 10.81%, and 11.25%, respectively, on these dates.  All of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.  Further, our tangible common equity ratio was 7.21% at June 30, 2020 compared to 7.98% and 8.06% at March 31, 2020 and December 31, 2019, respectively.

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 $3.5 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 57 banking offices and 85 ATMs/ITMs 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 our future results to differ materially.  The following factors, among others, could cause our actual results to differ: the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; 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; 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 our ability to manage the risks involved in the foregoing.  Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our 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 we assume 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 reconciliations are provided below.

(Dollars in Thousands, except per share data)Jun 30, 2020Mar 31, 2020Dec 31, 2019Sep 30, 2019Jun 30, 2019
Shareowners' Equity (GAAP) $335,057 $328,507 $327,016 $321,562 $314,595 
Less: Goodwill (GAAP)  89,095  89,275  84,811  84,811  84,811 
Tangible Shareowners' Equity (non-GAAP)A 245,962  239,232  242,205  236,751  229,784 
Total Assets (GAAP)  3,499,524  3,086,523  3,088,953  2,934,513  3,017,654 
Less: Goodwill (GAAP)  89,095  89,275  84,811  84,811  84,811 
Tangible Assets (non-GAAP)B$3,410,429 $2,997,248 $3,004,142 $2,849,702 $2,932,843 
Tangible Common Equity Ratio (non-GAAP)A/B 7.21% 7.98% 8.06% 8.31% 7.83%
Actual Diluted Shares Outstanding (GAAP)C 16,821,743  16,845,462  16,855,161  16,797,241  16,773,449 
Tangible Book Value per Diluted Share (non-GAAP)A/C$14.62 $14.20 $14.37 $14.09 $13.70 
                 


CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
           
 Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2020 Mar 31, 2020 Jun 30, 2019 Jun 30, 2020 Jun 30, 2019
EARNINGS          
Net Income Attributable to Common Shareowners$9,146 $4,287 $7,325 $13,433 $13,761 
Diluted Net Income Per Share$0.55 $0.25 $0.44 $0.80 $0.82 
PERFORMANCE          
Return on Average Assets 1.10% 0.57% 0.98% 0.85% 0.92%
Return on Average Equity 11.03% 5.20% 9.37% 8.12% 8.94%
Net Interest Margin 3.41% 3.78% 3.85% 3.59% 3.80%
Noninterest Income as % of Operating Revenue 54.26% 37.52% 32.95% 47.13% 33.23%
Efficiency Ratio 66.90% 74.89% 73.02% 70.30% 74.00%
CAPITAL ADEQUACY          
Tier 1 Capital 16.79% 16.12% 16.36% 16.79% 16.36%
Total Capital 17.81% 17.19% 17.13% 17.81% 17.13%
Leverage 10.24% 10.81% 10.64% 10.24% 10.64%
Common Equity Tier 1 14.21% 13.55% 13.67% 14.21% 13.67%
Tangible Common Equity (1) 7.21% 7.98% 7.83% 7.21% 7.83%
Equity to Assets 9.57% 10.64% 10.43% 9.57% 10.43%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 322.37% 432.61% 259.55% 322.37% 259.55%
Allowance as a % of Loans 1.11% 1.13% 0.79% 1.11% 0.79%
Net Charge-Offs as % of Average Loans 0.05% 0.23% 0.04% 0.14% 0.12%
Nonperforming Assets as % of Loans and OREO 0.40% 0.34% 0.36% 0.40% 0.36%
Nonperforming Assets as % of Total Assets 0.23% 0.21% 0.22% 0.23% 0.22%
STOCK PERFORMANCE          
High$23.99 $30.62 $25.00 $30.62 $25.87 
Low 16.16  15.61  21.57  15.61  21.04 
Close$20.95 $20.12 $24.85 $20.95 $24.85 
Average Daily Trading Volume 49,569  40,536  24,258  45,089  21,380 
           
(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 5.
           


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION   
Unaudited     
           
 2020 2019
(Dollars in thousands)Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ASSETS          
Cash and Due From Banks$75,155 $72,676 $60,087 $61,151 $53,731 
Funds Sold and Interest Bearing Deposits 513,273  196,936  318,336  177,389  234,097 
Total Cash and Cash Equivalents 588,428  269,612  378,423  238,540  287,828 
           
Investment Securities Available for Sale 341,180  382,514  403,601  376,981  410,851 
Investment Securities Held to Maturity 232,178  251,792  239,539  240,303  229,516 
Total Investment Securities 573,358  634,306  643,140  617,284  640,367 
           
Loans Held for Sale ("HFS") 76,610  82,598  9,509  13,075  9,885 
           
Loans Held for Investment ("HFI")          
Commercial, Financial, & Agricultural 421,270  249,020  255,365  259,870  265,001 
Real Estate - Construction 117,794  122,595  115,018  111,358  101,372 
Real Estate - Commercial 662,434  656,084  625,556  610,726  614,618 
Real Estate - Residential 353,831  354,150  353,642  354,545  349,843 
Real Estate - Home Equity 194,479  196,443  197,360  197,326  201,579 
Consumer 266,417  275,982  279,565  277,970  288,196 
Other Loans 4,883  6,580  7,808  14,248  13,131 
Overdrafts 1,069  1,533  1,615  1,710  1,442 
Total Loans Held for Investment 2,022,177  1,862,387  1,835,929  1,827,753  1,835,182 
Allowance for Loan Losses (22,457) (21,083) (13,905) (14,319) (14,593)
Loans Held for Investment, Net 1,999,720  1,841,304  1,822,024  1,813,434  1,820,589 
           
Premises and Equipment, Net 87,972  87,684  84,543  85,810  86,005 
Goodwill 89,095  89,275  84,811  84,811  84,811 
Other Real Estate Owned 1,059  1,463  953  526  1,010 
Other Assets 83,282  80,281  65,550  81,033  87,159 
Total Other Assets 261,408  258,703  235,857  252,180  258,985 
Total Assets$3,499,524 $3,086,523 $3,088,953 $2,934,513 $3,017,654 
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits$1,377,033 $1,066,607 $1,044,699 $1,022,774 $1,024,898 
NOW Accounts 808,244  779,467  902,499  728,395  810,568 
Money Market Accounts 240,754  210,124  217,839  239,410  240,181 
Regular Savings Accounts 423,924  384,480  374,396  372,601  371,773 
Certificates of Deposit 105,041  104,907  106,021  109,827  113,684 
Total Deposits 2,954,996  2,545,585  2,645,454  2,473,007  2,561,104 
           
Short-Term Borrowings 63,958  76,516  6,404  10,622  9,753 
Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
Other Long-Term Borrowings 5,583  5,896  6,514  6,963  7,313 
Other Liabilities 75,702  70,044  50,678  69,472  72,002 
Total Liabilities 3,153,126  2,750,928  2,761,937  2,612,951  2,703,059 
           
Temporary Equity 11,341  7,088  -  -  - 
           
SHAREOWNERS' EQUITY          
Common Stock 168  168  168  167  167 
Additional Paid-In Capital 31,575  32,100  32,092  31,075  30,751 
Retained Earnings 328,570  321,772  322,937  316,551  310,247 
Accumulated Other Comprehensive Loss, Net of Tax (25,256) (25,533) (28,181) (26,231) (26,570)
Total Shareowners' Equity 335,057  328,507  327,016  321,562  314,595 
Total Liabilities, Temporary Equity and Shareowners' Equity$3,499,524 $3,086,523 $3,088,953 $2,934,513 $3,017,654 
           
OTHER BALANCE SHEET DATA          
Earning Assets$3,185,418 $2,776,228 $2,806,913 $2,635,501 $2,719,530 
Interest Bearing Liabilities 1,700,391  1,614,277  1,666,560  1,520,705  1,606,159 
Book Value Per Diluted Share$19.92 $19.50 $19.40 $19.14 $18.76 
Tangible Book Value Per Diluted Share(1) 14.62  14.20  14.37  14.09  13.70 
Actual Basic Shares Outstanding 16,780  16,812  16,772  16,749  16,746 
Actual Diluted Shares Outstanding 16,822  16,845  16,855  16,797  16,773 
 
(1)  Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 5.
 


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS   
Unaudited     
               
            Six Months Ended
 2020 2019 Jun 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2020 2019
               
INTEREST INCOME              
Interest and Fees on Loans$23,687 $23,593 $23,842 $23,992$23,765$47,280 $46,381
Investment Securities 2,737  3,015  3,221  3,307 3,393 5,752  6,906
Funds Sold 88  757  945  1,142 1,507 845  3,100
Total Interest Income 26,512  27,365  28,008  28,441 28,665 53,877  56,387
               
INTEREST EXPENSE              
Deposits 218  939  1,157  1,596 1,988 1,157  4,087
Short-Term Borrowings 421  132  16  27 31 553  66
Subordinated Notes Payable 374  471  525  558 596 845  1,204
Other Long-Term Borrowings 41  50  56  63 66 91  138
Total Interest Expense 1,054  1,592  1,754  2,244 2,681 2,646  5,495
Net Interest Income 25,458  25,773  26,254  26,197 25,984 51,231  50,892
Provision for Credit Losses 2,005  4,990  (162) 776 646 6,995  1,413
Net Interest Income after Provision for
  Loan Losses
 23,453  20,783  26,416  25,421 25,338 44,236  49,479
               
NONINTEREST INCOME              
Deposit Fees 3,756  5,015  4,980  4,961 4,756 8,771  9,531
Bank Card Fees 3,142  3,051  3,131  2,972 3,036 6,193  5,891
Wealth Management Fees 2,554  2,604  2,761  2,992 2,404 5,158  4,727
Mortgage Banking Fees 17,814  3,030  1,542  1,587 1,199 20,844  2,192
Other 2,933  1,778  1,414  1,391 1,375 4,711  2,981
Total Noninterest Income 30,199  15,478  13,828  13,903 12,770 45,677  25,322
               
NONINTEREST EXPENSE              
Compensation 23,658  19,736  17,363  16,203 16,437 43,394  32,786
Occupancy, Net 5,798  4,979  4,680  4,710 4,537 10,777  9,046
Other Real Estate, Net 116  (798) 102  6 75 (682) 438
Other 7,731  7,052  6,997  6,954 7,347 14,783  14,324
Total Noninterest Expense 37,303  30,969  29,142  27,873 28,396 68,272  56,594
               
OPERATING PROFIT 16,349  5,292  11,102  11,451 9,712 21,641  18,207
Income Tax Expense 2,950  1,282  2,537  2,970 2,387 4,232  4,446
Net Income 13,399  4,010  8,565  8,481 7,325 17,409  13,761
(Gain) Loss Attributable to Noncontrolling Interest (4,253) 277  -  - - (3,976) -
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$9,146 $4,287 $8,565 $8,481$7,325$13,433 $13,761
               
PER COMMON SHARE              
Basic Net Income$0.55 $0.25 $0.51 $0.51$0.44$0.80 $0.82
Diluted Net Income 0.55  0.25  0.51  0.50 0.44 0.80  0.82
Cash Dividend$0.14 $0.14 $0.13 $0.13$0.11$0.28 $0.22
AVERAGE SHARES              
Basic 16,797  16,808  16,750  16,747 16,791 16,803  16,791
Diluted 16,839  16,842  16,834  16,795 16,818 16,844  16,820
                   


CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES
AND RISK ELEMENT ASSETS
Unaudited
                
            Six Months Ended
  2020 2019  Jun 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter  2020  2019 
                
ALLOWANCE FOR CREDIT LOSSES               
Balance at Beginning of Period$21,083 $13,905 $14,319 $14,593 $14,120  $13,905 $14,210 
Impact of Adopting ASC 326 (CECL) -  3,269  -  -  -   3,269  - 
Provision for Credit Losses - HFI 1,615  4,990  (162) 776  646   6,605  1,413 
Net Charge-Offs 241  1,081  252  1,050  173   1,322  1,030 
Balance at End of Period(2)$22,457 $21,083 $13,905 $14,319 $14,593  $22,457 $15,623 
As a % of Loans 1.11% 1.13% 0.75% 0.78% 0.79%  1.11% 0.79%
As a % of Nonperforming Loans 322.37% 432.61% 310.99% 290.55% 259.55%  322.37% 259.55%
                
CHARGE-OFFS               
Commercial, Financial and Agricultural$186 $362 $149 $289 $235  $548 $330 
Real Estate - Construction -  -  58  223  -   -  - 
Real Estate - Commercial -  11  33  26  -   11  155 
Real Estate - Residential 1  110  27  44  65   111  329 
Real Estate - Home Equity 52  31  0  333  45   83  97 
Consumer 634  864  819  744  520   1,498  1,315 
Overdrafts(3) 541  702  -  -  -   1,243  - 
Total Charge-Offs$1,414 $2,080 $1,086 $1,659 $865  $3,494 $2,226 
                
RECOVERIES               
Commercial, Financial and Agricultural$74 $40 $127 $86 $58  $114 $132 
Real Estate - Construction -  -  -  -  -   -  - 
Real Estate - Commercial 70  191  266  142  100   261  170 
Real Estate - Residential 51  40  116  46  223   91  267 
Real Estate - Home Equity 64  33  25  58  60   97  92 
Consumer 365  268  300  277  251   633  535 
Overdrafts(3) 549  427  -  -  -   976  - 
Total Recoveries$1,173 $999 $834 $609 $692  $2,172 $1,196 
                
NET CHARGE-OFFS$241 $1,081 $252 $1,050 $173  $1,322 $1,030 
                
Net Charge-Offs as a % of Average Loans(1) 0.05% 0.23% 0.05% 0.23% 0.04%  0.14% 0.12%
                
RISK ELEMENT ASSETS               
Nonaccruing Loans$6,966 $4,874 $4,472 $4,928 $5,622      
Other Real Estate Owned 1,059  1,463  953  526  1,010      
Total Nonperforming Assets ("NPAs")$8,025 $6,337 $5,425 $5,454 $6,632      
                
Past Due Loans 30-89 Days$2,948 $5,077 $4,871 $5,120 $5,443      
Past Due Loans 90 Days or More -  -  -  -  -      
Classified Loans 17,091  16,548  20,847  21,323  26,406      
Performing Troubled Debt Restructuring's$15,133 $15,934 $16,888 $18,284 $18,737      
                
Nonperforming Loans as a % of Loans 0.34% 0.26% 0.24% 0.27% 0.30%     
NPAs as a % of Loans and Other Real Estate 0.40% 0.34% 0.29% 0.30% 0.36%     
NPAs as a % of  Total Assets 0.23% 0.21% 0.18% 0.19% 0.22%     
                
(1) Annualized               
(2) Does not include $1.4 million for unfunded commitments recorded in other liabilities       
(3) Prior to the first quarter 2020, overdraft losses were reflected in noninterest income (deposit fees)     


CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)      
Unaudited       
 
  Second Quarter 2020  First Quarter 2020  Fourth Quarter 2019  Third Quarter 2019  Second Quarter 2019  Jun 2020 YTD  Jun 2019 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 HFI and HFS$2,057,925$23,785 4.65% $1,882,703 $23,692 5.06% $1,846,190 $23,958 5.15% $1,837,548  24,113 5.21% $1,823,311 $23,873 5.25% $1,970,551 $47,477 4.85% $1,801,977 $46,591 5.21%
                                                 
Investment Securities                                                
Taxable Investment Securities 601,509 2,708 1.80  629,512  2,995 1.91  610,046  3,186 2.08  607,363  3,249 2.13  614,775  3,301 2.15  615,511  5,703 1.86  616,442  6,688 2.18
Tax-Exempt Investment Securities 5,865 37 2.51  5,293  25 1.86  10,327  43 1.67  18,041  73 1.63  29,342  116 1.58  5,579  62 2.20  34,928  274 1.57
                                                 
Total Investment Securities 607,374 2,745 1.81  634,805  3,020 1.91  620,373  3,229 2.08  625,404  3,322 2.12  644,117  3,417 2.12  621,090  5,765 1.86  651,370  6,962 2.14
                                                 
Funds Sold 351,473 88 0.10  234,372  757 1.30  228,137  945 1.64  207,129  1,142 2.19  251,789  1,507 2.40  292,922  845 0.58  258,703  3,100 2.42
                                                 
Total Earning Assets 3,016,772$26,618 3.55%  2,751,880 $27,469 4.01%  2,694,700 $28,132 4.14%  2,670,081 $28,577 4.25%  2,719,217 $28,797 4.25%  2,884,563 $54,087 3.77%  2,712,050 $56,653 4.21%
                                                 
Cash and Due From Banks 72,647      56,958       53,174       50,981       51,832       64,802       52,834     
Allowance for Loan Losses (21,642)      (14,389)       (14,759)       (14,863)       (14,513)       (18,015)       (14,431)     
Other Assets 261,449      244,339       249,089       253,111       254,126       252,657       253,173     
                                                 
Total Assets$3,329,226     $3,038,788      $2,982,204      $2,959,310      $3,010,662      $3,184,007      $3,003,626     
                                                       
                                                 
LIABILITIES:                                                
Interest Bearing Deposits                                                
NOW Accounts$789,378$78 0.04% $808,811 $725 0.36% $755,625 $889 0.47% $749,678 $1,235 0.65% $832,982 $1,623 0.78% $799,094 $803 0.20% $858,488 $3,378 0.79%
Money Market Accounts 222,377 40 0.07  212,211  117 0.22  227,479  170 0.30  238,565  264 0.44  237,921  265 0.45  217,295  157 0.15  238,714  512 0.43
Savings Accounts 409,366 50 0.05  379,237  46 0.05  372,518  46 0.05  372,593  46 0.05  371,716  46 0.05  394,301  96 0.05  368,268  90 0.05
Time Deposits 104,718 50 0.19  105,542  51 0.19  108,407  52 0.19  111,447  51 0.18  115,442  54 0.19  105,130  101 0.19  117,131  107 0.18
Total Interest Bearing Deposits 1,525,839 218 0.06%  1,505,801  939 0.25%  1,464,029  1,157 0.31%  1,472,283  1,596 0.43%  1,558,061  1,988 0.51%  1,515,820  1,157 0.15%  1,582,601  4,087 0.52%
                                                 
Short-Term Borrowings 73,377 421 2.31%  32,915  132 1.61%  7,448  16 0.87%  8,697  27 1.24%  9,625  31 1.30%  53,146  553 2.09%  10,497  66 1.28%
Subordinated Notes Payable 52,887 374 2.80  52,887  471 3.52  52,887  525 3.88  52,887  558 4.13  52,887  596 4.46  52,887  845 3.16  52,887  1,204 4.53
Other Long-Term Borrowings 5,766 41 2.84  6,312  50 3.21  6,723  56 3.33  7,158  63 3.47  7,509  66 3.53  6,039  91 3.03  7,853  138 3.54
                                                 
Total Interest Bearing Liabilities 1,657,869$1,054 0.26%  1,597,915 $1,592 0.40%  1,531,087 $1,754 0.45%  1,541,025 $2,244 0.58%  1,628,082 $2,681 0.66%  1,627,892 $2,646 0.33%  1,653,838 $5,495 0.67%
                                                 
Noninterest Bearing Deposits 1,257,614      1,046,889       1,060,922       1,023,472       1,007,370       1,152,251       982,473     
Other Liabilities 72,073      59,587       63,291       74,540       61,611       65,830       56,867     
                                                 
Total Liabilities 2,987,556      2,704,391       2,655,300       2,639,037       2,697,063       2,845,973       2,693,178     
Temporary Equity 8,155      2,506.00       -       -       -       5,331       -     
                                                 
SHAREOWNERS' EQUITY: 333,515      331,891       326,904       320,273       313,599       332,703       310,448     
                                                 
Total Liabilities, Temporary Equity and Shareowners' Equity$3,329,226     $3,038,788      $2,982,204      $2,959,310      $3,010,662      $3,184,007      $3,003,626     
                                                       
                                                 
Interest Rate Spread  $25,564 3.30%   $25,877 3.61%   $26,378 3.69%   $26,333 3.67%   $26,116 3.59%   $51,441 3.44%   $51,158 3.54%
                                                 
Interest Income and Rate Earned(1)   26,618 3.55    27,469 4.01    28,132 4.14    28,577 4.25    28,797 4.25    54,087 3.77    56,653 4.21
Interest Expense and Rate Paid(2)   1,054 0.14    1,592 0.23    1,754 0.26    2,244 0.33    2,681 0.40    2,646 0.18    5,495 0.41
                                                 
Net Interest Margin  $25,564 3.41%   $25,877 3.78%   $26,378 3.89%   $26,333 3.92%   $26,116 3.85%   $51,441 3.59%   $51,158 3.80%
                                                 
(1)  Interest and average rates are calculated on a tax-equivalent basis using a 21% 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

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