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CST: 24/08/2019 08:14:32   

Capital City Bank Group, Inc. Reports Second Quarter 2019 Results

32 Days ago

TALLAHASSEE, Fla., July 23, 2019 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $7.3 million, or $0.44 per diluted share, for the second quarter of 2019 compared to net income of $6.4 million, or $0.38 per diluted share, for the first quarter of 2019, and $6.0 million, or $0.35 per diluted share, for the second quarter of 2018.  For the first six months of 2019, net income totaled $13.8 million, or $0.82 per diluted share, compared to net income of $11.8 million, or $0.69 per diluted share, for the same period of 2018.

Net income for the first six months of 2018 included tax benefits totaling $2.9 million, or $0.17 per diluted share (1Q - $1.5 million, or $0.09 per diluted share and 2Q - $1.4 million, or $0.08 per diluted share) related to 2017 plan year pension plan contributions made in 2018.

HIGHLIGHTS

  • Net interest income up 4.3% sequentially and 14.3% over prior year
  • Net interest margin of 3.85%, up 10 basis points over prior quarter
  • Average loan growth of $43 million, or 2.4% over prior quarter
  • Strong year over year growth in average deposit balances of $121 million, or 5.0%
  • Year-to-date net charge-offs at 12 basis points continues to reflect the quality of our loan portfolio
  • Repurchased 77,000 shares of our stock in the second quarter of 2019
  • Tangible equity ratio up 27 basis points sequentially to 7.83%

“I am very encouraged by our results in the first half and particularly pleased with the loan growth and margin expansion achieved in the second quarter,” said William G. Smith, Jr., Chairman, President and CEO. “Higher earning asset yields, loan growth and a phenomenal core deposit base are all contributing to higher net interest income. Credit quality continues to improve, and the strength of our Florida and Georgia economies is driving continued improvement in our market demographics. Lowering our efficiency ratio is a top priority, and we have multiple strategies in place to grow revenues and manage expenses. There is more to be done, but I am pleased with our progress as we remain focused on strategies that produce long-term value for our shareowners.”

Compared to the first quarter of 2019, the $1.2 million increase in operating profit reflected a $1.1 million increase in net interest income, higher noninterest income of $0.2 million, and a $0.1 million decrease in the loan loss provision, partially offset by higher noninterest expense of $0.2 million.

Compared to the second quarter of 2018, the $3.6 million increase in operating profit was attributable to higher net interest income of $3.2 million, higher noninterest income of $0.2 million, and a $0.2 million decrease in the loan loss provision.

The increase in operating profit for the first six months of 2019 versus the comparable period of 2018 was attributable to higher net interest income of $6.4 million, higher noninterest income of $0.3 million, and a $0.1 million decrease in the loan loss provision, partially offset by higher noninterest expense of $0.3 million.

Our return on average assets (“ROA”) was 0.98% and our return on average equity (“ROE”) was 9.37% for the second quarter of 2019.  These metrics were 0.87% and 8.49% for the first quarter of 2019, respectively, and 0.84% and 8.25% for the second quarter of 2018, respectively.  For the first six months of 2019, our ROA was 0.92% and our ROE was 8.94% compared to 0.83% and 8.20%, respectively, for the same period of 2018.

Discussion of Operating Results

Tax-equivalent net interest income for the second quarter of 2019 was $26.1 million compared to $25.0 million for the first quarter of 2019 and $22.9 million for the second quarter of 2018.  For the first six months of 2019, tax-equivalent net interest income totaled $51.2 million compared to $44.9 million for the comparable period of 2018.  The increase in tax-equivalent net interest income compared to the prior quarter reflected loan growth, higher interest rates, and one additional calendar day. The year-over-year comparisons for both the second quarter and year-to-date periods were primarily driven by significant growth in our earning assets, as higher balances of noninterest bearing deposits funded loan growth.

The federal funds target rate has increased nine times since December 2015 to 2.50% by the end of December 2018. The above comparisons reflected favorable repricing of our variable and adjustable rate earning assets as a result of these rate increases.  Our overall cost of funds was 40 basis points for the second quarter of 2019, a two basis point reduction compared to the prior quarter.  The reduction in cost of funds reflected the favorable shift in our deposit mix.  Due to highly competitive fixed-rate loan pricing across most markets, we have continued to review our loan pricing and make adjustments where appropriate and prudent.   

Our net interest margin for the second quarter of 2019 was 3.85%, an increase of 10 basis points compared to the first quarter of 2019 and an increase of 27 basis points over the second quarter of 2018.  For the first six months of 2019, the net interest margin increased 29 basis points to 3.80% compared to the same period of 2018. The increase in the margin as compared to all respective prior periods reflected rising interest rates and a favorable shift in our earning asset mix, which produced higher net interest income in each period. 

The provision for loan losses for the second quarter of 2019 was $0.6 million compared to $0.8 million for the first quarter of 2019 and $0.8 million for the second quarter of 2018.  For the first six months of 2019, the loan loss provision was $1.4 million compared to $1.6 million in 2018.  At June 30, 2019, the allowance for loan losses of $14.6 million represented 0.79% of outstanding loans (net of overdrafts) and provided coverage of 260% of nonperforming loans compared to 0.78% and 280%, respectively, at March 31, 2019 and 0.80% and 207%, respectively, at December 31, 2018.

Noninterest income for the second quarter of 2019 totaled $12.8 million, an increase of $0.2 million, or 1.7%, over the first quarter of 2019 and a $0.2 million, or 1.8%, increase over the second quarter of 2018.  For the first six months of 2019, noninterest income totaled $25.3 million, a $0.3 million, or 1.2%, increase over the same period of 2018.  Higher mortgage banking fees and bank card fees drove the increase compared to the first quarter of 2019.  Higher wealth management fees drove the increase compared to both prior year periods and reflected higher assets under management.        

Noninterest expense for the second quarter of 2019 totaled $28.4 million, an increase of $0.2 million, or 0.7%, over the first quarter of 2019 and comparable to the second quarter of 2018.  For the first six months of 2019, noninterest expense totaled $56.6 million, a $0.3 million, or 0.5% increase over the same period of 2018.  The slight increase over the first quarter of 2019 reflected higher compensation expense, primarily mid-year merit raises and commissions.  The increase for the six month period reflected higher compensation expense of $1.1 million that was partially offset by lower other real estate expense of $0.4 million and other expense of $0.4 million.  Higher base salary expense (primarily merit raises) and commissions drove the increase in compensation expense.  Lower valuation adjustments drove the reduction in other real estate expense.  The decrease in other expense primarily reflected lower professional fees.        

We realized income tax expense of $4.4 million (effective rate of 25%) for the first six months of 2019 compared to an income tax benefit of $0.1 million for the same period of 2018.  During 2018, we realized tax benefits totaling $2.9 million (1Q - $1.5 million and 2Q - $1.4 million) resulting from the effect of federal tax reform on pension plan contributions made in 2018 for the plan year 2017.     

Discussion of Financial Condition

Average earning assets were $2.719 billion for the second quarter of 2019, an increase of $14.4 million, or 0.5%, over the first quarter of 2019, and an increase of $164.7 million, or 6.4%, over the fourth quarter of 2018.  The change in average earning assets compared to the first quarter 2019 was primarily attributable to loan growth funded by noninterest bearing deposits, partially offset by a decline in our seasonal public fund balances.  The change in average earning assets over the fourth quarter 2018 was attributable to growth in our overnight funds position and loan portfolio, primarily funded by increases in our noninterest bearing and public fund deposits. 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $251.8 million for the second quarter of 2019 compared to an average net overnight funds sold position of $265.7 million for the first quarter of 2019 and $80.8 million for the fourth quarter of 2018.  The decrease in average net overnight funds compared to the prior quarter reflected loan growth, partially offset by runoff from the investment portfolio. The increase in average overnight funds compared to the fourth quarter of 2018 reflected growth in all deposit products except money market accounts and certificates of deposit, and a reduction in the investment portfolio, partially offset by loan growth.

Average loans increased $42.9 million, or 2.4% compared to the first quarter of 2019, and have grown $37.7 million, or 2.1% compared to the fourth quarter of 2018.  Growth over both prior periods occurred in all loan types except institutional, home equity, and consumer loans.  During the second quarter of 2019, we purchased pools of adjustable rate residential loans totaling $3.9 million.  In the first quarter 2019, we purchased a $10.3 million pool of fixed and adjustable rate commercial real estate loans and a $4.4 million pool of adjustable rate residential loans.

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 loan growth.

Nonperforming assets (nonaccrual loans and OREO) totaled $6.6 million at June 30, 2019, a decrease of $0.3 million, or 4.6%, from March 31, 2019 and $2.5 million, or 27.1%, from December 31, 2018.  Nonaccrual loans totaled $5.6 million at June 30, 2019, a $0.6 million increase over March 31, 2019 and a $1.2 million decrease from December 31, 2018.  The balance of OREO totaled $1.0 million at June 30, 2019, a decrease of $0.9 million and $1.2 million, respectively, from March 31, 2019 and December 31, 2018.  

Average total deposits were $2.565 billion for the second quarter of 2019, an increase of $0.7 million over the first quarter of 2019, and an increase of $153.1 million, or 6.3% over the fourth quarter of 2018.  The increase in deposits compared to the first quarter of 2019 reflected higher noninterest bearing and savings accounts, partially offset by lower public fund NOW accounts, money market accounts, and certificates of deposit balances. The increase in deposits when compared to the fourth quarter of 2018 reflected growth in all deposit products except money market accounts and certificates of deposit.  Public fund accounts typically peak in the first quarter and trend lower through the fourth quarter due to the cycle of tax receipts.  Deposit levels remain strong, and average core deposits continue to experience growth.  We monitor deposit rates on an ongoing basis as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings decreased $2.4 million in the second quarter 2019 compared to the prior quarter, and declined $8.2 million compared to the fourth quarter of 2018. Decreases occurred in both short-term and long-term borrowings as we reduced our repurchase agreements and a portion of our match funded advances from the Federal Home Loan Bank.  

Shareowners’ equity was $314.6 million at June 30, 2019, compared to $309.0 million at March 31, 2019 and $302.6 million at December 31, 2018.  Our leverage ratio was 10.64%, 10.53%, and 10.89%, respectively, on these dates.  Further, at June 30, 2019, our total risk-based capital ratio was 17.13% compared to 17.09% and 17.13% at March 31, 2019 and December 31, 2018, respectively.  Our common equity tier 1 capital ratio was 13.67% at June 30, 2019, compared to 13.62% at March 31, 2019 and 13.58% at December 31, 2018.  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 $3.0 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 81 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 our future results to differ materially.  The following factors, among others, could cause our actual results to differ: the accuracy of the our 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 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; 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 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, 2018, 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 tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity.  We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.  The GAAP to non-GAAP reconciliation is provided below.

(Dollars in Thousands)   Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018
Shareowners' Equity (GAAP)   $ 314,595   $ 308,986   $ 302,587   $ 298,016   $ 293,571  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Shareowners' Equity (non-GAAP) A   229,784     224,175     217,776     213,205     208,760  
Total Assets (GAAP)     3,017,654     3,052,051     2,959,183     2,819,190     2,880,278  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Assets (non-GAAP) B $ 2,932,843   $ 2,967,240   $ 2,874,372   $ 2,734,379   $ 2,795,467  
Tangible Common Equity Ratio (non-GAAP) A/B   7.83 %   7.56 %   7.58 %   7.80 %   7.47 %
Actual Diluted Shares Outstanding (GAAP) C   16,773,449     16,840,496     16,808,542     17,127,846     17,114,380  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 13.70   $ 13.31   $ 12.96   $ 12.45   $ 12.20  
                       


CAPITAL CITY BANK GROUP, INC.                    
EARNINGS HIGHLIGHTS                    
Unaudited                    
                     
    Three Months Ended   Six Months Ended
(Dollars in thousands, except per share data)   Jun 30, 2019   Mar 31, 2019   Jun 30, 2018   Jun 30, 2019   Jun 30, 2018
                     
EARNINGS                    
Net Income $ 7,325   $ 6,436   $ 6,003   $ 13,761   $ 11,776  
Net Income Per Common Share $ 0.44   $ 0.38   $ 0.35   $ 0.82   $ 0.69  
PERFORMANCE                    
Return on Average Assets   0.98 %   0.87 %   0.84 %   0.92 %   0.83 %
Return on Average Equity   9.37 %   8.49 %   8.25 %   8.94 %   8.20 %
Net Interest Margin   3.85 %   3.75 %   3.58 %   3.80 %   3.51 %
Noninterest Income as % of Operating Revenue   32.95 %   33.51 %   35.52 %   33.23 %   35.97 %
Efficiency Ratio   73.02 %   75.01 %   80.07 %   74.00 %   80.57 %
CAPITAL ADEQUACY                    
Tier 1 Capital Ratio   16.36 %   16.34 %   16.25 %   16.36 %   16.25 %
Total Capital Ratio   17.13 %   17.09 %   17.00 %   17.13 %   17.00 %
Leverage Ratio   10.64 %   10.53 %   10.69 %   10.64 %   10.69 %
Common Equity Tier 1 Ratio   13.67 %   13.62 %   13.46 %   13.67 %   13.46 %
Tangible Common Equity Ratio(1)   7.83 %   7.56 %   7.47 %   7.83 %   7.47 %
Equity to Assets   10.43 %   10.12 %   10.19 %   10.43 %   10.19 %
ASSET QUALITY                    
Allowance as % of Non-Performing Loans   259.55 %   279.77 %   236.25 %   259.55 %   236.25 %
Allowance as a % of Loans   0.79 %   0.78 %   0.78 %   0.79 %   0.78 %
Net Charge-Offs as % of Average Loans   0.04 %   0.20 %   0.12 %   0.12 %   0.16 %
Nonperforming Assets as % of Loans and ORE   0.36 %   0.39 %   0.52 %   0.36 %   0.52 %
Nonperforming Assets as % of Total Assets   0.22 %   0.23 %   0.32 %   0.22 %   0.32 %
STOCK PERFORMANCE                    
High $ 25.00   $ 25.87   $ 25.99   $ 25.87   $ 26.50  
Low   21.57     21.04     22.28     21.04     22.28  
Close $ 24.85   $ 21.78   $ 23.63   $ 24.85   $ 23.63  
Average Daily Trading Volume   24,258     18,407     25,246     21,380     23,204  
                     
(1) Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 4.
                     


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
    2019   2018
(Dollars in thousands)   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   Second Quarter
ASSETS                    
Cash and Due From Banks $ 53,731   $ 49,501   $ 62,032   $ 48,423   $ 56,573  
Funds Sold and Interest Bearing Deposits   234,097     304,213     213,968     26,839     107,066  
Total Cash and Cash Equivalents   287,828     353,714     276,000     75,262     163,639  
                     
Investment Securities Available for Sale   410,851     429,016     446,157     484,243     493,662  
Investment Securities Held to Maturity   229,516     226,179     217,320     227,923     236,764  
  Total Investment Securities   640,367     655,195     663,477     712,166     730,426  
                     
Loans Held for Sale   9,885     4,557     6,869     8,297     8,246  
                     
Loans, Net of Unearned Interest                    
Commercial, Financial, & Agricultural   265,001     238,942     233,689     239,044     222,406  
Real Estate - Construction   101,372     87,123     89,527     87,672     88,169  
Real Estate - Commercial   614,618     615,129     602,061     596,391     575,993  
Real Estate - Residential   349,843     338,574     334,197     333,896     320,296  
Real Estate - Home Equity   201,579     209,194     210,111     212,942     218,851  
Consumer   288,196     296,351     295,040     294,040     285,599  
Other Loans   13,131     10,430     8,018     8,167     11,648  
Overdrafts   1,442     1,362     1,582     1,602     1,513  
Total Loans, Net of Unearned Interest   1,835,182     1,797,105     1,774,225     1,773,754     1,724,475  
Allowance for Loan Losses   (14,593 )   (14,120 )   (14,210 )   (14,219 )   (13,563 )
Loans, Net   1,820,589     1,782,985     1,760,015     1,759,535     1,710,912  
                     
Premises and Equipment, Net   86,005     86,846     87,190     89,567     90,000  
Goodwill   84,811     84,811     84,811     84,811     84,811  
Other Real Estate Owned   1,010     1,902     2,229     2,720     3,373  
Other Assets   87,159     82,041     78,592     86,832     88,871  
Total Other Assets   258,985     255,600     252,822     263,930     267,055  
                     
Total Assets $ 3,017,654   $ 3,052,051   $ 2,959,183   $ 2,819,190   $ 2,880,278  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,024,898   $ 995,853   $ 947,858   $ 934,146   $ 937,241  
NOW Accounts   810,568     887,453     867,209     713,967     778,131  
Money Market Accounts   240,181     244,628     237,739     254,099     257,965  
Regular Savings Accounts   371,773     372,414     358,306     352,508     354,156  
Certificates of Deposit   113,684     116,946     120,744     126,496     131,697  
Total Deposits   2,561,104     2,617,294     2,531,856     2,381,216     2,459,190  
                     
Short-Term Borrowings   9,753     8,983     13,541     16,644     7,021  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   7,313     7,661     8,568     12,456     12,897  
Other Liabilities   72,002     56,240     49,744     57,971     54,712  
                     
Total Liabilities   2,703,059     2,743,065     2,656,596     2,521,174     2,586,707  
                     
SHAREOWNERS' EQUITY                    
Common Stock   167     168     167     171     171  
Additional Paid-In Capital   30,751     31,929     31,058     38,325     37,932  
Retained Earnings   310,247     304,763     300,177     293,254     288,800  
Accumulated Other Comprehensive Loss, Net of Tax   (26,570 )   (27,874 )   (28,815 )   (33,734 )   (33,332 )
                     
Total Shareowners' Equity   314,595     308,986     302,587     298,016     293,571  
                     
Total Liabilities and Shareowners' Equity $ 3,017,654   $ 3,052,051   $ 2,959,183   $ 2,819,190   $ 2,880,278  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 2,719,530   $ 2,761,070   $ 2,658,539   $ 2,521,056   $ 2,570,213  
Interest Bearing Liabilities   1,606,159     1,690,972     1,658,994     1,529,057     1,594,754  
                     
Book Value Per Diluted Share $ 18.76   $ 18.35   $ 18.00   $ 17.40   $ 17.15  
Tangible Book Value Per Diluted Share(1)   13.70     13.31     12.96     12.45     12.20  
                     
Actual Basic Shares Outstanding   16,746     16,812     16,748     17,059     17,056  
Actual Diluted Shares Outstanding   16,773     16,840     16,809     17,128     17,114  
                     
(1) Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconcilation to GAAP, refer to page 4.


CAPITAL CITY BANK GROUP, INC.                            
CONSOLIDATED STATEMENT OF OPERATIONS                      
Unaudited                            
                             
                        Six Months Ended
    2019   2018   June 30,
(Dollars in thousands, except per share data)   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   2019   2018  
                             
INTEREST INCOME                            
Interest and Fees on Loans $ 23,765 $ 22,616 $ 22,431   $ 21,618 $ 20,533 $ 46,381 $ 40,068  
Investment Securities   3,393   3,513   3,478     3,472   3,156   6,906   5,918  
Funds Sold   1,507   1,593   461     302   730   3,100   1,647  
Total Interest Income   28,665   27,722   26,370     25,392   24,419   56,387   47,633  
                             
INTEREST EXPENSE                            
Deposits   1,988   2,099   1,312     1,068   995   4,087   1,863  
Short-Term Borrowings   31   35   53     41   8   66   16  
Subordinated Notes Payable   596   608   572     568   552   1,204   1,027  
Other Long-Term Borrowings   66   72   85     92   94   138   194  
Total Interest Expense   2,681   2,814   2,022     1,769   1,649   5,495   3,100  
Net Interest Income   25,984   24,908   24,348     23,623   22,770   50,892   44,533  
Provision for Loan Losses   646   767   457     904   815   1,413   1,560  
Net Interest Income after Provision for
  Loan Losses
  25,338   24,141   23,891     22,719   21,955   49,479   42,973  
                             
NONINTEREST INCOME                            
Deposit Fees   4,756   4,775   5,172     5,207   4,842   9,531   9,714  
Bank Card Fees   3,036   2,855   2,830     2,828   2,909   5,891   5,720  
Wealth Management Fees   2,404   2,323   2,320     2,181   2,037   4,727   4,210  
Mortgage Banking Fees   1,199   993   1,129     1,343   1,206   2,192   2,263  
Other   1,375   1,606   1,787     1,749   1,548   2,981   3,112  
Total Noninterest Income   12,770   12,552   13,238     13,308   12,542   25,322   25,019  
                             
NONINTEREST EXPENSE                            
Compensation   16,437   16,349   16,322     15,891   15,797   32,786   31,708  
Occupancy, Net   4,537   4,509   4,804     4,645   4,503   9,046   9,054  
Other Real Estate, Net   75   363   (1,663 )   347   248   438   874  
Other   7,347   6,977   7,042     7,816   7,845   14,324   14,663  
Total Noninterest Expense   28,396   28,198   26,505     28,699   28,393   56,594   56,299  
                             
OPERATING PROFIT   9,712   8,495   10,624     7,328   6,104   18,207   11,693  
Income Tax Expense (Benefit)   2,387   2,059   2,166     1,338   101   4,446   (83 )
NET INCOME $ 7,325 $ 6,436 $ 8,458   $ 5,990 $ 6,003 $ 13,761 $ 11,776  
                             
PER SHARE DATA                            
Basic Net Income $ 0.44 $ 0.38 $ 0.50   $ 0.35 $ 0.35 $ 0.82 $ 0.69  
Diluted Net Income   0.44   0.38   0.50     0.35   0.35   0.82   0.69  
Cash Dividend $ 0.11 $ 0.11 $ 0.09   $ 0.09 $ 0.07 $ 0.22 $ 0.14  
AVERAGE SHARES                            
Basic    16,791   16,791   16,989     17,056   17,045   16,791   17,037  
Diluted    16,818   16,819   17,050     17,125   17,104   16,820   17,089  


CAPITAL CITY BANK GROUP, INC.                            
ALLOWANCE FOR LOAN LOSSES                            
AND RISK ELEMENT ASSETS                            
Unaudited                            
                             
                        Six Months Ended
    2019
  2018
  June 30,
(Dollars in thousands, except per share data)   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   2019     2018  
                             
ALLOWANCE FOR LOAN LOSSES                            
Balance at Beginning of Period $ 14,120   $ 14,210   $ 14,219   $ 13,563   $ 13,258   $ 14,210   $ 13,307  
Provision for Loan Losses   646     767     457     904     815     1,413     1,560  
Net Charge-Offs   173     857     466     248     510     1,030     1,304  
Balance at End of Period $ 14,593   $ 14,120   $ 14,210   $ 14,219   $ 13,563   $ 14,593   $ 13,563  
As a % of Loans   0.79 %   0.78 %   0.80 %   0.80 %   0.78 %   0.79 %   0.78 %
As a % of Nonperforming Loans   259.55 %   279.77 %   206.79 %   207.06 %   236.25 %   259.55 %   236.25 %
                             
CHARGE-OFFS                            
Commercial, Financial and Agricultural $ 235   $ 95   $ 53   $ 268   $ 141   $ 330   $ 323  
Real Estate - Construction   -     -     -     -     -     -     7  
Real Estate - Commercial   -     155     -     25     -     155     290  
Real Estate - Residential   65     264     111     106     456     329     563  
Real Estate - Home Equity   45     52     106     112     157     97     315  
Consumer   520     795     728     463     509     1,315     1,204  
Total Charge-Offs $ 865   $ 1,361   $ 998   $ 974   $ 1,263   $ 2,226   $ 2,702  
                             
RECOVERIES                            
Commercial, Financial and Agricultural $ 58   $ 74   $ 128   $ 78   $ 87   $ 132   $ 253  
Real Estate - Construction   -     -     25     -     -     -     1  
Real Estate - Commercial   100     70     13     222     15     170     138  
Real Estate - Residential   223     44     106     107     346     267     430  
Real Estate - Home Equity   60     32     61     47     22     92     83  
Consumer   251     284     199     272     283     535     493  
Total Recoveries $ 692   $ 504   $ 532   $ 726   $ 753   $ 1,196   $ 1,398  
                             
NET CHARGE-OFFS $ 173   $ 857   $ 466   $ 248   $ 510   $ 1,030   $ 1,304  
                             
Net Charge-Offs as a % of Average Loans (1)   0.04 %   0.20 %   0.10 %   0.06 %   0.12 %   0.12 %   0.16 %
                             
RISK ELEMENT ASSETS                            
Nonaccruing Loans $ 5,622   $ 5,047   $ 6,872   $ 6,867   $ 5,741          
Other Real Estate Owned   1,010     1,902     2,229     2,720     3,373          
Total Nonperforming Assets $ 6,632   $ 6,949   $ 9,101   $ 9,587   $ 9,114          
                             
Past Due Loans 30-89 Days $ 5,443   $ 4,682   $ 4,757   $ 3,684   $ 3,472          
Past Due Loans 90 Days or More   -     -     -     126     -          
Classified Loans   26,406     22,219     22,889     27,039     29,583          
Performing Troubled Debt Restructuring's $ 18,737   $ 20,791   $ 22,084   $ 28,661   $ 29,981          
                             
Nonperforming Loans as a % of Loans   0.30 %   0.28 %   0.39 %   0.39 %   0.33 %        
Nonperforming Assets as a % of Loans and                            
  Other Real Estate   0.36 %   0.39 %   0.51 %   0.54 %   0.52 %        
Nonperforming Assets as a % of Total Assets   0.22 %   0.23 %   0.31 %   0.34 %   0.32 %        
                             
(1) Annualized                            


CAPITAL CITY BANK GROUP, INC.                                                                                      
AVERAGE BALANCE AND INTEREST RATES (1)
                                                                                     
Unaudited                                                                                                  
                                                                                                   
    Second Quarter 2019     First Quarter 2019     Fourth Quarter 2018     Third Quarter 2018     Second Quarter 2018     Jun 2019 YTD     Jun 2018 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 $ 1,823,311     23,873   5.25 % $ 1,780,406     22,718   5.18 % $ 1,785,570     22,556   5.01 % $ 1,747,093     21,733   4.94 % $ 1,691,287     20,625   4.89 % $ 1,801,977     46,591   5.21 % $ 1,669,571     40,261   4.86 %
                                                                                                   
Investment Securities                                                                                                  
Taxable Investment Securities   614,775     3,301   2.15     618,127     3,387   2.20     637,735     3,325   2.08     663,639     3,290   1.98     643,516     2,945   1.83     616,442     6,688   2.18     631,394     5,468   1.74  
Tax-Exempt Investment Securities   29,342     116   1.58     40,575     158   1.56     50,362     193   1.54     60,952     229   1.50     72,478     266   1.47     34,928     274   1.57     78,605     584   1.49  
                                                                                                   
Total Investment Securities   644,117     3,417   2.12     658,702     3,545   2.16     688,097     3,518   2.04     724,591     3,519   1.94     715,994     3,211   1.79     651,370     6,962   2.14     709,999     6,052   1.71  
                                                                                                   
Funds Sold   251,789     1,507   2.40     265,694     1,593   2.43     80,815     461   2.26     63,608     302   1.88     158,725     730   1.84     258,703     3,100   2.42     199,593     1,647   1.66  
                                                                                                   
Total Earning Assets   2,719,217   $ 28,797   4.25 %   2,704,802   $ 27,856   4.17 %   2,554,482   $ 26,535   4.12 %   2,535,292   $ 25,554   4.00 %   2,566,006   $ 24,566   3.84 %   2,712,050   $ 56,653   4.21 %   2,579,163   $ 47,960   3.75 %
                                                                                                   
Cash and Due From Banks   51,832               53,848               52,344               49,493               50,364               52,834               51,531            
Allowance for Loan Losses   (14,513 )             (14,347 )             (14,642 )             (14,146 )             (13,521 )             (14,431 )             (13,586 )          
Other Assets   254,126               252,208               257,061               256,285               258,255               253,173               259,418            
                                                                                                   
Total Assets $ 3,010,662             $ 2,996,511             $ 2,849,245             $ 2,826,924             $ 2,861,104             $ 3,003,626             $ 2,876,526            
                                                                                                   
LIABILITIES:                                                                                                  
Interest Bearing Deposits                                                                                                  
NOW Accounts $ 832,982   $ 1,623   0.78 % $ 884,277   $ 1,755   0.80 % $ 739,225   $ 995   0.53 % $ 733,255   $ 773   0.42 % $ 790,335   $ 725   0.37 % $ 858,488   $ 3,378   0.79 % $ 826,554   $ 1,384   0.34 %
Money Market Accounts   237,921     265   0.45     239,516     247   0.42     248,486     216   0.34     254,440     190   0.30     255,143     166   0.26     238,714     512   0.43     250,883     269   0.22  
Savings Accounts   371,716     46   0.05     364,783     44   0.05     356,723     44   0.05     352,833     43   0.05     351,664     43   0.05     368,268     90   0.05     347,847     85   0.05  
Time Deposits   115,442     54   0.19     118,839     53   0.18     123,193     57   0.18     129,927     62   0.19     134,171     61   0.18     117,131     107   0.18     137,248     125   0.18  
Total Interest Bearing Deposits   1,558,061     1,988   0.51 %   1,607,415     2,099   0.53 %   1,467,627     1,312   0.37 %   1,470,455     1,068   0.30 %   1,531,313     995   0.27 %   1,582,601     4,087   0.52 %   1,562,532     1,863   0.25 %
                                                                                                   
Short-Term Borrowings   9,625     31   1.30 %   11,378     35   1.26 %   15,424     53   1.36 %   12,949     41   1.24 %   6,633     8   0.49 %   10,497     66   1.28 %   7,745     16   0.42 %
Subordinated Notes Payable   52,887     596   4.46     52,887     608   4.60     52,887     572   4.23     52,887     568   4.20     52,887     552   4.13     52,887     1,204   4.53     52,887     1,027   3.86  
Other Long-Term Borrowings   7,509     66   3.53     8,199     72   3.55     9,918     85   3.40     12,729     92   2.87     13,151     94   2.88     7,853     138   3.54     13,467     194   2.91  
                                                                                                   
Total Interest Bearing Liabilities   1,628,082   $ 2,681   0.66 %   1,679,879   $ 2,814   0.68 %   1,545,856   $ 2,022   0.54 %   1,549,020   $ 1,769   0.47 %   1,603,984   $ 1,649   0.43 %   1,653,838   $ 5,495   0.67 %   1,636,631   $ 3,100   0.40 %
                                                                                                   
Noninterest Bearing Deposits   1,007,370               957,300               944,748               921,817               900,643               982,473               881,433            
Other Liabilities   61,611               52,070               56,445               58,330               64,671               56,867               68,796            
                                                                                                   
Total Liabilities   2,697,063               2,689,249               2,547,049               2,529,167               2,569,298               2,693,178               2,586,860            
                                                                                                   
SHAREOWNERS' EQUITY:   313,599               307,262               302,196               297,757               291,806               310,448               289,666            
                                                                                                   
Total Liabilities and Shareowners' Equity $ 3,010,662             $ 2,996,511             $ 2,849,245             $ 2,826,924             $ 2,861,104             $ 3,003,626             $ 2,876,526            
                                                                                                   
Interest Rate Spread     $ 26,116   3.59 %     $ 25,042   3.49 %     $ 24,513   3.58 %     $ 23,785   3.53 %     $ 22,917   3.41 %     $ 51,158   3.54 %     $ 44,860   3.35 %
                                                                                                   
Interest Income and Rate Earned(1)       28,797   4.25         27,856   4.17         26,535   4.12         25,554   4.00         24,566   3.84         56,653   4.21         47,960   3.75  
Interest Expense and Rate Paid(2)       2,681   0.40         2,814   0.42         2,022   0.31         1,769   0.28         1,649   0.26         5,495   0.41         3,100   0.24  
                                                                                                   
Net Interest Margin     $ 26,116   3.85 %     $ 25,042   3.75 %     $ 24,513   3.81 %     $ 23,785   3.72 %     $ 22,917   3.58 %     $ 51,158   3.80 %     $ 44,860   3.51 %
                                                                                                   
(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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