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CST: 11/11/2019 22:03:02   

Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2018 Results

286 Days ago

TALLAHASSEE, Fla., Jan. 29, 2019 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $8.5 million, or $0.50 per diluted share for the fourth quarter of 2018 compared to net income of $6.0 million, or $0.35 per diluted share for the third quarter of 2018, and $3,000, or $0.00 per diluted share for the fourth quarter of 2017.  Earnings for the fourth quarter of 2017 included a $4.1 million, or $0.24 per diluted share, income tax expense related to the Tax Cuts and Jobs Act.   

For the full year 2018, net income totaled $26.2 million, or $1.54 per diluted share, compared to net income of $10.9 million, or $0.64 per diluted share for 2017.  Net income for 2018 included tax benefits totaling $3.3 million, or $0.19 per diluted share related to 2017 plan year pension plan contributions made during 2018.        

Fourth Quarter 2018 HIGHLIGHTS

  • Earnings per diluted share of $0.50, included other real estate gain of $0.09 per share 
  • Continued growth in net interest income, up $0.7 million, or 3.1 % sequentially
  • Continued reduction in classified assets, 16% sequentially    
  • Tangible capital ratio of 7.58%
  • Repurchased 324,000 shares of common stock

Full Year 2018 HIGHLIGHTS

  • Earnings per diluted share of $1.54, included tax benefits of $0.19 per share and higher other real estate gains of $0.05 per share
  • Continued improvement in operating leverage driven by margin expansion
    - Net interest income up $9.5 million, or 11.5%
    - Net interest margin up 27 basis points to 3.64%
    - Average loan growth of $100 million, or 6.2%
  • Continued reduction in classified assets, 28%

“2018 produced marked improvement and continues to move us closer to our historical performance levels,” said William G. Smith, Jr., Chairman, President and CEO. “Record loan growth, a rising rate environment and tax reform were all major contributors to our earnings growth.  Asset sensitivity and a strong core deposit base produced a net interest margin of 3.64%, up 27 basis points year over year.  Lowering our efficiency ratio is a top priority and we have multiple strategies in place to grow revenues and reduce expenses.  Florida is growing and we are once again on offense following a number of years playing defense after the crisis.  We appreciate our shareowners’ confidence in our management team and will remain focused on implementing strategies that produce long-term value for our shareowners.”

Compared to the third quarter of 2018, the $3.3 million increase in operating profit reflected a $2.2 million decrease in noninterest expense, a $0.7 million increase in net interest income, and a $0.5 million reduction in the loan loss provision, partially offset by lower noninterest income of $0.1 million.  During the fourth quarter of 2018, we sold a banking office and realized a $2.0 million gain, which was reflected in noninterest expense (other real estate).

Compared to the fourth quarter of 2017, the $4.0 million increase in operating profit reflected a $2.9 million increase in net interest income, a $0.4 million decrease in noninterest expense, a $0.4 million reduction in the loan loss provision, and  higher noninterest income of $0.3 million.

For the full year 2018, the $6.6 million increase in operating profit compared to 2017 was attributable to a $9.5 million increase in net interest income, partially offset by a $2.0 million increase in noninterest expense, a $0.7 million increase in the loan loss provision, and lower noninterest income of $0.2 million.

Our return on average assets (“ROA”) was 1.18% and our return on average equity (“ROE”) was 11.10% for the fourth quarter of 2018.  These metrics were 0.84% and 7.98% for the third quarter of 2018, respectively, and 0.00% and 0.00% for the fourth quarter of 2017, respectively.  For the full year 2018, our ROA was 0.92% and our ROE was 8.89% compared to 0.39% and 3.83%, respectively, for 2017.

Discussion of Operating Results

Tax-equivalent net interest income for the fourth quarter of 2018 was $24.5 million compared to $23.8 million for the third quarter of 2018 and $21.8 million for the fourth quarter of 2017.  For the full year 2018, tax-equivalent net interest income totaled $93.2 million compared to $84.2 million for 2017.  The increase in tax-equivalent net interest income compared to all prior periods reflected higher interest rates and a favorable shift in the earning asset mix. Higher rates were earned on overnight funds, investment securities and loans, partially offset by a higher cost on our negotiated rate deposits. 

The federal funds target rate ended the year at a range of 2.25%-2.50%. This was the result of four rates increases in 2018, which positively affected our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these increases resulted in higher rates paid on our negotiated rate deposit products, we continue to prudently manage our overall cost of funds, which was 31 basis points for the fourth quarter of 2018 compared to 28 basis points for the third quarter of 2018 and 27 basis points for the full year 2018. In conjunction with our overall balance sheet management, we continue to review our deposit board rates to determine whether rate increases are appropriate. We have developed several new deposit products designed to attract new clients or help maintain existing relationships for clients seeking higher returns on their deposit balances.  While rising rates and client expectations will generally result in a higher cost of funds, we will continue to prudently manage the mix and costs of our deposit base as we have done in the past.   

Our net interest margin for the fourth quarter of 2018 was 3.81%, an increase of nine basis points over the third quarter of 2018 and an increase of 36 basis points over the fourth quarter of 2017.  For the full year 2018, our net interest margin increased 27 basis points to 3.64%.  The increase in our margin compared to all prior periods noted above reflected rising interest rates and a favorable shift in our earning asset mix, which resulted in higher net interest income in each period. 

Our provision for loan losses for the fourth quarter of 2018 was $0.5 million compared to $0.9 million for the third quarter of 2018 and $0.8 million for the fourth quarter of 2017.  The reduction in our provision compared to the third quarter of 2018 was primarily attributable to a decrease in impaired loan reserves.  For the full year 2018, our loan loss provision was $2.9 million compared to $2.2 million for 2017 with the increase driven by growth in the loan portfolio.  At December 31, 2018, our allowance for loan losses of $14.2 million represented 0.80% of outstanding loans (net of overdrafts) and provided coverage of 207% of nonperforming loans compared to 0.80% and 207%, respectively, at September 30, 2018 and 0.80% and 186%, respectively, at December 31, 2017.
    
Noninterest income for the fourth quarter of 2018 totaled $13.2 million, a decrease of $0.1 million, or 0.5%, from the third quarter of 2018 and a $0.3 million, or 2.6%, increase over the fourth quarter of 2017.  Compared to the fourth quarter of 2017, the increase was attributable to higher deposit fees, wealth management fees, and other income.  For the full year 2018, noninterest income totaled $51.6 million, a $0.2 million, or 0.3%, decrease from 2017, and reflected lower mortgage banking fees of $1.0 million, partially offset by higher other income of $0.5 million and wealth management fees of $0.4 million.  The lower level of mortgage banking fees was due to a reduction in the volume of loans sold in secondary market as adjustable rate loan production has picked up momentum and is being retained in our loan portfolio instead of sold on the secondary market.  Total residential loan production (secondary market sales and portfolio) during 2018 was comparable to the prior year. The increase in other income reflected higher signing bonus income from processing contracts and miscellaneous income.  The increase in wealth management was attributable to higher trust fees and reflected growth in assets under management.   

Noninterest expense for the fourth quarter of 2018 totaled $26.5 million, a decrease of $2.2 million, or 7.6%, from the third quarter of 2018 and $0.4 million, or 1.5%, from the fourth quarter of 2017.  The decrease from the third quarter of 2018 was primarily attributable to lower other real estate owned (“OREO”) expense of $2.0 million and other expense of $0.7 million, partially offset by higher compensation expense of $0.4 million.  The lower OREO expense reflected a $2.0 million gain from the sale of a banking office in the fourth quarter of 2018.  The reduction in other expense was attributable to a decline in other losses, and lower professional fees and processing fees.  Higher cash incentive expense drove the increase in compensation expense.  For the full year 2018, noninterest expense totaled $111.5 million, an increase of $2.0 million, or 1.9%, over 2017 attributable to an increase in other expense of $1.4 million, compensation expense of $1.6 million, and occupancy expense of $0.7 million, partially offset by lower OREO expense of $1.6 million.  The increase in other expense was attributable to higher professional fees of $1.3 million.  The increase in professional fees reflected costs associated with several consulting projects, including both profit enhancements projects and the upgrading of ancillary systems, all of which were essentially complete at the end of the third quarter.  Higher salary expense, primarily cash incentives, drove the increase in compensation expense.  Slightly higher base salaries and contractual employment also contributed to the increase, but to a lesser extent.  Occupancy expense increased due to higher equipment/software maintenance agreement expense and to a lesser extent an increase in building maintenance costs (partly related to Hurricane Michael).  The aforementioned $2.0 million gain from the sale of a banking office drove the improvement in OREO expense.  The same factors drove the variances for the fourth quarter of 2018 versus fourth quarter of 2017.

For 2018, we realized income tax expense of $3.4 million, which reflected four discrete tax benefit items totaling $3.6 million resulting from the effect of federal tax reform enacted in December 2017.  Three items totaling $3.3 million related to pension plan contributions made in 2018 for the plan year 2017.  These pension related items were $1.5 million for the first quarter, $1.4 million for the second quarter and $0.4 million for the third quarter.  In addition, we realized a discrete tax item in the fourth quarter of 2018 for $0.3 million related to a cost segregation analysis for various properties we own that also benefited from the effects of federal tax reform.  Absent these discrete items, our effective tax rate would have been approximately 24%.  Income tax expense for the fourth quarter of 2017 included a $4.1 million discrete tax expense related to the Tax Cuts and Jobs Act.

Discussion of Financial Condition

Average earning assets were $2.554 billion for the fourth quarter of 2018, an increase of $19.2 million, or 0.8%, over the third quarter of 2018, and an increase of $42.5 million, or 1.7%, over the fourth quarter of 2017.  The increase in average earning assets compared to both prior periods reflects a higher level of deposits.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $80.8 million during the fourth quarter of 2018 compared to an average net overnight funds sold position of $63.6 million in the third quarter of 2018 and $174.6 million in the fourth quarter of 2017.  Compared to the third quarter of 2018, the increase in average net overnight funds primarily reflected an increase in noninterest bearing deposits and a decrease in our investment portfolio. The decrease compared to the fourth quarter 2017 was primarily attributable to growth in our loan portfolio. 

Average loans increased $38.5 million, or 2.2% compared to the third quarter of 2018, and have grown $144.8 million, or 8.8% compared to the fourth quarter of 2017.  The increase compared to the third quarter 2018 reflected growth in all loan types except home equity loans and construction loans. The increase compared to the fourth quarter 2017 reflected growth in all loan types except home equity loans. Over the course of 2018, we purchased both adjustable rate residential loans and fixed and adjustable rate commercial real estate loan pools totaling $26.1 million based on principal balances at the time of purchase.

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 and strategic loan purchases, have helped to increase overall loan growth.  In the current rising rate environment, our fixed rate offerings are reviewed frequently and rate increases are implemented as appropriate.

Nonperforming assets (nonaccrual loans and OREO) totaled $9.1 million at December 31, 2018, representing a decrease of $0.5 million, or 5.1%, from September 30, 2018, and a decrease of $2.0 million, or 18.0%, from December 31, 2017.  Nonaccrual loans totaled $6.9 million at December 31, 2018, comparable to September 30, 2018 and a $0.3 million decrease from December 31, 2017.  The balance of OREO totaled $2.2 million at December 31, 2018, a decrease of $0.5 million from September 30, 2018 and a decrease of $1.7 million from December 31, 2017.  For 2018, we added properties totaling $2.1 million, sold properties totaling $2.8 million and recorded valuation adjustments totaling $1.0 million.  Nonperforming assets represented 0.31% of total assets at December 31, 2018 compared to 0.34% at September 30, 2018 and 0.38% at December 31, 2017.

Average total deposits were $2.412 billion for the fourth quarter of 2018, an increase of $20.1 million, or 0.8%, over the third quarter of 2018, and an increase of $34.0 million, or 1.4%, over the fourth quarter of 2017.  The increase in deposits compared to the third quarter of 2018 reflected higher noninterest bearing deposit and savings accounts, partially offset by lower money market accounts and certificates of deposit balances. The increase in deposits compared to the fourth quarter of 2017 reflected growth in noninterest bearing accounts, public fund deposits, and savings accounts, partially offset by declines in certificates of deposit. Average public fund balances typically peak in the first quarter and trend downward through the middle of the fourth quarter due to the cycle of tax receipts.

Deposit levels continue to be closely monitored and managed in conjunction with runoff from the investment portfolio.  We monitor deposit rates on an ongoing basis as prudent pricing discipline remains the key to managing our mix of deposits.

Shareowners’ equity was $302.6 million at December 31, 2018, compared to $298.0 million at September 30, 2018 and $284.2 million at December 31, 2017.  At December 31, 2018, our common stock had a book value of $18.00 per diluted share compared to $17.40 at September 30, 2018 and $16.65 at December 31, 2017.  During the fourth quarter of 2018, we repurchased 324,441 shares of our stock at $24.75 per share.  Book value is impacted through other comprehensive income by the net unrealized gains and losses in our available for sale investment portfolio.  At December 31, 2018, the net after tax unrealized loss was $2.0 million compared to $3.4 million at September 30, 2018 and $1.7 million at December 31, 2017.  Book value is also impacted by the recording of our unfunded pension liability through other comprehensive income during the fourth quarter.  At December 31, 2018, the net after tax pension liability reflected in accumulated other comprehensive loss was $26.8 million compared to $30.3 million at December 31, 2017. 

At December 31, 2018, our leverage ratio was 10.89% compared to 10.99% and 10.47% at September 30, 2018 and December 31, 2017, respectively.  Further, our risk-adjusted capital ratio was 17.13%, 16.94%, and 17.10% on these respective dates.  Our common equity tier 1 ratio was 13.58% at December 31, 2018, compared to 13.43% at September 30, 2018 and 13.42% at December 31, 2017.  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 59 banking offices and 82 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, 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, 2017, 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 reconciliation is provided below.

(Dollars in Thousands)   Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017
Shareowners' Equity (GAAP)   $ 302,587   $ 298,016   $ 293,571   $ 288,360   $ 284,210  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Shareowners' Equity (non-GAAP) A   217,776     213,205     208,760     203,549     199,399  
Total Assets (GAAP)     2,959,183     2,819,190     2,880,278     2,924,832     2,898,794  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Assets (non-GAAP) B $ 2,874,372   $ 2,734,379   $ 2,795,467   $ 2,840,021   $ 2,813,983  
Tangible Common Equity Ratio (non-GAAP) A/B   7.58 %   7.80 %   7.47 %   7.17 %   7.09 %
Actual Diluted Shares Outstanding (GAAP) C   16,808,542     17,127,846     17,114,380     17,088,419     17,071,107  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 12.96   $ 12.45   $ 12.20   $ 11.91   $ 11.68  


CAPITAL CITY BANK GROUP, INC.                    
EARNINGS HIGHLIGHTS                    
Unaudited                    
                     
    Three Months Ended   Twelve Months Ended
(Dollars in thousands, except per share data)   Dec 31, 2018   Sep 30, 2018   Dec 31, 2017   Dec 31, 2018   Dec 31, 2017
                     
EARNINGS                    
Net Income $ 8,458   $ 5,990   $ 3   $ 26,224   $ 10,863  
Net Income Per Common Share $ 0.50   $ 0.35   $ 0.00   $ 1.54   $ 0.64  
PERFORMANCE                    
Return on Average Assets   1.18 %   0.84 %   0.00 %   0.92 %   0.39 %
Return on Average Equity   11.10 %   7.98 %   0.00 %   8.89 %   3.83 %
Net Interest Margin   3.81 %   3.72 %   3.45 %   3.64 %   3.37 %
Noninterest Income as % of Operating Revenue   35.22 %   36.04 %   37.51 %   35.79 %   38.41 %
Efficiency Ratio   70.21 %   77.37 %   77.50 %   77.05 %   80.50 %
CAPITAL ADEQUACY                    
Tier 1 Capital Ratio   16.36 %   16.17 %   16.33 %   16.36 %   16.33 %
Total Capital Ratio   17.13 %   16.94 %   17.10 %   17.13 %   17.10 %
Tangible Common Equity Ratio   7.58 %   7.80 %   7.09 %   7.58 %   7.09 %
Leverage Ratio   10.89 %   10.99 %   10.47 %   10.89 %   10.47 %
Common Equity Tier 1 Ratio   13.58 %   13.43 %   13.42 %   13.58 %   13.42 %
Equity to Assets   10.23 %   10.57 %   9.80 %   10.23 %   9.80 %
ASSET QUALITY                    
Allowance as % of Non-Performing Loans   206.79 %   207.06 %   185.87 %   206.79 %   185.87 %
Allowance as a % of Loans   0.80 %   0.80 %   0.80 %   0.80 %   0.80 %
Net Charge-Offs as % of Average Loans   0.10 %   0.06 %   0.21 %   0.12 %   0.14 %
Nonperforming Assets as % of Loans and ORE   0.51 %   0.54 %   0.67 %   0.51 %   0.67 %
Nonperforming Assets as % of Total Assets   0.31 %   0.34 %   0.38 %   0.31 %   0.38 %
STOCK PERFORMANCE                    
High $ 26.95   $ 25.91   $ 26.01   $ 26.95   $ 26.01  
Low   19.92     23.19     22.21     19.92     17.68  
Close $ 23.21   $ 23.34   $ 22.94   $ 23.21   $ 22.94  
Average Daily Trading Volume   21,455     16,500     19,112     21,082     23,793  


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
    2018   2017 
(Dollars in thousands, except per share data)   Fourth Quarter   Third Quarter   Second Quarter   First Quarter   Fourth Quarter
ASSETS                    
Cash and Due From Banks $ 62,032   $ 48,423   $ 56,573   $ 47,804   $ 58,419  
Funds Sold and Interest Bearing Deposits   213,968     26,839     107,066     250,821     227,023  
Total Cash and Cash Equivalents   276,000     75,262     163,639     298,625     285,442  
                     
Investment Securities Available for Sale   446,157     484,243     493,662     471,836     480,911  
Investment Securities Held to Maturity   217,320     227,923     236,764     225,552     216,679  
  Total Investment Securities   663,477     712,166     730,426     697,388     697,590  
                     
Loans Held for Sale   6,869     8,297     8,246     4,845     4,817  
                     
Loans, Net of Unearned Interest                    
Commercial, Financial, & Agricultural   233,689     239,044     222,406     198,775     218,166  
Real Estate - Construction   89,527     87,672     88,169     80,236     77,966  
Real Estate - Commercial   602,061     596,391     575,993     551,309     535,707  
Real Estate - Residential   334,197     333,896     320,296     307,050     308,159  
Real Estate - Home Equity   210,111     212,942     218,851     223,994     229,513  
Consumer   295,040     294,040     285,599     284,356     278,622  
Other Loans   8,018     8,167     11,648     14,988     3,747  
Overdrafts   1,582     1,602     1,513     1,187     1,612  
Total Loans, Net of Unearned Interest   1,774,225     1,773,754     1,724,475     1,661,895     1,653,492  
Allowance for Loan Losses   (14,210 )   (14,219 )   (13,563 )   (13,258 )   (13,307 )
Loans, Net   1,760,015     1,759,535     1,710,912     1,648,637     1,640,185  
                     
Premises and Equipment, Net   87,190     89,567     90,000     90,939     91,698  
Goodwill   84,811     84,811     84,811     84,811     84,811  
Other Real Estate Owned   2,229     2,720     3,373     3,330     3,941  
Other Assets   78,592     86,832     88,871     96,257     90,310  
Total Other Assets   252,822     263,930     267,055     275,337     270,760  
                     
Total Assets $ 2,959,183   $ 2,819,190   $ 2,880,278   $ 2,924,832   $ 2,898,794  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 947,858   $ 934,146   $ 937,241   $ 890,482   $ 874,583  
NOW Accounts   867,209     713,967     778,131     859,704     877,820  
Money Market Accounts   237,739     254,099     257,965     257,422     239,212  
Regular Savings Accounts   358,306     352,508     354,156     353,996     335,140  
Certificates of Deposit   120,744     126,496     131,697     137,280     143,122  
Total Deposits   2,531,856     2,381,216     2,459,190     2,498,884     2,469,877  
                     
Short-Term Borrowings   13,541     16,644     7,021     4,893     7,480  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   8,568     12,456     12,897     13,333     13,967  
Other Liabilities   49,744     57,971     54,712     66,475     70,373  
                     
Total Liabilities   2,656,596     2,521,174     2,586,707     2,636,472     2,614,584  
                     
SHAREOWNERS' EQUITY                    
Common Stock   167     171     171     171     170  
Additional Paid-In Capital   31,058     38,325     37,932     37,343     36,674  
Retained Earnings   300,177     293,254     288,800     283,990     279,410  
Accumulated Other Comprehensive Loss, Net of Tax   (28,815 )   (33,734 )   (33,332 )   (33,144 )   (32,044 )
                     
Total Shareowners' Equity   302,587     298,016     293,571     288,360     284,210  
                     
Total Liabilities and Shareowners' Equity $ 2,959,183   $ 2,819,190   $ 2,880,278   $ 2,924,832   $ 2,898,794  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 2,658,539   $ 2,521,056   $ 2,570,213   $ 2,614,949   $ 2,582,922  
Interest Bearing Liabilities   1,658,994     1,529,057     1,594,754     1,679,515     1,669,628  
                     
Book Value Per Diluted Share $ 18.00   $ 17.40   $ 17.15   $ 16.87   $ 16.65  
Tangible Book Value Per Diluted Share   12.96     12.45     12.20     11.91     11.68  
                     
Actual Basic Shares Outstanding   16,748     17,059     17,056     17,044     16,989  
Actual Diluted Shares Outstanding   16,809     17,128     17,114     17,088     17,071  


CAPITAL CITY BANK GROUP, INC.                            
CONSOLIDATED STATEMENT OF OPERATIONS                      
Unaudited                            
                             
                        Twelve Months Ended
    2018    2017   December 31,
(Dollars in thousands, except per share data)   Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  2018   2017
                             
INTEREST INCOME                            
Interest and Fees on Loans $ 22,431   $ 21,618 $ 20,533 $ 19,535   $ 19,513 $ 84,117   $ 75,717
Investment Securities   3,478     3,472   3,156   2,762     2,520   12,868     9,147
Funds Sold   461     302   730   917     594   2,410     2,066
Total Interest Income   26,370     25,392   24,419   23,214     22,627   99,395     86,930
                             
INTEREST EXPENSE                            
Deposits   1,312     1,068   995   868     590   4,243     1,789
Short-Term Borrowings   53     41   8   8     5   110     82
Subordinated Notes Payable   572     568   552   475     431   2,167     1,634
Other Long-Term Borrowings   85     92   94   100     112   371     443
Total Interest Expense   2,022     1,769   1,649   1,451     1,138   6,891     3,948
Net Interest Income   24,348     23,623   22,770   21,763     21,489   92,504     82,982
Provision for Loan Losses   457     904   815   745     826   2,921     2,215
Net Interest Income after Provision for
  Loan Losses
  23,891     22,719   21,955   21,018     20,663   89,583     80,767
                             
NONINTEREST INCOME                            
Deposit Fees   5,172     5,207   4,842   4,872     5,040   20,093     20,335
Bank Card Fees   2,830     2,828   2,909   2,811     2,830   11,378     11,191
Wealth Management Fees   2,320     2,181   2,037   2,173     2,172   8,711     8,284
Mortgage Banking Fees   1,129     1,343   1,206   1,057     1,410   4,735     5,754
Other   1,787     1,749   1,548   1,564     1,445   6,648     6,182
Total Noninterest Income   13,238     13,308   12,542   12,477     12,897   51,565     51,746
                             
NONINTEREST EXPENSE                            
Compensation   16,322     15,891   15,797   15,911     15,102   63,921     62,312
Occupancy, Net   4,804     4,645   4,503   4,551     4,400   18,503     17,837
Other Real Estate, Net   (1,663 )   347   248   626     355   (442 )   1,135
Other   7,042     7,816   7,845   6,818     7,040   29,521     28,163
Total Noninterest Expense   26,505     28,699   28,393   27,906     26,897   111,503     109,447
                             
OPERATING PROFIT   10,624     7,328   6,104   5,589     6,663   29,645     23,066
Income Tax Expense (Benefit)   2,166     1,338   101   (184 )   6,660   3,421     12,203
NET INCOME $ 8,458   $ 5,990 $ 6,003 $ 5,773   $ 3 $ 26,224   $ 10,863
                             
PER SHARE DATA                            
Basic Net Income $ 0.50   $ 0.35 $ 0.35 $ 0.34   $ 0.00 $ 1.54   $ 0.64
Diluted Net Income   0.50     0.35   0.35   0.34     0.00   1.54     0.64
Cash Dividend $ 0.09   $ 0.09 $ 0.07 $ 0.07   $ 0.07 $ 0.32   $ 0.24
AVERAGE SHARES                            
Basic    16,989     17,056   17,045   17,028     16,967   17,029     16,952
Diluted    17,050     17,125   17,104   17,073     17,050   17,072     17,013


CAPITAL CITY BANK GROUP, INC.                            
ALLOWANCE FOR LOAN LOSSES                            
AND RISK ELEMENT ASSETS                            
Unaudited                            
                             
                        Twelve Months Ended
    2018    2017    December 31,
(Dollars in thousands, except per share data)   Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
  Fourth
Quarter
  2018    2017 
                             
ALLOWANCE FOR LOAN LOSSES                            
Balance at Beginning of Period $ 14,219   $ 13,563   $ 13,258   $ 13,307   $ 13,339   $ 13,307   $ 13,431  
Provision for Loan Losses   457     904     815     745     826     2,921     2,215  
Net Charge-Offs   466     248     510     794     858     2,018     2,339  
Balance at End of Period $ 14,210   $ 14,219   $ 13,563   $ 13,258   $ 13,307   $ 14,210   $ 13,307  
As a % of Loans   0.80 %   0.80 %   0.78 %   0.80 %   0.80 %   0.80 %   0.80 %
As a % of Nonperforming Loans   206.79 %   207.06 %   236.25 %   181.26 %   185.87 %   206.79 %   185.87 %
                             
CHARGE-OFFS                            
Commercial, Financial and Agricultural $ 53   $ 268   $ 141   $ 182   $ 664   $ 644   $ 1,357  
Real Estate - Construction   -     -     -     7     -     7     -  
Real Estate - Commercial   -     25     -     290     42     315     685  
Real Estate - Residential   111     106     456     107     126     780     411  
Real Estate - Home Equity   106     112     157     158     48.00     533     190  
Consumer   728     463     509     695     577     2,395     2,193  
Total Charge-Offs $ 998   $ 974   $ 1,263   $ 1,439   $ 1,457   $ 4,674   $ 4,836  
                             
RECOVERIES                            
Commercial, Financial and Agricultural $ 128   $ 78   $ 87   $ 166   $ 113   $ 459   $ 313  
Real Estate - Construction   25     -     -     1     -     26     50  
Real Estate - Commercial   13     222     15     123     24     373     174  
Real Estate - Residential   106     107     346     84     141     643     616  
Real Estate - Home Equity   61     47     22     61     67     191     219  
Consumer   199     272     283     210     254     964     1,125  
Total Recoveries $ 532   $ 726   $ 753   $ 645   $ 599   $ 2,656   $ 2,497  
                             
NET CHARGE-OFFS $ 466   $ 248   $ 510   $ 794   $ 858   $ 2,018   $ 2,339  
                             
Net Charge-Offs as a % of Average Loans (1)   0.10 %   0.06 %   0.12 %   0.20 %   0.21 %   0.12 %   0.14 %
                             
RISK ELEMENT ASSETS                            
Nonaccruing Loans $ 6,872   $ 6,867   $ 5,741   $ 7,314   $ 7,159          
Other Real Estate Owned   2,229     2,720     3,373     3,330     3,941          
Total Nonperforming Assets $ 9,101   $ 9,587   $ 9,114   $ 10,644   $ 11,100          
                             
Past Due Loans 30-89 Days $ 4,757   $ 3,684   $ 3,472   $ 4,268   $ 4,543          
Past Due Loans 90 Days or More (accruing)   -     126     -     -     36          
Classified Loans   22,888     27,039     29,583     31,709     31,002          
Performing Troubled Debt Restructuring's $ 22,084   $ 28,661   $ 29,981   $ 31,472   $ 32,164          
                             
Nonperforming Loans as a % of Loans   0.39 %   0.39 %   0.33 %   0.44 %   0.43 %        
Nonperforming Assets as a % of Loans and                            
  Other Real Estate   0.51 %   0.54 %   0.52 %   0.64 %   0.67 %        
Nonperforming Assets as a % of Total Assets   0.31 %   0.34 %   0.32 %   0.36 %   0.38 %        
                             
(1) Annualized                            


CAPITAL CITY BANK GROUP, INC.                                                                                      
AVERAGE BALANCE AND INTEREST RATES (1)                                                                                       
Unaudited                                                                                                  
                                                                                                   
    Fourth Quarter 2018     Third Quarter 2018     Second Quarter 2018     First Quarter 2018     Fourth Quarter 2017     Dec 2018 YTD     Dec 2017 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 $ 1,785,570     22,556   5.01 % $ 1,747,093     21,733   4.94 % $ 1,691,287     20,625   4.89 % $ 1,647,612     19,636   4.83 % $ 1,640,738     19,696   4.76 % $ 1,718,348     84,550   4.92 % $ 1,618,583     76,385   4.72 %
                                                                                                   
Investment Securities                                                                                                  
Taxable Investment Securities   637,735     3,325   2.08     663,639     3,290   1.98     643,516     2,945   1.83     619,137     2,523   1.64     602,353     2,263   1.50     641,120     12,083   1.88     595,790     8,095   1.36  
Tax-Exempt Investment Securities   50,362     193   1.54     60,952     229   1.50     72,478     266   1.47     84,800     318   1.50     94,329     393   1.67     67,037     1,006   1.50     97,867     1,610   1.65  
                                                                                                   
Total Investment Securities   688,097     3,518   2.04     724,591     3,519   1.94     715,994     3,211   1.79     703,937     2,841   1.62     696,682     2,656   1.52     708,157     13,089   1.85     693,657     9,705   1.40  
                                                                                                   
Funds Sold   80,815     461   2.26     63,608     302   1.88     158,725     730   1.84     240,916     917   1.54     174,565     594   1.35     135,379     2,410   1.78     189,991     2,066   1.09  
                                                                                                   
Total Earning Assets   2,554,482   $ 26,535   4.12 %   2,535,292   $ 25,554   4.00 %   2,566,006   $ 24,566   3.84 %   2,592,465   $ 23,394   3.66 %   2,511,985   $ 22,946   3.63 %   2,561,884   $ 100,049   3.91 %   2,502,231   $ 88,156   3.52 %
                                                                                                   
Cash and Due From Banks   52,344               49,493               50,364               52,711               51,235               51,222               51,091            
Allowance for Loan Losses   (14,642 )             (14,146 )             (13,521 )             (13,651 )             (13,524 )             (13,993 )             (13,541 )          
Other Assets   257,061               256,285               258,255               260,595               272,755               258,035               276,315            
                                                                                                   
Total Assets $ 2,849,245             $ 2,826,924             $ 2,861,104             $ 2,892,120             $ 2,822,451             $ 2,857,148             $ 2,816,096            
                                                                                                   
LIABILITIES:                                                                                                  
Interest Bearing Deposits                                                                                                  
NOW Accounts $ 739,225   $ 995   0.53 % $ 733,255   $ 773   0.42 % $ 790,335   $ 725   0.37 % $ 863,175   $ 659   0.31 % $ 782,133   $ 400   0.20 % $ 781,026   $ 3,152   0.40 % $ 805,861   $ 1,094   0.14 %
Money Market Accounts   248,486     216   0.34     254,440     190   0.30     255,143     166   0.26     246,576     103   0.17     249,953     80   0.13     251,175     675   0.27     258,304     252   0.10  
Savings Accounts   356,723     44   0.05     352,833     43   0.05     351,664     43   0.05     343,987     42   0.05     333,703     41   0.05     351,341     172   0.05     323,928     159   0.05  
Time Deposits   123,193     57   0.18     129,927     62   0.19     134,171     61   0.18     140,359     64   0.18     145,622     69   0.19     131,860     244   0.18     151,301     284   0.19  
Total Interest Bearing Deposits   1,467,627     1,312   0.37 %   1,470,455     1,068   0.30 %   1,531,313     995   0.27 %   1,594,097     868   0.23 %   1,511,411     590   0.16 %   1,515,402     4,243   0.29 %   1,539,394     1,789   0.12 %
                                                                                                   
Short-Term Borrowings   15,424     53   1.36 %   12,949     41   1.24 %   6,633     8   0.49 %   8,869     8   0.37 %   8,074     5   0.25 %   10,992     110   0.99 %   9,927     82   0.82 %
Subordinated Notes Payable   52,887     572   4.23     52,887     568   4.20     52,887     552   4.13     52,887     475   3.60     52,887     431   3.19     52,887     2,167   4.04     52,887     1,634   3.05  
Other Long-Term Borrowings   9,918     85   3.40     12,729     92   2.87     13,151     94   2.88     13,787     100   2.93     14,726     112   3.01     12,387     371   3.00     15,174     443   2.92  
                                                                                                   
Total Interest Bearing Liabilities   1,545,856   $ 2,022   0.54 %   1,549,020   $ 1,769   0.47 %   1,603,984   $ 1,649   0.43 %   1,669,640   $ 1,451   0.37 %   1,587,098   $ 1,138   0.29 %   1,591,668   $ 6,891   0.45 %   1,617,382   $ 3,948   0.25 %
                                                                                                   
Noninterest Bearing Deposits   944,748               921,817               900,643               862,009               867,000               907,571               832,477            
Other Liabilities   56,445               58,330               64,671               72,969               80,309               63,045               82,833            
                                                                                                   
Total Liabilities   2,547,049               2,529,167               2,569,298               2,604,618               2,534,407               2,562,284               2,532,692            
                                                                                                   
SHAREOWNERS' EQUITY:   302,196               297,757               291,806               287,502               288,044               294,864               283,404            
                                                                                                   
Total Liabilities and Shareowners' Equity $ 2,849,245             $ 2,826,924             $ 2,861,104             $ 2,892,120             $ 2,822,451             $ 2,857,148             $ 2,816,096            
                                                                                                   
Interest Rate Spread     $ 24,513   3.58 %     $ 23,785   3.53 %     $ 22,917   3.41 %     $ 21,943   3.29 %     $ 21,808   3.33 %     $ 93,158   3.46 %     $ 84,208   3.27 %
                                                                                                   
Interest Income and Rate Earned(1)       26,535   4.12         25,554   4.00         24,566   3.84         23,394   3.66         22,946   3.63         100,049   3.91         88,156   3.52  
Interest Expense and Rate Paid(2)       2,022   0.31         1,769   0.28         1,649   0.26         1,451   0.23         1,138   0.18         6,891   0.27         3,948   0.16  
                                                                                                   
Net Interest Margin     $ 24,513   3.81 %     $ 23,785   3.72 %     $ 22,917   3.58 %     $ 21,943   3.43 %     $ 21,808   3.45 %     $ 93,158   3.64 %     $ 84,208   3.37 %
                                                                                                   
(1)   Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate for 2018 and a 35% Federal tax rate for 2017.                                                    
(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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