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CST: 11/11/2019 21:46:52   

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

13 Days ago

TALLAHASSEE, Fla., Oct. 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 third quarter of 2019 compared to net income of $7.3 million, or $0.44 per diluted share for the second quarter of 2019, and $6.0 million, or $0.35 per diluted share for the third quarter of 2018.  For the first nine months of 2019, net income totaled $22.2 million, or $1.32 per diluted share, compared to net income of $17.8 million, or $1.04 per diluted share for the same period of 2018. 

Net income for the first nine months of 2018 included tax benefits totaling $3.3 million, or $0.19 per diluted share (1Q - $1.5 million, or $0.09 per diluted share, 2Q - $1.4 million, or $0.08 per diluted share, and 3Q - $0.4 million, or $0.02 per diluted share) related to 2017 plan year pension contributions made in 2018.

HIGHLIGHTS

  • Strong operating leverage
    • Net interest income up 0.8% sequentially and 13.1% year-over-year
    • Noninterest income up 8.9% sequentially and 2.3% year-over-year
    • Noninterest expense down 1.8%  sequentially and 0.6% year-over-year
  • Net interest margin of 3.92%, up seven basis points over prior quarter
  • Average loans up $14 million, or 0.8% sequentially and $118 million, or 7.0% year-over-year
  • Classified loans declined $5.1 million, or 19% sequentially
  • Tangible common equity ratio, a non-GAAP financial measure, up 48 basis points sequentially to 8.31%

“Capital City reported a strong third quarter, and year-to-date net income is up 25%,” said William G. Smith, Jr., Capital City Bank Group Chairman, President and CEO.  “Given the reduction in rates during the quarter, I was pleased with the improvement in our net interest margin, which was driven by a seven basis point decline in our cost of funds.  Noninterest income is well diversified, and we posted solid growth for the quarter while our efficiency ratio declined to 69%.  Although average loan growth slowed this quarter, year-to-date we have enjoyed strong growth in our C&I, construction and residential portfolios, and credit quality continues to improve.  Florida and Georgia are strong and growing, and I remain optimistic.  Your management team will continue to focus on implementing strategies that produce long-term value for our shareowners, and I appreciate your continued support.”

Compared to the second quarter of 2019, the $1.7 million increase in operating profit reflected a $0.2 million increase in net interest income, higher noninterest income of $1.1 million, and lower noninterest expense of $0.5 million, partially offset by a $0.1 million increase in the loan loss provision.

Compared to the third quarter of 2018, the $4.1 million increase in operating profit was attributable to higher net interest income of $2.6 million, higher noninterest income of $0.6 million, lower noninterest expense of $0.8 million, and a $0.1 million decrease in the loan loss provision.

The increase in operating profit of $10.6 million for the first nine months of 2019 versus the comparable period of 2018 was attributable to higher net interest income of $8.9 million, higher noninterest income of $0.9 million, lower noninterest expense of $0.5 million, and a $0.3 million decrease in the loan loss provision.

Our return on average assets (“ROA”) was 1.14% and our return on average equity (“ROE”) was 10.51% for the third quarter of 2019.  These metrics were 0.98% and 9.37% for the second quarter of 2019, respectively, and 0.84% and 7.98% for the third quarter of 2018, respectively.  For the first nine months of 2019, our ROA was 1.00% and our ROE was 9.48% compared to 0.83% and 8.12%, respectively, for the same period of 2018.

Discussion of Operating Results

Tax-equivalent net interest income for the third quarter of 2019 was $26.3 million compared to $26.1 million for the second quarter of 2019 and $23.8 million for the third quarter of 2018.  The increase in tax-equivalent net interest income compared to the second quarter of 2019 reflected a favorable shift in the average earning asset mix. The increase compared to the third quarter of 2018 primarily reflected higher interest rates and loan growth.  For the first nine months of 2019, tax-equivalent net interest income totaled $77.5 million compared to $68.6 million for the comparable period of 2018.  The year-over-year increase was driven by growth in the loan portfolio, coupled with higher short-term rates, partially offset by higher rates paid on our negotiated rate deposits.

The federal funds target rate reached a recent high in the second quarter of 2019 at a range of 2.25% to 2.50%. During the third quarter, 2019, the Federal Open Market Committee reduced rates by an aggregate of 50 basis points to the current range of 1.75% to 2.00%.  These rate cuts have resulted in downward repricing of our variable/adjustable rate earning assets, which to date has been offset by loan growth and lower rates paid on our negotiated rate deposit products.  We continue to prudently manage our overall cost of funds, which was 33 basis points for the third quarter of 2019, compared to 40 basis points for the second quarter of 2019.  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 third quarter of 2019 was 3.92%, an increase of seven basis points over the second quarter of 2019 and an increase of 20 basis points over the third quarter of 2018.  For the first nine months of 2019, the net interest margin increased 26 basis points to 3.84% compared to the same period of 2018.  The increase in margin compared to the second quarter of 2019 was fully attributable to a seven basis point decline in our cost of funds, as both the rate and balance of our seasonal public deposits declined in the third quarter 2019.  The increase in the margin compared to both prior year periods reflected a favorable shift in our earning asset mix and higher interest rates.

The provision for loan losses for the third quarter of 2019 was $0.8 million compared to $0.6 million for the second quarter of 2019 and $0.9 million for the third quarter of 2018.  For the first nine months of 2019, the loan loss provision was $2.2 million compared to $2.5 million in 2018.  At September 30, 2019, the allowance for loan losses of $14.3 million represented 0.78% of outstanding loans (net of overdrafts) and provided coverage of 291% of nonperforming loans compared to 0.79% and 260%, respectively, at June 30, 2019 and 0.80% and 207%, respectively, at December 31, 2018.

Noninterest income for the third quarter of 2019 totaled $13.9 million, an increase of $1.1 million, or 8.9%, over the second quarter of 2019 and a $0.6 million, or 4.5%, increase over the third quarter of 2018.  For the first nine months of 2019, noninterest income totaled $39.2 million, a $0.9 million, or 2.3%, increase over the same period of 2018.  Higher wealth management fees, mortgage banking fees, and deposit fees drove the increase compared to the second quarter of 2019.  The increase over both prior year periods was primarily attributable to higher wealth management fees (increased trading activity by retail brokerage clients and, to a lesser extent, higher assets under management) and mortgage banking fees.

Noninterest expense for the third quarter of 2019 totaled $27.9 million, a decrease of $0.5 million, or 1.8%, from the second quarter of 2019 and $0.8 million, or 2.9%, from the third quarter of 2018.  For the first nine months of 2019, noninterest expense totaled $84.5 million, a $0.5 million, or 0.6% decrease from the same period of 2018.  In the third quarter of 2019, our small bank assessment credits were used to offset our FDIC insurance fees, which had a favorable impact of $0.4 million.  Lower expense for other real estate owned (“OREO”) properties also contributed to the favorable variance versus both prior year periods.  
       
We realized income tax expense of $7.4 million (effective rate of 25.0%) for the first nine months of 2019 compared to $1.3 million (effective rate of 6.6%) for the same period of 2018.  Income tax expense for the third quarter of 2019 was unfavorably impacted by net discrete items totaling $0.2 million.  During 2018, we realized tax benefits totaling $3.3 million (1Q - $1.5 million, 2Q - $1.4 million, 3Q - $0.4 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 $2.670 billion for the third quarter of 2019, a decrease of $49.1 million, or 1.8%, from the second quarter of 2019, and an increase of $115.6 million, or 4.5%, over the fourth quarter of 2018.  The change in average earning assets compared to the second quarter of 2019 was attributable to a decrease in short-term investments, primarily due to a decline in seasonal public fund balances and certificates of deposit.  The increase in average earning assets over the fourth quarter of 2018 was attributable to growth in both the loan portfolio and the overnight funds position, which was primarily funded by increases in noninterest bearing deposits and savings accounts.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $207.1 million during the third quarter of 2019 compared to an average net overnight funds sold position of $251.8 million in the second quarter of 2019 and $80.8 million in the fourth quarter of 2018.  The decrease in average net overnight funds compared to the second quarter 2019 reflected a decline in public fund deposits, partially offset by cash flow received from the investment portfolio. Overnight funds grew compared to the fourth quarter 2018 primarily due to higher balances of noninterest bearing deposits and cash flow from our investment portfolio, partially offset by loan growth.   

Average loans increased $14.2 million, or 0.8% compared to the second quarter of 2019, and grew by $52.0 million, or 2.9% compared to the fourth quarter of 2018.  The average increase compared to the second quarter of 2019 reflected growth in all loan types except commercial real estate, consumer loans, and home equity loans.  The increase compared to the fourth quarter of 2018 reflected growth in all product types except consumer and home equity loans. Over the course of 2019, we purchased adjustable rate residential loans totaling $11.2 million and a fixed rate commercial loan pool totaling $10.3 million based on principal balances at the time of purchase.

Without compromising our credit standards or taking on inordinate interest rate risk, we have modified some of our lending programs to address the highly competitive rate environment. We continue to closely monitor our markets and make minor rate adjustments as necessary.

Nonperforming assets (nonaccrual loans and OREO) totaled $5.5 million at September 30, 2019, a decrease of $1.2 million, or 17.8%, from June 30, 2019 and $3.6 million, or 40.1%, from December 31, 2018.  Nonaccrual loans totaled $4.9 million at September 30, 2019, a $0.7 million decrease from June 30, 2019 and a $1.9 million decrease from December 31, 2018.  The balance of OREO totaled $0.5 million at September 30, 2019, a decrease of $0.5 million and $1.7 million, respectively, from June 30, 2019 and December 31, 2018. 

Average total deposits were $2.496 billion for the third quarter of 2019, a decrease of $69.7 million, or 2.7%, from the second quarter of 2019, and an increase of $83.4 million, or 3.5%, over the fourth quarter of 2018.  The decline in average deposits compared to the second quarter of 2019 reflected lower public fund and certificates of deposit balances, partially offset by increases in noninterest bearing and savings accounts.  The increase in average deposits compared to the fourth quarter of 2018 primarily reflected growth in noninterest bearing deposits.

We continue to closely monitor and manage deposit levels as part of our overall liquidity position and believe a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings for the third quarter 2019 decreased $1.3 million compared to the second quarter 2019, and declined $9.5 million compared to the fourth quarter of 2018. Declines compared to both prior periods occurred in both short-term and long-term borrowings.     

Shareowners equity was $321.6 million at September 30, 2019 compared to $314.6 million at June 30, 2019 and $302.6 million at December 31, 2018.  Our leverage ratio was 11.09%, 10.64%, and 10.89%, respectively, on these dates.  At September 30, 2019, our total risk-based capital ratio was 17.59% compared to 17.13% and 17.13%, respectively.  Our common equity tier 1 capital ratio was 14.13% at September 30, 2019 compared to 13.67% at June 30, 2019 and 13.58% at December 31, 2018.  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 8.31% at September 30, 2019 compared to 7.83% and 7.58% for June 30, 2019 and December 31, 2018, 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 $2.9 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, except as required by law.

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)   Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Shareowners' Equity (GAAP)   $ 321,562   $ 314,595   $ 308,986   $ 302,587   $ 298,016  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Shareowners' Equity (non-GAAP) A   236,751     229,784     224,175     217,776     213,205  
Total Assets (GAAP)     2,934,513     3,017,654     3,052,051     2,959,183     2,819,190  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Assets (non-GAAP) B $ 2,849,702   $ 2,932,843   $ 2,967,240   $ 2,874,372   $ 2,734,379  
Tangible Common Equity Ratio (non-GAAP) A/B   8.31 %   7.83 %   7.56 %   7.58 %   7.80 %
Actual Diluted Shares Outstanding (GAAP) C   16,797,241     16,773,449     16,840,496     16,808,542     17,127,846  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 14.09   $ 13.70   $ 13.31   $ 12.96   $ 12.45  
                                 


                     
CAPITAL CITY BANK GROUP, INC.                    
EARNINGS HIGHLIGHTS                    
Unaudited                    
                     
    Three Months Ended   Nine Months Ended
(Dollars in thousands, except per share data)   Sep 30, 2019   Jun 30, 2019   Sep 30, 2018   Sep 30, 2019   Sep 30, 2018
                     
EARNINGS                    
Net Income $ 8,481   $ 7,325   $ 5,990   $ 22,242   $ 17,766  
Net Income Per Common Share $ 0.50   $ 0.44   $ 0.35   $ 1.32   $ 1.04  
PERFORMANCE                    
Return on Average Assets   1.14 %   0.98 %   0.84 %   1.00 %   0.83 %
Return on Average Equity   10.51 %   9.37 %   7.98 %   9.48 %   8.12 %
Net Interest Margin   3.92 %   3.85 %   3.72 %   3.84 %   3.58 %
Noninterest Income as % of Operating Revenue   34.67 %   32.95 %   36.04 %   33.72 %   35.99 %
Efficiency Ratio   69.27 %   73.02 %   77.37 %   72.37 %   79.46 %
CAPITAL ADEQUACY                    
Tier 1 Capital Ratio   16.83 %   16.36 %   16.17 %   16.83 %   16.17 %
Total Capital Ratio   17.59 %   17.13 %   16.94 %   17.59 %   16.94 %
Leverage Ratio   11.09 %   10.64 %   10.99 %   11.09 %   10.99 %
Common Equity Tier 1 Ratio   14.13 %   13.67 %   13.43 %   14.13 %   13.43 %
Tangible Common Equity Ratio(1)   8.31 %   7.83 %   7.80 %   8.31 %   7.80 %
Equity to Assets   10.96 %   10.43 %   10.57 %   10.96 %   10.57 %
ASSET QUALITY                    
Allowance as % of Non-Performing Loans   290.55 %   259.55 %   207.06 %   290.55 %   207.06 %
Allowance as a % of Loans   0.78 %   0.79 %   0.80 %   0.78 %   0.80 %
Net Charge-Offs as % of Average Loans   0.23 %   0.04 %   0.06 %   0.15 %   0.12 %
Nonperforming Assets as % of Loans and ORE   0.30 %   0.36 %   0.54 %   0.30 %   0.54 %
Nonperforming Assets as % of Total Assets   0.19 %   0.22 %   0.34 %   0.19 %   0.34 %
STOCK PERFORMANCE                    
High $ 28.00   $ 25.00   $ 25.91   $ 28.00   $ 26.50  
Low   23.70     21.57     23.19     21.04     22.28  
Close $ 27.45   $ 24.85   $ 23.34   $ 27.45   $ 23.34  
Average Daily Trading Volume   25,596     24,258     16,500     22,815     20,957  
                     
(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)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter
ASSETS                    
Cash and Due From Banks $ 61,151   $ 53,731   $ 49,501   $ 62,032   $ 48,423  
Funds Sold and Interest Bearing Deposits   177,389     234,097     304,213     213,968     26,839  
Total Cash and Cash Equivalents   238,540     287,828     353,714     276,000     75,262  
                     
Investment Securities Available for Sale   376,981     410,851     429,016     446,157     484,243  
Investment Securities Held to Maturity   240,303     229,516     226,179     217,320     227,923  
  Total Investment Securities   617,284     640,367     655,195     663,477     712,166  
                     
Loans Held for Sale   13,075     9,885     4,557     6,869     8,297  
                     
Loans, Net of Unearned Interest                    
Commercial, Financial, & Agricultural   259,870     265,001     238,942     233,689     239,044  
Real Estate - Construction   111,358     101,372     87,123     89,527     87,672  
Real Estate - Commercial   610,726     614,618     615,129     602,061     596,391  
Real Estate - Residential   354,545     349,843     338,574     334,197     333,896  
Real Estate - Home Equity   197,326     201,579     209,194     210,111     212,942  
Consumer   277,970     288,196     296,351     295,040     294,040  
Other Loans   14,248     13,131     10,430     8,018     8,167  
Overdrafts   1,710     1,442     1,362     1,582     1,602  
Total Loans, Net of Unearned Interest   1,827,753     1,835,182     1,797,105     1,774,225     1,773,754  
Allowance for Loan Losses   (14,319 )   (14,593 )   (14,120 )   (14,210 )   (14,219 )
Loans, Net   1,813,434     1,820,589     1,782,985     1,760,015     1,759,535  
                     
Premises and Equipment, Net   85,810     86,005     86,846     87,190     89,567  
Goodwill   84,811     84,811     84,811     84,811     84,811  
Other Real Estate Owned   526     1,010     1,902     2,229     2,720  
Other Assets   81,033     87,159     82,041     78,592     86,832  
Total Other Assets   252,180     258,985     255,600     252,822     263,930  
                     
Total Assets $ 2,934,513   $ 3,017,654   $ 3,052,051   $ 2,959,183   $ 2,819,190  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 1,022,774   $ 1,024,898   $ 995,853   $ 947,858   $ 934,146  
NOW Accounts   728,395     810,568     887,453     867,209     713,967  
Money Market Accounts   239,410     240,181     244,628     237,739     254,099  
Regular Savings Accounts   372,601     371,773     372,414     358,306     352,508  
Certificates of Deposit   109,827     113,684     116,946     120,744     126,496  
Total Deposits   2,473,007     2,561,104     2,617,294     2,531,856     2,381,216  
                     
Short-Term Borrowings   10,622     9,753     8,983     13,541     16,644  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     52,887  
Other Long-Term Borrowings   6,963     7,313     7,661     8,568     12,456  
Other Liabilities   69,472     72,002     56,240     49,744     57,971  
                     
Total Liabilities   2,612,951     2,703,059     2,743,065     2,656,596     2,521,174  
                     
SHAREOWNERS' EQUITY                    
Common Stock   167     167     168     167     171  
Additional Paid-In Capital   31,075     30,751     31,929     31,058     38,325  
Retained Earnings   316,551     310,247     304,763     300,177     293,254  
Accumulated Other Comprehensive Loss, Net of Tax   (26,231 )   (26,570 )   (27,874 )   (28,815 )   (33,734 )
                     
Total Shareowners' Equity   321,562     314,595     308,986     302,587     298,016  
                     
Total Liabilities and Shareowners' Equity $ 2,934,513   $ 3,017,654   $ 3,052,051   $ 2,959,183   $ 2,819,190  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 2,635,501   $ 2,719,530   $ 2,761,070   $ 2,658,539   $ 2,521,056  
Interest Bearing Liabilities   1,520,705     1,606,159     1,690,972     1,658,994     1,529,057  
                     
Book Value Per Diluted Share $ 19.14   $ 18.76   $ 18.35   $ 18.00   $ 17.40  
Tangible Book Value Per Diluted Share(1)   14.09     13.70     13.31     12.96     12.45  
                     
Actual Basic Shares Outstanding   16,749     16,746     16,812     16,748     17,059  
Actual Diluted Shares Outstanding   16,797     16,773     16,840     16,809     17,128  
                     
(1)Tangible book value per diluted share 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 OPERATIONS                      
Unaudited                            
                             
                        Nine Months Ended
    2019   2018   September 30,
(Dollars in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2019   2018
                             
INTEREST INCOME                            
Interest and Fees on Loans $ 23,992 $ 23,765 $ 22,616 $ 22,431   $ 21,618 $ 70,373 $ 61,686
Investment Securities   3,307   3,393   3,513   3,478     3,472   10,213   9,390
Funds Sold   1,142   1,507   1,593   461     302   4,242   1,949
Total Interest Income   28,441   28,665   27,722   26,370     25,392   84,828   73,025
                             
INTEREST EXPENSE                            
Deposits   1,596   1,988   2,099   1,312     1,068   5,683   2,931
Short-Term Borrowings   27   31   35   53     41   93   57
Subordinated Notes Payable   558   596   608   572     568   1,762   1,595
Other Long-Term Borrowings   63   66   72   85     92   201   286
Total Interest Expense   2,244   2,681   2,814   2,022     1,769   7,739   4,869
Net Interest Income   26,197   25,984   24,908   24,348     23,623   77,089   68,156
Provision for Loan Losses   776   646   767   457     904   2,189   2,464
Net Interest Income after Provision for
  Loan Losses
  25,421   25,338   24,141   23,891     22,719   74,900   65,692
                             
NONINTEREST INCOME                            
Deposit Fees   4,961   4,756   4,775   5,172     5,207   14,492   14,921
Bank Card Fees   2,972   3,036   2,855   2,830     2,828   8,863   8,548
Wealth Management Fees   2,992   2,404   2,323   2,320     2,181   7,719   6,391
Mortgage Banking Fees   1,587   1,199   993   1,129     1,343   3,779   3,606
Other   1,391   1,375   1,606   1,787     1,749   4,372   4,861
Total Noninterest Income   13,903   12,770   12,552   13,238     13,308   39,225   38,327
                             
NONINTEREST EXPENSE                            
Compensation   16,203   16,437   16,349   16,322     15,891   48,989   47,599
Occupancy, Net   4,710   4,537   4,509   4,804     4,645   13,756   13,699
Other Real Estate, Net   6   75   363   (1,663 )   347   444   1,221
Other   6,954   7,347   6,977   7,042     7,816   21,278   22,479
Total Noninterest Expense   27,873   28,396   28,198   26,505     28,699   84,467   84,998
                             
OPERATING PROFIT   11,451   9,712   8,495   10,624     7,328   29,658   19,021
Income Tax Expense   2,970   2,387   2,059   2,166     1,338   7,416   1,255
NET INCOME $ 8,481 $ 7,325 $ 6,436 $ 8,458   $ 5,990 $ 22,242 $ 17,766
                             
PER SHARE DATA                            
Basic Net Income $ 0.51 $ 0.44 $ 0.38 $ 0.50   $ 0.35 $ 1.33 $ 1.04
Diluted Net Income   0.50   0.44   0.38   0.50     0.35   1.32   1.04
Cash Dividend $ 0.13 $ 0.11 $ 0.11 $ 0.09   $ 0.09 $ 0.35 $ 0.23
AVERAGE SHARES                            
Basic    16,747   16,791   16,791   16,989     17,056   16,776   17,043
Diluted    16,795   16,818   16,819   17,050     17,125   16,810   17,102
                               


                             
CAPITAL CITY BANK GROUP, INC.                            
ALLOWANCE FOR LOAN LOSSES                            
AND RISK ELEMENT ASSETS                            
Unaudited                            
                             
                        Nine Months Ended
    2019
  2018   September 30,
(Dollars in thousands, except per share data)   Third Quarter   Second Quarter   First Quarter   Fourth Quarter   Third Quarter   2019    2018 
                             
ALLOWANCE FOR LOAN LOSSES                            
Balance at Beginning of Period $ 14,593   $ 14,120   $ 14,210   $ 14,219   $ 13,563   $ 14,210   $ 13,307  
Provision for Loan Losses   776     646     767     457     904     2,189     2,464  
Net Charge-Offs   1,050     173     857     466     248     2,080     1,552  
Balance at End of Period $ 14,319   $ 14,593   $ 14,120   $ 14,210   $ 14,219   $ 14,319   $ 14,219  
As a % of Loans   0.78 %   0.79 %   0.78 %   0.80 %   0.80 %   0.78 %   0.80 %
As a % of Nonperforming Loans   290.55 %   259.55 %   279.77 %   206.79 %   207.06 %   290.55 %   207.06 %
                             
CHARGE-OFFS                            
Commercial, Financial and Agricultural $ 289   $ 235   $ 95   $ 53   $ 268   $ 619   $ 591  
Real Estate - Construction   223     -     -     -     -     223     7  
Real Estate - Commercial   26     -     155     -     25     181     315  
Real Estate - Residential   44     65     264     111     106     373     669  
Real Estate - Home Equity   333     45     52     106     112.00     430     427  
Consumer   744     520     795     728     463     2,059     1,667  
Total Charge-Offs $ 1,659   $ 865   $ 1,361   $ 998   $ 974   $ 3,885   $ 3,676  
                             
RECOVERIES                            
Commercial, Financial and Agricultural $ 86   $ 58   $ 74   $ 128   $ 78   $ 218   $ 331  
Real Estate - Construction   -     -     -     25     -     -     1  
Real Estate - Commercial   142     100     70     13     222     312     360  
Real Estate - Residential   46     223     44     106     107     313     537  
Real Estate - Home Equity   58     60     32     61     47     150     130  
Consumer   277     251     284     199     272     812     765  
Total Recoveries $ 609   $ 692   $ 504   $ 532   $ 726   $ 1,805   $ 2,124  
                             
NET CHARGE-OFFS $ 1,050   $ 173   $ 857   $ 466   $ 248   $ 2,080   $ 1,552  
                             
Net Charge-Offs as a % of Average Loans (1)   0.23 %   0.04 %   0.20 %   0.10 %   0.06 %   0.15 %   0.12 %
                             
RISK ELEMENT ASSETS                            
Nonaccruing Loans $ 4,928   $ 5,622   $ 5,047   $ 6,872   $ 6,867          
Other Real Estate Owned   526     1,010     1,902     2,229     2,720          
Total Nonperforming Assets $ 5,454   $ 6,632   $ 6,949   $ 9,101   $ 9,587          
                             
Past Due Loans 30-89 Days $ 5,120   $ 5,443   $ 4,682   $ 4,757   $ 3,684          
Past Due Loans 90 Days or More (accruing)   -     -     -     -     126          
Classified Loans   21,323     26,406     22,219     22,889     27,039          
Performing Troubled Debt Restructuring's $ 18,284   $ 18,737   $ 20,791   $ 22,084   $ 28,661          
                             
Nonperforming Loans as a % of Loans   0.27 %   0.30 %   0.28 %   0.39 %   0.39 %        
Nonperforming Assets as a % of Loans and                            
  Other Real Estate   0.30 %   0.36 %   0.39 %   0.51 %   0.54 %        
Nonperforming Assets as a % of Total Assets   0.19 %   0.22 %   0.23 %   0.31 %   0.34 %        
                             
(1) Annualized                            
                             


                                                                                       
CAPITAL CITY BANK GROUP, INC.                                                                                      
AVERAGE BALANCE AND INTEREST RATES (1)                                                                                          
Unaudited                                                                                                  
                                                                                                   
    Third Quarter 2019     Second Quarter 2019     First Quarter 2019     Fourth Quarter 2018     Third Quarter 2018     Sep 2019 YTD     Sep 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 $ 1,837,548     24,113   5.21 % $ 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 % $ 1,813,964     70,705   5.21 % $ 1,695,695     61,994   4.89 %
                                                                                                   
Investment Securities                                                                                                  
Taxable Investment Securities   607,363     3,249   2.13     614,775     3,301   2.15     618,127     3,387   2.20     637,735     3,325   2.08     663,639     3,290   1.98     613,382     9,936   2.16     642,260     8,758   1.82  
Tax-Exempt Investment Securities   18,041     73   1.63     29,342     116   1.58     40,575     158   1.56     50,362     193   1.54     60,952     229   1.50     29,237     347   1.59     72,656     813   1.49  
                                                                                                   
Total Investment Securities   625,404     3,322   2.12     644,117     3,417   2.12     658,702     3,545   2.16     688,097     3,518   2.04     724,591     3,519   1.94     642,619     10,283   2.13     714,916     9,571   1.79  
                                                                                                   
Funds Sold   207,129     1,142   2.19     251,789     1,507   2.40     265,694     1,593   2.43     80,815     461   2.26     63,608     302   1.88     241,323     4,242   2.35     153,767     1,949   1.69  
                                                                                                   
Total Earning Assets   2,670,081   $ 28,577   4.25 %   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 %   2,697,906   $ 85,230   4.22 %   2,564,378   $ 73,514   3.83 %
                                                                                                   
Cash and Due From Banks   50,981               51,832               53,848               52,344               49,493               52,210               50,844            
Allowance for Loan Losses   (14,863 )             (14,513 )             (14,347 )             (14,642 )             (14,146 )             (14,576 )             (13,774 )          
Other Assets   253,111               254,126               252,208               257,061               256,285               253,152               258,363            
                                                                                                   
Total Assets $ 2,959,310             $ 3,010,662             $ 2,996,511             $ 2,849,245             $ 2,826,924             $ 2,988,692             $ 2,859,811            
                                                                                                   
LIABILITIES:                                                                                                  
Interest Bearing Deposits                                                                                                  
NOW Accounts $ 749,678   $ 1,235   0.65 % $ 832,982   $ 1,623   0.78 % $ 884,277   $ 1,755   0.80 % $ 739,225   $ 995   0.53 % $ 733,255   $ 773   0.42 % $ 821,819   $ 4,613   0.75 % $ 795,112   $ 2,157   0.36 %
Money Market Accounts   238,565     264   0.44     237,921     265   0.45     239,516     247   0.42     248,486     216   0.34     254,440     190   0.30     238,664     775   0.43     252,082     459   0.24  
Savings Accounts   372,593     46   0.05     371,716     46   0.05     364,783     44   0.05     356,723     44   0.05     352,833     43   0.05     369,726     136   0.05     349,527     128   0.05  
Time Deposits   111,447     51   0.18     115,442     54   0.19     118,839     53   0.18     123,193     57   0.18     129,927     62   0.19     115,215     159   0.18     134,781     187   0.19  
Total Interest Bearing Deposits   1,472,283     1,596   0.43 %   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 %   1,545,424     5,683   0.49 %   1,531,502     2,931   0.27 %
                                                                                                   
Short-Term Borrowings   8,697     27   1.24 %   9,625     31   1.30 %   11,378     35   1.26 %   15,424     53   1.36 %   12,949     41   1.24 %   9,890     93   1.27 %   9,499     57   0.80 %
Subordinated Notes Payable   52,887     558   4.13     52,887     596   4.46     52,887     608   4.60     52,887     572   4.23     52,887     568   4.20     52,887     1,762   4.39     52,887     1,595   3.98  
Other Long-Term Borrowings   7,158     63   3.47     7,509     66   3.53     8,199     72   3.55     9,918     85   3.40     12,729     92   2.87     7,619     201   3.52     13,218     286   2.89  
                                                                                                   
Total Interest Bearing Liabilities   1,541,025   $ 2,244   0.58 %   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 %   1,615,820   $ 7,739   0.64 %   1,607,106   $ 4,869   0.42 %
                                                                                                   
Noninterest Bearing Deposits   1,023,472               1,007,370               957,300               944,748               921,817               996,290               895,042            
Other Liabilities   74,540               61,611               52,070               56,445               58,330               62,823               65,270            
                                                                                                   
Total Liabilities   2,639,037               2,697,063               2,689,249               2,547,049               2,529,167               2,674,933               2,567,418            
                                                                                                   
SHAREOWNERS' EQUITY:   320,273               313,599               307,262               302,196               297,757               313,759               292,393            
                                                                                                   
Total Liabilities and Shareowners' Equity $ 2,959,310             $ 3,010,662             $ 2,996,511             $ 2,849,245             $ 2,826,924             $ 2,988,692             $ 2,859,811            
                                                                                                   
Interest Rate Spread     $ 26,333   3.67 %     $ 26,116   3.59 %     $ 25,042   3.49 %     $ 24,513   3.58 %     $ 23,785   3.53 %     $ 77,491   3.58 %     $ 68,645   3.41 %
                                                                                                   
Interest Income and Rate Earned(1)       28,577   4.25         28,797   4.25         27,856   4.17         26,535   4.12         25,554   4.00         85,230   4.22         73,514   3.83  
Interest Expense and Rate Paid(2)       2,244   0.33         2,681   0.40         2,814   0.42         2,022   0.31         1,769   0.28         7,739   0.38         4,869   0.25  
                                                                                                   
Net Interest Margin     $ 26,333   3.92 %     $ 26,116   3.85 %     $ 25,042   3.75 %     $ 24,513   3.81 %     $ 23,785   3.72 %     $ 77,491   3.84 %     $ 68,645   3.58 %
                                                                                                   
(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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