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Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2012 Results



Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2012
Results

TALLAHASSEE, Fla., Jan. 29, 2013 (GLOBE NEWSWIRE) -- Capital City Bank Group,
Inc. (Nasdaq:CCBG) today reported net income of $1.9 million, or $0.11 per
diluted share, for the fourth quarter of 2012, compared to net income of $1.1
million, or $0.07 per diluted share, for the third quarter of 2012 and a net
loss of $0.5 million, or $0.03 per diluted share, for the fourth quarter of
2011. For the full year 2012, CCBG reported net income of $0.1 million, or
$0.01 per diluted share, compared to net income of $4.9 million, or $0.29 per
diluted share in 2011.

Compared to the third quarter of 2012, the improvement in earnings reflects
lower noninterest expense of $0.7 million, a reduction in the loan loss
provision of $0.1 million, and an increase in operating revenues of $0.1
million, partially offset by higher income taxes of $0.1 million. Compared to
the fourth quarter of 2011, the increase in earnings was due to a lower loan
loss provision of $4.8 million and a decline in noninterest expense of $1.6
million, partially offset by a reduction in operating revenues of $1.6 million
and higher income taxes of $2.4 million.

For the full year 2012, the decline in earnings was attributable to lower
operating revenues of $11.3 million partially offset by a lower loan loss
provision of $2.8 million, a decrease in noninterest expense of $1.7 million
and a reduction in income taxes of $2.0 million. 2011 performance reflects the
sale of our Visa Class B shares which resulted in a $2.6 million net gain
($3.2 million pre-tax included in noninterest income and a swap liability of
$0.6 million included in noninterest expense).

"I am pleased with the fourth quarter results, which enabled Capital City Bank
Group to be profitable for the year," said William G. Smith, Jr., chairman,
president and CEO. "Though the market is still choppy, I am encouraged by
fourth quarter improvements, which included lower credit costs and modest, yet
noteworthy, growth in operating revenue. Nonperforming assets declined $10
million or 8 percent, and credit costs were down $0.8 million or 14 percent
for the quarter. Credit metrics continue to improve and credit quality remains
a top priority. With OREO sales exceeding $8 million in the fourth quarter and
topping $28 million for the year, we believe a retail strategy focused on the
disposition of other real estate owned continues to be in the best interest of
our shareowners. Despite weak demand, loans declined at a slower pace in the
fourth quarter, reinforcing my belief that our markets continue to exhibit
signs of recovery as shown by decreasing unemployment and a firming of home
prices. As we head into 2013, I am encouraged by these conditions, pleased
with our progress and remain optimistic about our future."

The Return on Average Assets was 0.29% and the Return on Average Equity was
2.95% for the fourth quarter of 2012. These metrics were 0.17% and 1.77% for
the third quarter of 2012, and -0.08% and -0.80% for the fourth quarter of
2011, respectively.

For the full year 2012, the Return on Average Assets was 0.00% and the Return
on Average Equity was 0.04% compared to 0.19% and 1.86%, respectively, for the
full year of 2011.

Discussion of Financial Condition

Average earning assets were $2.179 billion for the fourth quarter of 2012, a
decrease of $30.2 million, or 1.4%, from the third quarter of 2012, and an
increase of $32.5 million, or 1.5%, from the fourth quarter of 2011.  As
compared to the third quarter of 2012, the decline in average earning assets
is attributable to a lower level of overnight funds resulting from a seasonal
decline in deposits and the resolution of problem loans. The shift in the mix
of earning assets continued as the loan portfolio declined when compared to
the prior quarter. The increase in average earning assets compared to the
fourth quarter of 2011 primarily reflects a higher level of public funds. 

We maintained an average net overnight funds (deposits with banks plus fed
funds sold less fed funds purchased) sold position of $366.0 million during
the fourth quarter of 2012 compared to an average net overnight
funds sold position of $386.0 million in the third quarter of 2012 and an
average overnight funds sold position of $191.8 million in the fourth quarter
of 2011.  The lower balance when compared to the third quarter of 2012
reflects lower levels of deposits, primarily public funds and certificates of
deposit, partially offset by a decrease in the loan portfolio. The higher
balances when compared to the fourth quarter of 2011 primarily reflect the
decline in the loan portfolio.

When compared to the third quarter of 2012 and the fourth quarter of 2011,
average loans declined by $23.0 million and $128.4 million, respectively. Most
loan categories have experienced declines with the reduction primarily in the
commercial real estate and residential categories. Our core loan portfolio
continues to be impacted by normal amortization and a higher level of payoffs
that have outpaced our new loan production. New loan production continues to
be impacted by weak loan demand attributable to the trend toward consumers and
businesses deleveraging, the lack of consumer confidence, and a persistently
sluggish economy.

The resolution of problem loans (which has the effect of lowering the loan
portfolio as loans are either charged off or transferred to other real estate
owned "OREO") also contributed to the overall decline.  During the fourth
quarter of 2012, loan charge-offs and loans transferred to OREO accounted for
$13.7 million. This more than offset the net reduction in total loans of $12.0
million, which occurred in the fourth quarter of 2012. During the full year
2012, loan resolution accounted for $45.0 million, or 42%, of the net
reduction in loans of $107.4 million^1.

Average total deposits were $2.051 billion for the fourth quarter of 2012, a
decrease of $24.4 million, or 1.2%, from the third quarter of 2012 and higher
by $18.1 million, or 0.9%, over the fourth quarter of 2011.  The decrease in
deposits when compared to the third quarter of 2012 resulted from lower public
funds, money markets and certificates of deposit, partially offset by growth
in noninterest bearing accounts and regular savings. Compared to the fourth
quarter of 2011, the increase was driven primarily by higher public fund
balances, savings and noninterest bearing deposits. This was partially offset
by a reduction of certificates of deposit. The seasonal low in public fund
balances occurred during the fourth quarter and these balances are anticipated
to increase through the first quarter of 2013.

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

Borrowings decreased by $9.1 million when compared to the third quarter of
2012 as a result of lower balances in repurchase agreements, and were lower by
$1.0 million when compared to the fourth quarter of 2011, as a result of
normal amortization in FHLB advances.

Nonperforming assets (nonaccrual loans and OREO) totaled $117.7 million at
year-end 2012 compared to $127.2 million at the end of the third quarter of
2012 and $137.6 million at year-end 2011. Nonaccrual loans totaled $64.2
million at year-end 2012, a decrease of $9.9 million from the third quarter of
2012 and $10.8 million from year-end 2011, reflective of loan resolutions
(charge-offs and transfer of loans to OREO) and loans restored to an accrual
status, which outpaced gross additions. Gross additions slowed significantly
year over year, by approximately $45 million. The balance of OREO totaled
$53.4 million at year-end 2012, a $0.2 million increase over the third quarter
of 2012 and a decrease of $9.2 million from year-end 2011. We continued to
experience progress during 2012 in our efforts to dispose of OREO selling
properties totaling $28.2 million compared to $27.8 million in
2011. Nonperforming assets represented 4.47% of total assets at December 31,
2012 compared to 5.10% at September 30, 2012 and 5.21% at December 31, 2011.

Equity capital was $246.9 million as of December 31, 2012, compared to $250.4
million as of September 30, 2012 and $251.9 million as of December 31,
2011. Our leverage ratio was 9.90%, 9.83%, and 10.26%, respectively, for these
periods. Further, our risk-adjusted capital ratio of 15.72% at December 31,
2012 exceeds the 10.0% threshold to be designated as "well-capitalized" under
the risk-based regulatory guidelines. At December 31, 2012, our tangible
common equity ratio was 6.35%, compared to 6.86% at September 30, 2012 and
6.51% at December 31, 2011. The tangible common equity ratio was impacted by a
$5.5 million unfavorable variance in the pension component of our other
comprehensive income. This unfavorable variance was driven by a reduction in
our pension plan's discount rate due to a decline in market rates, and a lower
than anticipated return on plan assets.  

Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2012 was $20.7
million compared to $21.2 million for the third quarter of 2012 and $22.6
million for the fourth quarter of 2011.  For the full year 2012, tax
equivalent net interest income totaled $84.9 million compared to $92.8 million
in 2011. Factors affecting net interest income relative to the third quarter
of 2012 include a reduction in loan income attributable to declining loan
balances and unfavorable asset repricing. Year over year, the decrease was due
to reduction in loan income attributable to lower portfolio balances and
unfavorable asset repricing, which was partially offset by a reduction in
interest expense.  The lower interest expense is primarily attributable to
certificates of deposit and reflects both lower balances and favorable
repricing. 

The decline in the loan portfolio, coupled with the low rate environment
continues to put pressure on our net interest income.  The loan portfolio
yield is declining as the existing portfolio reprices. Lowering our cost of
funds, to the extent we can, and continuing to shift the mix of our deposits
will help to partially mitigate the unfavorable impact of weak loan demand and
repricing, although the impact is expected to be minimal.

The net interest margin for the fourth quarter of 2012 was 3.78%, a decrease
of 4 basis points from the third quarter of 2012 and a decline of 39 basis
points from the fourth quarter of 2011.  For the full year 2012, the margin
declined by 37 basis points to 3.81%. The decrease in the margin for all
comparable periods is attributable to the shift in our earning asset mix and
unfavorable asset repricing, partially offset by a lower average cost of
funds.

The provision for loan losses for the fourth quarter of 2012 was $2.8 million
compared to $2.9 million in the third quarter of 2012 and $7.6 million for the
fourth quarter of 2011. For the full year 2012, the loan loss provision
totaled $16.2 million compared to $19.0 million for 2011. Slower problem loan
migration, lower loan loss experience, and improved credit metrics resulted in
a lower level of loan loss provision for both the second half of 2012 and the
full year 2012. Net charge-offs for the fourth quarter of 2012 totaled $3.8
million, or 1.00% of average loans, compared to $2.6 million, or 0.66%, in the
third quarter of 2012, and $6.2 million, or 1.50%, in the fourth quarter of
2011. For 2012, our net charge-offs totaled $18.0 million, or 1.16%, of
average loans, compared to $23.4 million, or 1.39%, for 2011. Over the last
five years, we have recorded a cumulative loan loss provision totaling $131.5
million, or 6.9%, of beginning loans and have recognized cumulative net
charge-offs of $120.0 million, or 6.3%. At year-end 2012, the allowance for
loan losses of $29.2 million was 1.93% of outstanding loans (net of
overdrafts) and provided coverage of 45% of nonperforming loans compared to
1.97% and 41%, respectively, at the end of the third quarter of 2012, and
1.91% and 41%, respectively, at year-end 2011. 

Noninterest income for the fourth quarter of 2012 totaled $14.1 million, an
increase of $0.5 million, or 4.0%, over the third quarter of 2012 and an
increase of $0.2 million, or 1.7%, over the fourth quarter of 2011. The
increase over the third quarter of 2012 reflects higher deposit fees of $0.4
million and wealth management fees (trust fees and retail brokerage fees) of
$0.1 million. The favorable variance compared to the fourth quarter of 2011
was driven by higher deposit fees of $0.2 million. For the full year 2012,
noninterest income totaled $55.2 million, a decrease of $3.7 million, or 6.2%,
from 2011 attributable to a reduction in other income of $4.6 million, data
processing fees of $0.5 million, and wealth management fees of $0.4 million,
partially offset by higher deposit fees of $0.3 million, mortgage banking fees
of $0.9 million and bank card fees of $0.6 million. The decline in other
income was primarily attributable to a $3.2 million gain from the sale of our
Visa stock recognized during 2011 and to a lesser extent a reduction in gains
from the sale of other real estate properties. Data processing fees declined
due to a reduction in the number of banks that we process for as two of our
user banks were acquired and discontinued service in early 2011. The reduction
in wealth management fees reflects a decline in trust fees reflective of a
lower level of assets under management due to account distributions, and a
decrease in retail brokerage fees due to lower client trading activity. The
increase in deposit fees was driven by a lower level of charged off checking
accounts and improved fee collection experience. Increased loan origination
volume drove the higher level of mortgage banking fees reflecting increased
home purchase activity in our markets. The increase in bank card fees was
attributable to an increase in active cards and higher card utilization.

Noninterest expense for the fourth quarter of 2012 totaled $29.5 million, a
decrease of $0.7 million, or 2.4%, from the third quarter of 2012 and a
decrease of $1.6 million, or 5.3%, from the fourth quarter of 2011. The
decrease from the third quarter was driven by a decrease in OREO expense of
$0.7 million, occupancy expense of $0.2 million, and other expense of $0.1
million, partially offset by higher compensation expense of $0.3 million. The
reduction in OREO expense was driven by a lower level of valuation adjustments
and to a lesser extent a reduction in property carrying costs. Occupancy
expense declined due to lower property tax expense and utilities expense. The
reduction in other expense reflects a decrease in printing and supplies due to
lower usage and a lower level of operational losses. The increase in
compensation was attributable to higher pension plan expense and stock
compensation expense partially offset by lower expense for cash
incentives. Compared to the fourth quarter of 2011, the decrease was primarily
attributable to lower OREO expense of $1.5 million and other expense of $0.7
million partially offset by higher compensation expense of $0.5 million. A
lower level of valuation adjustments and property carrying costs drove the
reduction in OREO expense. Other expense declined due to a reduction in
advertising expense and lower expense for the Visa swap liability associated
with the sale of our Visa shares during 2011. A higher level of expense for
our pension plan and stock compensation plans partially offset by lower
associate salary expense drove the unfavorable variance in
compensation.       

For the full year 2012, noninterest expense totaled $124.6 million, a decrease
of $1.7 million, or 1.3%, from 2011 primarily attributable to a decline in
OREO expense of $1.2 million, occupancy expense of $0.5 million, intangible
amortization of $0.2 million, and other expense of $0.7 million, partially
offset by higher compensation expense of $0.6 million and furniture/equipment
expense of $0.3 million. A lower level of valuation adjustments drove the
decline in OREO expense. Occupancy expense decreased due to a decline in
building maintenance/repairs and utility expense reflecting our efforts to
re-negotiate vendor contracts and proactively manage our energy costs. The
reduction in intangible amortization expense reflects the full amortization of
certain core deposit intangibles related to past acquisitions. Other expense
decreased primarily due to lower expense for advertising of $0.7 million, FDIC
insurance of $0.4 million, postage of $0.2 million, and miscellaneous expense
of $0.7 million, partially offset by higher professional fees of $1.0 million
and processing costs of $0.3 million. The decline in advertising expense
reflects a lower level of brand promotional activities and improved control
over public relations costs. FDIC insurance costs declined due to maintenance
of a lower assessment base during 2012. The reduction in postage primarily
reflects migration of clients to electronic statements and improved control
over mailing activities. Lower expense for the Visa swap liability associated
with the sale of our Visa shares during 2011 drove the decline in
miscellaneous expense. The increase in professional fees was primarily due to
higher consulting fees and external audit fees. The aforementioned unfavorable
variance in compensation expense reflects higher pension plan expense that was
partially offset by lower expense for associate salaries and performance
compensation. Utilization of a lower discount rate in 2012 due to lower
long-term bond interest rates drove the aforementioned increase in pension
plan expense. Higher software and maintenance costs for newly implemented
information systems drove the unfavorable variance in furniture/equipment
expense.

We realized income tax expense of $0.6 million in the fourth quarter of 2012
compared to income tax expense of $0.4 million for the third quarter of 2012
and a tax benefit of $1.9 million for the fourth quarter of 2011.  For the
full year 2012, we realized a tax benefit of $1.3 million compared to income
tax expense of $0.6 million for 2011.  The decrease in the tax provision year
over year primarily reflects lower operating profits and to a lesser extent
the resolution of certain tax contingencies during the fourth quarter of 2012.

ABOUT CAPITAL CITY BANK GROUP

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly
traded bank holding companies headquartered in Florida and has approximately
$2.6 billion in assets. The Company provides a full range of banking services,
including traditional deposit and credit services, asset management, trust,
mortgage banking, merchant services, bankcards, data processing and securities
brokerage services. The Company's bank subsidiary, Capital City Bank, was
founded in 1895 and now has 69 locations and 72 ATMs in Florida, Georgia and
Alabama. For more information about Capital City Bank Group, Inc., visit
www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans
and expectations that are subject to uncertainties and risks, which could
cause the Company's future results to differ materially. The following
factors, among others, could cause the Company's actual results to differ: the
Company's need and our ability to incur additional debt or equity financing;
the accuracy of the Company's financial statement estimates and assumptions,
including the estimate used for the Company's loan loss provision and deferred
tax valuation allowance; continued depression of the market value of the
Company that could result in an impairment of goodwill; legislative or
regulatory changes, including the Dodd-Frank Act and Basel III; the strength
of the U.S. economy and the local economies where the Company conducts
operations; the frequency and magnitude of foreclosure of the Company's loans;
restrictions on our operations, including the inability to pay dividends
without our regulators' consent; the effects of the health and soundness of
other financial institutions, including the FDIC's need to increase Deposit
Insurance Fund assessments; the effects of the Company's lack of a diversified
loan portfolio, including the risks of geographic and industry concentrations;
harsh weather conditions and man-made disasters; fluctuations in inflation,
interest rates, or monetary policies; changes in the stock market and other
capital and real estate markets; customer acceptance of third-party products
and services; increased competition and its effect on pricing, including the
impact on our net interest margin from the repeal of Regulation Q; negative
publicity and the impact on our reputation; technological changes; the effects
of security breaches and computer viruses that may affect the Company's
computer systems; changes in consumer spending and savings habits; the
Company's growth and profitability; changes in accounting; and the Company's
ability to manage the risks involved in the foregoing. Additional factors can
be found in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2011, and the Company's other filings with the SEC, which are
available at the SEC's internet site (http://www.sec.gov). Forward-looking
statements in this Press Release speak only as of the date of the Press
Release, and the Company assumes no obligation to update forward-looking
statements or the reasons why actual results could differ.

 ^[1]The reductions in loan portfolio balances stated in this paragraph are
based on "as of" balances, not averages.

CAPITAL CITY BANK GROUP,                                              
INC.
EARNINGS HIGHLIGHTS                                                   
Unaudited                                                             
 
                             Three Months Ended            Twelve Months Ended
(Dollars in thousands,       Dec 31,   Sep 30,   Dec 31,   Dec 31,   Dec 31,
except per share data)       2012      2012      2011      2012      2011
                                                                      
EARNINGS                                                              
Net Income (Loss)             $ 1,874   $ 1,121   $ (535)   $ 108     $ 4,897
Net Income (Loss) Per Common  $ 0.11    $ 0.07    $ (0.03)  $ 0.01    $ 0.29
Share
PERFORMANCE                                                           
Return on Average Equity     2.95%     1.77%     -0.80%    0.04%     1.86%
Return on Average Assets     0.29%     0.17%     -0.08%    0.00%     0.19%
Net Interest Margin          3.78%     3.82%     4.17%     3.81%     4.18%
Noninterest Income as % of   40.81%    39.31%    38.34%    39.66%    39.13%
Operating Revenue
Efficiency Ratio             84.68%    86.89%    85.37%    88.72%    83.24%
CAPITAL ADEQUACY                                                      
Tier 1 Capital Ratio         14.35%    14.43%    13.96%    14.35%    13.96%
Total Capital Ratio          15.72%    15.80%    15.32%    15.72%    15.32%
Tangible Common Equity Ratio 6.35%     6.86%     6.51%     6.35%     6.51%
Leverage Ratio               9.90%     9.83%     10.26%    9.90%     10.26%
Equity to Assets             9.37%     10.04%    9.54%     9.37%     9.54%
ASSET QUALITY                                                         
Allowance as % of            45.42%    40.80%    41.37%    45.42%    41.37%
Non-Performing Loans
Allowance as a % of Loans    1.93%     1.97%     1.91%     1.93%     1.91%
Net Charge-Offs as % of      1.00%     0.66%     1.50%     1.16%     1.39%
Average Loans
Nonperforming Assets as % of 7.47%     8.02%     8.14%     7.47%     8.14%
Loans and ORE
Nonperforming Assets as % of 4.47%     5.10%     5.21%     4.47%     5.21%
Total Assets
STOCK PERFORMANCE                                                     
High                          $ 11.91   $ 10.96   $ 11.11   $ 11.91   $ 13.80
Low                          9.04      7.00      9.43      6.35      9.43
Close                        11.37     10.64     9.55      11.37     9.55
Average Daily Trading Volume  $ 20,045  $ 23,737  $ 33,026  $ 26,622  $ 32,096

                                                                        
CAPITAL CITY BANK                                                       
GROUP, INC.
CONSOLIDATED STATEMENT OF                                               
FINANCIAL CONDITION
Unaudited                                                               
 
                                                                        
                   2012                                                2011
(Dollars in        Fourth       Third        Second       First        Fourth
thousands)         Quarter      Quarter      Quarter      Quarter      Quarter
ASSETS                                                                  
Cash and Due From   $ 66,238     $ 53,076     $ 57,477     $ 50,567     $ 54,953
Banks
Funds Sold and
Interest Bearing   443,494      314,318      434,814      418,678      330,361
Deposits
Total Cash and      509,732      367,394      492,291      469,245      385,314
Cash Equivalents
                                                                        
Investment
Securities,        296,985      288,166      280,753      284,490      307,149
Available-for-Sale
                                                                        
Loans, Net of                                                           
Unearned Interest
Commercial,
Financial, &       139,850      135,939      136,736      132,119      130,879
Agricultural
Real Estate -      43,740       43,278       46,803       34,554       26,367
Construction
Real Estate -      613,625      609,671      605,819      624,528      639,140
Commercial
Real Estate -      318,400      341,044      353,198      364,123      386,877
Residential
Real Estate - Home 236,263      239,446      242,929      240,800      244,263
Equity
Consumer           150,728      154,389      162,899      174,132      186,216
Other Loans        11,547       6,891        5,638        6,555        12,495
Overdrafts         7,149        2,637        2,214        2,073        2,446
Total Loans, Net
of Unearned         1,521,302    1,533,295    1,556,236    1,578,884    1,628,683
Interest
Allowance for Loan (29,167)     (30,222)     (29,929)     (31,217)     (31,035)
Losses
Loans, Net          1,492,135    1,503,073    1,526,307    1,547,667    1,597,648
                                                                        
Premises and       107,092      109,003      110,302      111,408      110,991
Equipment, Net
Intangible Assets  85,053       85,161       85,269       85,376       85,484
Other Real Estate  53,426       53,172       58,059       58,100       62,600
Owned
Other Assets       89,561       87,815       92,869       103,992      92,126
Total Other Assets 335,132      335,151      346,499      358,876      351,201
                                                                        
Total Assets        $ 2,633,984  $ 2,493,784  $ 2,645,850  $ 2,660,278  $ 2,641,312
                                                                        
LIABILITIES                                                             
Deposits:                                                               
Noninterest         $ 609,235    $ 596,660    $ 623,130    $ 605,774    $ 618,317
Bearing Deposits
NOW Accounts       842,435      703,327      789,103      845,149      828,990
Money Market       267,766      285,084      288,352      283,224      276,910
Accounts
Regular Savings    184,541      181,523      178,388      172,262      158,462
Accounts
Certificates of    241,019      254,000      271,413      279,295      289,840
Deposit
Total Deposits     2,144,996    2,020,594    2,150,386    2,185,704    2,172,519
                                                                        
Short-Term         47,435       42,388       69,449       42,188       43,372
Borrowings
Subordinated Notes 62,887       62,887       62,887       62,887       62,887
Payable
Other Long-Term    46,859       38,126       38,846       42,826       44,606
Borrowings
Other Liabilities  84,918       79,427       75,260       75,876       65,986
                                                                        
Total Liabilities  2,387,095    2,243,422    2,396,828    2,409,481    2,389,370
                                                                        
SHAREOWNERS'                                                            
EQUITY
Common Stock       172          172          172          172          172
Additional Paid-In 38,707       38,493       38,260       38,101       37,838
Capital
Retained Earnings  237,569      235,694      234,573      236,299      237,461
Accumulated Other
Comprehensive      (29,559)     (23,997)     (23,983)     (23,775)     (23,529)
Loss, Net of Tax
                                                                        
Total Shareowners' 246,889      250,362      249,022      250,797      251,942
Equity
                                                                        
Total Liabilities
and Shareowners'    $ 2,633,984  $ 2,493,784  $ 2,645,850  $ 2,660,278  $ 2,641,312
Equity
                                                                        
OTHER BALANCE                                                           
SHEET DATA
Earning Assets      $ 2,261,781  $ 2,135,779  $ 2,271,803  $ 2,282,053  $ 2,266,193
Intangible Assets                                                       
Goodwill           84,811       84,811       84,811       84,811       84,811
Core Deposits      19           79           139          198          258
Other              223          271          319          367          415
Interest Bearing   1,692,942    1,567,335    1,698,438    1,727,831    1,705,066
Liabilities
                                                                        
Book Value Per      $ 14.31      $ 14.54      $ 14.48      $ 14.60      $ 14.68
Diluted Share
Tangible Book
Value Per Diluted  9.38         9.59         9.52         9.63         9.70
Share
                                                                        
Actual Basic       17,232       17,223       17,198       17,182       17,160
Shares Outstanding
Actual Diluted     17,259       17,223       17,198       17,182       17,161
Shares Outstanding
                                                                        

CAPITAL CITY
BANK GROUP,                                                                  
INC.
CONSOLIDATED
STATEMENT OF                                                                 
OPERATIONS
Unaudited                                                                    
 
                                                                  Twelve Months Ended
              2012                                      2011      December 31,
(Dollars in
thousands,    Fourth    Third     Second     First      Fourth    2012      2011
except per    Quarter   Quarter   Quarter    Quarter    Quarter
share data)
                                                                             
INTEREST                                                                     
INCOME
Interest and   $ 20,756  $ 21,274  $ 21,359   $ 22,005   $ 22,915  $ 85,394  $ 94,944
Fees on Loans
Investment    808       798       834        900        902       3,340     3,968
Securities
Funds Sold    223       254       244        225        95        946       547
Total
Interest      21,787    22,326    22,437     23,130     23,912    89,680    99,459
Income
                                                                             
INTEREST                                                                     
EXPENSE
Deposits      429       480       556        643        699       2,108     3,947
Short-Term    69        71        48         8          6         196       305
Borrowings
Subordinated  351       372       372        382        358       1,477     1,380
Notes Payable
Other
Long-Term     383       372       396        436        452       1,587     1,905
Borrowings
Total
Interest      1,232     1,295     1,372      1,469      1,515     5,368     7,537
Expense
Net Interest  20,555    21,031    21,065     21,661     22,397    84,312    91,922
Income
Provision for 2,766     2,864     5,743      4,793      7,600     16,166    18,996
Loan Losses
Net Interest
Income after  17,789    18,167    15,322     16,868     14,797    68,146    72,926
Provision for
Loan Losses
                                                                             
NONINTEREST                                                                  
INCOME
Service
Charges on    6,764     6,406     6,313      6,309      6,530     25,792    25,451
Deposit
Accounts
Data
Processing    671       687       680        675        743       2,713     3,230
Fees
Asset
Management    1,100     1,020     1,020      1,015      1,124     4,155     4,364
Fees^(1)
Retail
Brokerage     718       666       884        758        776       3,026     3,251
Fees^(1)
Mortgage      910       978       864        848        845       3,600     2,675
Banking Fees
Interchange   1,726     1,619     1,580      1,526      1,399     6,451     5,622
Fees ^ (2)
ATM/Debit
Card Fees     886       997       1,204      1,245      1,098     4,332     4,519
^(2)
Other         1,343     1,202     1,361      1,210      1,358     5,116     9,736
Total
Noninterest   14,118    13,575    13,906     13,586     13,873    55,185    58,848
Income
                                                                             
NONINTEREST                                                                  
EXPENSE
Compensation  15,772    15,510    16,117     16,843     15,260    64,242    63,642
Occupancy,    2,200     2,332     2,276      2,266      2,284     9,074     9,622
Net
Furniture and 2,212     2,245     2,245      2,201      2,097     8,903     8,558
Equipment
Intangible    108       108       107        108        107       431       675
Amortization
Other Real    1,917     2,616     3,460      3,513      3,425     11,506    12,677
Estate
Other         7,259     7,390     8,088      7,666      7,930     30,403    31,074
Total
Noninterest   29,468    30,201    32,293     32,597     31,103    124,559   126,248
Expense
                                                                             
OPERATING
PROFIT        2,439     1,541     (3,065)    (2,143)    (2,433)   (1,228)   5,526
(LOSS) 
Income Tax
Expense       564       420       (1,339)    (981)      (1,898)   (1,336)   629
(Benefit) 
NET INCOME     $ 1,875   $ 1,121   $ (1,726)  $ (1,162)  $ (535)   $ 108     $ 4,897
(LOSS)
                                                                             
PER SHARE                                                                    
DATA
Basic Income   $ 0.11    $ 0.07    $ (0.10)   $ (0.07)   $ (0.03)  $ 0.01    $ 0.29
(Loss) 
Diluted        $ 0.11    $ 0.07    $ (0.10)   $ (0.07)   $ (0.03)  $ 0.01    $ 0.29
Income (Loss)
Cash          0.000     0.000     0.000      0.000      0.000     0.000     0.300
Dividends
AVERAGE                                                                      
SHARES
Basic         17,229    17,215    17,192     17,181     17,157    17,205    17,140
Diluted       17,256    17,228    17,192     17,181     17,157    17,220    17,140
                                                                             
                                                                             
^(1) Together referred
to as "Wealth                                                                
Management Fees"
^(2) Together
referred to                                                                  
as "Bank Card
Fees"
                                                                             

CAPITAL CITY BANK                                                    
GROUP, INC.
ALLOWANCE FOR LOAN                                                   
LOSSES 
AND NONPERFORMING                                                    
ASSETS
Unaudited                                                            
 
                        2012       2012       2012       2012       2011
(Dollars in thousands,  Fourth     Third      Second     First      Fourth
except per share data)  Quarter    Quarter    Quarter    Quarter    Quarter
                                                                     
ALLOWANCE FOR LOAN                                                   
LOSSES
Balance at Beginning of  $ 30,222   $ 29,929   $ 31,217   $ 31,035   $ 29,658
Period
Provision for Loan      2,766      2,864      5,743      4,793      7,600
Losses
Net Charge-Offs         3,821      2,571      7,031      4,611      6,223
Balance at End of       $ 29,167   $ 30,222   $ 29,929   $ 31,217   $ 31,035
Period
As a % of Loans         1.93%      1.97%      1.93%      1.98%      1.91%
As a % of Nonperforming 45.42%     40.80%     40.03%     39.65%     41.37%
Loans
                                                                     
CHARGE-OFFS                                                          
Commercial, Financial    $ 166      $ 331      $ 57       $ 268      $ 634
and Agricultural
Real Estate -           227        127        275        --         25
Construction
Real Estate -           468        512        3,519      1,532      2,443
Commercial
Real Estate -           2,877      981        3,894      1,967      2,755
Residential
Real Estate - Home      745        834        425        892        205
Equity
Consumer                488        355        550        732        879
Total Charge-Offs       $ 4,971    $ 3,140    $ 8,720    $ 5,391    $ 6,941
                                                                     
RECOVERIES                                                           
Commercial, Financial    $ 87       $ 53       $ 83       $ 67       $ 242
and Agricultural
Real Estate -            7          9          27        --          -- 
Construction
Real Estate -           468        34         42         138        87
Commercial
Real Estate -           83         76         969        163        34
Residential
Real Estate - Home      250        15         116        18         13
Equity
Consumer                255        382        452        394        342
Total Recoveries         $ 1,150    $ 569      $ 1,689    $ 780      $ 718
                                                                     
NET CHARGE-OFFS          $ 3,821    $ 2,571    $ 7,031    $ 4,611    $ 6,223
                                                                     
Net Charge-Offs as a %  1.00%      0.66%      1.80%      1.16%      1.50%
of Average Loans^(1)
                                                                     
RISK ELEMENT ASSETS                                                  
Nonaccruing Loans        $ 64,222   $ 74,075   $ 74,770   $ 78,726   $ 75,023
Other Real Estate Owned 53,426     53,172     58,059     58,100     62,600
Total Nonperforming      $ 117,648  $ 127,247  $ 132,829  $ 136,826  $ 137,623
Assets
                                                                     
Past Due Loans 30-89     $ 9,934    $ 12,923   $ 16,695   $ 9,193    $ 19,425
Days 
Past Due Loans 90 Days  --         --         --         25         224
or More
Performing Troubled      $ 47,474   $ 45,973   $ 38,734   $ 37,373   $ 37,675
Debt Restructurings
                                                                     
Nonperforming Loans as  4.22%      4.83%      4.80%      4.99%      4.61%
a % of Loans
Nonperforming Assets as                                              
a % of
Loans and Other Real    7.47%      8.02%      8.23%      8.36%      8.14%
Estate
Nonperforming Assets as 42.62%     45.35%     47.62%     48.52%     48.63%
a % of Capital^(2)
Nonperforming Assets as 4.47%      5.10%      5.02%      5.14%      5.21%
a % of Total Assets
                                                                     
                                                                     
(1) Annualized                                                       
(2) Capital includes
allowance for loan                                                   
losses

CAPITAL CITY
BANK GROUP,                                                                                        
INC.
AVERAGE
BALANCE AND                                                                                        
INTEREST
RATES^(1)
Unaudited                                                                                          
 
                                                                                                   
             Fourth Quarter 2012            Third Quarter 2012             Second Quarter 2012
(Dollars in  Average      Interest  Average Average      Interest  Average Average      Interest  Average
thousands)   Balance                Rate    Balance                Rate    Balance                Rate
ASSETS:                                                                                            
Loans, Net
of Unearned   $ 1,518,280 20,837    5.46%    $ 1,541,262  21,366   5.51%    $ 1,570,827  21,456   5.49%
Interest
                                                                                                   
Investment                                                                                         
Securities
Taxable
Investment    219,985      697      1.26     214,431      691      1.28     216,952      730      1.35
Securities
Tax-Exempt
Investment   74,647       172       0.92    67,446       163       0.97    63,715       161       1.01
Securities
                                                                                                   
Total
Investment    294,632      869      1.17     281,877      854      1.21     280,667      891      1.27
Securities
                                                                                                   
Funds Sold   366,034      223       0.24    386,027      254       0.26    411,353      244       0.24
                                                                                                   
Total
Earning       2,178,946    $ 21,929 4.00%    2,209,166    $ 22,474 4.05%    2,262,847   $ 22,591  4.01%
Assets
                                                                                                   
Cash and Due  51,344                         47,207                         47,711                 
From Banks
Allowance
for Loan      (30,605)                       (30,260)                       (31,599)               
Losses
Other Assets 334,326                        340,126                        345,458                 
                                                                                                   
Total Assets  $ 2,534,011                    $ 2,566,239                    $ 2,624,417            
                                                                                                   
LIABILITIES:                                                                                       
Interest
Bearing                                                                                            
Deposits
NOW Accounts  $714,682     $131     0.07%    $740,178     $144     0.08%    $809,172     $167     0.08%
Money Market  275,458      57       0.08     287,250      60       0.08     280,371      63       0.09
Accounts
Savings       182,760      23       0.05     179,445      23       0.05     174,923      21       0.05
Accounts
Time         247,679      218       0.35    263,007      253       0.38    274,497      305       0.45
Deposits
Total
Interest      1,420,579    429      0.12%    1,469,880    480      0.13%    1,538,963    556      0.15%
Bearing
Deposits
                                                                                                   
Short-Term    45,893       69       0.59%    59,184       71       0.48%    57,983       48       0.33%
Borrowings
Subordinated
Notes         62,887       351      2.19     62,887       372      2.31     62,887       372      2.34
Payable
Other
Long-Term    42,673       383       3.57    38,494       372       3.85    40,617       396       3.92
Borrowings
                                                                                                   
Total
Interest      1,572,032   $1,232    0.31%    1,630,445   $1,295    0.32%    1,700,450   $1,372    0.32%
Bearing
Liabilities
                                                                                                   
Noninterest
Bearing       630,520                        605,602                        596,690                
Deposits
Other        78,442                         78,446                         74,633                  
Liabilities
                                                                                                   
Total        2,280,994                      2,314,493                      2,371,773               
Liabilities
                                                                                                   
SHAREOWNERS' 253,017                        251,746                        252,644                 
EQUITY:
                                                                                                   
Total
Liabilities
and           $ 2,534,011                    $ 2,566,239                    $ 2,624,417            
Shareowners'
Equity
                                                                                                   
Interest                   $ 20,697 3.69%                 $ 21,179 3.73%                 $ 21,219 3.69%
Rate Spread
                                                                                                   
Interest
Income and                21,929    4.00                 22,474    4.05                 22,591    4.01
Rate
Earned^(1)
Interest
Expense and               1,232     0.22                 1,295     0.23                 1,372     0.24
Rate
Paid^(2)
                                                                                                   
Net Interest               $ 20,697 3.78%                 $ 21,179 3.82%                 $ 21,219 3.77%
Margin
                                                                                                   
                                                                                                   
^(1) Interest and average rates are calculated on a                                                
tax-equivalent basis using the 35% Federal tax rate.
^(2) Rate calculated
based on average earning                                                                           
assets.

CAPITAL CITY BANK                                                       
GROUP, INC.
AVERAGE BALANCE
AND INTEREST                                                            
RATES^(1)
Unaudited                                                               
 
                                                                        
                  First Quarter 2012              Fourth Quarter 2011
(Dollars in       Average      Interest  Average  Average    Interest  Average
thousands)        Balance                Rate     Balance              Rate
ASSETS:                                                                 
Loans, Net of      $ 1,596,480  22,121   5.57%     $          23,032   5.55%
Unearned Interest                                 1,646,715
                                                                        
Investment                                                              
Securities
Taxable
Investment         242,481      794      1.31      248,217    816      1.31
Securities
Tax-Exempt
Investment        56,313       162       1.15     59,647     131       0.88
Securities
                                                                        
Total Investment   298,794      956      1.28      307,864    947      1.22
Securities
                                                                        
Funds Sold        373,033      225       0.24     191,884    96        0.20
                                                                        
Total Earning      2,268,307    $ 23,302 4.13%     2,146,463  $ 24,075 4.45%
Assets
                                                                        
Cash and Due From  49,427                          49,666               
Banks
Allowance for      (31,382)                        (29,550)             
Loan Losses
Other Assets      350,555                         343,336               
                                                                        
Total Assets       $ 2,636,907                     $                    
                                                  2,509,915
                                                                        
LIABILITIES:                                                            
Interest Bearing                                                        
Deposits
NOW Accounts       $ 823,406    $192     0.09%     $ 700,005  $ 148    0.08%
Money Market       277,558      75       0.11      283,677    75       0.11
Accounts
Savings Accounts   165,603      20       0.05      156,088    20       0.05
Time Deposits     284,129      356       0.50     299,487    456       0.60
Total Interest     1,550,696    643      0.17%     1,439,257  699      0.19%
Bearing Deposits
                                                                        
Short-Term         45,645       8        0.07%     44,573     6        0.05%
Borrowings
Subordinated       62,887       382      2.40      62,887     358      2.23
Notes Payable
Other Long-Term   44,286       436       3.96     45,007     452       3.99
Borrowings
                                                                        
Total Interest
Bearing            1,703,514    $ 1,469  0.35%     1,591,724  $ 1,515  0.38%
Liabilities
                                                                        
Noninterest        610,692                         593,718              
Bearing Deposits
Other Liabilities 68,254                          60,197                
                                                                        
Total Liabilities 2,382,460                       2,245,639             
                                                                        
SHAREOWNERS'      254,447                         264,276               
EQUITY:
                                                                        
Total Liabilities                                  $
and Shareowners'   $ 2,636,907                    2,509,915             
Equity
                                                                        
Interest Rate                   $ 21,833 3.78%                $ 22,560 4.07%
Spread
                                                                        
Interest Income
and Rate                       23,302    4.13                24,075    4.45
Earned^(1)
Interest Expense               1,469     0.26                1,515     0.28
and Rate Paid^(2)
                                                                        
Net Interest                    $ 21,833 3.87%                $ 22,560 4.17%
Margin
                                                                        
                                                                        
^(1) Interest and average rates are calculated on a                     
tax-equivalent basis using the 35% Federal tax rate.
^(2) Rate calculated based on                                           
average earning assets.

CAPITAL CITY                                                            
BANK GROUP, INC.
AVERAGE BALANCE
AND INTEREST                                                            
RATES^(1)
Unaudited                                                               
 
                                                                        
                 Dec 2012 YTD                    Dec 2011 YTD
(Dollars in      Average      Interest  Average  Average    Interest   Average
thousands)       Balance                Rate     Balance               Rate
ASSETS:                                                                 
Loans, Net of                                     $
Unearned          $ 1,556,565  $ 85,780 5.51%    1,686,995   $ 95,520  5.66%
Interest
                                                                        
Investment                                                              
Securities
Taxable
Investment        223,429      2,912    1.27      243,059    3,320     1.38
Securities
Tax-Exempt
Investment       65,560       658       1.00     62,497     996        1.59
Securities
                                                                        
Total Investment  288,989      3,570    1.23      305,556    4,316     1.41
Securities
                                                                        
Funds Sold       384,067      946       0.25     228,766    548        0.24
                                                                        
Total Earning     2,229,621    $ 90,296 4.05%     $          $ 100,384 4.52%
Assets                                           2,221,317
                                                                        
Cash and Due      48,924                          48,823                
From Banks
Allowance for     (30,959)                        (32,066)              
Loan Losses
Other Assets     342,587                         345,123                
                                                                        
Total Assets      $ 2,590,173                     $                     
                                                 2,583,197
                                                                        
LIABILITIES:                                                            
Interest Bearing                                                        
Deposits
NOW Accounts      $ 771,617    $634     0.08%     $ 748,774  $890      0.12%
Money Market      280,165      255      0.09      282,271    437       0.15
Accounts
Savings Accounts  175,712      87       0.05      151,801    73        0.05
Time Deposits    267,263      1,132     0.42     330,750    2,547      0.77
Total Interest    1,494,757    2,108    0.14%     1,513,596  3,947     0.26%
Bearing Deposits
                                                                        
Short-Term        52,178       196      0.38%     68,061     305       0.45%
Borrowings
Subordinated      62,887       1,477    2.31      62,887     1,380     2.16
Notes Payable
Other Long-Term  41,513       1,587     3.82     47,841     1,905      3.98
Borrowings
                                                                        
Total Interest
Bearing           1,651,335    $ 5,368  0.33%     1,692,385  $ 7,537   0.45%
Liabilities
                                                                        
Noninterest       610,915                         567,987               
Bearing Deposits
Other            74,963                          59,777                 
Liabilities
                                                                        
Total            2,337,213                       2,320,149              
Liabilities
                                                                        
SHAREOWNERS'     252,960                         263,048                
EQUITY:
                                                                        
Total
Liabilities and   $ 2,590,173                     $                     
Shareowners'                                     2,583,197
Equity
                                                                        
Interest Rate                  $ 84,928 3.72%                $ 92,847  4.07%
Spread
                                                                        
Interest Income
and Rate                      90,296    4.05                100,384    4.52
Earned^(1)
Interest Expense
and Rate                      5,368     0.24                7,537      0.34
Paid^(2)
                                                                        
Net Interest                   $ 84,928 3.81%                $ 92,847  4.18%
Margin
                                                                        
                                                                        
^(1) Interest and average rates are calculated on a                     
tax-equivalent basis using the 35% Federal tax rate.
^(2) Rate calculated based on                                           
average earning assets.

CONTACT: J. Kimbrough Davis
         Executive Vice President and Chief Financial Officer
         850.402.7820
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