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Section 1: 8-K (FORM 8K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  January 23, 2018

 

 

image_001 

 

 

CAPITAL CITY BANK GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Florida

 

0-13358

 

59-2273542

(State of Incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

217 North Monroe Street, Tallahassee, Florida

 

32301

(Address of principal executive offices

 

(Zip Code)

 

Registrant's telephone number, including area code: (850) 671-0300

 

                                                                                                                   

(Former Name or Former Address, if Changed Since Last Report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).      

           Emerging growth company     [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of The Exchange Act.   [  ]

 

 


 

CAPITAL CITY BANK GROUP, INC.

 

FORM 8-K

CURRENT REPORT

 

Item 2.02.                  Results of Operations and Financial Condition.

 

On January 23, 2018, Capital City Bank Group, Inc. (“CCBG”) issued an earnings press release reporting CCBG’s financial results for the fiscal year ended December 31, 2017.  A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

 

The information furnished under Item 2.02 of this Current Report, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01.                    Financial Statements and Exhibits.

 

(d)                Exhibits

 

Item No.      Description of Exhibit

 

99.1                     Press release, dated January 23, 2018.

  

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CAPITAL CITY BANK GROUP, INC.

 

Date:   January 23, 2018

By:  

/s/ J.Kimbrough Davis

 

 

 

J. Kimbrough Davis,

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

 


 

EXHIBIT INDEX

 

Exhibit

Number      Description

 

99.1             Press release, dated January 23, 2018

 

 

 


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1 PRESS RELEASE)

 

 

Capital City Bank Group, Inc.

Reports Fourth Quarter and Full Year 2017 Results

 

TALLAHASSEE, Fla. (January 23, 2018) – Capital City Bank Group, Inc. (Nasdaq: CCBG) today reported net income of $3,000, or $0.00 per diluted share for the fourth quarter of 2017 which included a $4.0 million, or $0.24 per diluted share, income tax expense related to the tax reform act commonly known as Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017, compared to net income of $4.6 million, or $0.27 per diluted share for the third quarter of 2017, and $3.3 million, or $0.20 per diluted share, for the fourth quarter of 2016.

 

Net income for the fourth quarter, excluding the impact of the Tax Act (“core earnings”) a non-GAAP financial measure, totaled $4.0 million, or $0.24 per diluted share. 

 

For the full year 2017, net income was 10.9 million, or $0.64 per diluted share, compared to net income of $11.7 million, or $0.69 per diluted share in 2016.  Core earnings for 2017 totaled $14.9 million, or $0.88 per diluted share.

 

Core earnings is presented in this press release to enable investors to better compare period-to-period results due to the effect of the Tax Act on 2017 fourth quarter and full year results of operations.  Reconciliations of this and other non-GAAP financial measures in this press release are included in the financial tables at the end of this press release.      

 

Full Year 2017 HIGHLIGHTS

·   Core earnings per diluted share of $0.88, 28% increase over 2016

·   Significant improvement in operating leverage driven by margin expansion and expense reduction

-       Net interest income up $5.0 million, or 6.4%

-       Average loan growth of $76 million, or 5.0%

-       Noninterest expense down $3.8 million, or 3.3%

·   NPAs and classified assets down 42% and 33%, respectively  

 

Fourth Quarter 2017 HIGHLIGHTS

·   Core earnings per diluted share of $0.24, down $0.03 sequentially due to other real estate owned gains in the third quarter of 2017 

·   Continued growth in net interest income, up $0.2 million, or 1.1 % sequentially   

·   NPAs and classified assets, down sequentially by 12% and 18%, respectively

 

“This year produced marked improvement in our overall performance as core earnings increased 28 percent,” said William G. Smith, Jr., Chairman, President and CEO. “These results were driven by loan growth, a rising rate environment, improving credit costs and a disciplined approach to managing expenses. Our net interest margin has increased 12 basis points year over year, aided by an asset-sensitive balance sheet and strong core deposit base.  Since 2010, we have reduced annual expenses by $24 million and this was our seventh consecutive year of expense reduction.  We are proud of these accomplishments and remain focused on strategies that will produce long-term value for our shareowners.”

 

Compared to the third quarter of 2017, the decrease in core earnings was primarily attributable to a higher loan loss provision of $0.3 million, a $0.2 million increase in noninterest expense, lower noninterest income of $0.1 million, and higher income taxes of $0.2 million, partially offset by higher net interest income of $0.2 million.

 

Compared to the fourth quarter of 2016, the increase in core earnings reflected higher net interest income of $1.4 million, a $0.7 million decrease in noninterest expense, and a $0.1 million increase in noninterest income, partially offset by higher income taxes of $1.1 million and a $0.4 million increase in the loan loss provision.

 

For the full year 2017, the increase in core earnings compared to 2016 was attributable to higher net interest income of $5.0 million and a $3.8 million reduction in noninterest expense, partially offset by lower noninterest income of $1.9 million, a $2.3 million increase in income taxes, and a $1.4 million increase in the loan loss provision.

 

Our return on average assets (“ROA”) was 0.00% and our return on average equity (“ROE”) was 0.00% for the fourth quarter of 2017.  Our core earnings ROA was 0.57% and our core earnings ROE was 5.56% for the fourth quarter of 2017.  These metrics were 0.65% and 6.33% for the third quarter of 2017, respectively, and 0.48% and 4.70% for the fourth quarter of 2016, respectively.  For the full year 2017, our ROA was 0.39% and our ROE was 3.83%.  Our core earnings ROA was 0.53% and our core earnings ROE was 5.26% for the full year 2017, compared to 0.43% and 4.22%, respectively, for the same period in 2016.

 


 

Discussion of Operating Results

 

Tax equivalent net interest income for the fourth quarter of 2017 was $21.8 million compared to $21.6 million for the third quarter of 2017 and $20.3 million for the fourth quarter of 2016.  During the fourth quarter of 2017, overnight funds increased as a result of the growth in noninterest bearing deposits, and to a lesser degree, seasonal growth in our public funds deposits. A portion of these overnight funds were used to fund growth in the loan and investment portfolios. The increase in tax equivalent net interest income compared to the fourth quarter of 2016 reflected growth in the loan portfolio and higher rates earned on overnight funds, investment securities, and variable rate loans, partially offset by a higher cost on our negotiated rate deposits.  For the full year 2017, tax equivalent net interest income totaled $84.2 million compared to $79.0 million for the prior year.  The year over year increase was driven by growth in the loan and investment portfolios, coupled with higher short-term rates, partially offset by a higher rate paid on negotiated rate deposits and one less calendar day as 2016 was a leap year. 

 

The overnight funds rate has increased five times since December 2015 to a target rate of 1.50% at the end of 2017, which positively affected our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these increases have also resulted in higher rates paid on our negotiated rate products, we continue to prudently manage our overall cost of funds, which was 18 and 16 basis points for the fourth quarter and full year 2017, respectively. Despite highly competitive fixed-rate loan pricing across most markets, we continue to review our loan pricing and make adjustments where appropriate.    

 

Our net interest margin for the fourth quarter of 2017 was 3.45%, a decrease of three basis points compared to the third quarter of 2017 and an increase of 11 basis points from the fourth quarter of 2016.  For the full year 2017, the net interest margin increased 12 basis points to 3.37% compared to 2016. The decrease in the margin compared to the third quarter of 2017 was due to seasonal growth in our overnight funds, resulting in a slightly less favorable asset mix.  The increase in the margin compared to the fourth quarter of 2016 and the prior full year was primarily attributable to loan growth, and higher yields on overnight funds and the investment portfolio, partially offset by higher rates on our negotiated rate deposits.

 

The provision for loan losses for the fourth quarter of 2017 was $0.8 million compared to $0.5 million for the third quarter of 2017 and $0.5 million for the fourth quarter of 2016.  The higher provision for the fourth quarter of 2017 reflected higher impaired reserves held for two problem loans.  For the full year 2017, the loan loss provision totaled $2.2 million compared to $0.8 million for 2016 with the increase primarily attributable to a higher level of net charge-offs and growth in the loan portfolio.  Net loan charge-offs for the fourth quarter of 2017 totaled $0.9 million compared to net loan charge-offs of $0.4 million for the third quarter of 2017 and net loan charge-offs of $0.8 million for the fourth quarter of 2016.  For the full year 2017, net loan charge-offs totaled $2.3 million (consisting of gross charge-offs of $4.8 million, less recoveries of $2.5 million), or 0.14% of average loans compared to $1.3 million (consisting of gross charge-offs of $4.7 million, less recoveries of $3.4 million), or 0.09% for 2016.  At December 31, 2017, the allowance for loan losses of $13.3 million was 0.80% of outstanding loans (net of overdrafts) and provided coverage of 186% of nonperforming loans compared to 0.82% and 203%, respectively, at September 30, 2017 and 0.86% and 157%, respectively, at December 31, 2016.

 

Noninterest income for the fourth quarter of 2017 totaled $12.9 million, a decrease of $0.1 million, or 0.8%, from the third quarter of 2017 and an increase of $0.1 million, or 0.9%, over the fourth quarter of 2016.  The decrease from the third quarter of 2017 was attributable to lower deposit fees and the increase over the fourth quarter of 2016 reflected higher wealth management fees of $0.4 million, partially offset by lower other income of $0.2 million and deposit fees of $0.1 million.  For the full year 2017, noninterest income totaled $51.7 million, a $1.9 million, or 3.6%, decrease from 2016, attributable to lower other income of $2.7 million and deposit fees of $1.0 million, partially offset by higher wealth management fees of $1.2 million and mortgage banking fees of $0.6 million.  The decrease in other income was attributable to a $2.5 million gain from the partial retirement of our trust preferred securities in the second quarter of 2016.  Lower fees related to data processing services provided to third parties also contributed to the decrease and reflected the discontinuance of this line of business over the past two years with our last client discontinuing service in the fourth quarter of 2017.  The reduction in deposit fees reflected lower utilization of our overdraft service product.  Growth in assets under management as well as improved sales efforts have resulted in strong growth in wealth management fees.  Strong home sales in our markets and a growing market share of residential loan production have driven the improvement in mortgage banking fees.       

 

 


 

Noninterest expense for the fourth quarter of 2017 totaled $26.9 million, an increase of $0.2 million, or 0.7%, over the third quarter of 2017, and a $0.7 million, or 2.4%, decrease from the fourth quarter of 2016.  The increase over the third quarter of 2017 reflected higher other real estate owned (“OREO”) expense of $0.5 million and other expense of $0.4 million, partially offset by lower compensation expense of $0.6 million and occupancy expense of $0.1 million.  The decrease from the fourth quarter of 2016 was attributable to lower compensation expense of $1.0 million and occupancy expense of $0.1 million, partially offset by higher other expense of $0.4 million.  For the full year 2017, noninterest expense totaled $109.4 million, a decrease of $3.8 million, or 3.3%, from 2016 attributable to lower OREO expense of $2.5 million, other expense of $0.7 million, occupancy expense of $0.5 million, and compensation expense of $0.1 million.  All OREO expense categories (gain/loss on sale, carrying costs, and valuation adjustments) declined as we continued efforts to liquidate our remaining properties.  Reduction in other cycle related expenses (legal expense and FDIC insurance expense) drove the decline in other expense.  The decrease in occupancy expense reflected our continuing efforts to optimize our banking office structure and operational processes.  The decrease in compensation expense reflected lower salary expense of $1.2 million partially offset by higher associate benefit expense of $1.1 million.  Continued headcount attrition drove the decline in salary expense and the increase in associate benefit expense reflected higher pension plan expense attributable to utilization of a lower discount rate for plan liabilities and to a lesser extent higher associate insurance expense and stock compensation expense.

 

We realized income tax expense of $6.7 million for the fourth quarter of 2017 which included a $4.0 million discrete tax expense related to the Tax Act.  Excluding the discrete tax expense, income tax totaled $2.7 million (39% effective rate) compared to $2.5 million (35% effective rate) for the third quarter of 2017 and $1.5 million (32% effective rate) for the fourth quarter of 2016.  For the full year 2017, income tax expense totaled $12.2 million, including the aforementioned $4.0 million discrete tax expense related to the Tax Act.  Excluding the discrete tax expense, income tax totaled $8.2 million (36% effective rate) compared to $5.9 million (33% effective rate) for 2016.  Income tax expense for the fourth quarter included a $0.3 million write-off of a deferred tax asset related to a cancelled stock award.  Income tax for the full year 2017 also included income tax benefits realized in the second quarter related to stock based compensation awards.  Absent future discrete events, we anticipate that our effective tax will approximate 24% due to a lower federal tax rate related to the Tax Act.

 

Discussion of Financial Condition

 

Average earning assets were $2.512 billion for the fourth quarter of 2017, an increase of $45.7 million, or 1.9%, over the third quarter of 2017, and an increase of $88.6 million, or 3.7%, over the fourth quarter of 2016.  The change in earning assets over both periods reflected a higher level of total deposits.    

 

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $174.6 million during the fourth quarter of 2017 compared to an average net overnight funds sold position of $140.7 million in the third quarter of 2017 and $145.5 million in the fourth quarter of 2016. The increase in net overnight funds compared to the prior periods reflected increases in noninterest bearing deposits, partially offset by increases in the loan portfolio and/or the investment portfolio.  

 

Average loans increased $2.2 million, or 0.1% when compared to the third quarter of 2017, and have grown $67.5 million, or 4.3% when compared to the fourth quarter of 2016. The average increase compared to the third quarter of 2017 primarily reflected growth in construction and indirect consumer loans, partially offset by a reduction in the remaining loan types. Average growth over the fourth quarter of 2016 was experienced in all loan products, with the exception of commercial loans, home equity loans, and consumer direct loans. A portion of the increase compared to the fourth quarter 2016 was due to strategic loan purchases of approximately $26.8 million in adjustable residential real estate loans and $16.4 million in fixed and adjustable rate commercial real estate loans.

 

We continue to make minor modifications on some of our lending programs to try and mitigate the impact that consumer and business deleveraging has had on our portfolio.  These programs, coupled with economic improvements in our anchor markets and strategic loan purchases, have helped to increase overall loan growth.

 

Nonperforming assets (nonaccrual loans and OREO) totaled $11.1 million at December 31, 2017, a decrease of $1.4 million, or 12%, from September 30, 2017 and $8.1 million, or 42%, from December 31, 2016.  Nonaccrual loans totaled $7.2 million at December 31, 2017, a $0.6 million increase over September 30, 2017 and a $1.4 million decrease from December 31, 2016.  Nonaccrual loan additions totaled $5.6 million in the fourth quarter of 2017 and $14.1 million for the full year 2017, which compares to $3.9 million and $13.1 million, respectively, for the same periods of 2016.  The balance of OREO totaled $3.9 million at December 31, 2017, a decrease of $2.0 million and $6.7 million, respectively, from September 30, 2017 and December 31, 2016.  For the fourth quarter of 2017, we added properties totaling $0.4 million, sold properties totaling $2.2 million, and recorded valuation adjustments totaling $0.2 million.  For the full year 2017, we added properties totaling $2.4 million, sold properties totaling $7.5 million, recorded valuation adjustments totaling $1.3 million, and miscellaneous adjustments totaling $0.3 million.  Nonperforming assets represented 0.38% of total assets at December 31, 2017 compared to 0.45% at September 30, 2017 and 0.67% at December 31, 2016.

 

 


 

Average total deposits were $2.378 billion for the fourth quarter of 2017, an increase of $49.2 million, or 2.1%, over the third quarter of 2017, and an increase of $71.5 million, or 3.1% over the fourth quarter of 2016. The increase in deposits when compared to the prior periods reflected growth in all deposit products except money market accounts and certificates of deposit.  Average total deposits year-over-year reflected strong growth in noninterest bearing deposits and savings accounts.  Deposit levels remain strong, particularly given the increases in the fed funds rate. Average core deposits continue to experience growth. Competitive rates are monitored on an ongoing basis as a prudent pricing discipline remains the key to managing our mix of deposits.

 

Average borrowings decreased $2.5 million compared to the third quarter of 2017, and decreased $9.4 million compared to the fourth quarter 2016. Declines over both prior periods were primarily due to payoffs of FHLB advances.

 

Shareowners’ equity was $284.4 million at December 31, 2017, compared to $285.2 million at September 30, 2017 and $275.2 million at December 31, 2016.  Our leverage ratio was 10.26%, 10.48%, and 10.23%, respectively, for these periods.  Further, at December 31, 2017, our risk-adjusted capital ratio was 16.77% compared to 16.96% and 16.28% at September 30, 2017 and December 31, 2016, respectively.  Our common equity tier 1 ratio was 13.09% at December 31, 2017, compared to 13.26% at September 30, 2017 and 12.61% at December 31, 2016.  All of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.  The $4.0 million deferred tax re-measurement adjustment recorded in the fourth quarter of 2017 due to the Tax Act unfavorably impacted our common equity tier 1 and risk-adjusted capital ratio by approximately 26 basis points.

 

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 60 banking offices and 73 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 accuracy of the Company’s 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 the Company’s computer systems or fraud related to debit card products; changes in consumer spending and savings habits; the Company’s growth and profitability; the strength of the U.S. economy and the local economies where the Company conducts operations; 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; 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 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, 2016, 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.

 

 

 


 

USE OF NON-GAAP FINANCIAL MEASURES

 

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity.  We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. 

 

In our discussion of financial performance, we use core earnings for the fourth quarter and full year 2017.  We believe this measure will enhance the understanding of the Company’s core business and performance without the impact of the deferred tax re-measurement that was required with the enactment of  the Tax Act.

 

The GAAP to non-GAAP reconciliations are provided below.

 

(Dollars in Thousands, except per share data)

 

Dec 31, 2017

Sep 30, 2017

Jun 30, 2017

Mar 31, 2017

Dec 31, 2016

TANGIBLE COMMON EQUITY RATIO

 

 

 

 

 

 

 

 

 

 

 

Shareowners' Equity (GAAP)

 

$

284,425

$

285,201

$

281,513

$

278,059

$

275,168

Less: Goodwill (GAAP)

 

 

84,811

 

84,811

 

84,811

 

84,811

 

84,811

Tangible Shareowners' Equity (non-GAAP)

A

 

199,614

 

200,390

 

196,702

 

193,248

 

190,357

Total Assets (GAAP)

 

 

2,899,192

 

2,790,842

 

2,814,843

 

2,895,531

 

2,845,197

Less: Goodwill (GAAP)

 

 

84,811

 

84,811

 

84,811

 

84,811

 

84,811

Tangible Assets (non-GAAP)

B

$

2,814,381

$

2,706,031

$

2,730,032

$

2,810,720

$

2,760,386

Tangible Common Equity Ratio (non-GAAP)

A/B

 

7.09%

 

7.41%

 

7.21%

 

6.88%

 

6.90%

Actual Diluted Shares Outstanding (GAAP)

C

 

17,071

 

17,045

 

17,025

 

16,979

 

16,949

Tangible Book Value per Diluted Share (non-GAAP)

A/C

$

11.69

$

11.76

$

11.55

$

11.38

$

11.23

 

 

 

Three Months Ended

 

Twelve Months Ended

(Dollars in Thousands, except per share data)

 

Dec 31, 2017

 

Dec 31, 2017

CORE EARNINGS

 

 

 

 

 

 

Net Income (GAAP)

$

3

$

10,863

Plus: Deferred Tax Re-Measurement

 

4,033

 

4,033

Net Income Core Earnings (non-GAAP)

 

4,036

 

14,896

 

 

 

 

 

 

 

Earnings Per Diluted Share (GAAP)

 

0.00

 

0.64

Plus: Deferred Tax Re-Measurement

 

0.24

 

0.24

Earnings Per Diluted Share Core Earnings (non-GAAP)

 

0.24

 

0.88

 

 

 

 

 

Average Assets

 

2,822,464

 

2,816,099

Average Shareowner's Equity

$

288,051

$

283,406

 

 

 

 

 

ROA (GAAP)

 

0.00%

 

0.39%

Plus: Deferred Tax Re-Measurement

 

0.57%

 

0.14%

Core Earnings ROA (non-GAAP)

 

0.57%

 

0.53%

 

 

 

 

 

ROE (GAAP)

 

0.00%

 

3.83%

Plus: Deferred Tax Re-Measurement

 

5.56%

 

1.43%

Core Earnings ROE (non-GAAP)

 

5.56%

 

5.26%

 


 

CAPITAL CITY BANK GROUP, INC.

 

 

 

 

 

 

 

 

 

 

EARNINGS HIGHLIGHTS

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

(Dollars in thousands, except per share data)

 

Dec 31, 2017

 

Sep 30, 2017

 

Dec 31, 2016

 

Dec 31, 2017

 

Dec 31, 2016

EARNINGS

 

 

 

 

 

 

 

 

 

 

Net Income

$

3

$

4,555

$

3,296

$

10,863

$

11,746

Diluted Net Income Per Share

$

0.00

$

0.27

$

0.20

$

0.64

$

0.69

PERFORMANCE

 

 

 

 

 

 

 

 

 

 

Return on Average Assets

 

0.00%

 

0.65%

 

0.48%

 

0.39%

 

0.43%

Return on Average Equity

 

0.00%

 

6.33%

 

4.70%

 

3.83%

 

4.22%

Net Interest Margin

 

3.45%

 

3.48%

 

3.34%

 

3.37%

 

3.25%

Noninterest Income as % of Operating Revenue

 

37.51%

 

37.94%

 

38.91%

 

38.41%

 

40.78%

Efficiency Ratio

 

77.50%

 

77.21%

 

83.23%

 

80.50%

 

85.34%

CAPITAL ADEQUACY

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital

 

16.01%

 

16.19%

 

15.51%

 

16.01%

 

15.51%

Total Capital

 

16.77%

 

16.96%

 

16.28%

 

16.77%

 

16.28%

Tangible Common Equity (1)

 

7.09%

 

7.41%

 

6.90%

 

7.09%

 

6.90%

Leverage

 

10.26%

 

10.48%

 

10.23%

 

10.26%

 

10.23%

Common Equity Tier 1

 

13.09%

 

13.26%

 

12.61%

 

13.09%

 

12.61%

Equity to Assets

 

9.81%

 

10.22%

 

9.67%

 

9.81%

 

9.67%

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

Allowance as % of Non-Performing Loans

 

185.87%

 

203.39%

 

157.40%

 

185.87%

 

157.40%

Allowance as a % of Loans

 

0.80%

 

0.82%

 

0.86%

 

0.80%

 

0.86%

Net Charge-Offs as % of Average Loans

 

0.21%

 

0.10%

 

0.20%

 

0.14%

 

0.09%

Nonperforming Assets as % of Loans and ORE

 

0.67%

 

0.76%

 

1.21%

 

0.67%

 

1.21%

Nonperforming Assets as % of Total Assets

 

0.38%

 

0.45%

 

0.67%

 

0.38%

 

0.67%

STOCK PERFORMANCE

 

 

 

 

 

 

 

 

 

 

High

$

26.01

$

24.58

$

23.15

$

26.01

$

23.15

Low

 

22.21

 

19.60

 

14.29

 

17.68

 

12.83

Close

$

22.94

$

24.01

$

20.48

$

22.94

$

20.48

Average Daily Trading Volume

 

19,112

 

29,551

 

23,371

 

23,793

 

21,473

 

 

 

 

 

 

 

 

 

 

 

(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to

      page 5.

 

 

 

 

 

 

 

 

 

 

 


 

CAPITAL CITY BANK GROUP, INC.

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

2016

(Dollars in thousands)

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

Fourth Quarter

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and Due From Banks

$

58,419

$

50,420

$

72,801

$

47,650

$

48,268

Funds Sold and Interest Bearing Deposits

 

227,023

 

140,694

 

162,377

 

290,897

 

247,779

Total Cash and Cash Equivalents

 

285,442

 

191,114

 

235,178

 

338,547

 

296,047

 

 

 

 

 

 

 

 

 

 

 

Investment Securities Available for Sale

 

480,911

 

510,846

 

529,686

 

541,102

 

522,734

Investment Securities Held to Maturity

 

216,679

 

184,262

 

157,074

 

158,515

 

177,365

   Total Investment Securities

 

697,590

 

695,108

 

686,760

 

699,617

 

700,099

 

 

 

 

 

 

 

 

 

 

 

Loans Held for Sale

 

4,817

 

7,800

 

8,213

 

7,498

 

10,886

 

 

 

 

 

 

 

 

 

 

 

Loans, Net of Unearned Interest

 

 

 

 

 

 

 

 

 

 

Commercial, Financial, & Agricultural

 

218,166

 

215,963

 

213,544

 

214,595

 

216,404

Real Estate - Construction

 

77,966

 

67,813

 

67,331

 

59,938

 

58,443

Real Estate - Commercial

 

535,707

 

527,331

 

519,140

 

503,868

 

503,978

Real Estate - Residential

 

308,159

 

306,272

 

302,072

 

295,406

 

272,895

Real Estate - Home Equity

 

229,513

 

228,499

 

230,995

 

231,300

 

236,512

Consumer

 

278,622

 

273,670

 

269,539

 

268,921

 

262,735

Other Loans

 

3,747

 

9,311

 

17,057

 

9,586

 

8,614

Overdrafts

 

1,612

 

1,479

 

1,518

 

1,345

 

1,708

Total Loans, Net of Unearned Interest

 

1,653,492

 

1,630,338

 

1,621,196

 

1,584,959

 

1,561,289

Allowance for Loan Losses

 

(13,307)

 

(13,339)

 

(13,242)

 

(13,335)

 

(13,431)

Loans, Net

 

1,640,185

 

1,616,999

 

1,607,954

 

1,571,624

 

1,547,858

 

 

 

 

 

 

 

 

 

 

 

Premises and Equipment, Net

 

91,698

 

92,345

 

92,495

 

93,755

 

95,476

Goodwill

 

84,811

 

84,811

 

84,811

 

84,811

 

84,811

Other Real Estate Owned

 

3,941

 

5,987

 

7,968

 

9,501

 

10,638

Other Assets

 

90,708

 

96,678

 

91,464

 

90,178

 

99,382

Total Other Assets

 

271,158

 

279,821

 

276,738

 

278,245

 

290,307

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

2,899,192

$

2,790,842

$

2,814,843

$

2,895,531

$

2,845,197

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Deposits

$

874,583

$

870,644

$

842,314

$

836,011

$

791,182

NOW Accounts

 

877,820

 

749,816

 

787,090

 

882,605

 

904,014

Money Market Accounts

 

239,212

 

249,964

 

265,032

 

263,080

 

252,800

Regular Savings Accounts

 

335,140

 

329,742

 

327,560

 

321,160

 

304,680

Certificates of Deposit

 

143,122

 

147,451

 

149,937

 

156,449

 

159,610

Total Deposits

 

2,469,877

 

2,347,617

 

2,371,933

 

2,459,305

 

2,412,286

 

 

 

 

 

 

 

 

 

 

 

Short-Term Borrowings

 

7,480

 

6,777

 

6,105

 

7,603

 

12,749

Subordinated Notes Payable

 

52,887

 

52,887

 

52,887

 

52,887

 

52,887

Other Long-Term Borrowings

 

13,967

 

15,047

 

15,631

 

16,460

 

14,881

Other Liabilities

 

70,556

 

83,313

 

86,774

 

81,217

 

77,226

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

2,614,767

 

2,505,641

 

2,533,330

 

2,617,472

 

2,570,029

 

 

 

 

 

 

 

 

 

 

 

SHAREOWNERS' EQUITY

 

 

 

 

 

 

 

 

 

 

Common Stock

 

170

 

170

 

170

 

170

 

168

Additional Paid-In Capital

 

36,674

 

35,892

 

35,522

 

34,859

 

34,188

Retained Earnings

 

273,829

 

275,013

 

271,646

 

268,934

 

267,037

Accumulated Other Comprehensive Loss, Net of Tax

 

(26,248)

 

(25,874)

 

(25,825)

 

(25,904)

 

(26,225)

 

 

 

 

 

 

 

 

 

 

 

Total Shareowners' Equity

 

284,425

 

285,201

 

281,513

 

278,059

 

275,168

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Shareowners' Equity

$

2,899,192

$

2,790,842

$

2,814,843

$

2,895,531

$

2,845,197

 

 

 

 

 

 

 

 

 

 

 

OTHER BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

Earning Assets

$

2,582,922

$

2,473,940

$

2,478,546

$

2,582,971

$

2,520,053

Interest Bearing Liabilities

 

1,669,628

 

1,551,684

 

1,604,242

 

1,700,244

 

1,701,621

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Diluted Share

$

16.66

$

16.73

$

16.54

$

16.38

$

16.23

Tangible Book Value Per Diluted Share(1)

 

11.69

 

11.76

 

11.55

 

11.38

 

11.23

 

 

 

 

 

 

 

 

 

 

 

Actual Basic Shares Outstanding

 

16,989

 

16,966

 

16,964

 

16,954

 

16,845

Actual Diluted Shares Outstanding

 

17,071

 

17,045

 

17,025

 

16,979

 

16,949

 

 

 

 

 

 

 

 

 

 

 

(1)  Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 5.

 


 

CAPITAL CITY BANK GROUP, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

2017

 

2016

 

December 31,

(Dollars in thousands, except per share data)

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and Fees on Loans

$

19,513

$

19,479

$

18,720

$

18,005

$

18,671

$

75,717

$

72,867

Investment Securities

 

2,520

 

2,416

 

2,169

 

2,042

 

1,949

 

9,147

 

7,183

Funds Sold

 

594

 

446

 

533

 

493

 

212

 

2,066

 

1,104

Total Interest Income

 

22,627

 

22,341

 

21,422

 

20,540

 

20,832

 

86,930

 

81,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

590

 

530

 

388

 

281

 

224

 

1,789

 

879

Short-Term Borrowings

 

5

 

15

 

17

 

45

 

57

 

82

 

148

Subordinated Notes Payable

 

431

 

420

 

404

 

379

 

363

 

1,634

 

1,434

Other Long-Term Borrowings

 

112

 

115

 

117

 

99

 

129

 

443

 

728

Total Interest Expense

 

1,138

 

1,080

 

926

 

804

 

773

 

3,948

 

3,189

Net Interest Income

 

21,489

 

21,261

 

20,496

 

19,736

 

20,059

 

82,982

 

77,965

Provision for Loan Losses

 

826

 

490

 

589

 

310

 

464

 

2,215

 

819

Net Interest Income after Provision for

  Loan Losses

 

20,663

 

20,771

 

19,907

 

19,426

 

19,595

 

80,767

 

77,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit Fees

 

5,040

 

5,153

 

5,052

 

5,090

 

5,238

 

20,335

 

21,332

Bank Card Fees

 

2,830

 

2,688

 

2,870

 

2,803

 

2,754

 

11,191

 

11,221

Wealth Management Fees

 

2,172

 

2,197

 

2,073

 

1,842

 

1,773

 

8,284

 

7,029

Mortgage Banking Fees

 

1,410

 

1,480

 

1,556

 

1,308

 

1,392

 

5,754

 

5,192

Other

 

1,445

 

1,478

 

1,584

 

1,675

 

1,621

 

6,182

 

8,907

Total Noninterest Income

 

12,897

 

12,996

 

13,135

 

12,718

 

12,778

 

51,746

 

53,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation

 

15,740

 

16,349

 

16,292

 

16,496

 

16,699

 

64,877

 

64,984

Occupancy, Net

 

4,400

 

4,501

 

4,555

 

4,381

 

4,519

 

17,837

 

18,296

Other Real Estate, Net

 

355

 

(118)

 

315

 

583

 

343

 

1,135

 

3,649

Other

 

6,402

 

5,975

 

6,759

 

6,462

 

5,999

 

25,598

 

26,285

Total Noninterest Expense

 

26,897

 

26,707

 

27,921

 

27,922

 

27,560

 

109,447

 

113,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

6,663

 

7,060

 

5,121

 

4,222

 

4,813

 

23,066

 

17,613

Income Tax Expense

 

6,660

 

2,505

 

1,560

 

1,478

 

1,517

 

12,203

 

5,867

NET INCOME

$

3

$

4,555

$

3,561

$

2,744

$

3,296

$

10,863

$

11,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Net Income

$

0.00

$

0.27

$

0.21

$

0.16

$

0.20

$

0.64

$

0.69

Diluted Net Income

 

0.00

 

0.27

 

0.21

 

0.16

 

0.20

 

0.64

 

0.69

Cash Dividend

$

0.07

$

0.07

$

0.05

$

0.05

$

0.05

$

0.24

$

0.17

AVERAGE SHARES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic 

 

16,967

 

16,965

 

16,955

 

16,919

 

16,809

 

16,952

 

16,989

Diluted 

 

17,050

 

17,044

 

17,016

 

16,944

 

16,913

 

17,013

 

17,061

 


 

CAPITAL CITY BANK GROUP, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AND RISK ELEMENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

2017

 

2016

 

December 31,

(Dollars in thousands, except per share data)

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

$

13,339

$

13,242

$

13,335

$

13,431

$

13,744

$

13,431

$

13,953

Provision for Loan Losses

 

826

 

490

 

589

 

310

 

464

 

2,215

 

819

Net Charge-Offs

 

858

 

393

 

682

 

406

 

777

 

2,339

 

1,341

Balance at End of Period

$

13,307

$

13,339

$

13,242

$

13,335

$

13,431

$

13,307

$

13,431

As a % of Loans

 

0.80%

 

0.82%

 

0.81%

 

0.84%

 

0.86%

 

0.80%

 

0.86%

As a % of Nonperforming Loans

 

185.87%

 

203.39%

 

166.23%

 

160.70%

 

157.40%

 

185.87%

 

157.40%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHARGE-OFFS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, Financial and Agricultural

$

664

$

276

$

324

$

93

$

377

$

1,357

$

861

Real Estate - Construction

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Real Estate - Commercial

 

42

 

94

 

478

 

71

 

70

 

685

 

349

Real Estate - Residential

 

126

 

125

 

44

 

116

 

120

 

411

 

899

Real Estate - Home Equity

 

48

 

50

 

0

 

92

 

38

 

190

 

450

Consumer

 

577

 

455

 

537

 

624

 

771

 

2,193

 

2,127

Total Charge-Offs

$

1,457

$

1,000

$

1,383

$

996

$

1,376

$

4,836

$

4,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECOVERIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial, Financial and Agricultural

$

113

$

79

$

40

$

81

$

50

$

313

$

337

Real Estate - Construction

 

-

 

50

 

-

 

-

 

-

 

50

 

-

Real Estate - Commercial

 

24

 

69

 

58

 

23

 

45

 

174

 

408

Real Estate - Residential

 

141

 

60

 

202

 

213

 

277

 

616

 

1,231

Real Estate - Home Equity

 

67

 

84

 

39

 

29

 

32

 

219

 

409

Consumer

 

254

 

265

 

362

 

244

 

195

 

1,125

 

960

Total Recoveries

$

599

$

607

$

701

$

590

$

599

$

2,497

$

3,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CHARGE-OFFS

$

858

$

393

$

682

$

406

$

777

$

2,339

$

1,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Charge-Offs as a % of Average Loans (1)

 

0.21%

 

0.10%

 

0.17%

 

0.10%

 

0.20%

 

0.14%

 

0.09%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RISK ELEMENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccruing Loans

$

7,159

$

6,558

$

7,966

$

8,298

$

8,533

 

 

 

 

Other Real Estate Owned

 

3,941

 

5,987

 

7,968

 

9,501

 

10,638

 

 

 

 

Total Nonperforming Assets

$

11,100

$

12,545

$

15,934

$

17,799

$

19,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past Due Loans 30-89 Days

$

4,579

$

5,687

$

3,789

$

3,263

$

6,438

 

 

 

 

Past Due Loans 90 Days or More

 

-

 

-

 

-

 

-

 

-

 

 

 

 

Classified Loans

 

31,002

 

36,545

 

41,322

 

40,978

 

41,507

 

 

 

 

Performing Troubled Debt Restructuring's

$

32,164

$

33,427

$

35,436

$

36,555

$

38,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Loans as a % of Loans

 

0.43%

 

0.40%

 

0.49%

 

0.52%

 

0.54%

 

 

 

 

Nonperforming Assets as a % of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans and Other Real Estate

 

0.67%

 

0.76%

 

0.97%

 

1.11%

 

1.21%

 

 

 

 

Nonperforming Assets as a % of

  Total Assets

 

0.38%

 

0.45%

 

0.57%

 

0.61%

 

0.67%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Annualized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

CAPITAL CITY BANK GROUP, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE AND INTEREST RATES(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fourth Quarter 2017

 

 

Third Quarter 2017

 

 

Second Quarter 2017

 

 

First Quarter 2017

 

 

Fourth Quarter 2016

 

 

Dec 2017 YTD

 

 

Dec 2016 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