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

    ソース: Nasdaq GlobeNewswire / 29 1 2019 07:00:17   America/New_York

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

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

    Fourth Quarter 2018 HIGHLIGHTS

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

    Full Year 2018 HIGHLIGHTS

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

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

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

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

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

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

    Discussion of Operating Results

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

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

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

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

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

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

    Discussion of Financial Condition

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

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

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

    We continue to make minor modifications on some of our lending programs to try to mitigate the impact that consumer and business deleveraging has had on our portfolio.  These programs, coupled with economic improvements in our anchor markets and strategic loan purchases, have helped to increase overall loan growth.  In the current rising rate environment, our fixed rate offerings are reviewed frequently and rate increases are implemented as appropriate.

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

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

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

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

    At December 31, 2018, our leverage ratio was 10.89% compared to 10.99% and 10.47% at September 30, 2018 and December 31, 2017, respectively.  Further, our risk-adjusted capital ratio was 17.13%, 16.94%, and 17.10% on these respective dates.  Our common equity tier 1 ratio was 13.58% at December 31, 2018, compared to 13.43% at September 30, 2018 and 13.42% at December 31, 2017.  At December 31, 2018, all of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.

    About Capital City Bank Group, Inc.

    Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $3.0 billion in assets.  We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services.  Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 59 banking offices and 82 ATMs in Florida, Georgia and Alabama.  For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

    FORWARD-LOOKING STATEMENTS

    Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially.  The following factors, among others, could cause our actual results to differ: the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes, and the ability to repay and qualified mortgage standards; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and our ability to manage the risks involved in the foregoing.  Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov).  Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ.

    USE OF NON-GAAP FINANCIAL MEASURES

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

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


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


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


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


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


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

    For Information Contact:
    J. Kimbrough Davis
    Executive Vice President and Chief Financial Officer 
    850.402.7820


    Capital City Bank Group, Inc..jpg

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