Capital City Bank Group Inc.
10/26/2021 | Press release | Distributed by Public on 10/26/2021 08:35
Press release, dated October 26, 2021 - Form 8-K
Capital City Bank Group, Inc.
Reports Third Quarter 2021 Results
TALLAHASSEE, Fla.(October 26, 2021) - Capital City Bank Group, Inc. (NASDAQ: CCBG) todayreported net income of $10.1
million, or $0.60 per diluted share, for the third quarter of 2021 comparedto net income of $7.4 million, or $0.44 per diluted share,
for the second quarter of 2021, and $10.4 million, or $0.62 per dilutedshare, for the third quarter of 2020.
For the first nine months of 2021, net income totaled $27.0 million,or $1.60 per diluted share, compared to net income of $23.8
million, or $1.42 per diluted share, for the same period of 2020.Net income for 2021 included partial pre-tax pension settlement
charges totaling $2.5 million (3Q - $0.5 million and 2Q -$2.0 million), or $0.12 per diluted share (after tax).
Our return on average assets ("ROA") was 0.99% and our return on average equity ("ROE")was 11.72% for the third quarter of
2021.These metrics were 0.75% and 9.05% for the second quarter of 2021, respectively,and 1.17% and 12.16% for the third
quarter of 2020, respectively.For the first nine months of 2021, our ROA was 0.92% and our ROE was 10.87%compared to 0.96%
and 9.50%, respectively,for the same period of 2020.
QUARTER HIGHLIGHTS
●
Net interest income grew$1.7 million, or 6.5% sequentially,driven by higher loan fees of $1.3 million (primarily SBA PPP fees
of $1.0 million) and a better earning asset mix
●
Average loans, excluding PPP loans,grew $35 million and average investment securities increased$218 million
●
Strong creditquality metrics resulted in no loan loss provisionfor the quarter
●
Noninterest expense decreased$2.4 million due to lower pension settlement charges of$1.5 million and a $1.0 million gain from
the sale of a banking office
●
Capital City Home Loans ("CCHL") contributed $0.06per share
"Capital City posted strong third quarter results and, year over year,earnings have increased 13.4%" said William G. Smith,Jr.,
Chairman, President and CEO of Capital City Bank Group."Historically favorable credit quality continued to improve resulting in
no provision for loan losses in the third quarter and a net provision credit year-to-date.Operating revenues improved as we
experienced growth in both net interest income and noninterest income,while noninterest expense declined reflecting lower pension
settlement charges and a gain on the sale of ORE (officebuilding).Our recent addition of Capital City Strategic Wealth(a financial
planning/advisory service) is gaining traction and expands ourportfolio of wealth management businesses.We continue to focusour
expansion efforts on markets in west Florida and the northernarc of Atlanta.While challenges remain, we are identifying
opportunities and executing on strategies we believe are sustainable andadd long-term value for our shareowners.I am optimistic
about the future and appreciate your continued support."
Discussion of Operating Results
Net Interest Income/Net InterestMargin
Tax-equivalent netinterest income for the third quarter of 2021 totaled $27.7 million comparedto $26.1 million for the second
quarter of 2021 and $25.2 million for the third quarter of 2020.Compared to the second quarter of 2021, the increase reflected
higher loan fees of $1.3 million (SBA PPP loan fees increased $1.0 million)and higher investment securities income of $0.3million,
which reflected deployment of excess overnight funds into the investmentportfolio.Compared to the second quarter of 2021, lower
loan interest income from SBA PPP loans was offset by loan interestincome from growth in non-SBA PPP loans.Compared to the
third quarter of 2020, the increase was primarily attributable to higher SBA PPP loan feesof $2.5 million.For the first nine months
of 2021, tax-equivalent net interest income totaled $78.4 million comparedto $76.7 million for the same period of 2020.The
increase generally reflected higher SBA PPP loan fees and lower interest expense,partially offset by lower rates earned on
investment securities and variable/adjustable rate loans.
Our net interest margin for the third quarter of 2021 was 2.98%, an increaseof nine basis points over the second quarter of 2021 and
a decrease of 14 basis points from the third quarter of 2020.Compared to the second quarter of 2021, the increase was primarily
driven by higher SBA PPP loan fees.Compared to the third quarter of 2020, the decrease was primarily attributableto growth in
earning assets (driven by deposit inflows),which negatively impacts our margin percentage.For the first nine months of 2021, the
net interest margin decreased 51 basis points to 2.91%,which is generally reflective of growth in earning assets. Our net interest
margin for the third quarter of 2021, excluding the impactof overnight funds in excess of $200 million, was 3.50%.
2
Provision for Credit Loss
We did notrecord a provision for credit losses for the third quarter of 2021.This comparesto a negative provision of $0.6 million
for the second quarter of 2021 and a provision expense of $1.3 millionfor the third quarter of 2020.For the first nine months of
2021, we recorded a negative provision of $1.6 million comparedto provision expense of $8.3 million for the same period of 2020.
The negative provision for the first nine months of 2021 generally reflectedimproving economic conditions, favorable loan
migration and strong net loan recoveries totaling $0.7million.We discuss the allowancefor credit losses further below.
Noninterest Income and NoninterestExpense
Noninterest income for the third quarter of 2021 totaled $26.6 million comparedto $26.5 million for the second quarter of 2021 and
$35.0 million for the third quarter of 2020.The slight increase over the second quarter of 2021 was primarily due to higher deposit
fees of $0.8 million and wealth management fees of $0.3 million, partially offsetby lower mortgage banking revenues of $0.9
million.The $8.4 million decrease from the third quarter of 2020 was primarilyattributable to lower mortgage banking revenues at
CCHL of $10.7 million, partially offset by higher depositfees of $0.8 million, wealth management fees of $0.8 million, and bank
card fees of $0.4 million.The decline in mortgage banking revenues was driven by lower productionvolume (primarily re-finance
activity) and a lower gain on sale margin (additionalinformation on CCHL is provided on Page 11).The increase in deposit fees
reflected the conversion of the remaining free checking accounts to a monthlymaintenance fee account type.The increase in wealth
management fees was attributable to higher retail brokerage transactionvolume and advisory accounts added from the acquisition of
Capital City Strategic Wealthon May 1, 2021.The increase in bank card fees generally reflected an increase in card-not-present
debit card transactions as well increased consumer spending.For the first nine months of 2021, noninterest income totaled $82.9
million compared to $80.6 million for the same period of 2020 with theincrease driven by higher wealth management fees of $2.0
million, bank card fees of $1.8 million, deposit fees of $0.5 million, andother income of $0.9 million (primarily loan servicing
income at CCHL), partially offset by lower mortgage bankingrevenues of $3.0 million.These variances were generally due to the
same aforementioned factors noted in the year over year quarterly comparison.
Noninterest expense for the third quarter of 2021 totaled $39.7 millioncompared to $42.1 million for the second quarter of 2021
and $40.3 million for the third quarter of 2020.The $2.4 million decrease from the second quarter of 2021 reflected a pension
settlement charge of $2.0 million in the second quarterof 2021 versus $0.5 million in the third quarter of 2021.In addition, OREO
expense declined by $0.9million due to a gain on the sale of a banking office in the thirdquarter of 2021.Compared to the third
quarter of 2020, the $0.6 million decrease was primarily attributable tolower compensation expense of $0.9 million (primarily
incentive compensation at CCHL) and OREO expense of $1.3 millionpartially offset by higher other expense of $1.0 million and a
pension settlement charge of $0.5 million.For the first nine months of 2021, noninterest expense totaled $122.3 millioncompared
to $108.6 million for the same period of 2020.The $13.7 million increase was attributable to the addition of expenses at CCHL of
$6.7 million as well as higher expenses at the core bank totaling $7.0million.The increase in expenses at the core bank were
primarily due to higher compensation expense of $1.5 million (primarilymerit raises), processing fees of $0.6 million (debit card
volume), professional fees of $0.5 million, occupancy expense of$0.4 million, and FDIC insurance of $0.4 million (higher asset
size), partially offset by lower OREO expense of $1.1million (gains from the sale of two banking offices).In addition, we have
realized pension settlement charges totaling $2.5million so far in 2021 and other expense increased $1.5 million, which reflected
higher expense for our base pension plan attributable to the utilization ofa lower discount rate for plan liabilities.We anticipate
additional settlement expense in the fourth quarter of 2021.
Income Taxes
We realized incometax expense of $2.9 million (effective rate of 20%) for the third quarterof 2021 compared to $2.1million
(effective rate of 19%) for the second quarter of 2021and $3.2 million (effective rate of 17%) for the third quarter of 2020.For the
first nine months of 2021, we realized income tax expense of $7.8 million (effectiverate of 19%) compared to $7.4 million
(effective rate of 19%) for the same period of 2020.Absent discrete items, we expect our annual effective tax rateto approximate
18%-19%.
3
Discussion of Financial Condition
Earning Assets
Average earningassets totaled $3.693 billion for the third quarter of 2021, an increase of $69.2million, or 1.9%, over the second
quarter of 2021, and an increase of $355.7 million, or 10.7%, overthe fourth quarter of 2020.The increase over both prior periods
was primarily driven by higher deposit balances, which funded growth in theinvestment portfolio.Deposit balances increased as a
result of strong core deposit growth, SBA PPP loan proceeds depositedin client accounts, and various other stimulus programs.
We maintainedan average net overnight funds (deposits with banks plus FED funds sold less FED fundspurchased) sold position of
$741.9 million in the third quarter of 2021compared to an average net overnight funds sold position of $818.6 millionin the second
quarter of 2021 and $705.1 million in the fourth quarter of 2020.The decrease compared to the second quarter of 2021 was
primarily due to growth in the investment portfolio.The increase compared to the fourth quarter 2020 was driven by strong core
deposit growth, in addition to pandemic related stimulus programs (seebelow -
Funding
).
Average loansheld for investment ("HFI") decreased $62.6 million, or 3.1%, from the secondquarter of 2021 and $19.3 million, or
1.0%, from the fourth quarter of 2020.Over these same prior periods, average loans (excluding SBA PPP loans)increased $34.9
million and $125.2 million and period end loans increased $5.1 millionand $102.8 million, respectively.Compared to the second
quarter of 2021, the increase in period end loans reflected growth in constructionand indirect loans,partially offset by a decline in
commercial real estate.Compared to the fourth quarter of 2020, we realized growth in construction,residential, commercial real
estate and indirect loans.At September 30, 2021, SBA PPP loan balances totaled $7.5 million and remainingdeferred SBA PPP net
loan fees totaled $0.3 million.SBA PPP loan forgiveness applications are expected tobe completed in the fourth quarter 2021.
Allowance for Credit Losses
At September 30, 2021, the allowance for credit losses for HFI loans totaled$21.5 million compared to $22.2 million at June 30,
2021 and $23.8 million at December 31, 2020.Activity within the allowance is provided on Page 9.At September 30, 2021, the
allowance represented 1.11% of HFIloans and provided coverage of 710% of nonperforming loans comparedto 1.10% and 434%,
respectively, at June30, 2021, and 1.19% and 406%, respectively,at December 31, 2020.At September 30, 2021, excluding SBA
PPP loans (100% government guaranteed),the allowance represented 1.12% of HFI loans compared to 1.30% at December31,
2020.
Credit Quality
Nonperforming assets (nonaccrual loans and OREO) totaled $3.2 millionat September 30, 2021 compared to $6.3 million at June
30, 2021 and $6.7 million at December 31, 2020.Nonaccrual loans totaled $3.0 million at September 30, 2021, a $2.1 million
decrease from June 30, 2021 and a $2.8 million decrease from December31, 2020.The balance of OREO totaled $0.2 million at
September 30, 2021, a $1.0 million decrease from June 30, 2021 and $0.6million decrease from December 31, 2020.
Funding (Deposits/Debt)
Average totaldeposits were $3.448 billion for the third quarter of 2021, an increase of $60.3 million,or 1.8%, over the second
quarter of 2021 and $381.6 million, or 12.4%, over the fourth quarterof 2020.The strongest growth over both comparable periods
occurred in our noninterest bearing deposits and savings account balances.Average public depositsin the third quarter 2021
decreased slightly compared to the second quarter of 2021, but increasedcompared to the fourth quarter of 2020.Over the past 12
months, multiple government stimulus programs have been implemented,including those under the CARES Act and the American
Rescue Plan Act, which are responsible for a large part of the growth in averagedeposits. Given these increases,the potential exists
for our deposit levels to be volatile for the remainder of 2021 and into 2022due to the uncertain timing of the outflows of the
stimulus related balances and the economic recovery.It is anticipated that current liquidity levels will remain robust due to our
strong overnight funds sold position.The Bank continues to strategically consider ways to safely deploy a portionof this liquidity.
Averageshort-term borrowings decreased $1.4 million over the second quarter of 2021and declined $45.5 million from the fourth
quarter of 2020, both of which reflected a seasonal fluctuation in warehouse lineborrowing needs to support CCHL'sloans held for
sale.
4
Capital
Shareowners' equity was $348.9 million at September 30, 2021compared to $335.9 million at June 30, 2021 and $320.8 million at
December 31, 2020.For the first nine months of 2021, shareowners' equity was positively impacted bynet income of $27.0
million, a $1.0 million increase in fair value of the interest rate swap related tosubordinated debt,net adjustments totaling $2.2
million related to transactions under our stock compensation plans,and reclassification of $7.8 million from temporary equity to
decrease the redemption value of the non-controlling interest in CCHL.In addition, $1.6 million was reclassified from accumulated
other comprehensive loss to pension expense in conjunction with the partialpension settlement charge reflected in earnings,
therefore, the charge had no net effect onequity.Shareowners' equity was reduced by common stock dividendsof $7.8 million
($0.46 per share),a $3.2 million decrease in the unrealized gain on investment securities,and stock compensation of $0.5 million.
At September 30, 2021, our total risk-based capital ratio was 16.70%compared to 16.48% at June 30, 2021 and 17.30% at
December 31, 2020.Our common equity tier 1 capital ratio was 13.45%, 13.14%, and 13.71%, respectively,on these dates.Our
leverage ratio was 9.05%, 8.84%, and 9.33%, respectively,on these dates.All of our regulatory capital ratios exceeded the
threshold to be designated as "well-capitalized" under the Basel IIIcapital standards.Further, our tangible common equity ratio
was 6.46% at September 30, 2021 compared to 6.19% and 6.25% at June30, 2021 and December 31, 2020, respectively.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largestpublicly traded financial holding companies headquartered
in Florida and has approximately $4.0 billion in assets.We providea full range of banking services, including traditional deposit
and credit services, mortgage banking, asset management, trust, merchantservices, bankcards,securities brokerage services and life
insurance.Our bank subsidiary, Capital City Bank,was founded in 1895 and now has 57 banking offices and 86 ATMs/ITMsin
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 plansand 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 magnitude and duration of the COVID-19pandemic and its impact on the global economy and financial market conditions
and our business, results of operations and financial condition, includingthe impact of our participation in government programs
related to COVID-19; the accuracy of the our financial statement estimatesand assumptions; legislative or regulatory changes;
fluctuations in inflation, interest rates, or monetary policies; the effectsof security breaches and computer viruses that may affectour
computer systems or fraud related to debit card products; changes in consumerspending and savings habits; our growth and
profitability; the strength of the U.S. economy and the local economieswhere we conduct operations; the effects of a non-diversified
loan portfolio, including the risks of geographic and industry concentrations;natural disasters, widespread health emergencies,
military conflict, terrorism or other geopolitical events; changes in thestock market and other capital and real estate markets;
customer acceptance of third-party products and services; increased competitionand its effect on pricing; negative publicity and the
impact on our reputation; technological changes, especially changesthat allow out of market competitorsto compete in our
markets; changes in accounting; and our ability to manage the risks involvedin the foregoing.Additional factors can be found in our
Annual Report on Form 10-K for the fiscal year ended December 31,2020, 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-lookingstatements or the reasons why actual results could differ.
5
USE OF NON-GAAP FINANCIAL MEASURES
We present a tangiblecommon equity ratio and a tangible book value per diluted share that removes the effectof goodwill and other
intangibles resulting from merger and acquisition activity.We believe thesemeasures are useful to investors because it allows
investors to more easily compare our capital adequacy to other companies in theindustry.
The GAAP to non-GAAP reconciliations are provided below.
(Dollars in Thousands, except per share data)
Sep 30, 2021
Jun 30, 2021
Mar 31, 2021
Dec 31, 2020
Sep 30, 2020
Shareowners' Equity (GAAP)
$
348,868
$
335,880
$
324,426
$
320,837
$
339,425
Less: Goodwill and Other Intangibles (GAAP)
93,293
93,333
89,095
89,095
89,095
Tangible Shareowners' Equity (non-GAAP)
A
255,575
242,547
235,331
231,742
250,330
Total Assets (GAAP)
4,048,733
4,011,459
3,929,884
3,798,071
3,587,041
Less: Goodwill and Other Intangibles (GAAP)
93,293
93,333
89,095
89,095
89,095
Tangible Assets (non-GAAP)
B
$
3,955,440
$
3,918,126
$
3,840,789
$
3,708,976
$
3,497,946
Tangible Common Equity Ratio (non-GAAP)
A/B
6.46%
6.19%
6.13%
6.25%
7.16%
Actual Diluted Shares Outstanding (GAAP)
C
16,911,715
16,901,375
16,875,719
16,844,997
16,800,563
Tangible Book Valueper Diluted Share (non-GAAP)
A/C
$
15.11
$
14.35
$
13.94
$
13.76
$
14.90
6
CAPITAL CITY BANKGROUP,INC.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended
Nine Months Ended
(Dollars in thousands, except per share data)
Sep 30, 2021
Jun 30, 2021
Sep 30, 2020
Sep 30, 2021
Sep 30, 2020
EARNINGS
Net Income Attributable to Common Shareowners
$
10,091
$
7,427
$
10,397
$
27,024
$
23,830
Diluted Net Income Per Share
$
0.60
$
0.44
$
0.62
$
1.60
$
1.42
PERFORMANCE
Return on Average Assets
0.99
%
0.75
%
1.17
%
0.92
%
0.96
%
Return on Average Equity
11.72
9.05
12.16
10.87
9.50
Net Interest Margin
2.98
2.89
3.12
2.91
3.42
Noninterest Income as % of Operating Revenue
48.99
50.47
58.19
51.47
51.37
Efficiency Ratio
73.09
%
80.18
%
67.01
%
75.83
%
69.04
%
CAPITAL ADEQUACY
Tier 1 Capital
15.69
%
15.44
%
16.77
%
15.69
%
16.77
%
Total Capital
16.70
16.48
17.88
16.70
17.88
Leverage
9.05
8.84
9.64
9.05
9.64
Common Equity Tier 1
13.45
13.14
14.20
13.45
14.20
Tangible Common Equity
(1)
6.46
6.19
7.16
6.46
7.16
Equity to Assets
8.62
%
8.37
%
9.46
%
8.62
%
9.46
%
ASSET QUALITY
Allowance as % of Non-Performing Loans
710.39
%
433.93
%
420.30
%
710.39
%
420.30
%
Allowance as a % of Loans HFI
1.11
1.10
1.16
1.11
1.16
Net Charge-Offs as % of Average Loans HFI
0.03
(0.07)
0.11
(0.05)
0.13
Nonperforming Assets as % of Loans HFI and OREO
0.17
0.31
0.34
0.17
0.34
Nonperforming Assets as % of Total Assets
0.08
%
0.16
%
0.19
%
0.08
%
0.19
%
STOCK PERFORMANCE
High
$
26.10
$
27.39
$
21.71
$
28.98
$
30.62
Low
22.02
24.55
17.55
21.42
15.61
Close
$
24.74
$
25.79
$
18.79
$
24.74
$
18.79
Average Daily Trading Volume
30,515
28,958
28,517
29,925
39,477
(1)
Tangible common equity ratio is a non-GAAP financial measure.For additional information, including a reconciliation to GAAP, refer to
Page 5.
7
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTOF FINANCIAL CONDITION
Unaudited
2021
2020
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
ASSETS
Cash and Due From Banks
$
73,132
$
78,894
$
73,973
$
67,919
$
76,509
Funds Sold and Interest Bearing Deposits
708,988
766,920
851,910
860,630
626,104
Total Cash and Cash Equivalents
782,120
845,814
925,883
928,549
702,613
Investment Securities Available for Sale
645,844
480,890
406,245
324,870
328,253
Investment Securities Held to Maturity
341,228
325,559
199,109
169,939
202,593
Total Investment Securities
987,072
806,449
605,354
494,809
530,846
Loans Held for Sale
77,036
80,821
82,081
114,039
116,561
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural
218,929
292,953
413,819
393,930
402,997
Real Estate - Construction
177,443
149,884
138,104
135,831
125,804
Real Estate - Commercial
683,379
707,599
669,158
648,393
656,064
Real Estate - Residential
355,958
362,018
358,849
342,664
335,713
Real Estate - Home Equity
187,642
190,078
202,099
205,479
197,363
Consumer
309,983
298,464
267,666
269,520
268,393
Other Loans
6,792
6,439
7,082
9,879
10,488
Overdrafts
1,299
1,227
950
730
1,339
Total Loans Held for Investment
1,941,425
2,008,662
2,057,727
2,006,426
1,998,161
Allowance for Credit Losses
(21,500)
(22,175)
(22,026)
(23,816)
(23,137)
Loans Held for Investment, Net
1,919,925
1,986,487
2,035,701
1,982,610
1,975,024
Premises and Equipment, Net
84,750
85,745
86,370
86,791
87,192
Goodwill and Other Intangibles
93,293
93,333
89,095
89,095
89,095
Other Real Estate Owned
192
1,192
110
808
1,227
Other Assets
104,345
111,618
105,290
101,370
84,483
Total Other Assets
282,580
291,888
280,865
278,064
261,997
Total Assets
$
4,048,733
$
4,011,459
$
3,929,884
$
3,798,071
$
3,587,041
LIABILITIES
Deposits:
Noninterest Bearing Deposits
$
1,592,345
$
1,552,864
$
1,473,891
$
1,328,809
$
1,378,314
NOW Accounts
926,201
970,705
993,571
1,046,408
827,506
Money Market Accounts
286,065
280,805
269,041
266,649
247,823
Regular Savings Accounts
559,714
539,477
518,373
474,100
451,944
Certificates of Deposit
101,637
103,070
103,232
101,594
103,859
Total Deposits
3,465,962
3,446,921
3,358,108
3,217,560
3,009,446
Short-Term Borrowings
51,410
47,200
55,687
79,654
90,936
Subordinated Notes Payable
52,887
52,887
52,887
52,887
52,887
Other Long-Term Borrowings
1,610
1,720
1,829
3,057
5,268
Other Liabilities
113,720
105,534
109,487
102,076
71,880
Total Liabilities
3,685,589
3,654,262
3,577,998
3,455,234
3,230,417
Temporary Equity
14,276
21,317
27,460
22,000
17,199
SHAREOWNERS' EQUITY
Common Stock
169
169
169
168
168
Additional Paid-In Capital
33,876
33,560
32,804
32,283
31,425
Retained Earnings
359,550
345,574
335,324
332,528
333,545
Accumulated Other Comprehensive Loss, Net of Tax
(44,727)
(43,423)
(43,871)
(44,142)
(25,713)
Total Shareowners' Equity
348,868
335,880
324,426
320,837
339,425
Total Liabilities, Temporary Equity and Shareowners' Equity
$
4,048,733
$
4,011,459
$
3,929,884
$
3,798,071
$
3,587,041
OTHER BALANCE SHEET DATA
Earning Assets
$
3,714,521
$
3,662,852
$
3,597,071
$
3,475,904
$
3,271,672
Interest Bearing Liabilities
1,979,524
1,995,864
1,994,620
2,024,349
1,780,223
Book Value Per Diluted Share
$
20.63
$
19.87
$
19.22
$
19.05
$
20.20
Tangible Book ValuePer Diluted Share
(1)
15.11
14.35
13.94
13.76
14.90
Actual Basic Shares Outstanding
16,878
16,874
16,852
16,791
16,761
Actual Diluted Shares Outstanding
16,912
16,901
16,876
16,845
16,801
(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.
8
CAPITAL CITY BANKGROUP,INC.
CONSOLIDATED STATEMENTOF OPERATIONS
Unaudited
2021
2020
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2021
2020
INTEREST INCOME
Interest and Fees on Loans
$
25,885
$
24,582
$
23,350
$
23,878
$
23,594
$
73,817
$
70,874
Investment Securities
2,350
2,054
1,883
2,096
2,426
6,287
8,178
Funds Sold
285
200
213
180
146
698
991
Total Interest Income
28,520
26,836
25,446
26,154
26,166
80,802
80,043
INTEREST EXPENSE
Deposits
210
208
208
201
190
626
1,347
Short-Term Borrowings
317
324
412
639
498
1,053
1,051
Subordinated Notes Payable
307
308
307
311
316
922
1,161
Other Long-Term Borrowings
14
16
21
30
40
51
131
Total Interest Expense
848
856
948
1,181
1,044
2,652
3,690
Net Interest Income
27,672
25,980
24,498
24,973
25,122
78,150
76,353
Provision for Credit Losses
-
(571)
(982)
1,342
1,308
(1,553)
8,303
Net Interest Income after Provision for Credit Losses
27,672
26,551
25,480
23,631
23,814
79,703
68,050
NONINTEREST INCOME
Deposit Fees
5,075
4,236
4,271
4,713
4,316
13,582
13,087
Bank Card Fees
3,786
3,998
3,618
3,462
3,389
11,402
9,582
Wealth Management Fees
3,623
3,274
3,090
3,069
2,808
9,987
7,966
Mortgage Banking Revenues
12,283
13,217
17,125
17,711
22,983
42,625
45,633
Other
1,807
1,748
1,722
1,568
1,469
5,277
4,374
Total Noninterest Income
26,574
26,473
29,826
30,523
34,965
82,873
80,642
NONINTEREST EXPENSE
Compensation
25,245
25,378
26,064
26,722
26,164
76,687
69,558
Occupancy, Net
6,032
5,973
5,967
5,976
5,906
17,972
16,683
Other Real Estate, Net
(1,126)
(270)
(118)
567
219
(1,514)
(463)
Pension Adjustment
500
2,000
-
-
-
2,500
-
Other
9,051
9,042
8,563
8,083
8,053
26,656
22,836
Total Noninterest Expense
39,702
42,123
40,476
41,348
40,342
122,301
108,614
OPERATING PROFIT
14,544
10,901
14,830
12,806
18,437
40,275
40,078
Income Tax Expense
2,949
2,059
2,787
2,833
3,165
7,795
7,397
Net Income
11,595
8,842
12,043
9,973
15,272
32,480
32,681
Pre-Tax Income Attributable to Noncontrolling Interest
(1,504)
(1,415)
(2,537)
(2,227)
(4,875)
(5,456)
(8,851)
NET INCOME ATTRIBUTABLETO
COMMON SHAREOWNERS
$
10,091
$
7,427
$
9,506
$
7,746
$
10,397
$
27,024
$
23,830
PER COMMON SHARE
Basic Net Income
$
0.60
$
0.44
$
0.56
$
0.46
$
0.62
$
1.60
$
1.42
Diluted Net Income
0.60
0.44
0.56
0.46
0.62
1.60
1.42
Cash Dividend
$
0.16
$
0.15
$
0.15
$
0.15
$
0.14
$
0.46
$
0.42
AVERAGESHARES
Basic
16,875
16,858
16,838
16,763
16,771
16,857
16,792
Diluted
16,909
16,885
16,862
16,817
16,810
16,886
16,823
9
CAPITAL CITY BANK GROUP,INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND RISK ELEMENT ASSETS
Unaudited
2021
2020
September 30,
(Dollars in thousands, except per share data)
Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
2021
2020
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period
$
22,175
$
22,026
$
23,816
$
23,137
$
22,457
$
23,816
$
13,905
Impact of Adopting ASC 326 (CECL)
-
-
-
-
-
-
3,269
Provision for Credit Losses
(546)
(184)
(2,312)
1,165
1,265
(3,042)
7,870
Net Charge-Offs (Recoveries)
129
(333)
(522)
486
585
(726)
1,907
Balance at End of Period
$
21,500
$
22,175
$
22,026
$
23,816
$
23,137
$
21,500
$
23,137
As a % of Loans HFI
1.11%
1.10%
1.07%
1.19%
1.16%
1.11%
1.16%
As a % of Nonperforming Loans
710.39%
433.93%
410.78%
405.66%
420.30%
710.39%
420.30%
ACL - DEBT SECURITIES
Provision for Credit Losses
$
16
$
-
$
-
$
-
$
-
$
16
$
-
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period
2,587
$
2,974
$
1,644
$
1,467
$
1,424
$
1,644
$
157
Impact of Adopting ASC 326 (CECL)
-
-
-
-
-
-
876
Provision for Credit Losses
530
(387)
1,330
177
43
1,473
434
Balance at End of Period
(1)
3,117
2,587
2,974
1,644
1,467
3,117
1,467
CHARGE-OFFS
Commercial, Financial and Agricultural
$
37
$
32
$
69
$
104
$
137
$
138
$
685
Real Estate - Construction
-
-
-
-
-
-
-
Real Estate - Commercial
405
-
-
-
17
405
28
Real Estate - Residential
17
65
6
38
1
88
112
Real Estate - Home Equity
15
74
5
10
58
94
141
Consumer
221
230
564
668
619
1,015
2,117
Overdrafts
1,093
440
492
564
450
2,025
1,693
Total Charge-Offs
$
1,788
$
841
$
1,136
$
1,384
$
1,282
$
3,765
$
4,776
RECOVERIES
Commercial, Financial and Agricultural
$
66
$
103
$
136
$
64
$
74
$
305
$
188
Real Estate - Construction
10
-
-
50
-
10
-
Real Estate - Commercial
169
26
645
27
30
840
291
Real Estate - Residential
401
244
75
153
35
720
126
Real Estate - Home Equity
46
70
124
40
41
240
138
Consumer
334
332
311
306
280
977
913
Overdrafts
633
399
367
258
237
1,399
1,213
Total Recoveries
$
1,659
$
1,174
$
1,658
$
898
$
697
$
4,491
$
2,869
NET CHARGE-OFFS (RECOVERIES)
$
129
$
(333)
$
(522)
$
486
$
585
$
(726)
$
1,907
Net Charge-Offs as a % of Average LoansHFI
(2)
0.03%
(0.07)%
(0.10)%
0.09%
0.11%
(0.05)%
0.13%
RISK ELEMENT ASSETS
Nonaccruing Loans
$
3,026
$
5,110
$
5,362
$
5,871
$
5,505
Other Real Estate Owned
192
1,192
110
808
1,227
Total Nonperforming Assets ("NPAs")
$
3,218
$
6,302
$
5,472
$
6,679
$
6,732
Past Due Loans 30-89 Days
$
3,360
$
3,745
$
2,622
$
4,594
$
3,191
Past Due Loans 90 Days or More
-
-
-
-
-
Classified Loans
16,310
19,397
20,608
17,631
16,772
Performing Troubled Debt Restructurings
$
7,919
$
8,992
$
13,597
$
13,887
$
14,693
Nonperforming Loans as a % of Loans HFI
0.16%
0.25%
0.26%
0.29%
0.28%
NPAs as a % of Loans HFI and Other Real Estate
0.17%
0.31%
0.27%
0.33%
0.34%
NPAs as a % ofTotal Assets
0.08%
0.16%
0.14%
0.18%
0.19%
(1)
Recorded in other liabilities
(2)
Annualized
10
CAPITAL CITY BANK GROUP,INC.
AVERAGEBALANCE AND INTEREST RATES
Unaudited
Third Quarter 2021
Second Quarter 2021
First Quarter 2021
Fourth Quarter 2020
Third Quarter 2020
Sep 2021 YTD
Sep 2020 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 Held for Sale
$
67,753
$
497
2.91
%
$
77,101
$
566
2.94
%
$
106,242
$
970
3.70
%
$
121,052
878
3.85
%
$
92,522
$
671
3.64
%
$
83,558
$
2,033
3.24
%
$
67,719
$
1,577
3.50
%
Loans Held for Investment
(1)
1,974,132
25,458
5.12
2,036,781
24,095
4.74
2,044,363
22,483
4.46
1,993,470
23,103
4.55
2,005,178
23,027
4.53
2,018,168
72,036
4.76
1,945,524
69,598
4.77
Investment Securities
Taxable Investment Securities
904,962
2,333
1.03
687,882
2,036
1.18
528,842
1,863
1.41
513,277
2,072
1.61
553,395
2,401
1.73
708,606
6,232
1.17
594,654
8,104
1.82
Tax-Exempt Investment Securities
(1)
4,332
25
2.31
3,530
23
2.58
3,844
25
2.61
4,485
30
2.71
4,860
32
2.66
3,904
73
2.49
5,338
94
2.34
Total Investment Securities
909,294
2,358
1.03
691,412
2,059
1.19
532,686
1,888
1.42
517,762
2,102
1.62
558,255
2,433
1.74
712,510
6,305
1.18
599,992
8,198
1.82
Funds Sold
741,944
285
0.15
818,616
200
0.10
814,638
213
0.11
705,125
180
0.10
567,883
146
0.10
791,466
698
0.12
385,245
991
0.34
Total Earning Assets
3,693,123
$
28,598
3.07
%
3,623,910
$
26,920
2.98
%
3,497,929
$
25,554
2.96
%
3,337,409
$
26,263
3.14
%
3,223,838
$
26,277
3.25
%
3,605,702
$
81,072
3.01
%
2,998,480
$
80,364
3.58
%
Cash and Due From Banks
72,773
74,076
68,978
73,968
69,893
71,956
66,512
Allowance for Loan Losses
(22,817)
(22,794)
(24,128)
(23,725)
(22,948)
(23,241)
(19,672)
Other Assets
283,534
281,157
278,742
264,784
268,549
281,162
257,993
Total Assets
$
4,026,613
$
3,956,349
$
3,821,521
$
3,652,436
$
3,539,332
$
3,935,579
$
3,303,313
LIABILITIES:
Interest Bearing Deposits
NOW Accounts
$
945,788
$
72
0.03
%
$
966,649
$
74
0.03
%
$
985,517
$
76
0.03
%
$
879,564
$
66
0.03
%
$
826,776
$
61
0.03
%
$
965,839
$
222
0.03
%
$
808,389
$
864
0.14
%
Money Market Accounts
282,860
34
0.05
272,138
33
0.05
269,829
33
0.05
261,543
34
0.05
247,185
32
0.05
274,990
100
0.05
227,331
189
0.11
Savings Accounts
551,383
68
0.05
529,844
64
0.05
492,252
60
0.05
466,116
57
0.05
438,762
54
0.05
524,710
192
0.05
409,230
150
0.05
Time Deposits
102,765
36
0.14
102,995
37
0.15
102,089
39
0.15
102,809
44
0.17
104,522
43
0.16
102,619
112
0.15
104,925
144
0.18
Total Interest Bearing Deposits
1,882,796
210
0.04
%
1,871,626
208
0.04
%
1,849,687
208
0.05
%
1,710,032
201
0.05
%
1,617,245
190
0.05
%
1,868,158
626
0.04
%
1,549,875
1,347
0.12
%
Short-Term Borrowings
49,773
317
2.53
%
51,152
324
2.54
%
67,033
412
2.49
%
95,280
639
2.67
%
74,557
498
2.66
%
55,923
1,053
2.52
%
60,335
1,051
2.33
%
Subordinated Notes Payable
52,887
307
2.27
52,887
308
2.30
52,887
307
2.32
52,887
311
2.30
52,887
316
2.34
52,887
922
2.30
52,887
1,161
2.89
Other Long-Term Borrowings
1,652
14
3.37
1,762
16
3.38
2,736
21
3.18
3,700
30
3.18
5,453
40
2.91
2,046
51
3.29
5,842
131
3.00
Total Interest Bearing Liabilities
1,987,108
$
848
0.17
%
1,977,427
$
856
0.17
%
1,972,343
$
948
0.19
%
1,861,899
$
1,181
0.25
%
1,750,142
$
1,044
0.24
%
1,979,014
$
2,652
0.18
%
1,668,939
$
3,690
0.30
%
Noninterest Bearing Deposits
1,564,892
1,515,726
1,389,821
1,356,104
1,354,032
1,490,787
1,220,002
Other Liabilities
112,707
107,801
111,050
74,605
83,192
110,526
71,661
Total Liabilities
3,664,707
3,600,954
3,473,214
3,292,608
3,187,366
3,580,327
2,960,602
Temporary Equity
20,446
26,355
21,977
16,154
11,893
22,920
7,534
SHAREOWNERS' EQUITY:
341,460
329,040
326,330
343,674
340,073
332,332
335,177
Total Liabilities, TemporaryEquity and
Shareowners' Equity
$
4,026,613
$
3,956,349
$
3,821,521
$
3,652,436
$
3,539,332
$
3,935,579
$
3,303,313
Interest Rate Spread
$
27,750
2.91
%
$
26,064
2.81
%
$
24,606
2.77
%
$
25,082
2.88
%
$
25,233
3.01
%
$
78,420
2.83
%
$
76,674
3.29
%
Interest Income and Rate Earned
(1)
28,598
3.07
26,920
2.98
25,554
2.96
26,263
3.14
26,277
3.25
81,072
3.01
80,364
3.58
Interest Expense and Rate Paid
(2)
848
0.09
856
0.09
948
0.11
1,181
0.14
1,044
0.13
2,652
0.10
3,690
0.16
Net Interest Margin
$
27,750
2.98
%
$
26,064
2.89
%
$
24,606
2.85
%
$
25,082
3.00
%
$
25,233
3.12
%
$
78,420
2.91
%
$
76,674
3.42
%
(1)
Interest and average rates arecalculated on a tax-equivalent basis using a 21% Federal tax rate.
(2)
Rate calculated based on average earning assets.
11
CAPITAL CITY HOME LOANS
MORTGAGE BANKING ACTIVITY
Unaudited
Three Months Ended
Nine Months Ended
(Dollars in thousands)
Sep 30, 2021
Jun 30, 2021
Sep 30, 2020
Sep 30, 2021
Sep 30, 2020
Net Interest Income
$
(30)
$
19
$
17
$
(165)
$
142
Mortgage Banking Fees
12,293
13,116
22,775
42,255
44,046
Other
455
425
287
1,306
587
Total NoninterestIncome
12,748
13,541
23,062
43,561
44,633
Salaries
7,600
8,538
10,753
26,414
21,376
Other Associate Benefits
215
210
192
646
446
Total Compensation
7,815
8,748
10,945
27,060
21,822
Occupancy, Net
849
854
845
2,564
1,844
Other
1,292
1,359
1,342
3,751
3,048
Total NoninterestExpense
9,956
10,961
13,132
33,375
26,714
Operating Profit
$
2,762
$
2,599
$
9,947
$
10,021
$
18,061
Key Performance Metrics
Total Loans Closed
$
360,167
$
406,859
$
526,252
$
1,230,151
$
1,139,681
Total Loans Closed -Mix
Purchase
71%
76%
60%
69%
59%
Refinance
29%
24%
40%
31%
41%