• Capital City Bank Group, Inc. Reports Third Quarter 2021 Results

    Source: Nasdaq GlobeNewswire / 26 Oct 2021 07:00:02   America/New_York

    TALLAHASSEE, Fla., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $10.1 million, or $0.60 per diluted share, for the third quarter of 2021 compared to 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 diluted share, 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 credit quality metrics resulted in no loan loss provision for 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 $0.06 per 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 (office building). Our recent addition of Capital City Strategic Wealth (a financial planning/advisory service) is gaining traction and expands our portfolio of wealth management businesses. We continue to focus our expansion efforts on markets in west Florida and the northern arc of Atlanta. While challenges remain, we are identifying opportunities and executing on strategies we believe are sustainable and add 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 Interest Margin

    Tax-equivalent net interest income for the third quarter of 2021 totaled $27.7 million compared to $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 $0.3 million, which reflected deployment of excess overnight funds into the investment portfolio. Compared to the second quarter of 2021, lower loan interest income from SBA PPP loans was offset by loan interest income from growth in non-SBA PPP loans. Compared to the third quarter of 2020, the increase was primarily attributable to higher SBA PPP loan fees of $2.5 million. For the first nine months of 2021, tax-equivalent net interest income totaled $78.4 million compared to $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 increase of 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 attributable to 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 impact of overnight funds in excess of $200 million, was 3.50%.

    Provision for Credit Loss

    We did not record a provision for credit losses for the third quarter of 2021. This compares to a negative provision of $0.6 million for the second quarter of 2021 and a provision expense of $1.3 million for the third quarter of 2020. For the first nine months of 2021, we recorded a negative provision of $1.6 million compared to provision expense of $8.3 million for the same period of 2020. The negative provision for the first nine months of 2021 generally reflected improving economic conditions, favorable loan migration and strong net loan recoveries totaling $0.7 million. We discuss the allowance for credit losses further below.

    Noninterest Income and Noninterest Expense

    Noninterest income for the third quarter of 2021 totaled $26.6 million compared to $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 offset by lower mortgage banking revenues of $0.9 million. The $8.4 million decrease from the third quarter of 2020 was primarily attributable to lower mortgage banking revenues at CCHL of $10.7 million, partially offset by higher deposit fees 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 production volume (primarily re-finance activity) and a lower gain on sale margin (additional information on CCHL is provided on Page 11). The increase in deposit fees reflected the conversion of the remaining free checking accounts to a monthly maintenance fee account type. The increase in wealth management fees was attributable to higher retail brokerage transaction volume and advisory accounts added from the acquisition of Capital City Strategic Wealth on 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 the increase driven by higher wealth management fees of $2.0 million, bank card fees of $1.8 million, deposit fees of $0.5 million, and other income of $0.9 million (primarily loan servicing income at CCHL), partially offset by lower mortgage banking revenues 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 million compared 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 quarter of 2021 versus $0.5 million in the third quarter of 2021. In addition, OREO expense declined by $0.9 million due to a gain on the sale of a banking office in the third quarter of 2021. Compared to the third quarter of 2020, the $0.6 million decrease was primarily attributable to lower compensation expense of $0.9 million (primarily incentive compensation at CCHL) and OREO expense of $1.3 million partially 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 million compared 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 $7.0 million. The increase in expenses at the core bank were primarily due to higher compensation expense of $1.5 million (primarily merit 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 $1.1 million (gains from the sale of two banking offices). In addition, we have realized pension settlement charges totaling $2.5 million so far in 2021 and other expense increased $1.5 million, which reflected higher expense for our base pension plan attributable to the utilization of a lower discount rate for plan liabilities. We anticipate additional settlement expense in the fourth quarter of 2021.

    Income Taxes

    We realized income tax expense of $2.9 million (effective rate of 20%) for the third quarter of 2021 compared to $2.1 million (effective rate of 19%) for the second quarter of 2021 and $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 (effective rate 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 rate to approximate 18%-19%.

    Discussion of Financial Condition

    Earning Assets

    Average earning assets totaled $3.693 billion for the third quarter of 2021, an increase of $69.2 million, or 1.9%, over the second quarter of 2021, and an increase of $355.7 million, or 10.7%, over the fourth quarter of 2020. The increase over both prior periods was primarily driven by higher deposit balances, which funded growth in the investment portfolio. Deposit balances increased as a result of strong core deposit growth, SBA PPP loan proceeds deposited in client accounts, and various other stimulus programs.

    We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $741.9 million in the third quarter of 2021 compared to an average net overnight funds sold position of $818.6 million in 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 (see below – Funding).

    Average loans held for investment (“HFI”) decreased $62.6 million, or 3.1%, from the second quarter 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 million and $102.8 million, respectively. Compared to the second quarter of 2021, the increase in period end loans reflected growth in construction and 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 remaining deferred SBA PPP net loan fees totaled $0.3 million. SBA PPP loan forgiveness applications are expected to be 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 HFI loans and provided coverage of 710% of nonperforming loans compared to 1.10% and 434%, respectively, at June 30, 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 December 31, 2020.

    Credit Quality

    Nonperforming assets (nonaccrual loans and OREO) totaled $3.2 million at 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 December 31, 2020. The balance of OREO totaled $0.2 million at September 30, 2021, a $1.0 million decrease from June 30, 2021 and $0.6 million decrease from December 31, 2020.

    Funding (Deposits/Debt)

    Average total deposits 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 quarter of 2020. The strongest growth over both comparable periods occurred in our noninterest bearing deposits and savings account balances. Average public deposits in the third quarter 2021 decreased slightly compared to the second quarter of 2021, but increased compared 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 average deposits. Given these increases, the potential exists for our deposit levels to be volatile for the remainder of 2021 and into 2022 due 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 portion of this liquidity.

    Average short-term borrowings decreased $1.4 million over the second quarter of 2021 and declined $45.5 million from the fourth quarter of 2020, both of which reflected a seasonal fluctuation in warehouse line borrowing needs to support CCHL’s loans held for sale.

    Capital

    Shareowners’ equity was $348.9 million at September 30, 2021 compared 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 by net income of $27.0 million, a $1.0 million increase in fair value of the interest rate swap related to subordinated 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 partial pension settlement charge reflected in earnings, therefore, the charge had no net effect on equity. Shareowners’ equity was reduced by common stock dividends of $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 III capital standards. Further, our tangible common equity ratio was 6.46% at September 30, 2021 compared to 6.19% and 6.25% at June 30, 2021 and December 31, 2020, respectively.

    About Capital City Bank Group, Inc.

    Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $4.0 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, 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/ITMs 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 magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; 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; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; 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; 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, 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-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 and other intangibles 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 reconciliations are provided below.

    (Dollars in Thousands, except per share data)Sep 30, 2021Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 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 Value per Diluted Share (non-GAAP)A/C$15.11 $14.35 $13.94 $13.76 $14.90 
                     


    CAPITAL CITY BANK GROUP, 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. 
                


    CAPITAL CITY BANK GROUP, INC.          
    CONSOLIDATED STATEMENT OF 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 Value Per 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.
     


    CAPITAL CITY BANK GROUP, INC.              
    CONSOLIDATED STATEMENT OF 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 ATTRIBUTABLE TO
    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 
    AVERAGE SHARES              
    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 
                          


    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 Loans HFI(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 % of Total Assets 0.08% 0.16% 0.14% 0.18% 0.19%    
                   
    (1) Recorded in other liabilities              
    (2) Annualized              
                   


    CAPITAL CITY BANK GROUP, INC.                                           
    AVERAGE BALANCE 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, Temporary Equity 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 are calculated on a tax-equivalent basis using a 21% Federal tax rate.                                
    (2) Rate calculated based on average earning assets.                                 
                                      


    CAPITAL CITY HOME LOANS           
    MORTGAGE BANKING ACTIVITY           
    Unaudited           
                
      Three Months Ended Nine Months Ended
    (Dollars in thousands) Sep 30, 2021Jun 30, 2021Sep 30, 2020 Sep 30, 2021Sep 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 Noninterest Income 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 Noninterest Expense 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%
                     

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


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