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Capital City Bank Group, Inc. Reports First Quarter 2017 Results

/EIN News/ -- TALLAHASSEE, Fla., April 24, 2017 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $2.7 million, or $0.16 per diluted share for the first quarter of 2017 compared to net income of $3.3 million, or $0.20 per diluted share for the fourth quarter of 2016, and $1.6 million, or $0.10 per diluted share, for the first quarter of 2016.

HIGHLIGHTS

  • 60% growth in earnings per share over prior year reflects improving operating leverage  
  • Solid period-end loan growth of 1.3% sequentially and 5.0% over prior year
  • Continued progress in reducing noninterest expense ~ 3.5% from prior year 
  • Lower net  loan charge-offs of 10 basis points supports lower level of loan loss provision 
  • NPAs and classified assets down 7% and 3%, respectively and 33% and 25%, respectively compared to the fourth quarter of 2016 and first quarter of 2016

“2017 is off to a strong start as first quarter results showed continued improvement in most categories,” said William G. Smith, Jr., Chairman, President and CEO. “Earnings were up more than 60% year over year, and loan growth, credit quality and expense management continued their favorable trends. I continue to see an improving economy, and our approach is more focused than any other time I can remember in my career. As we move through 2017, we will continue to execute on those initiatives that add value to our shareowners.”

Compared to the fourth quarter of 2016, performance reflects lower net interest income of $0.3 million, a $0.1 million decrease in noninterest income, and higher noninterest expense of $0.4 million, partially offset by a $0.1 million decrease in the loan loss provision and lower income taxes of $0.1 million.

Compared to the first quarter of 2016, the increase in earnings was due to higher net interest income of $0.5 million, a $0.1 million decrease in the loan loss provision, and lower noninterest expense of $1.0 million, partially offset by higher income taxes of $0.5 million.

The Return on Average Assets was 0.39% and the Return on Average Equity was 4.00% for the first quarter of 2017.  These metrics were 0.48% and 4.70% for the fourth quarter of 2016, respectively, and 0.24% and 2.39% for the first quarter of 2016, respectively. 

Discussion of Operating Results
Tax equivalent net interest income for the first quarter of 2017 was $20.0 million compared to $20.3 million for the fourth quarter of 2016 and $19.4 million for the first quarter of 2016.  The decline in tax equivalent net interest income compared to the fourth quarter of 2016 was attributable to two less calendar days, in addition to the reversal of a non-accrual interest adjustment made during the fourth quarter, partially offset by higher income from overnight funds.  The increase in tax-equivalent net interest income compared to the first quarter of 2016 reflected growth in our investment portfolio and higher income from overnight funds.  

Although the Federal Open Market Committee (FOMC) increased the federal funds target rate 25 basis points to 100 basis points in March 2017, aggressive lending competition in all markets continues to impact pricing for loans.  Some of this pressure has been alleviated by our adjustable rate loans tied to the prime rate.  We continue to review our various loan strategies, with the goal of enhancing performance, subject to our overall risk appetite.  In addition, we have maintained a disciplined approach to deposit pricing, reflected in our cost of funds being unchanged quarter-over-quarter.

Our net interest margin for the first quarter of 2017 was 3.21%, a decrease of 13 basis points from the fourth quarter of 2016 and an increase of one basis point from the first quarter of 2016.  The decrease in the margin compared to the fourth quarter of 2016 was due to an unfavorable shift in earning assets, primarily due to a higher composition of overnight funds driven by the influx of seasonal public deposits.  The increase in the margin compared to the first quarter of 2016 was primarily due to a positive shift in earning assets, as overnight funds were utilized to fund growth in the loan and investment portfolios.

The provision for loan losses for the first quarter of 2017 was $0.3 million compared to $0.4 million for the fourth quarter of 2016 and $0.5 million for the first quarter of 2016.  The lower level of loan loss provision reflects continued favorable problem loan migration and lower net loan charge-offs, partially offset by growth in the loan portfolio.  Net loan charge-offs for the first quarter of 2017 totaled $0.4 million compared to $0.8 million for the fourth quarter of 2016 and the first quarter of 2016.  As of March 31, 2017, the allowance for loan losses of $13.3 million was 0.84% of outstanding loans (net of overdrafts) and provided coverage of 161% of nonperforming loans compared to 0.86% and 157%, respectively, as of December 31, 2016 and 0.90% and 150%, respectively, as of March 31, 2016.

Noninterest income for the first quarter of 2017 totaled $12.7 million, a decrease of $0.1 million, or 0.5%, from the fourth quarter of 2016 and comparable to the first quarter of 2016.  The decrease from the fourth quarter of 2016 reflects lower deposit fees of $0.1 million and mortgage banking fees of $0.1 million, partially offset by higher wealth management fees of $0.1 million.  Compared to the first quarter of 2016, higher mortgage banking fees of $0.3 million was offset by lower deposit fees of $0.3 million.  For both comparable periods, the decrease in deposit fees reflects lower overdraft service fees attributable to a reduction in accounts using this service as well as lower utilization by existing users.  The year over year improvement in mortgage banking fees reflects continued strong residential home sales activity in our markets.         

Noninterest expense for the first quarter of 2017 totaled $27.9 million, an increase of $0.4 million, or 1.3%, over the fourth quarter of 2016.  The increase was attributable to an increase in other expense of $0.5 million and other real estate owned (“OREO”) expense of $0.2 million, partially offset by lower compensation expense of $0.2 million and occupancy expense of $0.1 million.  The increase in other expense reflects higher processing expense of $0.3 million and telephone expense of $0.2 million.  Processing expense for the fourth quarter of 2016 was favorably impacted by our annual VISA processing volume rebate.  Telephone expense was unfavorably impacted in the first quarter of 2017 due to running dual circuits as our new telephone system is implemented with an estimated completion date by the end of the second quarter of 2017. 

The increase in OREO expense was attributable to lower carrying costs reflective of expense recoveries realized in the fourth quarter of 2016.  Noninterest expense decreased $1.0 million, or 3.5%, from the first quarter of 2016 primarily attributable to lower OREO expense of $0.8 million and other expense of $0.3 million.  The decrease in OREO expense generally reflects continued progress in property dispositions and lower related carrying costs.  The reduction in other expense was primarily attributable to lower debit card fraud losses.   

We realized income tax expense of $1.5 million (35% effective rate) for the first quarter of 2017 compared to $1.5 million (32% effective rate) for the fourth quarter of 2016 and $0.9 million (34% effective rate) for the first quarter of 2016.  Absent future discrete events, we anticipate our effective tax rate will remain in the range of 34%-35%.

Discussion of Financial Condition

Average earning assets were $2.529 billion for the first quarter of 2017, an increase of $105.8 million, or 4.4%, over the fourth quarter of 2016, and an increase of $88.5 million, or 3.6%, over the first quarter of 2016.  The change in average earning assets over the fourth quarter reflects a higher level of public fund deposits.  Compared to the first quarter of 2016, average earning assets increased as deposit growth was broad based, occurring in all deposit products except certificates of deposit.   

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $245.2 million during the first quarter of 2017 compared to an average net overnight funds sold position of $145.5 million in the fourth quarter of 2016 and $286.2 million in the first quarter of 2016.  The increase in net overnight funds compared to the fourth quarter of 2016 primarily reflected higher public fund balances. The decrease in net overnight funds compared to the first quarter of 2016 reflects growth in the loan and investment portfolios, and a reduction in both short-term and long-term borrowings, partially offset by growth in deposit balances.

Average loans increased $12.3 million, or 0.8% when compared to the fourth quarter of 2016, and have grown $78.1 million, or 5.2% when compared to the first quarter of 2016.  The increase compared to the fourth quarter of 2016 reflects growth in all loan types except institutional, home equity and direct consumer loans.  Growth over the first quarter of 2016 was experienced in all loan products, with the exception of residential mortgages and direct consumer loans. 

Without compromising our credit standards or taking on inordinate interest rate risk, 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, have helped to increase overall loan production.

Nonperforming assets (nonaccrual loans and OREO) totaled $17.8 million at the end of the first quarter of 2017, a decrease of $1.4 million, or 7%, from the fourth quarter of 2016 and $8.7 million, or 33%, from the first quarter of 2016.  Nonaccrual loans totaled $8.3 million at the end of the first quarter of 2017, a $0.2 million decrease from the fourth quarter of 2016 and a $0.8 million decrease from the first quarter of 2016.  Nonaccrual loan additions totaled $2.9 million in the first quarter of 2017 compared to $3.9 million and $3.7 million, respectively, for the fourth and first quarters of 2016.  The balance of OREO totaled $9.5 million at the end of the first quarter of 2017, a decrease of $1.1 million and $7.9 million, respectively, from the fourth and first quarters of 2016.  For the first quarter of 2017, we added properties totaling $1.5 million, sold properties totaling $2.1 million, and recorded valuation adjustments totaling $0.6 million.  Nonperforming assets represented 0.61% of total assets as of March 31, 2017 compared to 0.67% as of December 31, 2016 and 0.95% as of March 31, 2016.

Average total deposits were $2.407 billion for the first quarter of 2017, an increase of $100.4 million, or 4.4%, over the fourth quarter of 2016, and an increase of $148.7 million, or 6.6% over the first quarter of 2016.  The increase in deposits when compared to the fourth quarter of 2016 reflected growth in all deposit products except noninterest bearing deposits and certificates of deposit.  The seasonal inflow of public fund balances began late in the fourth quarter of 2016, and the public fund balances are expected to decline through late in the fourth quarter of 2017.  The increase in deposits compared to the first quarter 2016 reflected increases in all deposit products except certificates of deposit.   Average public deposits increased $16.1 million in the first quarter of 2017 compared to the first quarter of 2016.

Deposit levels remain strong, particularly given the recent increase in the fed funds rate, and average core deposits continue to experience growth.  Because prudent pricing discipline is critical to managing our mix of deposits, we continue to monitor interest rates paid by competitors in markets we serve.

Compared to the fourth quarter of 2016, average borrowings decreased $5.0 million primarily due to a reduction in FHLB advances.  Compared to the first quarter of 2016, average borrowings decreased by $77.4 million due to a partial redemption of subordinated debt, a decline in repurchase agreements, and payoffs of FHLB advances.

Shareowners’ equity was $278.1 million as of March 31, 2017, compared to $275.2 million as of December 31, 2016 and $276.8 million as of March 31, 2016.  During the first quarter of 2017, shareowners’ equity was positively impacted by net income of $2.7 million, stock compensation accretion of $0.4 million, a net decrease of $0.3 million in the unrealized loss on investment securities, and net adjustments totaling $0.3 million related to transactions under our stock compensation plans.  Shareowners’ equity was reduced by common stock dividends of $0.8 million ($0.05 per share).  Our leverage ratio was 9.95%, 10.23%, and 10.34%, respectively, for these periods.  Further, as of March 31, 2017, our risk-adjusted capital ratio was 16.44% compared to 16.28% and 17.20% at December 31, 2016 and March 31, 2016, respectively.  Our common equity tier 1 ratio was 12.77% as of March 31, 2017, compared to 12.61% as of December 31, 2016 and 12.82% as of March 31, 2016.  All of our capital ratios exceed 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 $2.9 billion in assets.  We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, data processing, and securities brokerage services.  Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 60 banking offices and 73 ATMs in Florida, Georgia and Alabama.  For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially.  The following factors, among others, could cause the Company’s actual results to differ: the accuracy of the Company’s financial statement estimates and assumptions; legislative or regulatory changes, including the Dodd-Frank Act, Basel III, and the ability to repay and qualified mortgage standards; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect the Company’s computer systems or fraud related to debit card products; changes in consumer spending and savings habits; the Company’s growth and profitability; the strength of the U.S. economy and the local economies where the Company conducts operations; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing.  Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and the Company’s other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov).  Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURES

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

(Dollars in Thousands)   Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016
Shareowners' Equity (GAAP)   $ 278,059   $ 275,168   $ 276,624   $ 274,824   $ 276,833  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Shareowners' Equity (non-GAAP) A   193,248     190,357     191,813     190,013     192,022  
Total Assets (GAAP)     2,895,531     2,845,197     2,753,154     2,767,636     2,792,186  
Less: Goodwill (GAAP)     84,811     84,811     84,811     84,811     84,811  
Tangible Assets (non-GAAP) B $ 2,810,720   $ 2,760,386   $ 2,668,343   $ 2,682,825   $ 2,707,375  
Tangible Common Equity Ratio (non-GAAP) A/B   6.88 %   6.90 %   7.19 %   7.08 %   7.09 %
Actual Diluted Shares Outstanding (GAAP) C   16,979     16,949     16,874     16,855     17,254  
Tangible Book Value per Diluted Share (non-GAAP) A/C $ 11.38   $ 11.23   $ 11.37   $ 11.27   $ 11.13  


CAPITAL CITY BANK GROUP, INC.            
EARNINGS HIGHLIGHTS            
Unaudited            
             
    Three Months Ended
(Dollars in thousands, except per share data)   Mar 31, 2017   Dec 31, 2016   Mar 31, 2016
EARNINGS            
Net Income $ 2,744   $ 3,296   $ 1,647  
Diluted Net Income Per Share $ 0.16   $ 0.20   $ 0.10  
PERFORMANCE            
Return on Average Assets   0.39 %   0.48 %   0.24 %
Return on Average Equity   4.00 %   4.70 %   2.39 %
Net Interest Margin   3.21 %   3.34 %   3.20 %
Noninterest Income as % of Operating Revenue   39.19 %   38.91 %   39.76 %
Efficiency Ratio   85.33 %   83.23 %   90.13 %
CAPITAL ADEQUACY            
Tier 1 Capital   15.68 %   15.51 %   16.39 %
Total Capital   16.44 %   16.28 %   17.20 %
Tangible Common Equity (1)   6.88 %   6.90 %   7.09 %
Leverage   9.95 %   10.23 %   10.34 %
Common Equity Tier 1   12.77 %   12.61 %   12.82 %
Equity to Assets   9.60 %   9.67 %   9.91 %
ASSET QUALITY            
Allowance as % of Non-Performing Loans   160.70 %   157.40 %   150.44 %
Allowance as a % of Loans   0.84 %   0.86 %   0.90 %
Net Charge-Offs as % of Average Loans   0.10 %   0.20 %   0.21 %
Nonperforming Assets as % of Loans and ORE   1.11 %   1.21 %   1.73 %
Nonperforming Assets as % of Total Assets   0.61 %   0.67 %   0.95 %
STOCK PERFORMANCE            
High $ 21.79   $ 23.15   $ 15.88  
Low   19.22     14.29     12.83  
Close $ 21.39   $ 20.48   $ 14.59  
Average Daily Trading Volume   23,150     23,371     22,720  
             
(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to
  page 4.            


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION            
Unaudited                    
                     
  2017     2016  
(Dollars in thousands)   First Quarter   Fourth Quarter   Third Quarter   Second Quarter   First Quarter
ASSETS                    
Cash and Due From Banks $ 47,650   $ 48,268   $ 79,608   $ 51,766   $ 45,914  
Funds Sold and Interest Bearing Deposits   290,897     247,779     144,576     220,719     304,908  
Total Cash and Cash Equivalents   338,547     296,047     224,184     272,485     350,822  
                     
Investment Securities Available for Sale   541,102     522,734     500,139     485,848     462,444  
Investment Securities Held to Maturity   158,515     177,365     189,928     204,474     187,079  
  Total Investment Securities   699,617     700,099     690,067     690,322     649,523  
                     
Loans Held for Sale   7,498     10,886     10,510     12,046     10,475  
                     
Loans, Net of Unearned Interest                    
Commercial, Financial, & Agricultural   214,595     216,404     223,278     207,105     183,681  
Real Estate - Construction   59,938     58,443     54,107     46,930     42,538  
Real Estate - Commercial   503,868     503,978     497,775     485,329     503,259  
Real Estate - Residential   295,406     272,895     276,193     280,015     285,772  
Real Estate - Home Equity   231,300     236,512     235,433     235,394     234,128  
Consumer   268,921     262,735     258,173     252,347     245,197  
Other Loans   9,586     8,614     10,875     11,177     10,297  
Overdrafts   1,345     1,708     1,678     2,177     1,963  
Total Loans, Net of Unearned Interest   1,584,959     1,561,289     1,557,512     1,520,474     1,506,835  
Allowance for Loan Losses   (13,335 )   (13,431 )   (13,744 )   (13,677 )   (13,613 )
Loans, Net   1,571,624     1,547,858     1,543,768     1,506,797     1,493,222  
                     
Premises and Equipment, Net   93,755     95,476     96,499     97,313     98,029  
Goodwill   84,811     84,811     84,811     84,811     84,811  
Other Real Estate Owned   9,501     10,638     12,738     14,622     17,450  
Other Assets   90,178     99,382     90,577     89,240     87,854  
Total Other Assets   278,245     290,307     284,625     285,986     288,144  
                     
Total Assets $ 2,895,531   $ 2,845,197   $ 2,753,154   $ 2,767,636   $ 2,792,186  
                     
LIABILITIES                    
Deposits:                    
Noninterest Bearing Deposits $ 836,011   $ 791,182   $ 801,671   $ 798,219   $ 790,040  
NOW Accounts   882,605     904,014     793,363     804,263     786,432  
Money Market Accounts   263,080     252,800     257,004     259,813     254,682  
Regular Savings Accounts   321,160     304,680     298,682     294,432     286,807  
Certificates of Deposit   156,449     159,610     164,387     168,079     173,447  
Total Deposits   2,459,305     2,412,286     2,315,107     2,324,806     2,291,408  
                     
Short-Term Borrowings   7,603     12,749     12,113     9,609     62,922  
Subordinated Notes Payable   52,887     52,887     52,887     52,887     62,887  
Other Long-Term Borrowings   16,460     14,881     21,368     26,401     27,062  
Other Liabilities   81,217     77,226     75,055     79,109     71,074  
                     
Total Liabilities   2,617,472     2,570,029     2,476,530     2,492,812     2,515,353  
                     
SHAREOWNERS' EQUITY                    
Common Stock   170     168     168     168     172  
Additional Paid-In Capital   34,859     34,188     33,152     32,855     38,671  
Retained Earnings   268,934     267,037     264,581     262,380     259,139  
Accumulated Other Comprehensive Loss, Net of Tax   (25,904 )   (26,225 )   (21,277 )   (20,579 )   (21,149 )
                     
Total Shareowners' Equity   278,059     275,168     276,624     274,824     276,833  
                     
Total Liabilities and Shareowners' Equity $ 2,895,531   $ 2,845,197   $ 2,753,154   $ 2,767,636   $ 2,792,186  
                     
OTHER BALANCE SHEET DATA                    
Earning Assets $ 2,582,971   $ 2,520,053   $ 2,402,664   $ 2,443,561   $ 2,471,741  
Interest Bearing Liabilities   1,700,244     1,701,621     1,599,804     1,615,484     1,654,239  
                     
Book Value Per Diluted Share $ 16.38   $ 16.23   $ 16.39   $ 16.31   $ 16.04  
Tangible Book Value Per Diluted Share(1)   11.38     11.23     11.37     11.27     11.13  
                     
Actual Basic Shares Outstanding   16,954     16,845     16,807     16,804     17,222  
Actual Diluted Shares Outstanding   16,979     16,949     16,874     16,855     17,254  
                     
(1)  Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 4.


CAPITAL CITY BANK GROUP, INC.                    
CONSOLIDATED STATEMENT OF OPERATIONS              
Unaudited                    
                     
    2017   2016
(Dollars in thousands, except per share data)   First
Quarter
  Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
                     
INTEREST INCOME                    
Interest and Fees on Loans $ 18,005 $ 18,671 $ 18,046 $ 18,105   $ 18,045
Investment Securities   2,042   1,949   1,846   1,751     1,637
Funds Sold   493   212   212   318     362
Total Interest Income   20,540   20,832   20,104   20,174     20,044
                     
INTEREST EXPENSE                    
Deposits   281   224   223   211     221
Short-Term Borrowings   45   57   43   38     10
Subordinated Notes Payable   379   363   341   343     387
Other Long-Term Borrowings   99   129   177   206     216
Total Interest Expense   804   773   784   798     834
Net Interest Income   19,736   20,059   19,320   19,376     19,210
Provision for Loan Losses   310   464   -   (97 )   452
Net Interest Income after Provision for
  Loan Losses
  19,426   19,595   19,320   19,473     18,758
                     
NONINTEREST INCOME                    
Deposit Fees   5,090   5,238   5,373   5,321     5,400
Bank Card Fees   2,803   2,754   2,759   2,855     2,853
Wealth Management Fees   1,842   1,773   1,774   1,690     1,792
Mortgage Banking Fees   1,308   1,392   1,503   1,267     1,030
Other   1,675   1,621   1,602   4,082     1,602
Total Noninterest Income   12,718   12,778   13,011   15,215     12,677
                     
NONINTEREST EXPENSE                    
Compensation   16,496   16,699   15,993   16,051     16,241
Occupancy, Net   4,381   4,519   4,734   4,584     4,459
Other Real Estate, Net   583   343   821   1,060     1,425
Other   6,462   5,999   6,474   7,007     6,805
Total Noninterest Expense   27,922   27,560   28,022   28,702     28,930
                     
OPERATING PROFIT   4,222   4,813   4,309   5,986     2,505
Income Tax Expense   1,478   1,517   1,436   2,056     858
NET INCOME $ 2,744 $ 3,296 $ 2,873 $ 3,930   $ 1,647
                     
PER SHARE DATA                    
Basic Net Income $ 0.16 $ 0.20 $ 0.18 $ 0.22   $ 0.10
Diluted Net Income   0.16   0.20   0.17   0.22     0.10
Cash Dividend $ 0.05 $ 0.05 $ 0.04 $ 0.04   $ 0.04
AVERAGE SHARES                    
Basic    16,919   16,809   16,804   17,144     17,202
Diluted    16,944   16,913   16,871   17,196     17,235


CAPITAL CITY BANK GROUP, INC.                    
ALLOWANCE FOR LOAN LOSSES                    
AND RISK ELEMENT ASSETS                    
Unaudited                    
                     
    2017     2016  
(Dollars in thousands, except per share data)   First
Quarter
  Fourth
Quarter
  Third
Quarter
  Second
Quarter
  First
Quarter
                     
ALLOWANCE FOR LOAN LOSSES                    
Balance at Beginning of Period $ 13,431   $ 13,744   $ 13,677   $ 13,613   $ 13,953  
Provision for Loan Losses   310     464     -     (97 )   452  
Net Charge-Offs (Recoveries)   406     777     (67 )   (161 )   792  
Balance at End of Period $ 13,335   $ 13,431   $ 13,744   $ 13,677   $ 13,613  
As a % of Loans   0.84 %   0.86 %   0.88 %   0.89 %   0.90 %
As a % of Nonperforming Loans   160.70 %   157.40 %   159.56 %   166.50 %   150.44 %
                     
CHARGE-OFFS                    
Commercial, Financial and Agricultural $ 93   $ 377   $ 143   $ 304   $ 37  
Real Estate - Construction   -     -     -     -     -  
Real Estate - Commercial   71     70     5     -     274  
Real Estate - Residential   116     120     96     205     478  
Real Estate - Home Equity   92     38     51     146     215  
Consumer   624     771     479     438     439  
Total Charge-Offs $ 996   $ 1,376   $ 774   $ 1,093   $ 1,443  
                     
RECOVERIES                    
Commercial, Financial and Agricultural $ 81   $ 50   $ 199   $ 49   $ 39  
Real Estate - Construction   -     -     -     -     -  
Real Estate - Commercial   23     45     45     237     81  
Real Estate - Residential   213     277     139     579     236  
Real Estate - Home Equity   29     32     237     81     59  
Consumer   244     195     221     308     236  
Total Recoveries $ 590   $ 599   $ 841   $ 1,254   $ 651  
                     
NET CHARGE-OFFS (RECOVERIES) $ 406   $ 777   $ (67 ) $ (161 ) $ 792  
                     
Net Charge-Offs as a % of Average Loans(1)   0.10 %   0.20 %   (0.02 )%   (0.04 )%   0.21 %
                     
RISK ELEMENT ASSETS                    
Nonaccruing Loans $ 8,298   $ 8,533   $ 8,614   $ 8,214   $ 9,049  
Other Real Estate Owned   9,501     10,638     12,738     14,622     17,450  
Total Nonperforming Assets $ 17,799   $ 19,171   $ 21,352   $ 22,836   $ 26,499  
                     
Past Due Loans 30-89 Days $ 3,263   $ 6,438   $ 5,667   $ 3,872   $ 3,599  
Past Due Loans 90 Days or More   -     -     -     -     -  
Classified Loans   40,978     41,507     43,228     45,058     49,780  
Performing Troubled Debt Restructuring's $ 36,555   $ 38,233   $ 35,046   $ 35,526   $ 36,700  
                     
Nonperforming Loans as a % of Loans   0.52 %   0.54 %   0.55 %   0.54 %   0.60 %
Nonperforming Assets as a % of Loans and Other Real Estate   1.11 %   1.21 %   1.35 %   1.48 %   1.73 %
Nonperforming Assets as a % of Total Assets   0.61 %   0.67 %   0.78 %   0.83 %   0.95 %
                     
(1) Annualized                    


CAPITAL CITY BANK GROUP, INC.                                                          
AVERAGE BALANCE AND INTEREST RATES(1)
                                                         
Unaudited                                                                      
                                                                       
    First Quarter 2017     Fourth Quarter 2016     Third Quarter 2016     Second Quarter 2016     First Quarter 2016  
(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
 
ASSETS:                                                                      
Loans, Net of Unearned Interest $ 1,585,561     18,137   4.64 % $ 1,573,264     18,827   4.76 % $ 1,555,889     18,216   4.66 % $ 1,531,777     18,233   4.79 % $ 1,507,508     18,141   4.84 %
                                                                       
Investment Securities                                                                      
Taxable Investment Securities   600,528     1,784   1.20     614,560     1,726   1.12     606,606     1,632   1.07     571,343     1,539   1.08     552,092     1,420   1.03  
Tax-Exempt Investment Securities   97,965     396   1.62     90,046     343   1.52     89,241     327   1.47     90,030     325   1.44     94,951     332   1.40  
                                                                       
Total Investment Securities   698,493     2,180   1.26     704,606     2,069   1.17     695,847     1,959   1.12     661,373     1,864   1.13     647,043     1,752   1.09  
                                                                       
Funds Sold   245,153     493   0.81     145,518     212   0.58     166,207     212   0.51     254,627     318   0.50     286,167     362   0.51  
                                                                       
Total Earning Assets   2,529,207   $ 20,810   3.33 %   2,423,388   $ 21,108   3.47 %   2,417,943   $ 20,387   3.35 %   2,447,777   $ 20,415   3.35 %   2,440,718   $ 20,255   3.34 %
                                                                       
Cash and Due From Banks   48,906               50,207               45,139               46,605               47,834            
Allowance for Loan Losses   (13,436 )             (14,017 )             (14,052 )             (14,254 )             (13,999 )          
Other Assets   280,463               283,885               285,435               287,726               289,193            
                                                                       
Total Assets $ 2,845,140             $ 2,743,463             $ 2,734,465             $ 2,767,854             $ 2,763,746            
                                                                       
LIABILITIES:                                                                      
Interest Bearing Deposits                                                                      
NOW Accounts $ 880,707   $ 134   0.06 % $ 782,518   $ 78   0.04 % $ 774,899   $ 78   0.04 % $ 762,667   $ 67   0.04 % $ 798,996   $ 69   0.03 %
Money Market Accounts   259,106     35   0.06     257,398     31   0.05     258,183     30   0.05     257,000     30   0.05     252,446     29   0.05  
Savings Accounts   311,212     38   0.05     303,006     37   0.05     297,172     37   0.05     291,210     36   0.05     277,745     34   0.05  
Time Deposits   158,289     74   0.19     161,859     78   0.19     165,324     78   0.19     170,837     78   0.19     177,057     89   0.20  
Total Interest Bearing Deposits   1,609,314     281   0.07 %   1,504,781     224   0.06 %   1,495,578     223   0.06 %   1,481,714     211   0.06 %   1,506,244     221   0.06 %
                                                                       
Short-Term Borrowings   12,810     45   1.43 %   14,768     57   1.54 %   12,162     43   1.39 %   53,691     38   0.28 %   66,938     10   0.06 %
Subordinated Notes Payable   52,887     379   2.86     52,887     363   2.68     52,887     341   2.52     54,316     343   2.50     62,887     387   2.43  
Other Long-Term Borrowings   14,468     99   2.77     17,473     129   2.93     23,629     177   2.98     26,721     206   3.11     27,769     216   3.12  
                                                                       
Total Interest Bearing Liabilities   1,689,479   $ 804   0.20 %   1,589,909   $ 773   0.20 %   1,584,256   $ 784   0.20 %   1,616,442   $ 798   0.20 %   1,663,838   $ 834   0.20 %
                                                                       
Noninterest Bearing Deposits   797,964               802,136               793,163               794,839               752,356            
Other Liabilities   79,208               72,475               79,639               77,041               70,088            
                                                                       
Total Liabilities   2,566,651               2,464,520               2,457,058               2,488,322               2,486,282            
                                                                       
SHAREOWNERS' EQUITY:   278,489               278,943               277,407               279,532               277,464            
                                                                       
Total Liabilities and Shareowners' Equity $ 2,845,140             $ 2,743,463             $ 2,734,465             $ 2,767,854             $ 2,763,746            
                                                                       
Interest Rate Spread     $ 20,006   3.14 %     $ 20,335   3.27 %     $ 19,603   3.15 %     $ 19,617   3.15 %     $ 19,421   3.14 %
                                                                       
Interest Income and Rate Earned(1)       20,810   3.33         21,108   3.47         20,387   3.35         20,415   3.35         20,255   3.34  
Interest Expense and Rate Paid(2)       804   0.13         773   0.13         784   0.13         798   0.13         834   0.14  
                                                                       
Net Interest Margin     $ 20,006   3.21 %     $ 20,335   3.34 %     $ 19,603   3.23 %     $ 19,617   3.22 %     $ 19,421   3.20 %
                                                                       
(1)  Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.                                         
(2)  Rate calculated based on average earning assets.
                                               
For Information Contact:
                    J. Kimbrough Davis
                    Executive Vice President 
                    and Chief Financial Officer
                    850.402.7820

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