8-K
CAPITAL CITY BANK GROUP INC (CCBG)
UNITED STATES
SECURITIES ANDEXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Dateof earliest event reported): January 30, 2020
CAPITAL CITY BANKGROUP, INC.
(Exact name of registrant as specified in its charter)
| Florida | 0-13358 | 59-2273542 |
|---|---|---|
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 217 North Monroe Street, Tallahassee,<br> Florida | 32301 | |
| (Address of principal executive offices | (Zip Code) |
Registrant's telephone number, including area code: (850) 402-7821
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, Par value $0.01 | CCBG | Nasdaq Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of The Exchange Act. [ ]
CAPITAL CITY BANK GROUP, INC.
FORM 8-K
CURRENT REPORT
Item 2.02. Resultsof Operations and Financial Condition.
On January 30, 2020, Capital City Bank Group, Inc. (“CCBG”) issued an earnings press release reporting CCBG’s financial results for the year ended December 31, 2019. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
The information furnished under Item 2.02 of this Current Report, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. FinancialStatements and Exhibits.
(d) Exhibits .
Item No. Description of Exhibit
99.1 Press release, dated January 30, 2020.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAPITAL CITY BANK GROUP, INC.
| Date: <br> January 30, 2020 | By: | /s/<br> J.Kimbrough Davis |
|---|---|---|
| J.<br> Kimbrough Davis, | ||
| Executive<br> Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press release, dated January 30, 2020
Capital CityBank Group, Inc.
Reports Fourth Quarter and Full Year 2019 Results
TALLAHASSEE, Fla. (January 30, 2020) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $8.6 million, or $0.51 per diluted share for the fourth quarter of 2019 compared to net income of $8.5 million, or $0.50 per diluted share for the third quarter of 2019, and $8.5 million, or $0.50 per diluted share for the fourth quarter of 2018.
For the full year 2019, net income totaled $30.8 million, or $1.83 per diluted share, compared to net income of $26.2 million, or $1.54 per diluted share for 2018. Net income for 2018 included tax benefits totaling $3.3 million, or $0.19 per diluted share related to 2017 plan year pension contributions made in 2018.
Fourth Quarter2019 HIGHLIGHTS
· Operating revenuesheld firm despite third and fourth quarter Fed rate reductions
- Highlights the value of our revenuediversification and core deposit franchise
· Average loans increased$9 million, or 0.5% sequentially
· Loan loss provisiondecreased $1.0 million sequentially
· Entered into adefinitive agreement to acquire 51% ownership in Brand Mortgage, LLC
Full Year 2019 HIGHLIGHTS
· Strong revenuegrowth
- Net interest income increased 12%
- Noninterest income increased 3%
· Net interest marginof 3.85%, increased 21 basis points
· Average loansincreased $104 million, or 6%
· Average depositbalances increased $115 million, or 5%
· Continued strongcredit quality
- Loan loss provision decreased $0.9million, or 31%
- Nonperforming assets decreased $3.7million, or 40%
· Tangible commonequity ratio, a non-GAAP financial measure, increased 48 basis points to 8.06%
· Tangible book valueper share, a non-GAAP financial measure, increased 10.9% to $14.37
“Capital City wrapped up 2019 with a strong fourth quarter and solid performance for the year as annual earnings per share increased 19%,” said William G. Smith, Jr., Chairman, President and CEO. “While rates declined throughout the year, our net interest income and net interest margin increased $10.7 million and 21 basis points, respectively. Wealth management, mortgage banking and bankcard fees drove $1.5 million growth in noninterest income, while our efficiency ratio continues to show significant improvement. Loan growth in 2019 was lower than projected, but we know our markets, operate within our risk profile and will not unnecessarily compromise on rate or quality. For the year, net charge-offs were 0.13% of average loans and our credit quality metrics continued to improve. Florida and Georgia are strong and growing and I remain optimistic. Additionally, I am excited about our recent announcement to acquire a 51% ownership interest in Brand Mortgage, which we expect to close later this quarter and operate as Capital City Home Loans. There is a wonderful chemistry between our two management teams and I believe this strategic alliance will significantly enhance our overall mortgage banking business. Your management team will continue to focus on implementing strategies that produce long-term value for our shareowners and I appreciate your continued support.”
Compared to the third quarter of 2019, the $0.1 million increase in net income reflected a $1.0 million decrease in the loan loss provision, lower income taxes of $0.4 million, and a $0.1 million increase in net interest income, partially offset by higher noninterest expense of $1.3 million and lower noninterest income of $0.1 million.
Compared to the fourth quarter of 2018, the $0.1 million increase in net income was attributable to higher net interest income of $1.9 million, higher noninterest income of $0.6 million, and a $0.6 million decrease in the loan loss provision, partially offset by higher noninterest expense of $2.6 million and income taxes of $0.4 million.
The increase in net income of $4.6 million for the full year 2019 versus 2018 was attributable to higher net interest income of $10.8 million, higher noninterest income of $1.5 million, and a $0.9 million decrease in the loan loss provision, partially offset by higher income taxes of $6.5 million and noninterest expense of $2.1 million.
Our return on average assets (“ROA”) was 1.14% and our return on average equity (“ROE”) was 10.39% for the fourth quarter of 2019. These metrics were 1.14% and 10.51% for the third quarter of 2019, respectively, and 1.18% and 11.10% for the fourth quarter of 2018, respectively. For the full year 2019, our ROA was 1.03% and our ROE was 9.72% compared to 0.92% and 8.89%, respectively, for 2018.
Discussion of Operating Results
Tax-equivalent net interest income for the fourth quarter of 2019 was $26.4 million compared to $26.3 million for the third quarter of 2019 and $24.5 million for the fourth quarter of 2018. For the full year 2019, tax-equivalent net interest income totaled $103.9 million compared to $93.2 million for 2018. Compared to the third quarter of 2019, growth in both our overnight funds and loans offset the unfavorable rate variance due to the lower overnight funds rate. Compared to the prior-year periods, the increase in net interest income was driven by deposit growth (predominately noninterest bearing), which funded growth in overnight funds and loans. Additionally, average yields/rates were generally favorable as higher rates prior to 2019 continued to migrate through the earning asset portfolios.
The federal funds target rate reached a recent high in the second quarter of 2019 at a range of 2.25% to 2.50%. During the second half of 2019, the Federal Open Market Committee reduced rates by an aggregate of 75 basis points to the current range of 1.50% to 1.75%. These rate cuts resulted in downward repricing of our variable/adjustable rate earning assets, which to date has been offset by loan growth and a corresponding reduction in rates paid on our negotiated rate deposit products. We continue to prudently manage our overall cost of funds, which was 26 basis points for the fourth quarter of 2019, compared to 33 basis points for the third quarter of 2019. Due to highly competitive fixed-rate loan pricing in our markets, we continue to review our loan pricing and make adjustments where we believe appropriate and prudent.
Our net interest margin for the fourth quarter of 2019 was 3.89%, a decrease of three basis points from the third quarter of 2019 and an increase of eight basis points over the fourth quarter of 2018. For the full year 2019, the net interest margin was 3.85%, a 21 basis point increase compared to 2018. The decrease in the margin compared to the third quarter 2019 was due primarily to the growth and composition of our earning assets. The increase in the margin compared to the fourth quarter 2018 reflected a three basis point increase in our earning asset yield and a five basis point decline in our cost of funds. The increase in the margin compared to 2018 was attributable to a 29 basis point increase in our earning asset yield, partially offset by an eight basis point increase in our cost of funds. In general, overnight rates rose into the second quarter 2019, at which time they reversed and began to fall in response to the Fed rate cuts.
The provision for loan losses for the fourth quarter of 2019 was negative $0.2 million and reflected a lower level of net loan losses. This compares to a provision expense of $0.8 for the third quarter of 2019 and $0.4 million for the fourth quarter of 2018. For the full year 2019, the loan loss provision expense was $2.0 million compared to $2.9 million in 2018. At December 31, 2019, the allowance for loan losses of $13.9 million represented 0.75% of outstanding loans (net of overdrafts) and provided coverage of 311% of nonperforming loans compared to 0.78% and 291%, respectively, at September 30, 2019 and 0.80% and 207%, respectively, at December 31, 2018.
Noninterest income for the fourth quarter of 2019 totaled $13.8 million, a decrease of $0.1 million, or 0.5%, from the third quarter of 2019 and a $0.6 million, or 4.5%, increase over the fourth quarter of 2018. For the full year 2019, noninterest income totaled $53.1 million, a $1.5 million, or 2.9%, increase over 2018, which reflected higher wealth management fees of $1.8 million, mortgage banking fees of $0.6 million, and bank card fees of $0.6 million, partially offset by lower deposit fees of $0.6 million and other income of $0.9 million. The improvement in wealth management fees was driven by higher trading activity by our retail brokerage clients and to a lesser extent growth in assets under management. A lower rate environment drove higher residential loan production and the increase in mortgage banking fees. Higher debit card utilization by our clients and credit card promotions throughout the year drove the improvement in bank card fees. The decline in deposit fees reflected lower overdraft fees and the reduction in other income was primarily attributable to a miscellaneous recovery in the fourth quarter of 2018 and lower miscellaneous fees. The same aforementioned factors drove the variance versus the fourth quarter of 2018.
Noninterest expense for the fourth quarter of 2019 totaled $29.1 million, an increase of $1.3 million, or 4.6%, over the third quarter of 2019 and $2.6 million, or 9.9%, over the fourth quarter of 2018. Compared to the third quarter of 2019, higher compensation expense (primarily incentives) and legal/professional fees related to the Brand Mortgage, LLC transaction drove the increase. The increase over the fourth quarter of 2018 was primarily attributable to lower other real estate owned (“OREO”) expense in the fourth quarter of 2018, which reflected a large gain from the sale of a banking office. Higher compensation expense (base salaries and commissions) also contributed to the variance. For the full year 2019, noninterest expense totaled $113.6 million, a $2.1 million, or 1.9% increase over 2018, which primarily reflected higher compensation expense of $2.4 million (base salaries and commissions) and OREO expense of $1.0 million, partially offset by lower other expense of $1.2 million (primarily legal fees, professional fees, and FDIC insurance fees).
We realized income tax expense of $2.5 million (effective rate of 22.9%) for the fourth quarter of 2019 compared to $3.0 million (effective rate of 25.9%) for the third quarter of 2019 and $2.1 million (effective rate of 20.4%) for the fourth quarter of 2018. Income tax expense for the third quarter of 2019 was unfavorably impacted by net discrete items totaling $0.3 million. For the full year 2019, income tax expense totaled $9.9 million (effective rate of 24.4%) compared to $3.4 million (effective rate of 11.5%) for 2018. During 2018, we realized tax benefits totaling $3.3 million (1Q - $1.5 million, 2Q - $1.4 million, 3Q - $0.4 million) resulting from the effect of federal tax reform on pension plan contributions made in 2018 for the plan year 2017.
Discussionof Financial Condition
Average earning assets were $2.695 billion for the fourth quarter of 2019, an increase of $24.6 million, or 0.9%, over the third quarter of 2019, and an increase of $140.2 million, or 5.5%, over the fourth quarter of 2018. The increase in average earning assets compared to both prior periods reflected a higher level of deposits, primarily noninterest bearing accounts.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $228.1 million in the fourth quarter of 2019 compared to an average net overnight funds sold position of $207.1 million in the third quarter of 2019 and $80.8 million in the fourth quarter of 2018. The increase compared to both prior periods reflected deposit growth and runoff from the investment portfolio, partially offset by loan growth.
Average loans increased $8.6 million, or 0.5% compared to the third quarter of 2019, and grew by $60.6 million, or 3.4% compared to the fourth quarter of 2018. The increase compared to both prior periods reflected growth in all our loan types except institutional loans, consumer loans, and home equity loans. During 2019, we purchased adjustable rate residential loans totaling $14.9 million and a fixed rate commercial loan pool totaling $10.3 million, in each case based on principal balances at the time of purchase.
Without compromising our credit standards or taking on inordinate interest rate risk, we have modified some of our lending programs to address the highly competitive rate environment. We continue to closely monitor our markets and make minor rate adjustments as necessary.
Nonperforming assets (nonaccrual loans and OREO) totaled $5.4 million at December 31, 2019, comparable to September 30, 2019, and a $3.7 million, or 40.4%, decrease from December 31, 2018. Nonaccrual loans totaled $4.5 million at December 31, 2019, a $0.5 million decrease from September 30, 2019 and a $2.4 million decrease from December 31, 2018. The balance of OREO totaled $1.0 million at December 31, 2019, an increase of $0.4 million over September 30, 2019 and a $1.3 million decrease from December 31, 2018.
Average total deposits were $2.525 billion for the fourth quarter of 2019, an increase of $29.2 million, or 1.2%, from the third quarter of 2019, and an increase of $112.6 million, or 4.7%, over the fourth quarter of 2018. The increase in average deposits compared to both prior periods primarily reflected increases in noninterest bearing deposits, partially offset by declines in money market accounts and certificates of deposit.
We continue to closely monitor and manage deposit levels as part of our overall liquidity position and believe a prudent pricing discipline remains the key to managing our mix of deposits.
Average borrowings for the fourth quarter 2019 decreased $1.7 million compared to the third quarter 2019, and declined $11.2 million compared to the fourth quarter of 2018. Declines compared to both prior periods occurred in both short-term and long-term borrowings.
Shareowners equity was $326.7 million at December 31, 2019 compared to $321.6 million at September 30, 2019 and $302.6 million at December 31, 2018. Our leverage ratio was 11.25%, 11.09%, and 10.89%, respectively, on these dates. At December 31, 2019, our total risk-based capital ratio was 17.90% compared to 17.59% and 17.13%, respectively. Our common equity tier 1 capital ratio was 14.47% at December 31, 2019 compared to 14.13% at September 30, 2019 and 13.58% at December 31, 2018. 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 8.05% at December 31, 2019 compared to 8.31% and 7.58% at September 30, 2019 and December 31, 2018, 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 $3.1 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 57 banking offices and 82 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this press release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes, 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 our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, 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, except as required by law.
USE OF NON-GAAP FINANCIAL MEASURES
We present a tangible common equity ratio and tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. The GAAP to non-GAAP reconciliation is provided below.
| (Dollars in Thousands) | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | |||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shareowners'<br> Equity (GAAP) | $ | 327,016 | $ | 321,562 | $ | 314,595 | $ | 308,986 | $ | 302,587 | ||||||||||||||||||||||||||||||||
| Less: Goodwill<br> (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||||||||||||||||||||||||
| Tangible<br> Shareowners' Equity (non-GAAP) | A | 242,205 | 236,751 | 229,784 | 224,175 | 217,776 | ||||||||||||||||||||||||||||||||||||
| Total Assets<br> (GAAP) | 3,088,953 | 2,934,513 | 3,017,654 | 3,052,051 | 2,959,183 | |||||||||||||||||||||||||||||||||||||
| Less: Goodwill<br> (GAAP) | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||||||||||||||||||||||||
| Tangible Assets<br> (non-GAAP) | B | $ | 3,004,142 | $ | 2,849,702 | $ | 2,932,843 | $ | 2,967,240 | $ | 2,874,372 | |||||||||||||||||||||||||||||||
| Tangible Common Equity Ratio (non-GAAP) | A/B | 8.06% | **** | 8.31% | **** | 7.83% | **** | 7.56% | **** | 7.58% | ||||||||||||||||||||||||||||||||
| Actual Diluted<br> Shares Outstanding (GAAP) | C | 16,855,161 | 16,797,241 | 16,773,449 | 16,840,496 | 16,808,542 | ||||||||||||||||||||||||||||||||||||
| Tangible Book Value per Diluted Share (non-GAAP) | A/C | $ | 14.37 | $ | 14.09 | $ | 13.70 | $ | 13.31 | $ | 12.96 | |||||||||||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| EARNINGS HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Dec 31, 2019 | Sep 30, 2019 | **** | Dec 31, 2018 | Dec 31, 2019 | **** | Dec 31, 2018 | |||||||||||||||||||||||||||||||||||
| EARNINGS | ||||||||||||||||||||||||||||||||||||||||||
| Net Income | $ | 8,565 | $ | 8,481 | $ | 8,458 | $ | 30,807 | $ | 26,224 | ||||||||||||||||||||||||||||||||
| Net Income Per<br> Common Share | $ | 0.51 | $ | 0.50 | $ | 0.50 | $ | 1.83 | $ | 1.54 | ||||||||||||||||||||||||||||||||
| PERFORMANCE | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||
| Return on<br> Average Assets | 1.14% | 1.14% | 1.18% | 1.03% | 0.92% | |||||||||||||||||||||||||||||||||||||
| Return on<br> Average Equity | 10.39% | 10.51% | 11.10% | 9.72% | 8.89% | |||||||||||||||||||||||||||||||||||||
| Net Interest<br> Margin | 3.89% | 3.92% | 3.81% | 3.85% | 3.64% | |||||||||||||||||||||||||||||||||||||
| Noninterest<br> Income as % of Operating Revenue | 34.50% | 34.67% | 35.22% | 33.92% | 35.79% | |||||||||||||||||||||||||||||||||||||
| Efficiency<br> Ratio | 72.48% | 69.27% | 70.21% | 72.40% | 77.05% | |||||||||||||||||||||||||||||||||||||
| CAPITAL ADEQUACY | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||
| Tier 1 Capital<br> Ratio | 17.16% | 16.83% | 16.36% | 17.16% | 16.36% | |||||||||||||||||||||||||||||||||||||
| Total Capital<br> Ratio | 17.90% | 17.59% | 17.13% | 17.90% | 17.13% | |||||||||||||||||||||||||||||||||||||
| Leverage Ratio | 11.25% | 11.09% | 10.89% | 11.25% | 10.89% | |||||||||||||||||||||||||||||||||||||
| Common Equity<br> Tier 1 Ratio | 14.47% | 14.13% | 13.58% | 14.47% | 13.58% | |||||||||||||||||||||||||||||||||||||
| Tangible Common<br> Equity Ratio^(1)^ | 8.06% | 8.31% | 7.58% | 8.06% | 7.58% | |||||||||||||||||||||||||||||||||||||
| Equity to<br> Assets | 10.59% | 10.96% | 10.23% | 10.59% | 10.23% | |||||||||||||||||||||||||||||||||||||
| ASSET QUALITY | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||
| Allowance as %<br> of Non-Performing Loans | 310.99% | 290.55% | 206.79% | 310.99% | 206.79% | |||||||||||||||||||||||||||||||||||||
| Allowance as a<br> % of Loans | 0.75% | 0.78% | 0.80% | 0.75% | 0.80% | |||||||||||||||||||||||||||||||||||||
| Net Charge-Offs<br> as % of Average Loans | 0.05% | 0.23% | 0.10% | 0.13% | 0.12% | |||||||||||||||||||||||||||||||||||||
| Nonperforming<br> Assets as % of Loans and ORE | 0.29% | 0.30% | 0.51% | 0.29% | 0.51% | |||||||||||||||||||||||||||||||||||||
| Nonperforming<br> Assets as % of Total Assets | 0.18% | 0.19% | 0.31% | 0.18% | 0.31% | |||||||||||||||||||||||||||||||||||||
| STOCK PERFORMANCE | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||
| High | $ | 30.95 | $ | 28.00 | $ | 26.95 | $ | 30.95 | $ | 26.95 | ||||||||||||||||||||||||||||||||
| Low | 25.75 | 23.70 | 19.92 | 21.04 | 19.92 | |||||||||||||||||||||||||||||||||||||
| Close | $ | 30.50 | $ | 27.45 | $ | 23.21 | $ | 30.50 | $ | 23.21 | ||||||||||||||||||||||||||||||||
| Average Daily<br> Trading Volume | 41,247 | 25,596 | 21,455 | 27,496 | 21,082 | |||||||||||||||||||||||||||||||||||||
| ^(1)^Tangible common equity ratio is a<br> non-GAAP financial measure. For additional information, including a<br> reconciliation to GAAP, | ||||||||||||||||||||||||||||||||||||||||||
| refer to<br> page 4. | ||||||||||||||||||||||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | **** | **** | **** | |||||||||||||||||||||||||||||||||||||||
| Unaudited | **** | **** | **** | **** | **** | |||||||||||||||||||||||||||||||||||||
| 2019 | **** | 2018 | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | |||||||||||||||||||||||||||||||||||||
| ASSETS | **** | **** | **** | **** | **** | |||||||||||||||||||||||||||||||||||||
| Cash and Due<br> From Banks | $ | 60,087 | $ | 61,151 | $ | 53,731 | $ | 49,501 | $ | 62,032 | ||||||||||||||||||||||||||||||||
| Funds Sold and<br> Interest Bearing Deposits | 318,336 | 177,389 | 234,097 | 304,213 | 213,968 | |||||||||||||||||||||||||||||||||||||
| Total Cash and<br> Cash Equivalents | 378,423 | 238,540 | 287,828 | 353,714 | 276,000 | |||||||||||||||||||||||||||||||||||||
| Investment<br> Securities Available for Sale | 403,601 | 376,981 | 410,851 | 429,016 | 446,157 | |||||||||||||||||||||||||||||||||||||
| Investment<br> Securities Held to Maturity | 239,539 | 240,303 | 229,516 | 226,179 | 217,320 | |||||||||||||||||||||||||||||||||||||
| Total<br> Investment Securities | 643,140 | 617,284 | 640,367 | 655,195 | 663,477 | |||||||||||||||||||||||||||||||||||||
| Loans Held for<br> Sale | 9,509 | 13,075 | 9,885 | 4,557 | 6,869 | |||||||||||||||||||||||||||||||||||||
| Loans, Net of<br> Unearned Interest | **** | **** | **** | **** | **** | |||||||||||||||||||||||||||||||||||||
| Commercial,<br> Financial, & Agricultural | 255,365 | 259,870 | 265,001 | 238,942 | 233,689 | |||||||||||||||||||||||||||||||||||||
| Real Estate -<br> Construction | 115,018 | 111,358 | 101,372 | 87,123 | 89,527 | |||||||||||||||||||||||||||||||||||||
| Real Estate -<br> Commercial | 625,556 | 610,726 | 614,618 | 615,129 | 602,061 | |||||||||||||||||||||||||||||||||||||
| Real Estate -<br> Residential | 353,642 | 354,545 | 349,843 | 338,574 | 334,197 | |||||||||||||||||||||||||||||||||||||
| Real Estate -<br> Home Equity | 197,360 | 197,326 | 201,579 | 209,194 | 210,111 | |||||||||||||||||||||||||||||||||||||
| Consumer | 279,565 | 277,970 | 288,196 | 296,351 | 295,040 | |||||||||||||||||||||||||||||||||||||
| Other Loans | 7,808 | 14,248 | 13,131 | 10,430 | 8,018 | |||||||||||||||||||||||||||||||||||||
| Overdrafts | 1,615 | 1,710 | 1,442 | 1,362 | 1,582 | |||||||||||||||||||||||||||||||||||||
| Total Loans, Net<br> of Unearned Interest | 1,835,929 | 1,827,753 | 1,835,182 | 1,797,105 | 1,774,225 | |||||||||||||||||||||||||||||||||||||
| Allowance for<br> Loan Losses | (13,905) | (14,319) | (14,593) | (14,120) | (14,210) | |||||||||||||||||||||||||||||||||||||
| Loans, Net | 1,822,024 | 1,813,434 | 1,820,589 | 1,782,985 | 1,760,015 | |||||||||||||||||||||||||||||||||||||
| Premises and<br> Equipment, Net | 84,543 | 85,810 | 86,005 | 86,846 | 87,190 | |||||||||||||||||||||||||||||||||||||
| Goodwill | 84,811 | 84,811 | 84,811 | 84,811 | 84,811 | |||||||||||||||||||||||||||||||||||||
| Other Real<br> Estate Owned | 953 | 526 | 1,010 | 1,902 | 2,229 | |||||||||||||||||||||||||||||||||||||
| Other Assets | 65,550 | 81,033 | 87,159 | 82,041 | 78,592 | |||||||||||||||||||||||||||||||||||||
| Total Other<br> Assets | 235,857 | 252,180 | 258,985 | 255,600 | 252,822 | |||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 3,088,953 | $ | 2,934,513 | $ | 3,017,654 | $ | 3,052,051 | $ | 2,959,183 | ||||||||||||||||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||||||||||||
| Noninterest<br> Bearing Deposits | $ | 1,044,699 | $ | 1,022,774 | $ | 1,024,898 | $ | 995,853 | $ | 947,858 | ||||||||||||||||||||||||||||||||
| NOW Accounts | 902,499 | 728,395 | 810,568 | 887,453 | 867,209 | |||||||||||||||||||||||||||||||||||||
| Money Market<br> Accounts | 217,839 | 239,410 | 240,181 | 244,628 | 237,739 | |||||||||||||||||||||||||||||||||||||
| Regular Savings<br> Accounts | 374,396 | 372,601 | 371,773 | 372,414 | 358,306 | |||||||||||||||||||||||||||||||||||||
| Certificates of<br> Deposit | 106,021 | 109,827 | 113,684 | 116,946 | 120,744 | |||||||||||||||||||||||||||||||||||||
| Total Deposits | 2,645,454 | 2,473,007 | 2,561,104 | 2,617,294 | 2,531,856 | |||||||||||||||||||||||||||||||||||||
| Short-Term<br> Borrowings | 6,404 | 10,622 | 9,753 | 8,983 | 13,541 | |||||||||||||||||||||||||||||||||||||
| Subordinated<br> Notes Payable | 52,887 | 52,887 | 52,887 | 52,887 | 52,887 | |||||||||||||||||||||||||||||||||||||
| Other Long-Term<br> Borrowings | 6,514 | 6,963 | 7,313 | 7,661 | 8,568 | |||||||||||||||||||||||||||||||||||||
| Other<br> Liabilities | 50,678 | 69,472 | 72,002 | 56,240 | 49,744 | |||||||||||||||||||||||||||||||||||||
| Total<br> Liabilities | 2,761,937 | 2,612,951 | 2,703,059 | 2,743,065 | 2,656,596 | |||||||||||||||||||||||||||||||||||||
| SHAREOWNERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||
| Common Stock | 168 | 167 | 167 | 168 | 167 | |||||||||||||||||||||||||||||||||||||
| Additional<br> Paid-In Capital | 32,092 | 31,075 | 30,751 | 31,929 | 31,058 | |||||||||||||||||||||||||||||||||||||
| Retained<br> Earnings | 322,937 | 316,551 | 310,247 | 304,763 | 300,177 | |||||||||||||||||||||||||||||||||||||
| Accumulated<br> Other Comprehensive Loss, Net of Tax | (28,181) | (26,231) | (26,570) | (27,874) | (28,815) | |||||||||||||||||||||||||||||||||||||
| Total<br> Shareowners' Equity | 327,016 | 321,562 | 314,595 | 308,986 | 302,587 | |||||||||||||||||||||||||||||||||||||
| Total<br> Liabilities and Shareowners' Equity | $ | 3,088,953 | $ | 2,934,513 | $ | 3,017,654 | $ | 3,052,051 | $ | 2,959,183 | ||||||||||||||||||||||||||||||||
| OTHER BALANCE SHEET DATA | ||||||||||||||||||||||||||||||||||||||||||
| Earning Assets | $ | 2,806,913 | $ | 2,635,501 | $ | 2,719,530 | $ | 2,761,070 | $ | 2,658,539 | ||||||||||||||||||||||||||||||||
| Interest Bearing<br> Liabilities | 1,666,560 | 1,520,705 | 1,606,159 | 1,690,972 | 1,658,994 | |||||||||||||||||||||||||||||||||||||
| Book Value Per<br> Diluted Share | $ | 19.40 | $ | 19.14 | $ | 18.76 | $ | 18.35 | $ | 18.00 | ||||||||||||||||||||||||||||||||
| Tangible Book<br> Value Per Diluted Share^(1)^ | 14.37 | 14.09 | 13.70 | 13.31 | 12.96 | |||||||||||||||||||||||||||||||||||||
| Actual Basic<br> Shares Outstanding | 16,772 | 16,749 | 16,746 | 16,812 | 16,748 | |||||||||||||||||||||||||||||||||||||
| Actual Diluted<br> Shares Outstanding | 16,855 | 16,797 | 16,773 | 16,840 | 16,809 | |||||||||||||||||||||||||||||||||||||
| ^(1)^Tangible book value per diluted share is<br> a non-GAAP financial measure. For additional information, including a<br> reconciliation to GAAP, refer to page 4. | ||||||||||||||||||||||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||||||||
| Unaudited | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||||||
| Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||
| 2019 | **** | 2018 | **** | December 31, | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | **** | 2019 | 2018 | ||||||||||||||||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||||||
| Interest and<br> Fees on Loans | $ | 23,842 | $ | 23,992 | $ | 23,765 | $ | 22,616 | $ | 22,431 | $ | 94,215 | $ | 84,117 | ||||||||||||||||||||||||||||
| Investment<br> Securities | 3,221 | 3,307 | 3,393 | 3,513 | 3,478 | 13,434 | 12,868 | |||||||||||||||||||||||||||||||||||
| Funds Sold | 945 | 1,142 | 1,507 | 1,593 | 461 | 5,187 | 2,410 | |||||||||||||||||||||||||||||||||||
| Total Interest<br> Income | 28,008 | 28,441 | 28,665 | 27,722 | 26,370 | 112,836 | 99,395 | |||||||||||||||||||||||||||||||||||
| INTEREST EXPENSE | **** | **** | **** | **** | **** | **** | **** | |||||||||||||||||||||||||||||||||||
| Deposits | 1,157 | 1,596 | 1,988 | 2,099 | 1,312 | 6,840 | 4,243 | |||||||||||||||||||||||||||||||||||
| Short-Term<br> Borrowings | 16 | 27 | 31 | 35 | 53 | 109 | 110 | |||||||||||||||||||||||||||||||||||
| Subordinated<br> Notes Payable | 525 | 558 | 596 | 608 | 572 | 2,287 | 2,167 | |||||||||||||||||||||||||||||||||||
| Other Long-Term<br> Borrowings | 56 | 63 | 66 | 72 | 85 | 257 | 371 | |||||||||||||||||||||||||||||||||||
| Total Interest<br> Expense | 1,754 | 2,244 | 2,681 | 2,814 | 2,022 | 9,493 | 6,891 | |||||||||||||||||||||||||||||||||||
| Net Interest<br> Income | 26,254 | 26,197 | 25,984 | 24,908 | 24,348 | 103,343 | 92,504 | |||||||||||||||||||||||||||||||||||
| Provision for<br> Loan Losses | (162) | 776 | 646 | 767 | 457 | 2,027 | 2,921 | |||||||||||||||||||||||||||||||||||
| Net Interest<br> Income after Provision for<br><br> <br>Loan Losses | 26,416 | 25,421 | 25,338 | 24,141 | 23,891 | 101,316 | 89,583 | |||||||||||||||||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||||||||||||||||
| Deposit Fees | 4,980 | 4,961 | 4,756 | 4,775 | 5,172 | 19,472 | 20,093 | |||||||||||||||||||||||||||||||||||
| Bank Card Fees | 3,131 | 2,972 | 3,036 | 2,855 | 2,830 | 11,994 | 11,378 | |||||||||||||||||||||||||||||||||||
| Wealth<br> Management Fees | 2,761 | 2,992 | 2,404 | 2,323 | 2,320 | 10,480 | 8,711 | |||||||||||||||||||||||||||||||||||
| Mortgage Banking<br> Fees | 1,542 | 1,587 | 1,199 | 993 | 1,129 | 5,321 | 4,735 | |||||||||||||||||||||||||||||||||||
| Other | 1,414 | 1,391 | 1,375 | 1,606 | 1,787 | 5,786 | 6,648 | |||||||||||||||||||||||||||||||||||
| Total<br> Noninterest Income | 13,828 | 13,903 | 12,770 | 12,552 | 13,238 | 53,053 | 51,565 | |||||||||||||||||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||||||
| Compensation | **** | 17,363 | **** | 16,203 | **** | 16,437 | **** | 16,349 | **** | 16,322 | **** | 66,352 | **** | 63,921 | ||||||||||||||||||||||||||||
| Occupancy, Net | 4,680 | 4,710 | 4,537 | 4,509 | 4,804 | 18,436 | 18,503 | |||||||||||||||||||||||||||||||||||
| Other Real<br> Estate, Net | 102 | 6 | 75 | 363 | (1,663) | 546 | (442) | |||||||||||||||||||||||||||||||||||
| Other | 6,997 | 6,954 | 7,347 | 6,977 | 7,042 | 28,275 | 29,521 | |||||||||||||||||||||||||||||||||||
| Total<br> Noninterest Expense | 29,142 | 27,873 | 28,396 | 28,198 | 26,505 | 113,609 | 111,503 | |||||||||||||||||||||||||||||||||||
| OPERATING PROFIT | 11,102 | 11,451 | 9,712 | 8,495 | 10,624 | 40,760 | 29,645 | |||||||||||||||||||||||||||||||||||
| Income Tax<br> Expense | 2,537 | 2,970 | 2,387 | 2,059 | 2,166 | 9,953 | 3,421 | |||||||||||||||||||||||||||||||||||
| NET INCOME | $ | 8,565 | $ | 8,481 | $ | 7,325 | $ | 6,436 | $ | 8,458 | $ | 30,807 | $ | 26,224 | ||||||||||||||||||||||||||||
| PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||||||
| Basic Net Income | $ | 0.51 | $ | 0.51 | $ | 0.44 | $ | 0.38 | $ | 0.50 | $ | 1.84 | $ | 1.54 | ||||||||||||||||||||||||||||
| Diluted Net<br> Income | 0.51 | 0.50 | 0.44 | 0.38 | 0.50 | 1.83 | 1.54 | |||||||||||||||||||||||||||||||||||
| Cash Dividend | $ | 0.13 | $ | 0.13 | $ | 0.11 | $ | 0.11 | $ | 0.09 | $ | 0.48 | $ | 0.32 | ||||||||||||||||||||||||||||
| AVERAGE SHARES | ||||||||||||||||||||||||||||||||||||||||||
| Basic | 16,750 | 16,747 | 16,791 | 16,791 | 16,989 | 16,770 | 17,029 | |||||||||||||||||||||||||||||||||||
| Diluted | 16,834 | 16,795 | 16,818 | 16,819 | 17,050 | 16,827 | 17,072 | |||||||||||||||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||||||||||||||||
| AND RISK ELEMENT ASSETS | ||||||||||||||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||||
| Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||
| 2019 | **** | 2018 | December 31, | |||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | 2019 | 2018 | |||||||||||||||||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||||||||||||||||
| Balance at<br> Beginning of Period | $ | 14,319 | $ | 14,593 | $ | 14,120 | $ | 14,210 | $ | 14,219 | $ | 14,210 | $ | 13,307 | ||||||||||||||||||||||||||||
| Provision for<br> Loan Losses | (162) | 776 | 646 | 767 | 457 | 2,027 | 2,921 | |||||||||||||||||||||||||||||||||||
| Net Charge-Offs | 252 | 1,050 | 173 | 857 | 466 | 2,332 | 2,018 | |||||||||||||||||||||||||||||||||||
| Balance at End<br> of Period | $ | 13,905 | $ | 14,319 | $ | 14,593 | $ | 14,120 | $ | 14,210 | $ | 13,905 | $ | 14,210 | ||||||||||||||||||||||||||||
| As a % of Loans | 0.75% | 0.78% | 0.79% | 0.78% | 0.80% | 0.75% | 0.80% | |||||||||||||||||||||||||||||||||||
| As a % of<br> Nonperforming Loans | 310.99% | 290.55% | 259.55% | 279.77% | 206.79% | 310.99% | 206.79% | |||||||||||||||||||||||||||||||||||
| CHARGE-OFFS | ||||||||||||||||||||||||||||||||||||||||||
| Commercial,<br> Financial and Agricultural | $ | 149 | $ | 289 | $ | 235 | $ | 95 | $ | 53 | $ | 768 | $ | 644 | ||||||||||||||||||||||||||||
| Real Estate -<br> Construction | 58 | 223 | - | - | - | 281 | 7 | |||||||||||||||||||||||||||||||||||
| Real Estate -<br> Commercial | 33 | 26 | - | 155 | - | 214 | 315 | |||||||||||||||||||||||||||||||||||
| Real Estate -<br> Residential | **** | 27 | **** | 44 | **** | 65 | **** | 264 | **** | 111 | **** | 400 | **** | 780 | ||||||||||||||||||||||||||||
| Real Estate -<br> Home Equity | **** | - | **** | 333 | **** | 45 | **** | 52 | **** | 106 | **** | 430 | **** | 533 | ||||||||||||||||||||||||||||
| Consumer | 819 | 744 | 520 | 795 | 728 | 2,878 | 2,395 | |||||||||||||||||||||||||||||||||||
| Total<br> Charge-Offs | $ | 1,086 | $ | 1,659 | $ | 865 | $ | 1,361 | $ | 998 | $ | 4,971 | $ | 4,674 | ||||||||||||||||||||||||||||
| RECOVERIES | ||||||||||||||||||||||||||||||||||||||||||
| Commercial,<br> Financial and Agricultural | $ | 127 | $ | 86 | $ | 58 | $ | 74 | $ | 128 | $ | 345 | $ | 459 | ||||||||||||||||||||||||||||
| Real Estate -<br> Construction | - | - | - | - | 25 | - | 26 | |||||||||||||||||||||||||||||||||||
| Real Estate -<br> Commercial | 266 | 142 | 100 | 70 | 13 | 578 | 373 | |||||||||||||||||||||||||||||||||||
| Real Estate -<br> Residential | 116 | 46 | 223 | 44 | 106 | 429 | 643 | |||||||||||||||||||||||||||||||||||
| Real Estate -<br> Home Equity | 25 | 58 | 60 | 32 | 61 | 175 | 191 | |||||||||||||||||||||||||||||||||||
| Consumer | 300 | 277 | 251 | 284 | 199 | 1,112 | 964 | |||||||||||||||||||||||||||||||||||
| Total Recoveries | $ | 834 | $ | 609 | $ | 692 | $ | 504 | $ | 532 | $ | 2,639 | $ | 2,656 | ||||||||||||||||||||||||||||
| NET CHARGE-OFFS | $ | 252 | $ | 1,050 | $ | 173 | $ | 857 | $ | 466 | $ | 2,332 | $ | 2,018 | ||||||||||||||||||||||||||||
| Net Charge-Offs<br> as a % of Average Loans ^(1)^ | 0.05% | 0.23% | 0.04% | 0.20% | 0.10% | 0.13% | 0.12% | |||||||||||||||||||||||||||||||||||
| RISK ELEMENT ASSETS | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||
| Nonaccruing<br> Loans | $ | 4,472 | $ | 4,928 | $ | 5,622 | $ | 5,047 | $ | 6,872 | ||||||||||||||||||||||||||||||||
| Other Real<br> Estate Owned | 953 | 526 | 1,010 | 1,902 | 2,229 | |||||||||||||||||||||||||||||||||||||
| Total<br> Nonperforming Assets | $ | 5,425 | $ | 5,454 | $ | 6,632 | $ | 6,949 | $ | 9,101 | ||||||||||||||||||||||||||||||||
| Past Due Loans<br> 30-89 Days | $ | 4,871 | $ | 5,120 | $ | 5,443 | $ | 4,682 | $ | 4,757 | ||||||||||||||||||||||||||||||||
| Past Due Loans<br> 90 Days or More (accruing) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Classified Loans | 20,847 | 21,323 | 26,406 | 22,219 | 22,889 | |||||||||||||||||||||||||||||||||||||
| Performing<br> Troubled Debt Restructuring's | $ | 16,888 | $ | 18,284 | $ | 18,737 | $ | 20,791 | $ | 22,084 | ||||||||||||||||||||||||||||||||
| Nonperforming<br> Loans as a % of Loans | 0.24% | 0.27% | 0.30% | 0.28% | 0.39% | |||||||||||||||||||||||||||||||||||||
| Nonperforming<br> Assets as a % of Loans and | ||||||||||||||||||||||||||||||||||||||||||
| Other Real<br> Estate | 0.29% | 0.30% | 0.36% | 0.39% | 0.51% | |||||||||||||||||||||||||||||||||||||
| Nonperforming<br> Assets as a % of Total Assets | 0.18% | 0.19% | 0.22% | 0.23% | 0.31% | |||||||||||||||||||||||||||||||||||||
| ^(1)^ Annualized | ||||||||||||||||||||||||||||||||||||||||||
| CAPITAL CITY BANK GROUP, INC. | ||||||||||||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| AVERAGE BALANCE AND INTEREST RATES^(1)^ | **** | **** | **** | **** | **** | |||||||||||||||||||||||||||||||||||||
| Unaudited | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||||||
| **** | **** | Fourth Quarter 2019 | **** | **** | Third Quarter 2019 | **** | **** | Second Quarter 2019 | **** | **** | First Quarter 2019 | **** | **** | Fourth Quarter 2018 | **** | **** | Dec 2019 YTD | **** | **** | Dec 2018 YTD | **** | |||||||||||||||||||||
| (Dollars in thousands) | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | Average<br><br> <br>Balance | Interest | Average<br><br> <br>Rate | |||||||||||||||||||||
| ASSETS: | **** | **** | **** | **** | **** | **** | ||||||||||||||||||||||||||||||||||||
| Loans, Net of<br> Unearned Interest | $ | 1,846,190 | 23,958 | 5.15 | % | $ | 1,837,548 | 24,113 | 5.21 | % | $ | 1,823,311 | 23,873 | 5.25 | % | $ | 1,780,406 | 22,718 | 5.18 | % | $ | 1,785,570 | 22,556 | 5.01 | % | $ | 1,822,087 | 94,662 | 5.20 | % | $ | 1,718,348 | 84,550 | 4.92 | % | |||||||
| Investment<br> Securities | ||||||||||||||||||||||||||||||||||||||||||
| Taxable<br> Investment Securities | 610,046 | 3,186 | 2.08 | 607,363 | 3,249 | 2.13 | 614,775 | 3,301 | 2.15 | 618,127 | 3,387 | 2.20 | 637,735 | 3,325 | 2.08 | 612,541 | 13,123 | 2.14 | 641,120 | 12,083 | 1.88 | |||||||||||||||||||||
| Tax-Exempt<br> Investment Securities | 10,327 | 43 | 1.67 | 18,041 | 73 | 1.63 | 29,342 | 116 | 1.58 | 40,575 | 158 | 1.56 | 50,362 | 193 | 1.54 | 24,471 | 390 | 1.60 | 67,037 | 1,006 | 1.50 | |||||||||||||||||||||
| Total Investment<br> Securities | **** | 620,373 | 3,229 | 2.08 | **** | 625,404 | 3,322 | 2.12 | **** | 644,117 | 3,417 | 2.12 | **** | 658,702 | 3,545 | 2.16 | **** | 688,097 | 3,518 | 2.04 | **** | 637,012 | 13,513 | 2.12 | **** | 708,157 | 13,089 | 1.85 | ||||||||||||||
| Funds Sold | 228,137 | 945 | 1.64 | 207,129 | 1,142 | 2.19 | 251,789 | 1,507 | 2.40 | 265,694 | 1,593 | 2.43 | 80,815 | 461 | 2.26 | 237,999 | 5,187 | 2.18 | 135,379 | 2,410 | 1.78 | |||||||||||||||||||||
| Total Earning<br> Assets | 2,694,700 | $ | 28,132 | 4.14 | % | 2,670,081 | $ | 28,577 | 4.25 | % | 2,719,217 | $ | 28,797 | 4.25 | % | 2,704,802 | $ | 27,856 | 4.17 | % | 2,554,482 | $ | 26,535 | 4.12 | % | 2,697,098 | $ | 113,362 | 4.20 | % | 2,561,884 | $ | 100,049 | 3.91 | % | |||||||
| Cash and Due<br> From Banks | 53,174 | 50,981 | 51,832 | 53,848 | 52,344 | 52,453 | 51,222 | |||||||||||||||||||||||||||||||||||
| Allowance for<br> Loan Losses | (14,759) | (14,863) | (14,513) | (14,347) | (14,642) | (14,622) | (13,993) | |||||||||||||||||||||||||||||||||||
| Other Assets | 249,089 | 253,111 | 254,126 | 252,208 | 257,061 | 252,127 | 258,035 | |||||||||||||||||||||||||||||||||||
| Total Assets | $ | 2,982,204 | $ | 2,959,310 | $ | 3,010,662 | $ | 2,996,511 | $ | 2,849,245 | $ | 2,987,056 | $ | 2,857,148 | ||||||||||||||||||||||||||||
| LIABILITIES: | ||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing<br> Deposits | ||||||||||||||||||||||||||||||||||||||||||
| NOW Accounts | $ | 755,625 | $ | 889 | 0.47 | % | $ | 749,678 | $ | 1,235 | 0.65 | % | $ | 832,982 | $ | 1,623 | 0.78 | % | $ | 884,277 | $ | 1,755 | 0.80 | % | $ | 739,225 | $ | 995 | 0.53 | % | $ | 805,134 | $ | 5,502 | 0.68 | % | $ | 781,026 | $ | 3,152 | 0.40 | % |
| Money Market<br> Accounts | 227,479 | 170 | 0.30 | 238,565 | 264 | 0.44 | 237,921 | 265 | 0.45 | 239,516 | 247 | 0.42 | 248,486 | 216 | 0.34 | 235,845 | 946 | 0.40 | 251,175 | 675 | 0.27 | |||||||||||||||||||||
| Savings Accounts | 372,518 | 46 | 0.05 | 372,593 | 46 | 0.05 | 371,716 | 46 | 0.05 | 364,783 | 44 | 0.05 | 356,723 | 44 | 0.05 | 370,430 | 182 | 0.05 | 351,341 | 172 | 0.05 | |||||||||||||||||||||
| Time Deposits | 108,407 | 52 | 0.19 | 111,447 | 51 | 0.18 | 115,442 | 54 | 0.19 | 118,839 | 53 | 0.18 | 123,193 | 57 | 0.18 | 113,499 | 210 | 0.19 | 131,860 | 244 | 0.18 | |||||||||||||||||||||
| Total Interest<br> Bearing Deposits | 1,464,029 | 1,157 | 0.31 | % | 1,472,283 | 1,596 | 0.43 | % | 1,558,061 | 1,988 | 0.51 | % | 1,607,415 | 2,099 | 0.53 | % | 1,467,627 | 1,312 | 0.37 | % | 1,524,908 | 6,840 | 0.45 | % | 1,515,402 | 4,243 | 0.29 | % | ||||||||||||||
| Short-Term<br> Borrowings | 7,448 | 16 | 0.87 | % | 8,697 | 27 | 1.24 | % | 9,625 | 31 | 1.30 | % | 11,378 | 35 | 1.26 | % | 15,424 | 53 | 1.36 | % | 9,275 | 109 | 1.19 | % | 10,992 | 110 | 0.99 | % | ||||||||||||||
| Subordinated<br> Notes Payable | 52,887 | 525 | 3.88 | 52,887 | 558 | 4.13 | 52,887 | 596 | 4.46 | 52,887 | 608 | 4.60 | 52,887 | 572 | 4.23 | 52,887 | 2,287 | 4.26 | 52,887 | 2,167 | 4.04 | |||||||||||||||||||||
| Other Long-Term<br> Borrowings | 6,723 | 56 | 3.33 | 7,158 | 63 | 3.47 | 7,509 | 66 | 3.53 | 8,199 | 72 | 3.55 | 9,918 | 85 | 3.40 | 7,393 | 257 | 3.48 | 12,387 | 371 | 3.00 | |||||||||||||||||||||
| Total Interest<br> Bearing Liabilities | 1,531,087 | $ | 1,754 | 0.45 | % | 1,541,025 | $ | 2,244 | 0.58 | % | 1,628,082 | $ | 2,681 | 0.66 | % | 1,679,879 | $ | 2,814 | 0.68 | % | 1,545,856 | $ | 2,022 | 0.54 | % | 1,594,463 | $ | 9,493 | 0.60 | % | 1,591,668 | $ | 6,891 | 0.45 | % | |||||||
| Noninterest<br> Bearing Deposits | 1,060,922 | 1,023,472 | 1,007,370 | 957,300 | 944,748 | 1,012,581 | 907,571 | |||||||||||||||||||||||||||||||||||
| Other<br> Liabilities | 63,291 | 74,540 | 61,611 | 52,070 | 56,445 | 62,940 | 63,045 | |||||||||||||||||||||||||||||||||||
| Total Liabilities | 2,655,300 | 2,639,037 | 2,697,063 | 2,689,249 | 2,547,049 | 2,669,984 | 2,562,284 | |||||||||||||||||||||||||||||||||||
| SHAREOWNERS' EQUITY: | 326,904 | 320,273 | 313,599 | 307,262 | 302,196 | 317,072 | 294,864 | |||||||||||||||||||||||||||||||||||
| Total Liabilities<br> and Shareowners' Equity | $ | 2,982,204 | $ | 2,959,310 | $ | 3,010,662 | $ | 2,996,511 | $ | 2,849,245 | $ | 2,987,056 | $ | 2,857,148 | ||||||||||||||||||||||||||||
| Interest Rate Spread | $ | 26,378 | 3.69 | % | $ | 26,333 | 3.67 | % | $ | 26,116 | 3.59 | % | $ | 25,042 | 3.49 | % | $ | 24,513 | 3.58 | % | $ | 103,869 | 3.61 | % | $ | 93,158 | 3.46 | % | ||||||||||||||
| Interest Income<br> and Rate Earned^(1)^ | 28,132 | 4.14 | 28,577 | 4.25 | 28,797 | 4.25 | 27,856 | 4.17 | 26,535 | 4.12 | 113,362 | 4.20 | 100,049 | 3.91 | ||||||||||||||||||||||||||||
| Interest Expense<br> and Rate Paid^(2)^ | 1,754 | 0.26 | 2,244 | 0.33 | 2,681 | 0.40 | 2,814 | 0.42 | 2,022 | 0.31 | 9,493 | 0.35 | 6,891 | 0.27 | ||||||||||||||||||||||||||||
| Net Interest<br> Margin | $ | 26,378 | 3.89 | % | $ | 26,333 | 3.92 | % | $ | 26,116 | 3.85 | % | $ | 25,042 | 3.75 | % | $ | 24,513 | 3.81 | % | $ | 103,869 | 3.85 | % | $ | 93,158 | 3.64 | % | ||||||||||||||
| ^(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. |