Capital City Bank Group, Inc.
Reports Third Quarter 2008 Results
TALLAHASSEE, Fla. (October 21, 2008) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income for the third quarter of 2008 totaling $4.8 million ($0.29 per diluted share) compared to $4.8 million ($0.28 per diluted share) in the second quarter of 2008 and $7.2 million ($0.41 per diluted share) for the third quarter of 2007. Earnings for the third quarter of 2008 include a loan loss provision of $10.4 million ($.37 per diluted share) versus $5.4 million ($.20 per diluted share) in the second quarter of 2008 and $1.6 million ($.05 per diluted share) in the third quarter of 2007. Earnings for the third quarter of 2008 also included a $6.25 million pre-tax gain ($0.22 per diluted share (after-tax)) from the sale of a major portion of the bank’s merchant services portfolio.
Earnings for the first nine months of 2008 totaled $16.9 million ($0.99 per diluted share) compared to $22.0 million ($1.22 per diluted share) for the same period in 2007. Year-to-date 2008 earnings include a loan loss provision of $20.0 million ($0.72 per diluted share) versus $4.5 million ($.15 per diluted share) for the same period in 2007. In addition to the third quarter gain from the sale of a portion of the bank’s merchant services portfolio, earnings for the first nine months of 2008 included a $2.4 million pre-tax gain from the redemption of Visa, Inc. shares related to its initial public offering and the reversal of $1.1 million (pre-tax) in Visa related litigation reserves.
“Net income did not meet our expectations for the third quarter as we provided a substantially larger provision for loan losses,” said William G. Smith, Jr., Chairman, CEO, and President.
“During the quarter, nonperforming assets increased by $19.9 million to $67.7 million, or 3.51% of total loans and other real estate. We have committed the necessary resources to manage this portfolio and resolve the underlying credits. Further, we recognize the urgency of the challenge before us and we are appropriately identifying our problems, determining values, and establishing reserves accordingly, as evidenced by the size of this quarter’s provision.”
“In this time of uncertainty and market turmoil, capital is king. Fortunately, we have long focused on building a strong capital base to help protect the institution in times such as now. Including the one-time gain of $.22 per share, net income covered our dividend and enabled us to again add to our already strong capital position, increasing our total risk based capital to over 15%.”
“Looking forward, we believe our overall financial strength will enable us to fully support our ongoing business development efforts as we manage through this challenging environment, and also capitalize on opportunities to expand our franchise both organically and potentially through acquisitions,” said Smith.
The Return on Average Assets was .76% and the Return on Average Equity was 6.34% for the third quarter of 2008. These metrics were .73% and 6.43% for the second quarter of 2008 and 1.15% and 9.44% for the third quarter of 2007, respectively.
For the first nine months of 2008, the Return on Average Assets was .87% and the Return on Average Equity was 7.53% compared to 1.18% and 9.53%, respectively, for the same period in 2007.
Discussion of Financial Condition
Average earning assets were $2.208 billion for the third quarter, a decrease of $96.3 million, or 4.18% from the second quarter of 2008, and an increase of $16.4 million, or .75% from the fourth quarter of 2007. The decrease from the linked quarter is primarily attributable to a $107.0 million decrease in short-term investments driven by the decline in client deposits (see discussion below), partially offset by a $6.2 million increase in average loans. Compared to the fourth quarter of 2007, the increase primarily reflects an increase in average short-term investments ($3.2 million), investment securities ($3.2 million), and loans ($6.9 million). Given our risk management practices, the relatively small loan growth in this current economic environment is not unexpected; however, management is encouraged by the stabilized trend realized in loan balances so far in 2008 which reflects our continued focus on the sales and service efforts of our bankers.
Nonperforming assets of $67.7 million increased from the linked second quarter by $19.9 million and from the fourth quarter of 2007 by $39.5 million. For the same periods, nonaccrual loans totaling $61.5 million increased $19.8 million and $36.4 million, respectively. The increase from the second quarter primarily reflects further migration to nonaccrual status of construction and residential real estate loans to builders and investors reflecting the current stress on that segment of our markets and consumers in general. Restructured loans totaled $1.4 million at the end of the quarter. Other real estate owned totaled $4.8 million at the end of the third quarter compared to $4.3 million at the end of the second quarter and $3.0 million at year-end 2007. Other real estate owned properties are reviewed quarterly to assess market conditions and the reasonableness of the fair value for these assets, and adjustments to carrying values are made, as needed. Nonperforming assets represented 3.51% of loans and other real estate at the end of the third quarter compared to 2.49% and 1.47% at the end of the prior quarter and year-end 2007, respectively.
Average total deposits were $2.031 billion for the third quarter, a decrease of $109.8 million, or 5.1%, from the second quarter and an increase of $13.9 million, or 0.7%, over the fourth quarter of 2007. On a linked quarter basis, deposits declined primarily reflecting a lower level of public funds, which we believe is partially attributable to seasonality, and a reduction in certificates of deposit balances. In managing our deposit base, we continue to focus on managing the overall mix of deposits rather than matching the rates of higher rate paying competitors. Compared to the fourth quarter of 2007, a majority of the increase in deposits has come in the NOW account category which reflected strong growth in public funds deposits attributable to a migration of deposits from the Florida State Board of Administration’s Local Government Investment Pool, which began in the fourth quarter of 2007 and continued through the second quarter. Partially offsetting the public funds growth were declines in noninterest bearing demand, money market accounts and certificates of deposit which resulted from management’s aforementioned strategy not to compete with higher rate paying competitors.
We had approximately $86.5 million in average net overnight funds sold for the third quarter of 2008 as compared to $195.5 million in the second quarter of 2008 and $84.1 million in the fourth quarter of 2007. The reduction on a linked quarter basis reflects a decline in deposits, primarily public funds and certificates of deposit as noted above.
Discussion of Operating Results
Tax equivalent net interest income for the third quarter of 2008 was $27.8 million compared to $28.1 million for the second quarter of 2008 and $28.5 million for the third quarter of 2007. For the first nine months of 2008, tax equivalent net interest income totaled $83.0 million compared to $86.5 million for the comparable period in 2007.
The decrease in the net interest income on a linked quarter basis reflects higher foregone interest on nonaccrual loans and a decline in loan fees. During this same period, the net interest margin expanded by 11 basis points to 5.01%, which is attributable to a lower cost of funds resulting from a favorable shift in the mix of deposits. Management has responded aggressively to the federal funds rate reductions which began in September 2007, and believe we have successfully neutralized the overall impact.
The decline in net interest income for the three and nine months ended September 30, 2008, as compared to the same periods of 2007 was primarily the result of a higher level of foregone interest associated with the increased level of nonperforming assets, and an unfavorable shift in the mix of earning assets. These factors, coupled with the influx of higher cost municipal deposits in 2008, led to compression in our net interest margin of 26 and 43 basis points, respectively.
Average negotiated deposits, which include public funds, grew from $290 million in the third quarter of 2007 to $490 million in the current quarter, but were down from $538 million in the second quarter of 2008. We believe this change is partially attributable to local governments reaching the end of their fiscal year. Although the growth in public funds has had a positive impact on net interest income, it has had an adverse impact on our margin percentage due to the relatively thin spreads.
The provision for loan losses for the current quarter was $10.4 million compared to $5.4 million in the second quarter of 2008 and $1.6 million for the third quarter of 2007. The provision for the first nine months of 2008 totaled $20.0 million compared to $4.5 million for the same period in 2007. The increase in the provision for the third quarter and for the first nine months of the year generally reflects declining economic conditions and the associated impact on consumers, housing, and real estate markets. Compared to the prior quarter, the increase in the provision primarily reflects a higher level of reserves allocated to our residential real estate, construction, and consumer loan portfolios, all driven by a higher level of nonaccruals and past due loans within those portfolios as well as collateral valuation declines, which have increased the level of reserves held for impaired loans. For the quarter, net charge-offs totaled $2.4 million, or ..50%, of average loans compared to $3.2 million, or .67%, in the second quarter of 2008 and $1.0 million, or .21%, in the third quarter of 2007. The decline in net charge-offs for the current quarter primarily reflects a lower level of real estate loan charge-offs, which spiked during the prior quarter due to the write-down of larger problem loans that were working through the foreclosure process, but had permanent collateral shortfalls. Management continues to perform a detailed review and valuation assessment of impaired loans on a quarterly basis and recognizes losses when permanent impairment is identified. At quarter-end, the allowance for loan losses was 1.59% of outstanding loans (net of overdrafts) and provided coverage of 49% of nonperforming loans.
Noninterest income for the third quarter increased $4.5 million, or 28.6%, from the second quarter of 2008. This change is attributable to a pre-tax gain of $6.25 million from the sale of a major portion of the bank’s merchant services portfolio on July 31, 2008. The bank retained and will continue to service approximately forty percent of the merchant services portfolio. This gain was partially offset by a reduction in merchant services fees of $1.5 million attributable to the portion of the merchant services portfolio sold, and lower mortgage banking revenues of $175,000. Compared to the third quarter of 2007, noninterest income increased $5.8 million, or 40.1% due primarily to the same factors previously mentioned. An increase in deposit fees of $724,000, or 11.3% also contributed to the improvement. For the first nine months of 2008, noninterest income grew $10.3 million, or 23.6%, from the comparable period in 2007 due primarily to the aforementioned gain from the merchant services portfolio sale, a gain from the redemption of Visa, Inc. shares during the first quarter of 2008 ($2.4 million) and strong improvement in deposit fees ($2.1 million).
Noninterest expense for the third quarter decreased $840,000, or 2.7%, from the second quarter of 2008 primarily attributable to lower interchange fees ($1.4 million) related to the cost of processing and supporting the bank’s merchant services portfolio, a major portion of which was sold on July 31, 2008. Higher expense for commission fees related to processing cost for our accounts receivable financing product and the write-down of several other real estate properties during the quarter partially offset the aforementioned decline. Compared to the third quarter of 2007, the reduction in interchange fees associated with the partial sale of the merchant services portfolio were offset by a higher level of commission fees and other real estate owned write-downs. For the first nine months of 2008, noninterest expense grew $92,000, or .10% from the comparable period in 2007 due to higher compensation and occupancy expense, and commission fees. The increase in compensation expense is due to higher associate base salaries reflective of annual merit/market based raises and the opening of three new banking offices during 2007. The increase in occupancy is due to higher depreciation expense also attributable to the aforementioned new banking offices and the implementation of a new telephone system in early 2008. The reversal of a portion ($1.1 million) of our Visa litigation accrual and the reduction of interchange fees of approximately $596,000 partially offset the aforementioned increases in compensation, occupancy, and commission fees. Management continues to work on expense reduction opportunities, improvement in cost controls, and enhancement of operating efficiencies as core strategic objectives.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 69 banking offices, one mortgage lending office, and 80 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. 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 frequency and magnitude of foreclosure of the Company’s loans; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the Company’s ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; 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, 2007, 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.
| EARNINGS HIGHLIGHTS | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| (Dollars in thousands, except per share data) | | Sep 30, 2008 | | | Jun 30, 2008 | | | Sep 30, 2007 | | | Sep 30, 2008 | | | Sep 30, 2007 | |
| EARNINGS | | | | | | | | | | | | | | | |
| Net Income | | $ | 4,838 | | | $ | 4,810 | | | $ | 7,171 | | | $ | 16,928 | | | $ | 22,019 | |
| Diluted Earnings Per Common Share | | $ | 0.29 | | | $ | 0.28 | | | $ | 0.41 | | | $ | 0.99 | | | $ | 1.22 | |
| PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| Return on Average Equity | | | 6.34 | % | | | 6.43 | % | | | 9.44 | % | | | 7.53 | % | | | 9.53 | % |
| Return on Average Assets | | | 0.76 | % | | | 0.73 | % | | | 1.15 | % | | | 0.87 | % | | | 1.18 | % |
| Net Interest Margin | | | 5.01 | % | | | 4.90 | % | | | 5.27 | % | | | 4.87 | % | | | 5.30 | % |
| Noninterest Income as % of Operating Revenue | | | 42.64 | % | | | 36.39 | % | | | 34.08 | % | | | 39.84 | % | | | 33.92 | % |
| Efficiency Ratio | | | 59.27 | % | | | 66.89 | % | | | 66.27 | % | | | 62.98 | % | | | 66.18 | % |
| CAPITAL ADEQUACY | | | | | | | | | | | | | | | | | | | | |
| Tier 1 Capital Ratio | | | 13.54 | % | | | 13.15 | % | | | 13.74 | % | | | 13.54 | % | | | 13.74 | % |
| Total Capital Ratio | | | 15.15 | % | | | 14.35 | % | | | 14.76 | % | | | 15.15 | % | | | 14.76 | % |
| Leverage Ratio | | | 11.21 | % | | | 10.54 | % | | | 11.36 | % | | | 11.21 | % | | | 11.36 | % |
| Equity to Assets | | | 12.17 | % | | | 11.19 | % | | | 12.26 | % | | | 12.17 | % | | | 12.26 | % |
| ASSET QUALITY | | | | | | | | | | | | | | | | | | | | |
| Allowance as % of Non-Performing Loans | | | 48.55 | % | | | 51.80 | % | | | 145.49 | % | | | 48.55 | % | | | 145.49 | % |
| Allowance as a % of Loans | | | 1.59 | % | | | 1.18 | % | | | 0.95 | % | | | 1.59 | % | | | 0.95 | % |
| Net Charge-Offs as % of Average Loans | | | 0.50 | % | | | 0.67 | % | | | 0.21 | % | | | 0.53 | % | | | 0.25 | % |
| Nonperforming Assets as % of Loans and ORE | | | 3.51 | % | | | 2.49 | % | | | 0.74 | % | | | 3.51 | % | | | 0.74 | % |
| STOCK PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 34.50 | | | $ | 30.19 | | | $ | 36.40 | | | $ | 34.50 | | | $ | 36.40 | |
| Low | | $ | 19.20 | | | $ | 21.76 | | | $ | 27.69 | | | $ | 19.20 | | | $ | 27.69 | |
| Close | | $ | 31.35 | | | $ | 21.76 | | | $ | 31.20 | | | $ | 31.35 | | | $ | 31.20 | |
| Average Daily Trading Volume | | | 45,717 | | | | 36,196 | | | | 40,247 | | | | 37,902 | | | | 35,017 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF INCOME | | | | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Nine Months Ended | |
| | | | | | | | | | | | | | | | | | September 30 | |
| (Dollars in thousands, except per share data) | | 2008 Third Quarter | | | 2008 Second Quarter | | | 2008 First Quarter | | | 2007 Fourth Quarter | | | 2007 Third Quarter | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 32,435 | | | $ | 33,422 | | | $ | 35,255 | | | $ | 37,730 | | | $ | 38,692 | | | $ | 101,112 | | | $ | 116,837 | |
| Investment Securities | | | 1,744 | | | | 1,810 | | | | 1,893 | | | | 1,992 | | | | 1,968 | | | | 5,447 | | | | 5,851 | |
| Funds Sold | | | 475 | | | | 1,028 | | | | 1,575 | | | | 1,064 | | | | 639 | | | | 3,078 | | | | 1,849 | |
| Total Interest Income | | | 34,654 | | | | 36,260 | | | | 38,723 | | | | 40,786 | | | | 41,299 | | | | 109,637 | | | | 124,537 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 5,815 | | | | 7,162 | | | | 10,481 | | | | 11,323 | | | | 11,266 | | | | 23,458 | | | | 33,364 | |
| Short-Term Borrowings | | | 230 | | | | 296 | | | | 521 | | | | 639 | | | | 734 | | | | 1,047 | | | | 2,232 | |
| Subordinated Notes Payable | | | 936 | | | | 931 | | | | 931 | | | | 936 | | | | 936 | | | | 2,798 | | | | 2,794 | |
| Other Long-Term Borrowings | | | 488 | | | | 396 | | | | 331 | | | | 343 | | | | 453 | | | | 1,215 | | | | 1,451 | |
| Total Interest Expense | | | 7,469 | | | | 8,785 | | | | 12,264 | | | | 13,241 | | | | 13,389 | | | | 28,518 | | | | 39,841 | |
| Net Interest Income | | | 27,185 | | | | 27,475 | | | | 26,459 | | | | 27,545 | | | | 27,910 | | | | 81,119 | | | | 84,696 | |
| Provision for Loan Losses | | | 10,425 | | | | 5,432 | | | | 4,142 | | | | 1,699 | | | | 1,552 | | | | 19,999 | | | | 4,464 | |
| Net Interest Income after Provision for Loan Losses | | | 16,760 | | | | 22,043 | | | | 22,317 | | | | 25,846 | | | | 26,358 | | | | 61,120 | | | | 80,232 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 7,110 | | | | 7,060 | | | | 6,765 | | | | 7,256 | | | | 6,387 | | | | 20,935 | | | | 18,874 | |
| Data Processing Fees | | | 873 | | | | 812 | | | | 813 | | | | 853 | | | | 775 | | | | 2,498 | | | | 2,280 | |
| Asset Management Fees | | | 1,025 | | | | 1,125 | | | | 1,150 | | | | 1,100 | | | | 1,200 | | | | 3,300 | | | | 3,600 | |
| Retail Brokerage Fees | | | 565 | | | | 735 | | | | 469 | | | | 619 | | | | 625 | | | | 1,769 | | | | 1,891 | |
| Gain on Sale of Investment Securities | | | 27 | | | | 30 | | | | 65 | | | | 7 | | | | - | | | | 122 | | | | 7 | |
| Mortgage Banking Revenues | | | 331 | | | | 506 | | | | 494 | | | | 425 | | | | 642 | | | | 1,331 | | | | 2,171 | |
| Merchant Fees | | | 616 | | | | 2,074 | | | | 2,208 | | | | 1,743 | | | | 1,686 | | | | 4,898 | | | | 5,514 | |
| Interchange Fees | | | 1,073 | | | | 1,076 | | | | 1,009 | | | | 962 | | | | 934 | | | | 3,158 | | | | 2,795 | |
| Gain on Sale of Merchant Services Portfolio | | | 6,250 | | | | - | | | | - | | | | - | | | | - | | | | 6,250 | | | | - | |
| ATM/Debit Card Fees | | | 742 | | | | 758 | | | | 744 | | | | 705 | | | | 685 | | | | 2,244 | | | | 1,987 | |
| Other | | | 1,600 | | | | 1,542 | | | | 4,082 | | | | 2,153 | | | | 1,497 | | | | 7,224 | | | | 4,358 | |
| Total Noninterest Income | | | 20,212 | | | | 15,718 | | | | 17,799 | | | | 15,823 | | | | 14,431 | | | | 53,729 | | | | 43,477 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Associate Benefits | | | 15,417 | | | | 15,318 | | | | 15,604 | | | | 14,472 | | | | 15,096 | | | | 46,339 | | | | 45,807 | |
| Occupancy, Net | | | 2,373 | | | | 2,491 | | | | 2,362 | | | | 2,378 | | | | 2,409 | | | | 7,226 | | | | 6,969 | |
| Furniture and Equipment | | | 2,369 | | | | 2,583 | | | | 2,582 | | | | 2,534 | | | | 2,513 | | | | 7,534 | | | | 7,356 | |
| Intangible Amortization | | | 1,459 | | | | 1,459 | | | | 1,459 | | | | 1,458 | | | | 1,459 | | | | 4,377 | | | | 4,376 | |
| Other | | | 8,298 | | | | 8,905 | | | | 7,791 | | | | 10,772 | | | | 8,442 | | | | 24,994 | | | | 25,870 | |
| Total Noninterest Expense | | | 29,916 | | | | 30,756 | | | | 29,798 | | | | 31,614 | | | | 29,919 | | | | 90,470 | | | | 90,378 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OPERATING PROFIT | | | 7,056 | | | | 7,005 | | | | 10,318 | | | | 10,055 | | | | 10,870 | | | | 24,379 | | | | 33,331 | |
| Provision for Income Taxes | | | 2,218 | | | | 2,195 | | | | 3,038 | | | | 2,391 | | | | 3,699 | | | | 7,451 | | | | 11,312 | |
| NET INCOME | | $ | 4,838 | | | $ | 4,810 | | | $ | 7,280 | | | $ | 7,664 | | | $ | 7,171 | | | $ | 16,928 | | | $ | 22,019 | |
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| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic Earnings | | $ | 0.29 | | | $ | 0.28 | | | $ | 0.42 | | | $ | 0.44 | | | $ | 0.41 | | | $ | 0.99 | | | $ | 1.22 | |
| Diluted Earnings | | $ | 0.29 | | | $ | 0.28 | | | $ | 0.42 | | | $ | 0.44 | | | $ | 0.41 | | | $ | 0.99 | | | $ | 1.22 | |
| Cash Dividends | | | 0.185 | | | | 0.185 | | | | 0.185 | | | | 0.185 | | | | 0.175 | | | | 0.555 | | | | 0.525 | |
| AVERAGE SHARES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 17,124 | | | | 17,146 | | | | 17,170 | | | | 17,444 | | | | 17,709 | | | | 17,147 | | | | 18,066 | |
| Diluted | | | 17,128 | | | | 17,147 | | | | 17,178 | | | | 17,445 | | | | 17,719 | | | | 17,149 | | | | 18,077 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| (Dollars in thousands, except per share data) | | 2008 Third Quarter | | | 2008 Second Quarter | | | 2008 First Quarter | | | 2007 Fourth Quarter | | | 2007 Third Quarter | |
| | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 71,062 | | | $ | 108,672 | | | $ | 97,525 | | | $ | 93,437 | | | $ | 91,378 | |
| Funds Sold and Interest Bearing Deposits | | | 27,419 | | | | 192,786 | | | | 241,202 | | | | 166,260 | | | | 19,599 | |
| Total Cash and Cash Equivalents | | | 98,481 | | | | 301,458 | | | | 338,727 | | | | 259,697 | | | | 110,977 | |
| | | | | | | | | | | | | | | | | | | | | |
| Investment Securities, Available-for-Sale | | | 193,978 | | | | 185,971 | | | | 186,944 | | | | 190,719 | | | | 184,609 | |
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| Loans, Net of Unearned Interest | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial, & Agricultural | | | 189,676 | | | | 196,075 | | | | 202,238 | | | | 208,864 | | | | 205,628 | |
| Real Estate - Construction | | | 148,160 | | | | 150,907 | | | | 152,060 | | | | 142,248 | | | | 145,343 | |
| Real Estate - Commercial | | | 639,443 | | | | 622,282 | | | | 624,826 | | | | 634,920 | | | | 631,418 | |
| Real Estate - Residential | | | 473,962 | | | | 481,397 | | | | 482,058 | | | | 481,150 | | | | 480,488 | |
| Real Estate - Home Equity | | | 212,118 | | | | 205,536 | | | | 197,093 | | | | 192,428 | | | | 183,620 | |
| Consumer | | | 252,743 | | | | 244,071 | | | | 238,663 | | | | 243,415 | | | | 246,137 | |
| Other Loans | | | 7,378 | | | | 9,436 | | | | 10,506 | | | | 7,222 | | | | 8,739 | |
| Overdrafts | | | 3,749 | | | | 7,111 | | | | 7,014 | | | | 5,603 | | | | 2,515 | |
| Total Loans, Net of Unearned Interest | | | 1,927,229 | | | | 1,916,815 | | | | 1,914,458 | | | | 1,915,850 | | | | 1,903,888 | |
| Allowance for Loan Losses | | | (30,544 | ) | | | (22,518 | ) | | | (20,277 | ) | | | (18,066 | ) | | | (18,001 | ) |
| Loans, Net | | | 1,896,685 | | | | 1,894,297 | | | | 1,894,181 | | | | 1,897,784 | | | | 1,885,887 | |
| | | | | | | | | | | | | | | | | | | | | |
| Premises and Equipment, Net | | | 104,806 | | | | 102,559 | | | | 100,145 | | | | 98,612 | | | | 95,816 | |
| Intangible Assets | | | 94,192 | | | | 95,651 | | | | 97,109 | | | | 98,568 | | | | 100,026 | |
| Other Assets | | | 66,308 | | | | 69,479 | | | | 75,406 | | | | 70,947 | | | | 62,611 | |
| Total Other Assets | | | 265,306 | | | | 267,689 | | | | 272,660 | | | | 268,127 | | | | 258,453 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,454,450 | | | $ | 2,649,415 | | | $ | 2,692,512 | | | $ | 2,616,327 | | | $ | 2,439,926 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest Bearing Deposits | | $ | 382,878 | | | $ | 416,992 | | | $ | 432,904 | | | $ | 432,659 | | | $ | 419,242 | |
| NOW Accounts | | | 698,509 | | | | 814,380 | | | | 800,128 | | | | 744,093 | | | | 530,619 | |
| Money Market Accounts | | | 368,453 | | | | 387,011 | | | | 381,474 | | | | 386,619 | | | | 399,578 | |
| Regular Savings Accounts | | | 116,858 | | | | 118,307 | | | | 116,018 | | | | 111,600 | | | | 115,955 | |
| Certificates of Deposit | | | 396,086 | | | | 426,236 | | | | 462,081 | | | | 467,373 | | | | 472,019 | |
| Total Deposits | | | 1,962,784 | | | | 2,162,926 | | | | 2,192,605 | | | | 2,142,344 | | | | 1,937,413 | |
| | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | | 47,069 | | | | 51,783 | | | | 61,781 | | | | 53,131 | | | | 63,817 | |
| Subordinated Notes Payable | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | |
| Other Long-Term Borrowings | | | 53,074 | | | | 36,857 | | | | 29,843 | | | | 26,731 | | | | 29,725 | |
| Other Liabilities | | | 29,841 | | | | 38,382 | | | | 47,723 | | | | 38,559 | | | | 47,031 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 2,155,655 | | | | 2,352,835 | | | | 2,394,839 | | | | 2,323,652 | | | | 2,140,873 | |
| | | | | | | | | | | | | | | | | | | | | |
| SHAREOWNERS' EQUITY | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | 171 | | | | 171 | | | | 172 | | | | 172 | | | | 176 | |
| Additional Paid-In Capital | | | 36,681 | | | | 36,382 | | | | 38,042 | | | | 38,243 | | | | 50,789 | |
| Retained Earnings | | | 267,853 | | | | 266,171 | | | | 264,538 | | | | 260,325 | | | | 255,876 | |
| Accumulated Other Comprehensive Loss, Net of Tax | | | (5,910 | ) | | | (6,144 | ) | | | (5,079 | ) | | | (6,065 | ) | | | (7,788 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Shareowners' Equity | | | 298,795 | | | | 296,580 | | | | 297,673 | | | | 292,675 | | | | 299,053 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareowners' Equity | | $ | 2,454,450 | | | $ | 2,649,415 | | | $ | 2,692,512 | | | $ | 2,616,327 | | | $ | 2,439,926 | |
| | | | | | | | | | | | | | | | | | | | | |
| OTHER BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | |
| Earning Assets | | $ | 2,148,626 | | | $ | 2,295,572 | | | $ | 2,342,604 | | | $ | 2,272,829 | | | $ | 2,108,096 | |
| Intangible Assets | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | |
| Deposit Base | | | 8,345 | | | | 9,756 | | | | 11,167 | | | | 12,578 | | | | 13,988 | |
| Other | | | 1,036 | | | | 1,084 | | | | 1,131 | | | | 1,179 | | | | 1,227 | |
| Interest Bearing Liabilities | | | 1,742,936 | | | | 1,897,461 | | | | 1,914,212 | | | | 1,852,434 | | | | 1,674,600 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book Value Per Diluted Share | | $ | 17.45 | | | $ | 17.33 | | | $ | 17.33 | | | $ | 17.03 | | | $ | 16.95 | |
| Tangible Book Value Per Diluted Share | | | 11.94 | | | | 11.74 | | | | 11.67 | | | | 11.30 | | | | 11.28 | |
| | | | | | | | | | | | | | | | | | | | | |
| Actual Basic Shares Outstanding | | | 17,125 | | | | 17,111 | | | | 17,175 | | | | 17,183 | | | | 17,628 | |
| Actual Diluted Shares Outstanding | | | 17,129 | | | | 17,112 | | | | 17,183 | | | | 17,184 | | | | 17,639 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| AND NONPERFORMING ASSETS | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | 2008 | | | 2008 | | | 2008 | | | 2007 | | | 2007 | |
| (Dollars in thousands) | | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | | | Third Quarter | |
| | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| Balance at Beginning of Period | | $ | 22,518 | | | $ | 20,277 | | | $ | 18,066 | | | $ | 18,001 | | | $ | 17,469 | |
| Provision for Loan Losses | | | 10,425 | | | | 5,432 | | | | 4,142 | | | | 1,699 | | | | 1,552 | |
| Net Charge-Offs | | | 2,399 | | | | 3,191 | | | | 1,931 | | | | 1,634 | | | | 1,020 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance at End of Period | | $ | 30,544 | | | $ | 22,518 | | | $ | 20,277 | | | $ | 18,066 | | | $ | 18,001 | |
| As a % of Loans | | | 1.59 | % | | | 1.18 | % | | | 1.06 | % | | | 0.95 | % | | | 0.95 | % |
| As a % of Nonperforming Loans | | | 48.55 | % | | | 51.80 | % | | | 54.32 | % | | | 71.92 | % | | | 145.49 | % |
| As a % of Nonperforming Assets | | | 45.10 | % | | | 47.12 | % | | | 49.34 | % | | | 64.15 | % | | | 128.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
| CHARGE-OFFS | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 275 | | | $ | 407 | | | $ | 636 | | | $ | 370 | | | $ | 279 | |
| Real Estate - Construction | | | 77 | | | | 158 | | | | 572 | | | | 58 | | | | - | |
| Real Estate - Commercial | | | (35 | ) | | | 1,115 | | | | 126 | | | | 133 | | | | 245 | |
| Real Estate - Residential | | | 797 | | | | 817 | | | | 176 | | | | 209 | | | | 161 | |
| Consumer | | | 1,797 | | | | 1,232 | | | | 1,170 | | | | 1,302 | | | | 854 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Charge-Offs | | $ | 2,911 | | | $ | 3,729 | | | $ | 2,680 | | | $ | 2,072 | | | $ | 1,539 | |
| | | | | | | | | | | | | | | | | | | | | |
| RECOVERIES | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 68 | | | $ | 55 | | | $ | 139 | | | $ | 47 | | | $ | 44 | |
| Real Estate - Construction | | | 4 | | | | - | | | | - | | | | - | | | | - | |
| Real Estate - Commercial | | | 1 | | | | 13 | | | | 1 | | | | 2 | | | | 2 | |
| Real Estate - Residential | | | 6 | | | | 24 | | | | 3 | | | | 5 | | | | 2 | |
| Consumer | | | 433 | | | | 446 | | | | 606 | | | | 384 | | | | 471 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Recoveries | | $ | 512 | | | $ | 538 | | | $ | 749 | | | $ | 438 | | | $ | 519 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET CHARGE-OFFS | | $ | 2,399 | | | $ | 3,191 | | | $ | 1,931 | | | $ | 1,634 | | | $ | 1,020 | |
Net Charge-Offs as a % of Average Loans(1) | | | 0.50 | % | | | 0.67 | % | | | 0.41 | % | | | 0.34 | % | | | 0.21 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RISK ELEMENT ASSETS | | | | | | | | | | | | | | | | | | | | |
| Nonaccruing Loans | | $ | 61,509 | | | $ | 41,738 | | | $ | 35,352 | | | $ | 25,120 | | | $ | 12,373 | |
| Restructured Loans | | | 1,403 | | | | 1,733 | | | | 1,980 | | | | - | | | | - | |
| Total Nonperforming Loans | | | 62,912 | | | | 43,471 | | | | 37,332 | | | | 25,120 | | | | 12,373 | |
| Other Real Estate | | | 4,813 | | | | 4,322 | | | | 3,768 | | | | 3,043 | | | | 1,685 | |
| Total Nonperforming Assets | | $ | 67,725 | | | $ | 47,793 | | | $ | 41,100 | | | $ | 28,163 | | | $ | 14,058 | |
| Past Due Loans 90 Days or More | | $ | 50 | | | $ | 896 | | | $ | 842 | | | $ | 416 | | | $ | 874 | |
| Nonperforming Loans as a % of Loans | | | 3.26 | % | | | 2.27 | % | | | 1.95 | % | | | 1.31 | % | | | 0.65 | % |
| Nonperforming Assets as a % of | | | | | | | | | | | | | | | | | | | | |
| Loans and Other Real Estate | | | 3.51 | % | | | 2.49 | % | | | 2.14 | % | | | 1.47 | % | | | 0.74 | % |
Nonperforming Assets as a % of Capital(2) | | | 20.56 | % | | | 14.98 | % | | | 12.93 | % | | | 9.06 | % | | | 4.43 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) Annualized | | | | | | | | | | | | | | | | | | | | |
| (2) Capital includes allowance for loan losses. | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCE AND INTEREST RATES(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Third Quarter 2008 | | | Second Quarter 2008 | | | First Quarter 2008 | | | Fourth Quarter 2007 | | | Third Quarter 2007 | | | September 2008 YTD | | | September 2007 YTD | |
| (Dollars in thousands) | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | | | Average Balance | | | Interest | | | Average Rate | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ASSETS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans, Net of Unearned Interest | | $ | 1,915,008 | | | | 32,622 | | | | 6.78 | % | | $ | 1,908,802 | | | | 33,610 | | | | 7.08 | % | | $ | 1,909,574 | | | | 35,452 | | | | 7.47 | % | | $ | 1,908,069 | | | | 37,969 | | | | 7.89 | % | | $ | 1,907,235 | | | | 38,901 | | | | 8.09 | % | | $ | 1,911,142 | | | | 101,684 | | | | 7.11 | % | | $ | 1,943,874 | | | | 117,465 | | | | 8.08 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable Investment Securities | | | 93,723 | | | | 940 | | | | 3.99 | % | | | 93,814 | | | | 1,028 | | | | 4.38 | % | | | 94,786 | | | | 1,108 | | | | 4.67 | % | | | 99,055 | | | | 1,226 | | | | 4.93 | % | | | 102,618 | | | | 1,224 | | | | 4.75 | % | | | 94,106 | | | | 3,076 | | | | 4.35 | % | | | 105,453 | | | | 3,723 | | | | 4.70 | % |
| Tax-Exempt Investment Securities | | | 98,966 | | | | 1,234 | | | | 4.99 | % | | | 94,371 | | | | 1,200 | | | | 5.09 | % | | | 90,790 | | | | 1,207 | | | | 5.32 | % | | | 87,358 | | | | 1,178 | | | | 5.39 | % | | | 85,446 | | | | 1,142 | | | | 5.35 | % | | | 94,725 | | | | 3,641 | | | | 5.13 | % | | | 84,003 | | | | 3,269 | | | | 5.19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Investment Securities | | | 192,689 | | | | 2,174 | | | | 4.50 | % | | | 188,185 | | | | 2,228 | | | | 4.73 | % | | | 185,576 | | | | 2,315 | | | | 4.99 | % | | | 186,413 | | | | 2,404 | | | | 5.15 | % | | | 188,064 | | | | 2,366 | | | | 5.02 | % | | | 188,831 | | | | 6,717 | | | | 4.74 | % | | | 189,456 | | | | 6,992 | | | | 4.92 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Funds Sold | | | 99,973 | | | | 475 | | | | 1.86 | % | | | 206,984 | | | | 1,028 | | | | 1.96 | % | | | 206,313 | | | | 1,574 | | | | 3.02 | % | | | 96,748 | | | | 1,064 | | | | 4.31 | % | | | 49,438 | | | | 639 | | | | 5.06 | % | | | 170,831 | | | | 3,077 | | | | 2.37 | % | | | 47,602 | | | | 1,849 | | | | 5.12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Earning Assets | | | 2,207,670 | | | $ | 35,271 | | | | 6.36 | % | | | 2,303,971 | | | $ | 36,866 | | | | 6.43 | % | | | 2,301,463 | | | $ | 39,341 | | | | 6.87 | % | | | 2,191,230 | | | $ | 41,437 | | | | 7.50 | % | | | 2,144,737 | | | $ | 41,906 | | | | 7.75 | % | | | 2,270,804 | | | $ | 111,478 | | | | 6.55 | % | | | 2,180,932 | | | $ | 126,306 | | | | 7.74 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | | 77,309 | | | | | | | | | | | | 82,182 | | | | | | | | | | | | 94,247 | | | | | | | | | | | | 85,598 | | | | | | | | | | | | 84,477 | | | | | | | | | | | | 84,552 | | | | | | | | | | | | 87,062 | | | | | | | | | |
| Allowance for Loan Losses | | | (22,851 | ) | | | | | | | | | | | (20,558 | ) | | | | | | | | | | | (18,227 | ) | | | | | | | | | | | (18,127 | ) | | | | | | | | | | | (17,664 | ) | | | | | | | | | | | (20,554 | ) | | | | | | | | | | | (17,336 | ) | | | | | | | | |
| Other Assets | | | 266,510 | | | | | | | | | | | | 269,176 | | | | | | | | | | | | 268,991 | | | | | | | | | | | | 260,981 | | | | | | | | | | | | 256,153 | | | | | | | | | | | | 268,220 | | | | | | | | | | | | 252,359 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,528,638 | | | | | | | | | | | $ | 2,634,771 | | | | | | | | | | | $ | 2,646,474 | | | | | | | | | | | $ | 2,519,682 | | | | | | | | | | | $ | 2,467,703 | | | | | | | | | | | $ | 2,603,022 | | | | | | | | | | | $ | 2,503,017 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Bearing Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW Accounts | | $ | 727,754 | | | $ | 1,443 | | | | 0.79 | % | | $ | 788,237 | | | $ | 1,935 | | | | 0.99 | % | | $ | 773,891 | | | $ | 3,440 | | | | 1.79 | % | | $ | 608,347 | | | $ | 2,980 | | | | 1.94 | % | | $ | 525,795 | | | $ | 2,531 | | | | 1.91 | % | | $ | 763,164 | | | $ | 6,818 | | | | 1.19 | % | | $ | 539,777 | | | $ | 7,768 | | | | 1.92 | % |
| Money Market Accounts | | | 369,544 | | | | 1,118 | | | | 1.20 | % | | | 376,996 | | | | 1,210 | | | | 1.29 | % | | | 389,828 | | | | 2,198 | | | | 2.27 | % | | | 404,406 | | | | 3,217 | | | | 3.16 | % | | | 403,957 | | | | 3,565 | | | | 3.50 | % | | | 378,756 | | | | 4,526 | | | | 1.60 | % | | | 394,762 | | | | 10,450 | | | | 3.54 | % |
| Savings Accounts | | | 117,970 | | | | 30 | | | | 0.10 | % | | | 117,182 | | | | 29 | | | | 0.10 | % | | | 113,163 | | | | 34 | | | | 0.12 | % | | | 113,527 | | | | 57 | | | | 0.20 | % | | | 117,451 | | | | 70 | | | | 0.24 | % | | | 116,112 | | | | 93 | | | | 0.11 | % | | | 121,781 | | | | 222 | | | | 0.24 | % |
| Time Deposits | | | 410,101 | | | | 3,224 | | | | 3.13 | % | | | 443,006 | | | | 3,988 | | | | 3.62 | % | | | 467,280 | | | | 4,809 | | | | 4.14 | % | | | 471,454 | | | | 5,069 | | | | 4.27 | % | | | 471,868 | | | | 5,100 | | | | 4.29 | % | | | 440,019 | | | | 12,021 | | | | 3.65 | % | | | 475,831 | | | | 14,924 | | | | 4.19 | % |
| Total Interest Bearing Deposits | | | 1,625,369 | | | | 5,815 | | | | 1.42 | % | | | 1,725,421 | | | | 7,162 | | | | 1.67 | % | | | 1,744,162 | | | | 10,481 | | | | 2.42 | % | | | 1,597,734 | | | | 11,323 | | | | 2.81 | % | | | 1,519,071 | | | | 11,266 | | | | 2.94 | % | | | 1,698,051 | | | | 23,458 | | | | 1.85 | % | | | 1,532,151 | | | | 33,364 | | | | 2.91 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | | 51,738 | | | | 230 | | | | 1.76 | % | | | 55,830 | | | | 296 | | | | 2.13 | % | | | 68,095 | | | | 521 | | | | 3.06 | % | | | 64,842 | | | | 639 | | | | 3.89 | % | | | 65,130 | | | | 734 | | | | 4.45 | % | | | 58,530 | | | | 1,047 | | | | 2.38 | % | | | 66,921 | | | | 2,232 | | | | 4.44 | % |
| Subordinated Notes Payable | | | 62,887 | | | | 936 | | | | 5.83 | % | | | 62,887 | | | | 931 | | | | 5.86 | % | | | 62,887 | | | | 931 | | | | 5.96 | % | | | 62,887 | | | | 936 | | | | 5.91 | % | | | 62,887 | | | | 936 | | | | 5.91 | % | | | 62,887 | | | | 2,798 | | | | 5.85 | % | | | 62,887 | | | | 2,794 | | | | 5.94 | % |
| Other Long-Term Borrowings | | | 43,237 | | | | 488 | | | | 4.48 | % | | | 34,612 | | | | 396 | | | | 4.60 | % | | | 27,644 | | | | 331 | | | | 4.82 | % | | | 28,215 | | | | 343 | | | | 4.83 | % | | | 38,269 | | | | 453 | | | | 4.70 | % | | | 35,194 | | | | 1,215 | | | | 4.61 | % | | | 41,212 | | | | 1,451 | | | | 4.71 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Interest Bearing Liabilities | | | 1,783,231 | | | $ | 7,469 | | | | 1.67 | % | | | 1,878,750 | | | $ | 8,785 | | | | 1.88 | % | | | 1,902,788 | | | $ | 12,264 | | | | 2.59 | % | | | 1,753,678 | | | $ | 13,241 | | | | 3.00 | % | | | 1,685,357 | | | $ | 13,389 | | | | 3.15 | % | | | 1,854,662 | | | $ | 28,518 | | | | 2.05 | % | | | 1,703,171 | | | $ | 39,841 | | | | 3.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest Bearing Deposits | | | 405,314 | | | | | | | | | | | | 415,125 | | | | | | | | | | | | 404,712 | | | | | | | | | | | | 419,002 | | | | | | | | | | | | 435,089 | | | | | | | | | | | | 408,372 | | | | | | | | | | | | 449,436 | | | | | | | | | |
| Other Liabilities | | | 36,498 | | | | | | | | | | | | 40,006 | | | | | | | | | | | | 42,170 | | | | | | | | | | | | 47,660 | | | | | | | | | | | | 45,721 | | | | | | | | | | | | 39,547 | | | | | | | | | | | | 41,341 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 2,225,043 | | | | | | | | | | | | 2,333,881 | | | | | | | | | | | | 2,349,670 | | | | | | | | | | | | 2,220,340 | | | | | | | | | | | | 2,166,167 | | | | | | | | | | | | 2,302,581 | | | | | | | | | | | | 2,193,948 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| SHAREOWNERS' EQUITY: | | $ | 303,595 | | | | | | | | | | | $ | 300,890 | | | | | | | | | | | $ | 296,804 | | | | | | | | | | | $ | 299,342 | | | | | | | | | | | $ | 301,536 | | | | | | | | | | | $ | 300,441 | | | | | | | | | | | $ | 309,069 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareowners' Equity | | $ | 2,528,638 | | | | | | | | | | | $ | 2,634,771 | | | | | | | | | | | $ | 2,646,474 | | | | | | | | | | | $ | 2,519,682 | | | | | | | | | | | $ | 2,467,703 | | | | | | | | | | | $ | 2,603,022 | | | | | | | | | | | $ | 2,503,017 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Rate Spread | | | | | | $ | 27,802 | | | | 4.69 | % | | | | | | $ | 28,081 | | | | 4.55 | % | | | | | | $ | 27,077 | | | | 4.28 | % | | | | | | $ | 28,196 | | | | 4.50 | % | | | | | | $ | 28,517 | | | | 4.60 | % | | | | | | $ | 82,960 | | | | 4.50 | % | | | | | | $ | 86,465 | | | | 4.61 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income and Rate Earned(1) | | | $ | 35,271 | | | | 6.36 | % | | | | | | $ | 36,866 | | | | 6.43 | % | | | | | | $ | 39,341 | | | | 6.87 | % | | | | | | $ | 41,437 | | | | 7.50 | % | | | | | | $ | 41,906 | | | | 7.75 | % | | | | | | $ | 111,478 | | | | 6.55 | % | | | | | | $ | 126,306 | | | | 7.74 | % |
Interest Expense and Rate Paid(2) | | | | | | | 7,469 | | | | 1.35 | % | | | | | | | 8,785 | | | | 1.53 | % | | | | | | | 12,264 | | | | 2.14 | % | | | | | | | 13,241 | | | | 2.40 | % | | | | | | | 13,389 | | | | 2.48 | % | | | | | | | 28,518 | | | | 1.68 | % | | | | | | | 39,841 | | | | 2.44 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Interest Margin | | | | | | $ | 27,802 | | | | 5.01 | % | | | | | | $ | 28,081 | | | | 4.90 | % | | | | | | $ | 27,077 | | | | 4.73 | % | | | | | | $ | 28,196 | | | | 5.10 | % | | | | | | $ | 28,517 | | | | 5.27 | % | | | | | | $ | 82,960 | | | | 4.87 | % | | | | | | $ | 86,465 | | | | 5.30 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| (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. |
