Capital City Bank Group, Inc.
Reports Third Quarter 2012 Results
TALLAHASSEE, Fla. (October 23, 2012) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $1.1 million, or $0.07 per diluted share, for the third quarter of 2012, compared to a net loss of $1.7 million, or $0.10 per diluted share, for the second quarter of 2012, and net income of $2.0 million, or $0.12 per diluted share, for the third quarter of 2011. For the first nine months of 2012, the Company reported a net loss of $1.8 million, or $0.10 per diluted share, compared to net income of $5.4 million, or $0.32 per diluted share, for the same period in 2011.
Compared to the second quarter of 2012, the increase in earnings reflects a lower loan loss provision of $2.9 million, and a $2.1 million decline in noninterest expense, partially offset by lower operating revenues (net interest income plus noninterest income) of $0.4 million and higher income taxes of $1.8 million.
Compared to the third quarter of 2011, the reduction in earnings was due to lower operating revenues of $2.7 million partially offset by a $0.9 million decrease in the loan loss provision, a $0.4 million reduction in noninterest expense, and lower income taxes of $0.5 million.
The decrease in earnings for the nine month period ended September 30, 2012 is attributable to lower operating revenues of $9.7 million, and a higher loan loss provision of $2.0 million, partially offset by lower noninterest expense of $0.1 million and income taxes of $4.4 million. Earnings in 2011 reflect the sale of our Visa Class B shares of stock which resulted in a net pre-tax gain of $2.6 million ($3.2 million pre-tax gain included in noninterest income and recognition of a $0.6 million swap liability included in noninterest expense).
“While the economy remains challenging, our pre-tax, pre-credit cost operating income improved as we continued to trim expenses,” said William G. Smith, Jr., Chairman, President and CEO. “Credit quality remains a top priority and continues to improve. Nonperforming assets declined as did our past due loans and net charge-offs; and our retail strategy for the disposition of problem assets continues to produce results, which we believe are in the best interest of our shareowners. A modest level of loss in newly identified problem loans coupled with less severe valuation adjustments on our other real estate owned properties have contributed to lower credit costs and improved profitability. As we have stated all along, we don’t expect the path forward to be linear and anticipate quarterly performance will continue to be choppy, but when viewed on an annual basis, we are clearly making progress and are optimistic about the future,” said Smith.
The Return on Average Assets was 0.17% and the Return on Average Equity was 1.77% for the third quarter of 2012. These metrics were -0.26% and -2.75% for the second quarter of 2012, and 0.31% and 2.97% for the third quarter of 2011, respectively.
For the first nine months of 2012, the Return on Average Assets was -0.09% and the Return on Average Equity was -0.93% compared to 0.28% and 2.77%, respectively, for the same period in 2011.
Discussion of Financial Condition
Average earning assets were $2.209 billion for the third quarter of 2012, a decrease of $53.7 million, or 2.4%, from the second quarter of 2012, and an increase of $62.7 million, or 2.9%, over the fourth quarter of 2011. As compared to the second quarter of 2012, the decline in average earning assets is attributable to a lower level of overnight funds resulting from a decline in deposits and the resolution of problem loans. The shift in the mix of earning assets continued as the loan portfolio declined when compared to the prior quarter. The increase in average earning assets compared to the fourth quarter of 2011 primarily reflects the higher level of deposits resulting from the seasonal influx of public funds.
We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $386.0 million during the third quarter of 2012 compared to an average net overnight funds sold position of $411.3 million in the second quarter of 2012 and an average overnight funds sold position of $191.8 million in the fourth quarter of 2011. The lower balance when compared to the second quarter of 2012 reflects lower levels of public fund deposits partially offset by a decrease in the loan portfolio. The higher balances when compared to the fourth quarter of 2011 reflect higher levels of public funds and savings accounts, in addition to lower balances in the loan and investment portfolios.
When compared to the second quarter of 2012 and the fourth quarter of 2011, average loans declined by $29.6 million and $105.5 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential categories. Our core loan portfolio continues to be impacted by normal amortization and a higher level of payoffs that have outpaced our new loan production. New loan production continues to be impacted by weak loan demand attributable to the trend toward consumers and businesses deleveraging, the lack of consumer confidence, and a persistently sluggish economy.
The resolution of problem loans (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to other real estate owned “OREO”) also contributed to the overall decline. During the third quarter of 2012, loan charge-offs and loans transferred to OREO accounted for $6.0 million, or 26%, of the net reduction in total loans of $22.9 million from the second quarter of 2012. Compared to the fourth quarter of 2011, loan resolution accounted for $31.3 million, or 33%, of the net reduction in loans of $95.4 million1.
Nonperforming assets (nonaccrual loans and OREO) totaled $127.2 million at the end of the third quarter of 2012 compared to $132.8 million at the end of the second quarter of 2012 and $137.6 million at the end of the fourth quarter of 2011. Nonaccrual loans totaled $74.1 million, a decrease of $0.7 million from the second quarter of 2012 and $0.9 million from the fourth quarter of 2011, reflective of loan charge-offs and the migration of loans to OREO, which outpaced gross additions. Gross additions to nonaccrual status were up slightly during the third quarter, but have slowed noticeably during the first nine months of 2012. The balance of OREO totaled $53.2 million at the end of the third quarter, a $4.9 million decrease from the second quarter of 2012 and $9.4 million from the fourth quarter of 2011. We continue to experience progress in our efforts to dispose of OREO by selling properties totaling $20.1 million during the first nine months of 2012. Nonperforming assets represented 5.10% of total assets at September 30, 2012 compared to 5.02% at June 30, 2012 and 5.21% at December 31, 2011.
Average total deposits were $2.075 billion for the third quarter of 2012, a decrease of $60.2 million, or 2.8%, from the second quarter of 2012 and higher by $42.5 million, or 2.1%, from the fourth quarter of 2011. The decrease in deposits when compared to the second quarter of 2012 resulted from lower public funds and certificates of deposit, partially offset by growth in noninterest bearing accounts, regular savings, and money market accounts. Compared to the fourth quarter of 2011, the increase was driven primarily by higher public fund balances, savings and noninterest bearing deposits. This was partially offset by a reduction of certificates of deposit. The seasonal low in public fund balances generally occurs in the fourth quarter, and these balances are anticipated to increase through the first quarter of 2013.
Our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts. Prudent pricing discipline will continue to be the key to managing our mix of deposits. Therefore, we do not attempt to compete with higher rate paying competitors for deposits.
During the fourth quarter of 2012, we may realize some attrition in noninterest bearing deposit balances due to the unlimited government guarantee on noninterest bearing accounts, which if not extended, is set to expire at year-end. Our average noninterest bearing deposits represented 29.2% of our total deposits during the third quarter of 2012.
Borrowings decreased by $0.9 million when compared to the second quarter of 2012 as a result of lower balances in repurchase agreements, and were higher by $8.1 million when compared to the fourth quarter of 2011, as a result of higher balances in repurchase agreements.
1 The reductions in loan portfolio balances stated in this paragraph are based on “as of” balances, not averages.
Discussion of Operating Results
Tax equivalent net interest income for the third quarter of 2012 was $21.2 million, which is comparable to the second quarter of 2012, and down from $23.3 million for the third quarter of 2011. For the nine months ended September 30, 2012, tax equivalent net interest income totaled $64.2 million compared to $70.3 million for the same period of 2011. Factors affecting net interest income relative to the second quarter of 2012 include a reduction in loan income attributable to declining loan balances, primarily offset by one additional calendar day and interest recoveries. When compared to the three and nine month periods of 2011, the decrease was primarily driven by declines in loan income attributable to lower portfolio balances, which was partially offset by a reduction in interest expense. The lower interest expense is primarily attributable to certificates of deposit and reflects both lower balances and favorable repricing.
The decline in the loan portfolio, coupled with the low rate environment continues to put pressure on our net interest income. The loan portfolio yield is declining as the existing portfolio reprices. Lowering our cost of funds, to the extent we can, and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and repricing, although the impact is expected to be minimal.
| | The net interest margin for the third quarter of 2012 was 3.82%, an increase of 5 basis points from the second quarter of 2012 and a decline of 38 basis points from the third quarter of 2011. Year-to-date net interest margin of 3.81% declined 37 basis points from the comparable period in 2011. The increase in margin compared to the linked quarter reflects a lower level of earning assets and higher interest recoveries. The decrease in the margin compared to the third quarter of 2011 and year-to-date is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds. |
| | The provision for loan losses for the third quarter of 2012 was $2.9 million compared to $5.7 million in the second quarter of 2012 and $3.7 million for the third quarter of 2011. The decrease from both periods was driven by slower problem loan migration and lower net charge-offs resulting in a favorable impact on our general reserve allocation. For the first nine months of 2012, the loan loss provision totaled $13.4 million compared to $11.4 million for the same period in 2011 with the increase primarily attributable to an increase in impaired loans. Net charge-offs for the third quarter of 2012 totaled $2.6 million, or 0.66%, of average loans (annualized) compared to $7.0 million, or 1.80%, for the second quarter of 2012 and $5.1 million, or 1.22%, in the third quarter of 2011. For the first nine months of 2012, net charge-offs totaled $14.2 million, or 1.21%, of average loans (annualized) compared to $17.2 million, or 1.35%, for the same period of 2011. At quarter-end, the allowance for loan losses of $30.2 million was 1.97% of outstanding loans (net of overdrafts) and provided coverage of 41% of nonperforming loans compared to 1.93% and 40%, respectively, at June 30, 2012, and 1.91% and 41%, respectively, at December 31, 2011. |
Noninterest income for the third quarter of 2012 totaled $13.6 million, a decrease of $0.3 million, or 2.4%, from the second quarter of 2012 and a decrease of $0.6 million, or 4.4%, from the third quarter of 2011. The decrease from the second quarter of 2012 was driven primarily by lower wealth management fees (trust fees and retail brokerage fees) of $0.2 million and bank card fees of $0.2 million, partially offset by higher mortgage banking fees of $0.1 million. Compared to the third quarter of 2011, the decrease primarily reflects a reduction in deposit fees of $0.2 million, wealth management fees of $0.2 million, data processing fees of $0.1 million, and other income of $0.5 million, partially offset by higher mortgage banking fees of $0.3 million. For the first nine months of 2012, noninterest income totaled $41.1 million, a decrease of $3.9 million from the same period of 2011 reflective of lower data processing fees of $0.4 million, wealth management fees of $0.4 million, and other income of $4.6 million, partially offset by higher mortgage banking fees of $0.9 million and bank card fees of $0.5 million. Data processing fees declined due to a reduction in the number of banks that we process for as two of our user banks were acquired and discontinued service in early 2011. The reduction in wealth management fees reflects a decline in trust fees reflective of a lower level of assets under management due to account distributions, and a decrease in retail brokerage fees due to lower client trading activity. The decrease in other income was primarily attributable to the Visa gain realized in the first quarter of 2011 and a lower level of gains from the sale of OREO properties. Increased loan origination drove the higher level of mortgage banking fees reflecting increased home purchase activity in our markets. The increase in bank card fees was attributable to an increase in active cards and higher card utilization.
Noninterest expense for the third quarter of 2012 totaled $30.2 million, a decrease of $2.1 million, or 6.5%, from the second quarter of 2012 and $0.4 million, or 1.5%, from the third quarter of 2011. The decrease compared to the second quarter of 2012 reflects a reduction in salaries/associate benefit expense of $0.6 million, OREO expense of $0.8 million, and other expense of $0.7 million. The decrease in salaries/associate benefit expense was due to lower associate salary expense reflective of lower headcount, pension plan expense, and associate insurance expense. A decline in valuation adjustments drove the decrease in OREO expense. Other expense declined due to lower advertising fees and professional fees, as well as one-time severance costs that were recorded in the second quarter of 2012. Lower salaries/associate benefit expense and occupancy expense drove the decrease compared to the third quarter of 2011.
For the first nine months of 2012, noninterest expense totaled $95.1 million, a decrease of $0.1 million from the same period of 2011 attributable to lower occupancy expense of $0.5 million and intangible amortization expense of $0.2 million, partially offset by higher furniture/equipment expense of $0.2 million, OREO expense of $0.3 million, and salaries/associate benefit expense of $0.1 million. A decrease in building maintenance/repairs and utility expense drove the decline in occupancy expense. The reduction in intangible amortization expense reflects the full amortization of certain core deposit intangibles related to past acquisitions. Higher software and maintenance costs for newly implemented information systems drove the increase in furniture/equipment expense. A slightly higher level of carrying costs and valuation adjustments drove the increase in ORE expense. The slight net increase in salaries/associate benefit expense reflects higher pension plan expense that was partially offset by lower expense for associate salaries and performance compensation. Utilization of a lower discount rate in 2012 due to lower long-term bond interest rates drove the aforementioned increase in pension plan expense.
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 66 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the Company’s need and our ability to incur additional debt or equity financing; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate used for the Company’s loan loss provision and deferred tax valuation allowance; continued depression of the market value of the Company that could result in an impairment of goodwill; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company’s loans; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; the effects of the health and soundness of other financial institutions, including the FDIC’s need to increase Deposit Insurance Fund assessments; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; 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 impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; 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; the Company’s ability to integrate acquisitions; 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, 2011, 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.
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| EARNINGS HIGHLIGHTS | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | | | | Nine Months Ended | |
| (Dollars in thousands, except per share data) | | Sep 30, 2012 | | | Jun 30, 2012 | | | Sep 30, 2011 | | | Sep 30, 2012 | | | Sep 30, 2011 | |
| | | | | | | | | | | | | | | | |
| EARNINGS | | | | | | | | | | | | | | | |
| Net Income (Loss) | | $ | 1,121 | | | $ | (1,726 | ) | | $ | 1,977 | | | $ | (1,767 | ) | | $ | 5,432 | |
| Net Income (Loss) Per Common Share | | $ | 0.07 | | | $ | (0.10 | ) | | $ | 0.12 | | | $ | (0.10 | ) | | $ | 0.32 | |
| PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| Return on Average Equity | | | 1.77 | % | | | -2.75 | % | | | 2.97 | % | | | -0.93 | % | | | 2.77 | % |
| Return on Average Assets | | | 0.17 | % | | | -0.26 | % | | | 0.31 | % | | | -0.09 | % | | | 0.28 | % |
| Net Interest Margin | | | 3.82 | % | | | 3.77 | % | | | 4.20 | % | | | 3.81 | % | | | 4.18 | % |
| Noninterest Income as % of Operating Revenue | | | 39.31 | % | | | 39.88 | % | | | 38.14 | % | | | 39.28 | % | | | 39.38 | % |
| Efficiency Ratio | | | 87.68 | % | | | 90.88 | % | | | 81.40 | % | | | 90.12 | % | | | 82.07 | % |
| CAPITAL ADEQUACY | | | | | | | | | | | | | | | | | | | | |
| Tier 1 Capital Ratio | | | 14.43 | % | | | 14.17 | % | | | 14.05 | % | | | 14.43 | % | | | 14.05 | % |
| Total Capital Ratio | | | 15.80 | % | | | 15.54 | % | | | 15.41 | % | | | 15.80 | % | | | 15.41 | % |
| Tangible Common Equity Ratio | | | 6.86 | % | | | 6.40 | % | | | 7.19 | % | | | 6.86 | % | | | 7.19 | % |
| Leverage Ratio | | | 9.83 | % | | | 9.60 | % | | | 10.20 | % | | | 9.83 | % | | | 10.20 | % |
| Equity to Assets | | | 10.04 | % | | | 9.41 | % | | | 10.34 | % | | | 10.04 | % | | | 10.34 | % |
| ASSET QUALITY | | | | | | | | | | | | | | | | | | | | |
| Allowance as % of Non-Performing Loans | | | 40.80 | % | | | 40.03 | % | | | 55.54 | % | | | 40.80 | % | | | 55.54 | % |
| Allowance as a % of Loans | | | 1.97 | % | | | 1.93 | % | | | 1.79 | % | | | 1.97 | % | | | 1.79 | % |
| Net Charge-Offs as % of Average Loans | | | 0.66 | % | | | 1.80 | % | | | 1.22 | % | | | 1.21 | % | | | 1.35 | % |
| Nonperforming Assets as % of Loans and ORE | | | 8.02 | % | | | 8.23 | % | | | 6.67 | % | | | 8.02 | % | | | 6.67 | % |
| Nonperforming Assets as % of Total Assets | | | 5.10 | % | | | 5.02 | % | | | 4.54 | % | | | 5.10 | % | | | 4.54 | % |
| STOCK PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 10.96 | | | $ | 8.73 | | | $ | 11.18 | | | $ | 10.96 | | | $ | 13.80 | |
| Low | | | 7.00 | | | | 6.35 | | | | 9.81 | | | | 6.35 | | | | 9.81 | |
| Close | | | 10.64 | | | | 7.37 | | | | 10.38 | | | | 10.64 | | | | 10.38 | |
| Average Daily Trading Volume | | $ | 23,737 | | | $ | 37,926 | | | $ | 43,483 | | | $ | 28,826 | | | $ | 31,783 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 2012 | | | 2011 | |
| (Dollars in thousands) | | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | | | Third Quarter | |
| ASSETS | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 53,076 | | | $ | 57,477 | | | $ | 50,567 | | | $ | 54,953 | | | $ | 53,027 | |
| Funds Sold and Interest Bearing Deposits | | | 314,318 | | | | 434,814 | | | | 418,678 | | | | 330,361 | | | | 193,387 | |
| Total Cash and Cash Equivalents | | | 367,394 | | | | 492,291 | | | | 469,245 | | | | 385,314 | | | | 246,414 | |
| | | | | | | | | | | | | | | | | | | | | |
| Investment Securities, Available-for-Sale | | | 288,166 | | | | 280,753 | | | | 284,490 | | | | 307,149 | | | | 306,038 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans, Net of Unearned Interest | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial, & Agricultural | | | 135,939 | | | | 136,736 | | | | 132,119 | | | | 130,879 | | | | 142,511 | |
| Real Estate - Construction | | | 43,278 | | | | 46,803 | | | | 34,554 | | | | 26,367 | | | | 31,991 | |
| Real Estate - Commercial | | | 609,671 | | | | 605,819 | | | | 624,528 | | | | 639,140 | | | | 644,128 | |
| Real Estate - Residential | | | 341,044 | | | | 353,198 | | | | 364,123 | | | | 386,877 | | | | 388,686 | |
| Real Estate - Home Equity | | | 239,446 | | | | 242,929 | | | | 240,800 | | | | 244,263 | | | | 245,438 | |
| Consumer | | | 154,389 | | | | 162,899 | | | | 174,132 | | | | 186,216 | | | | 188,933 | |
| Other Loans | | | 6,891 | | | | 5,638 | | | | 6,555 | | | | 12,495 | | | | 13,720 | |
| Overdrafts | | | 2,637 | | | | 2,214 | | | | 2,073 | | | | 2,446 | | | | 2,292 | |
| Total Loans, Net of Unearned Interest | | | 1,533,295 | | | | 1,556,236 | | | | 1,578,884 | | | | 1,628,683 | | | | 1,657,699 | |
| Allowance for Loan Losses | | | (30,222 | ) | | | (29,929 | ) | | | (31,217 | ) | | | (31,035 | ) | | | (29,658 | ) |
| Loans, Net | | | 1,503,073 | | | | 1,526,307 | | | | 1,547,667 | | | | 1,597,648 | | | | 1,628,041 | |
| | | | | | | | | | | | | | | | | | | | | |
| Premises and Equipment, Net | | | 109,003 | | | | 110,302 | | | | 111,408 | | | | 110,991 | | | | 111,471 | |
| Intangible Assets | | | 85,161 | | | | 85,269 | | | | 85,376 | | | | 85,484 | | | | 85,591 | |
| Other Real Estate Owned | | | 53,172 | | | | 58,059 | | | | 58,100 | | | | 62,600 | | | | 61,196 | |
| Other Assets | | | 87,815 | | | | 92,869 | | | | 103,992 | | | | 92,126 | | | | 85,221 | |
| Total Other Assets | | | 335,151 | | | | 346,499 | | | | 358,876 | | | | 351,201 | | | | 343,479 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,493,784 | | | $ | 2,645,850 | | | $ | 2,660,278 | | | $ | 2,641,312 | | | $ | 2,523,972 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest Bearing Deposits | | $ | 596,660 | | | $ | 623,130 | | | $ | 605,774 | | | $ | 618,317 | | | $ | 584,628 | |
| NOW Accounts | | | 703,327 | | | | 789,103 | | | | 845,149 | | | | 828,990 | | | | 708,066 | |
| Money Market Accounts | | | 285,084 | | | | 288,352 | | | | 283,224 | | | | 276,910 | | | | 280,001 | |
| Regular Savings Accounts | | | 181,523 | | | | 178,388 | | | | 172,262 | | | | 158,462 | | | | 154,136 | |
| Certificates of Deposit | | | 254,000 | | | | 271,413 | | | | 279,295 | | | | 289,840 | | | | 316,968 | |
| Total Deposits | | | 2,020,594 | | | | 2,150,386 | | | | 2,185,704 | | | | 2,172,519 | | | | 2,043,798 | |
| | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | | 42,388 | | | | 69,449 | | | | 42,188 | | | | 43,372 | | | | 47,508 | |
| Subordinated Notes Payable | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | |
| Other Long-Term Borrowings | | | 38,126 | | | | 38,846 | | | | 42,826 | | | | 44,606 | | | | 45,389 | |
| Other Liabilities | | | 79,427 | | | | 75,260 | | | | 75,876 | | | | 65,986 | | | | 63,465 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 2,243,422 | | | | 2,396,828 | | | | 2,409,481 | | | | 2,389,370 | | | | 2,263,047 | |
| | | | | | | | | | | | | | | | | | | | | |
| SHAREOWNERS' EQUITY | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | 172 | | | | 172 | | | | 172 | | | | 172 | | | | 172 | |
| Additional Paid-In Capital | | | 38,493 | | | | 38,260 | | | | 38,101 | | | | 37,838 | | | | 38,074 | |
| Retained Earnings | | | 235,694 | | | | 234,573 | | | | 236,299 | | | | 237,461 | | | | 237,969 | |
| Accumulated Other Comprehensive Loss, Net of Tax | | | (23,997 | ) | | | (23,983 | ) | | | (23,775 | ) | | | (23,529 | ) | | | (15,290 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Shareowners' Equity | | | 250,362 | | | | 249,022 | | | | 250,797 | | | | 251,942 | | | | 260,925 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareowners' Equity | | $ | 2,493,784 | | | $ | 2,645,850 | | | $ | 2,660,278 | | | $ | 2,641,312 | | | $ | 2,523,972 | |
| | | | | | | | | | | | | | | | | | | | | |
| OTHER BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | |
| Earning Assets | | $ | 2,135,779 | | | $ | 2,271,803 | | | $ | 2,282,053 | | | $ | 2,266,193 | | | $ | 2,157,124 | |
| Intangible Assets | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | |
| Core Deposits | | | 79 | | | | 139 | | | | 198 | | | | 258 | | | | 318 | |
| Other | | | 271 | | | | 319 | | | | 367 | | | | 415 | | | | 462 | |
| Interest Bearing Liabilities | | | 1,567,335 | | | | 1,698,438 | | | | 1,727,831 | | | | 1,705,066 | | | | 1,614,954 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book Value Per Diluted Share | | $ | 14.54 | | | $ | 14.48 | | | $ | 14.60 | | | $ | 14.68 | | | $ | 15.20 | |
| Tangible Book Value Per Diluted Share | | | 9.59 | | | | 9.52 | | | | 9.63 | | | | 9.70 | | | | 10.21 | |
| | | | | | | | | | | | | | | | | | | | | |
| Actual Basic Shares Outstanding | | | 17,223 | | | | 17,198 | | | | 17,182 | | | | 17,160 | | | | 17,157 | |
| Actual Diluted Shares Outstanding | | | 17,223 | | | | 17,198 | | | | 17,182 | | | | 17,161 | | | | 17,172 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF OPERATIONS | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Nine Months Ended | |
| | | 2012 | | | 2011 | | | September 30, | |
| (Dollars in thousands, except per share data) | | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | | | Third Quarter | | | 2012 | | | 2011 | |
| | | | | | | | | | | | | | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 21,274 | | | $ | 21,359 | | | $ | 22,005 | | | $ | 22,915 | | | $ | 23,777 | | | $ | 64,638 | | | $ | 72,029 | |
| Investment Securities | | | 798 | | | | 834 | | | | 900 | | | | 902 | | | | 978 | | | | 2,532 | | | | 3,066 | |
| Funds Sold | | | 254 | | | | 244 | | | | 225 | | | | 95 | | | | 136 | | | | 723 | | | | 452 | |
| Total Interest Income | | | 22,326 | | | | 22,437 | | | | 23,130 | | | | 23,912 | | | | 24,891 | | | | 67,893 | | | | 75,547 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 480 | | | | 556 | | | | 643 | | | | 699 | | | | 907 | | | | 1,679 | | | | 3,248 | |
| Short-Term Borrowings | | | 71 | | | | 48 | | | | 8 | | | | 6 | | | | 78 | | | | 127 | | | | 299 | |
| Subordinated Notes Payable | | | 372 | | | | 372 | | | | 382 | | | | 358 | | | | 339 | | | | 1,126 | | | | 1,022 | |
| Other Long-Term Borrowings | | | 372 | | | | 396 | | | | 436 | | | | 452 | | | | 467 | | | | 1,204 | | | | 1,453 | |
| Total Interest Expense | | | 1,295 | | | | 1,372 | | | | 1,469 | | | | 1,515 | | | | 1,791 | | | | 4,136 | | | | 6,022 | |
| Net Interest Income | | | 21,031 | | | | 21,065 | | | | 21,661 | | | | 22,397 | | | | 23,100 | | | | 63,757 | | | | 69,525 | |
| Provision for Loan Losses | | | 2,864 | | | | 5,743 | | | | 4,793 | | | | 7,600 | | | | 3,718 | | | | 13,400 | | | | 11,396 | |
| Net Interest Income after Provision for Loan Losses | | | 18,167 | | | | 15,322 | | | | 16,868 | | | | 14,797 | | | | 19,382 | | | | 50,357 | | | | 58,129 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 6,406 | | | | 6,313 | | | | 6,309 | | | | 6,530 | | | | 6,629 | | | | 19,028 | | | | 18,921 | |
| Data Processing Fees | | | 687 | | | | 680 | | | | 675 | | | | 743 | | | | 749 | | | | 2,042 | | | | 2,487 | |
Asset Management Fees(1) | | | 1,020 | | | | 1,020 | | | | 1,015 | | | | 1,124 | | | | 1,080 | | | | 3,055 | | | | 3,240 | |
Retail Brokerage Fees(1) | | | 666 | | | | 884 | | | | 758 | | | | 776 | | | | 807 | | | | 2,308 | | | | 2,475 | |
| Mortgage Banking Fees | | | 978 | | | | 864 | | | | 848 | | | | 845 | | | | 645 | | | | 2,690 | | | | 1,830 | |
Interchange Fees (2) | | | 1,619 | | | | 1,580 | | | | 1,526 | | | | 1,399 | | | | 1,420 | | | | 4,725 | | | | 4,223 | |
ATM/Debit Card Fees (2) | | | 997 | | | | 1,204 | | | | 1,245 | | | | 1,098 | | | | 1,170 | | | | 3,446 | | | | 3,421 | |
| Other | | | 1,202 | | | | 1,361 | | | | 1,210 | | | | 1,358 | | | | 1,693 | | | | 3,773 | | | | 8,378 | |
| Total Noninterest Income | | | 13,575 | | | | 13,906 | | | | 13,586 | | | | 13,873 | | | | 14,193 | | | | 41,067 | | | | 44,975 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Associate Benefits | | | 15,510 | | | | 16,117 | | | | 16,843 | | | | 15,260 | | | | 15,805 | | | | 48,470 | | | | 48,382 | |
| Occupancy, Net | | | 2,332 | | | | 2,276 | | | | 2,266 | | | | 2,284 | | | | 2,495 | | | | 6,874 | | | | 7,338 | |
| Furniture and Equipment | | | 2,245 | | | | 2,245 | | | | 2,201 | | | | 2,097 | | | | 2,118 | | | | 6,691 | | | | 6,461 | |
| Intangible Amortization | | | 108 | | | | 107 | | | | 108 | | | | 107 | | | | 108 | | | | 323 | | | | 568 | |
| Other Real Estate | | | 2,616 | | | | 3,460 | | | | 3,513 | | | | 3,425 | | | | 2,542 | | | | 9,589 | | | | 9,252 | |
| Other | | | 7,390 | | | | 8,088 | | | | 7,666 | | | | 7,930 | | | | 7,579 | | | | 23,144 | | | | 23,144 | |
| Total Noninterest Expense | | | 30,201 | | | | 32,293 | | | | 32,597 | | | | 31,103 | | | | 30,647 | | | | 95,091 | | | | 95,145 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OPERATING PROFIT (LOSS) | | | 1,541 | | | | (3,065 | ) | | | (2,143 | ) | | | (2,433 | ) | | | 2,928 | | | | (3,667 | ) | | | 7,959 | |
| Income Tax Expense (Benefit) | | | 420 | | | | (1,339 | ) | | | (981 | ) | | | (1,898 | ) | | | 951 | | | | (1,900 | ) | | | 2,527 | |
| NET INCOME (LOSS) | | $ | 1,121 | | | $ | (1,726 | ) | | $ | (1,162 | ) | | $ | (535 | ) | | $ | 1,977 | | | $ | (1,767 | ) | | $ | 5,432 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic Income (Loss) | | $ | 0.07 | | | $ | (0.10 | ) | | $ | (0.07 | ) | | $ | (0.03 | ) | | $ | 0.12 | | | $ | (0.10 | ) | | $ | 0.32 | |
| Diluted Income (Loss) | | $ | 0.07 | | | $ | (0.10 | ) | | $ | (0.07 | ) | | $ | (0.03 | ) | | $ | 0.12 | | | $ | (0.10 | ) | | $ | 0.32 | |
| Cash Dividends | | | 0.000 | | | | 0.000 | | | | 0.000 | | | | 0.000 | | | | 0.100 | | | | 0.000 | | | | 0.300 | |
| AVERAGE SHARES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 17,215 | | | | 17,192 | | | | 17,181 | | | | 17,157 | | | | 17,152 | | | | 17,196 | | | | 17,134 | |
| Diluted | | | 17,228 | | | | 17,192 | | | | 17,181 | | | | 17,157 | | | | 17,167 | | | | 17,196 | | | | 17,143 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Together referred to as "Wealth Management Fees" | | | | | | | | | | | | | | | | | | | | | |
(2) Together referred to as "Bank Card Fees" | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| AND NONPERFORMING ASSETS | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | 2012 | | | 2012 | | | 2012 | | | 2011 | | | 2011 | |
| (Dollars in thousands, except per share data) | | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | | | Third Quarter | |
| | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| Balance at Beginning of Period | | $ | 29,929 | | | $ | 31,217 | | | $ | 31,035 | | | $ | 29,658 | | | $ | 31,080 | |
| Provision for Loan Losses | | | 2,864 | | | | 5,743 | | | | 4,793 | | | | 7,600 | | | | 3,718 | |
| Net Charge-Offs | | | 2,571 | | | | 7,031 | | | | 4,611 | | | | 6,223 | | | | 5,140 | |
| Balance at End of Period | | $ | 30,222 | | | $ | 29,929 | | | $ | 31,217 | | | $ | 31,035 | | | $ | 29,658 | |
| As a % of Loans | | | 1.97 | % | | | 1.93 | % | | | 1.98 | % | | | 1.91 | % | | | 1.79 | % |
| As a % of Nonperforming Loans | | | 40.80 | % | | | 40.03 | % | | | 39.65 | % | | | 41.37 | % | | | 55.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| CHARGE-OFFS | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 331 | | | $ | 57 | | | $ | 268 | | | $ | 634 | | | $ | 186 | |
| Real Estate - Construction | | | 127 | | | | 275 | | | | - | | | | 25 | | | | 75 | |
| Real Estate - Commercial | | | 512 | | | | 3,519 | | | | 1,532 | | | | 2,443 | | | | 1,031 | |
| Real Estate - Residential | | | 981 | | | | 3,894 | | | | 1,967 | | | | 2,755 | | | | 3,287 | |
| Real Estate - Home Equity | | | 834 | | | | 425 | | | | 892 | | | | 205 | | | | 580 | |
| Consumer | | | 355 | | | | 550 | | | | 732 | | | | 879 | | | | 832 | |
| Total Charge-Offs | | $ | 3,140 | | | $ | 8,720 | | | $ | 5,391 | | | $ | 6,941 | | | $ | 5,991 | |
| | | | | | | | | | | | | | | | | | | | | |
| RECOVERIES | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 53 | | | $ | 83 | | | $ | 67 | | | $ | 242 | | | $ | 33 | |
| Real Estate - Construction | | | 9 | | | | 27 | | | | - | | | | - | | | | - | |
| Real Estate - Commercial | | | 34 | | | | 42 | | | | 138 | | | | 87 | | | | 37 | |
| Real Estate - Residential | | | 76 | | | | 969 | | | | 163 | | | | 34 | | | | 271 | |
| Real Estate - Home Equity | | | 15 | | | | 116 | | | | 18 | | | | 13 | | | | 108 | |
| Consumer | | | 382 | | | | 452 | | | | 394 | | | | 342 | | | | 402 | |
| Total Recoveries | | $ | 569 | | | $ | 1,689 | | | $ | 780 | | | $ | 718 | | | $ | 851 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET CHARGE-OFFS | | $ | 2,571 | | | $ | 7,031 | | | $ | 4,611 | | | $ | 6,223 | | | $ | 5,140 | |
| | | | | | | | | | | | | | | | | | | | | |
Net Charge-Offs as a % of Average Loans(1) | | | 0.66 | % | | | 1.80 | % | | | 1.16 | % | | | 1.50 | % | | | 1.22 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RISK ELEMENT ASSETS | | | | | | | | | | | | | | | | | | | | |
| Nonaccruing Loans | | $ | 74,075 | | | $ | 74,770 | | | $ | 78,726 | | | $ | 75,023 | | | $ | 53,396 | |
| Other Real Estate Owned | | | 53,172 | | | | 58,059 | | | | 58,100 | | | | 62,600 | | | | 61,196 | |
| Total Nonperforming Assets | | $ | 127,247 | | | $ | 132,829 | | | $ | 136,826 | | | $ | 137,623 | | | $ | 114,592 | |
| | | | | | | | | | | | | | | | | | | | | |
| Past Due Loans 30-89 Days | | $ | 12,923 | | | $ | 16,695 | | | $ | 9,193 | | | $ | 19,425 | | | $ | 17,053 | |
| Past Due Loans 90 Days or More | | | - | | | | - | | | | 25 | | | | 224 | | | | 26 | |
| Performing Troubled Debt Restructuring's | | $ | 45,973 | | | $ | 38,734 | | | $ | 37,373 | | | $ | 37,675 | | | $ | 28,404 | |
| | | | | | | | | | | | | | | | | | | | | |
| Nonperforming Loans as a % of Loans | | | 4.83 | % | | | 4.80 | % | | | 4.99 | % | | | 4.61 | % | | | 3.22 | % |
| Nonperforming Assets as a % of | | | | | | | | | | | | | | | | | | | | |
| Loans and Other Real Estate | | | 8.02 | % | | | 8.23 | % | | | 8.36 | % | | | 8.14 | % | | | 6.67 | % |
Nonperforming Assets as a % of Capital(2) | | | 45.35 | % | | | 47.62 | % | | | 48.52 | % | | | 48.63 | % | | | 39.44 | % |
| Nonperforming Assets as a % of Total Assets | | | 5.10 | % | | | 5.02 | % | | | 5.14 | % | | | 5.21 | % | | | 4.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) Annualized | | | | | | | | | | | | | | | | | | | | |
| (2) Capital includes allowance for loan losses | | | | | | | | | | | | | | | | | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCE AND INTEREST RATES(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Third Quarter 2012 | | | Second Quarter 2012 | | | First Quarter 2012 | | | Fourth Quarter 2011 | | | Third Quarter 2011 | | | Sep 2012 YTD | | | Sep 2011 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 | $ | 1,541,262 | | 21,366 | | 5.51 | % | $ | 1,570,827 | | 21,456 | | 5.49 | % | $ | 1,596,480 | | 22,121 | | 5.57 | % | $ | 1,646,715 | | 23,032 | | 5.55 | % | $ | 1,667,720 | $ | 23,922 | | 5.69 | % | $ | 1,569,420 | $ | 64,943 | | 5.53 | % | $ | 1,700,570 | $ | 72,488 | | 5.70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable Investment Securities | 214,431 | | 691 | | 1.28 | | | 216,952 | | 730 | | 1.35 | | | 242,481 | | 794 | | 1.31 | | | 248,217 | | 816 | | 1.31 | | | 248,138 | | 828 | | 1.32 | | | 224,584 | | 2,215 | | 1.33 | | | 241,321 | | 2,504 | | 1.40 | |
| Tax-Exempt Investment Securities | 67,446 | | 163 | | 0.97 | | | 63,715 | | 161 | | 1.01 | | | 56,313 | | 162 | | 1.15 | | | 59,647 | | 131 | | 0.88 | | | 55,388 | | 231 | | 1.67 | | | 62,509 | | 486 | | 1.04 | | | 63,457 | | 865 | | 1.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Investment Securities | 281,877 | # | 854 | | 1.21 | | | 280,667 | | 891 | | 1.27 | | | 298,794 | | 956 | | 1.28 | | | 307,864 | | 947 | | 1.22 | | | 303,526 | | 1,059 | | 1.39 | | | 287,093 | # | 2,701 | | 1.25 | | | 304,778 | | 3,369 | | 1.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Funds Sold | | 386,027 | | 254 | | 0.26 | | | 411,353 | | 244 | | 0.24 | | | 373,033 | | 225 | | 0.24 | | | 191,884 | | 96 | | 0.20 | | | 231,681 | | 136 | | 0.23 | | | 390,122 | | 723 | | 0.25 | | | 241,195 | | 452 | | 0.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Earning Assets | | 2,209,166 | $ | 22,474 | | 4.05 | % | | 2,262,847 | $ | 22,591 | | 4.01 | % | | 2,268,307 | $ | 23,302 | | 4.13 | % | | 2,146,463 | $ | 24,075 | | 4.45 | % | | 2,202,927 | $ | 25,117 | | 4.52 | % | | 2,246,635 | $ | 68,367 | | 4.06 | % | | 2,246,543 | $ | 76,309 | | 4.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | 47,207 | | | | | | | 47,711 | | | | | | | 49,427 | | | | | | | 49,666 | | | | | | | 47,252 | | | | | | | 48,112 | | | | | | | 48,539 | | | | | |
| Allowance for Loan Losses | (30,260) | | | | | | | (31,599) | | | | | | | (31,382) | | | | | | | (29,550) | | | | | | | (30,969) | | | | | | | (31,077) | | | | | | | (32,914) | | | | | |
| Other Assets | | 340,126 | | | | | | | 345,458 | | | | | | | 350,555 | | | | | | | 343,336 | | | | | | | 344,041 | | | | | | | 345,361 | | | | | | | 345,725 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Assets | $ | 2,566,239 | | | | | | $ | 2,624,417 | | | | | | $ | 2,636,907 | | | | | | $ | 2,509,915 | | | | | | $ | 2,563,251 | | | | | | $ | 2,609,031 | | | | | | $ | 2,607,893 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Bearing Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW Accounts | $ | 740,178 | $ | 144 | | 0.08 | % | $ | 809,172 | $ | 167 | | 0.08 | % | $ | 823,406 | $ | 192 | | 0.09 | % | $ | 700,005 | $ | 148 | | 0.08 | % | $ | 726,652 | $ | 222 | | 0.12 | % | $ | 790,733 | $ | 503 | | 0.08 | % | $ | 765,209 | $ | 742 | | 0.13 | % |
| Money Market Accounts | | 287,250 | | 60 | | 0.08 | | | 280,371 | | 63 | | 0.09 | | | 277,558 | | 75 | | 0.11 | | | 283,677 | | 75 | | 0.11 | | | 282,378 | | 95 | | 0.13 | | | 281,746 | | 198 | | 0.09 | | | 281,798 | | 362 | | 0.17 | |
| Savings Accounts | | 179,445 | | 23 | | 0.05 | | | 174,923 | | 21 | | 0.05 | | | 165,603 | | 20 | | 0.05 | | | 156,088 | | 20 | | 0.05 | | | 153,748 | | 19 | | 0.05 | | | 173,346 | | 64 | | 0.05 | | | 150,357 | | 53 | | 0.05 | |
| Time Deposits | | 263,007 | | 253 | | 0.38 | | | 274,497 | | 305 | | 0.45 | | | 284,129 | | 356 | | 0.50 | | | 299,487 | | 456 | | 0.60 | | | 324,951 | | 571 | | 0.70 | | | 273,838 | | 914 | | 0.45 | | | 341,286 | | 2,091 | | 0.82 | |
| Total Interest Bearing Deposits | 1,469,880 | # | 480 | | 0.13 | % | | 1,538,963 | # | 556 | | 0.15 | % | | 1,550,696 | # | 643 | | 0.17 | % | | 1,439,257 | # | 699 | | 0.19 | % | | 1,487,729 | # | 907 | | 0.24 | % | | 1,519,664 | # | 1,679 | | 0.15 | % | | 1,538,650 | # | 3,248 | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | 59,184 | | 71 | | 0.48 | % | | 57,983 | | 48 | | 0.33 | % | | 45,645 | | 8 | | 0.07 | % | | 44,573 | | 6 | | 0.05 | % | | 64,160 | | 78 | | 0.48 | % | | 54,289 | | 127 | | 0.31 | % | | 75,976 | | 299 | | 0.53 | % |
| Subordinated Notes Payable | 62,887 | | 372 | | 2.31 | | | 62,887 | | 372 | | 2.34 | | | 62,887 | | 382 | | 2.40 | | | 62,887 | | 358 | | 2.23 | | | 62,887 | | 339 | | 2.11 | | | 62,887 | | 1,126 | | 2.35 | | | 62,887 | | 1,022 | | 2.14 | |
| Other Long-Term Borrowings | 38,494 | | 372 | | 3.85 | | | 40,617 | | 396 | | 3.92 | | | 44,286 | | 436 | | 3.96 | | | 45,007 | | 452 | | 3.99 | | | 46,435 | | 467 | | 3.99 | | | 41,123 | | 1,204 | | 3.91 | | | 48,795 | | 1,453 | | 3.98 | |
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| Total Interest Bearing Liabilities | 1,630,445 | $ | 1,295 | | 0.32 | % | | 1,700,450 | $ | 1,372 | | 0.32 | % | | 1,703,514 | $ | 1,469 | | 0.35 | % | | 1,591,724 | $ | 1,515 | | 0.38 | % | | 1,661,211 | $ | 1,791 | | 0.43 | % | | 1,677,962 | $ | 4,136 | | 0.33 | % | | 1,726,308 | $ | 6,022 | | 0.47 | % |
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| Noninterest Bearing Deposits | 605,602 | | | | | | | 596,690 | | | | | | | 610,692 | | | | | | | 593,718 | | | | | | | 574,184 | | | | | | | 604,333 | | | | | | | 559,316 | | | | | |
| Other Liabilities | | 78,446 | | | | | | | 74,633 | | | | | | | 68,254 | | | | | | | 60,197 | | | | | | | 63,954 | | | | | | | 73,795 | | | | | | | 59,635 | | | | | |
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| Total Liabilities | | 2,314,493 | | | | | | | 2,371,773 | | | | | | | 2,382,460 | | | | | | | 2,245,639 | | | | | | | 2,299,349 | | | | | | | 2,356,090 | | | | | | | 2,345,260 | | | | | |
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| SHAREOWNERS' EQUITY: | | 251,746 | | | | | | | 252,644 | | | | | | | 254,447 | | | | | | | 264,276 | | | | | | | 263,902 | | | | | | | 252,941 | | | | | | | 262,634 | | | | | |
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| Total Liabilities and Shareowners' Equity | $ | 2,566,239 | | | | | | $ | 2,624,417 | | | | | | $ | 2,636,907 | | | | | | $ | 2,509,915 | | | | | | $ | 2,563,251 | | | | | | $ | 2,609,031 | | | | | | $ | 2,607,894 | | | | | |
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| Interest Rate Spread | | | $ | 21,179 | | 3.73 | % | | | $ | 21,219 | | 3.69 | % | | | $ | 21,833 | | 3.78 | % | | | $ | 22,560 | | 4.07 | % | | | $ | 23,326 | | 4.09 | % | | | $ | 64,231 | | 3.73 | % | | | $ | 70,287 | | 4.07 | % |
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Interest Income and Rate Earned(1) | | 22,474 | | 4.05 | | | | | 22,591 | | 4.01 | | | | | 23,302 | | 4.13 | | | | | 24,075 | | 4.45 | | | | | 25,117 | | 4.52 | | | | | 68,367 | | 4.06 | | | | | 76,309 | | 4.54 | |
Interest Expense and Rate Paid(2) | | 1,295 | | 0.23 | | | | | 1,372 | | 0.24 | | | | | 1,469 | | 0.26 | | | | | 1,515 | | 0.28 | | | | | 1,791 | | 0.32 | | | | | 4,136 | | 0.25 | | | | | 6,022 | | 0.36 | |
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| Net Interest Margin | | | $ | 21,179 | | 3.82 | % | | | $ | 21,219 | | 3.77 | % | | | $ | 21,833 | | 3.87 | % | | | $ | 22,560 | | 4.17 | % | | | $ | 23,326 | | 4.20 | % | | | $ | 64,231 | | 3.81 | % | | | $ | 70,287 | | 4.18 | % |
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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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
