Exhibit 99.1 Capital City Bank Group, Inc.'s Press Release, dated
July 27, 2006
[CCBG LOGO]
Corporate Headquarters
217 North Monroe Street News Release
Tallahassee, FL 32301 For Immediate Release July 27, 2006
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For Information Contact:
J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.671.0610
Capital City Bank Group, Inc.
Reports Second Quarter Earnings of $0.44 per Diluted Share,
Consistent With Same Period in 2005
TALLAHASSEE, Fla. --
HIGHLIGHTS
* Quarterly earnings totaled $8.3 million, an increase of 5.7% over the
second quarter of 2005. On a per share basis, earnings per diluted share
of $0.44 were consistent with the comparable period in 2005.
* Strong growth in operating revenues reflective of an 11.3% improvement in
net interest income and a 16.3% increase in noninterest income.
* Improvement in net interest margin as reflected by a 31 basis point
increase over the second quarter of 2005 and 13 basis points over the
first quarter of 2006 - net interest margin of 5.38% continues to
significantly exceed peer group.
* Continued strong credit quality as reflected by a nonperforming asset
ratio of .28% and an annualized net charge-off ratio of .03%.
* Well-capitalized with a risk based capital ratio of 13.92%.
EARNINGS HIGHLIGHTS
Three Months Ended Six Months Ended
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June 30, March 31, June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2006 2006 2005 2006 2005
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EARNINGS
Net Income $ 8,315 7,421 7,868 15,736 14,245
Diluted Earnings Per Common Share 0.44 0.40 0.44 0.84 0.80
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PERFORMANCE
Return on Average Equity 10.56% 9.66 11.35 10.12 10.66
Return on Average Assets 1.28 1.16 1.28 1.22 1.21
Net Interest Margin 5.38 5.25 5.07 5.31 4.99
Noninterest Income as % of Operating Revenue 31.69 30.93 30.75 31.32 30.89
Efficiency Ratio 66.23 67.20 63.56 66.70 65.23
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CAPITAL ADEQUACY
Tier 1 Capital Ratio 12.99% 13.00 11.96 12.99 11.96
Total Capital Ratio 13.92 13.94 12.91 13.92 12.91
Leverage Ratio 10.35 10.34 9.28 10.35 9.28
Equity to Assets 11.56 11.63 11.23 11.56 11.23
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Three Months Ended Six Months Ended
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June 30, March 31, June 30, June 30, June 30,
(Dollars in thousands, except per share data) 2006 2006 2005 2006 2005
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ASSET QUALITY
Allowance as % of Non-Performing Loans 325.80% 330.70 289.12 325.80 289.12
Allowance as a % of Loans 0.84 0.84 0.85 0.84 0.85
Net Charge-Offs as % of Average Loans 0.03 0.16 0.08 0.09 0.08
Nonperforming Assets as % of Loans and ORE 0.28 0.28 0.30 0.28 0.30
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STOCK PERFORMANCE
High $ 35.39 37.97 33.46 37.97 33.60
Low 29.51 33.79 28.02 29.51 28.02
Close $ 30.20 35.55 32.32 30.20 32.32
Average Daily Trading Volume 27,302 15,281 23,792 21,387 22,442
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Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported earnings for the
second quarter of 2006 totaling $8.3 million, or $0.44 per diluted share.
This compares to $7.9 million, or $0.44 per diluted share, in the second
quarter of 2005. Results include the impact of the acquisition of First
National Bank of Alachua in May 2005. The Return on Average Assets was 1.28%
and the Return on Average Equity was 10.56%, compared to 1.28% and 11.35%,
respectively, for the comparable period in 2005.
The increase in dollar earnings was primarily attributable to an increase in
operating revenues (net interest income plus noninterest income) of $5.0
million, or 12.8%, and a decrease in the loan loss provision of $0.3 million,
or 68.8%, partially offset by an increase in noninterest expense of $4.5
million, or 16.8%, and income taxes of $0.4 million, or 8.7%. The increase
in operating revenues is reflective of an 11.3% increase in net interest
income and a 16.3% increase in noninterest income. The increase in net
interest income is attributable to earning asset growth and an improving net
interest margin. Growth in noninterest income was driven primarily by higher
deposit service charge fees. The lower loan loss provision is reflective of
a lower level of required reserves. Higher expense for compensation,
occupancy, advertising, and intangible amortization were the primary reasons
for the increase in noninterest expense.
William G. Smith, Jr., Chairman, President and CEO, stated, "Second quarter
earnings were in line with our expectations. Capital City's short duration
asset portfolios have responded extremely well to rising interest rates
boosting our net interest margin to 5.38%, 13 basis points higher than the
first quarter of 2006. Growth in our loan portfolio did not meet
expectations, but the higher interest rate environment and favorable
repricing variances more than compensated for the short-fall in loan growth.
We continue to evaluate expansion opportunities and are excited about our
plans to open three new offices in existing markets during the second half of
2006."
Tax equivalent net interest income in the second quarter increased $3.2
million, or 11.7%, compared to the second quarter of 2005, due to earning
asset growth, strong loan growth for the second half of 2005 in existing
markets, and improvement in the net interest margin. The net interest margin
increased 31 basis points from the second quarter of 2005 to a level of
5.38%, attributable to a 103 basis point improvement in earning asset yields
partially offset by higher cost of funds of 72 basis points. The higher rate
environment resulted in a favorable repricing spread and higher yield on new
loan production. Both earning asset yields and funding costs increased
during the second quarter as compared to the first quarter of 2006, but the
net interest margin improved by 13 basis points.
Provision for loan losses of $0.1 million for the quarter was $0.3 million
lower than the second quarter of 2005 due to a lower level of required
reserves per the analysis of the allowance for loan losses at quarter-end.
Net charge-offs totaled $0.1 million, or .03%, of average loans for the
quarter compared to $0.4 million, or .08%, for the second quarter of 2005.
At quarter-end, the allowance for loan losses was .84% of outstanding loans
and provided coverage of 326% of nonperforming loans.
Noninterest income increased $2.0 million, or 16.3%, from the second quarter
of 2005 primarily due to higher deposit service charge fees, retail brokerage
fees, and card processing fees. The increase in deposit service charge fees
is due to the growth in deposit accounts reflective of acquisitions and
strong deposit growth that has resulted from the Company's "Absolutely Free"
checking products. The improvement in retail brokerage fees is due to an
increase in sales force which has increased sales production. Card
processing fees were driven higher by increased transaction volume for
merchant services and increased bank card activity.
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Noninterest expense grew by $4.5 million, or 16.8%, compared to the second
quarter of 2005. Higher expense for compensation, occupancy, advertising,
and intangible amortization were the primary reasons for the increase. The
increase in compensation was driven by higher associate salaries, reflecting
the integration of associates from the Alachua acquisition in late May 2005,
and higher associate benefit cost, primarily pension, insurance, and stock-
based compensation. The increase in occupancy was driven by higher expense
for depreciation, maintenance/repair, and utilities, primarily attributable
to the increase in the number of banking offices. Advertising expense
increased consistent with the expansion of the Company's "Absolutely Free"
product offerings. The increase in intangible amortization is primarily
reflective of core deposit amortization from the May 2005 acquisition.
Average earning assets for the quarter increased $108.3 million, or 5.0%,
over the comparable quarter in 2005. The increase in earning assets is
primarily reflective of an increase in average loans reflective of the late
May 2005 acquisition and strong loan production in existing markets in the
second half of 2005.
Nonperforming assets of $5.8 million decreased from the second quarter of
2005 by $.5 million and represented .28% of total loans and other real estate
at quarter-end. This compares to .30% and .28%, respectively for the second
quarter of 2005 and first quarter of 2006. The decrease in the level of
nonperforming assets is due to a decrease in nonaccrual loans primarily
reflective of the resolution of a large problem loan in the third quarter of
2005.
Average total deposits increased $115.6 million, or 6.0%, from the second
quarter of 2005 driven by a $164.0 million increase in nonmaturity deposits
partially offset by a $19.1 million decrease in savings deposits and $29.3
million decrease in certificates of deposit. The increase in nonmaturity
deposits is reflective of the May 2005 acquisition and strong growth in
balances related to "Absolutely Free" deposit products, and the Company's
Cash Power money market account product.
The Company ended the second quarter with approximately $35.7 million in
average net overnight funds sold as compared to $13.0 million net overnight
funds purchased in the second quarter of 2005. The significant improvement
is due primarily to the aforementioned deposit growth.
Supplemental Materials
Additional financial, statistical and business related information, as well
as business financial trends, relating to the second quarter results, are
available in the Investor Relations section on the Company's internet website
at www.ccbg.com.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest financial
services companies headquartered in Florida and has approximately $2.7
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, four mortgage
lending offices, and 79 ATMs in Florida, Georgia and Alabama. In 2006,
Mergent, Inc., a leading provider of information on publicly traded
companies, named the Company as a Dividend Achiever, a list of public
companies that have increased their regular cash dividends for at least 10
consecutive years. Of all publicly traded U.S. companies that pay dividends,
less than three percent made this list. Capital City Bank Group, Inc. was
also named to this list in 2005. For more information about Capital City
Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: The matters discussed in this press release that are not historical
facts, contain forward-looking information with respect to strategic
initiatives. Such forward-looking statements are based on current plans and
expectations, which are subject to a number of uncertainties and risks.
These uncertainties and risks could cause future results of Capital City Bank
Group, Inc. (the "Company") to differ materially from those anticipated by
such statements. The following factors, among others, could cause the
Company's actual results to differ from those set forth in these forward-
looking statements: the Company's ability to integrate the business and
operations of companies and banks that it has acquired, and those it may
acquire in the future; strength of the United States economy in general and
the strength of the local economies in which the Company conducts operations;
effects of harsh weather conditions, including hurricanes; inflation,
interest rate, market and monetary fluctuations; effect of changes in the
stock market and other capital markets; legislative or regulatory changes;
willingness of customers to accept third-party products and services for the
Company's products and services and vice versa; changes in the securities and
real estate markets; increased competition and its effect on pricing;
technological changes; changes in monetary and fiscal policies of the U.S.
government; changes in consumer spending and savings habits; growth and
profitability of the Company's noninterest income; changes in accounting
principles, policies, practices or guidelines; other risks described from
time to time in the Company's filings with the Securities and Exchange
Commission; and the Company's ability to manage the risks involved in the
foregoing. Additional factors that could cause the Company's results to
differ materially from those described in the forward-looking statements can
be found in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2005, and the Company's other filings with the Securities
and Exchange Commission ("SEC") and available at the SEC's internet site
(http://www.sec.gov). The 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 the forward-looking statements or to update the reasons
why actual results could differ from those contained in the forward-looking
statements.
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