Capital City Bank Group, Inc. Reports Fourth Quarter 2020 Results

Rhea-AI Summary

Capital City Bank Group (CCBG) reported a net income of $7.7 million, or $0.46 per diluted share, for Q4 2020, down from $10.4 million in Q3 2020. For the full year, net income rose to $31.6 million compared to $30.8 million in 2019. Key highlights include a 1.8% increase in operating revenues, a firm net interest income, and a 7% rise in other fee revenues. Loan balances were boosted by $190 million in SBA PPP loan originations. Credit quality remains solid, with 97% of pandemic-related extensions resuming payments, though a $6.6 million reserve build was noted for potential credit losses.

Positive

• Net income for Q4 2020 was $7.7 million, showing resilience compared to Q4 2019.
• Year-over-year net income growth to $31.6 million in 2020, up from $30.8 million in 2019.
• Operating revenues (excluding mortgage fees) improved by 1.8%, indicating solid performance.
• 7% increase in other fee revenues contributes positively to the financial outlook.
• $190 million in SBA PPP loan originations bolstered loan balances.

Negative

• Decline in net income from $10.4 million in Q3 2020, indicating potential operational challenges.
• Credit loss reserve build of $6.6 million raises concerns about future credit quality.
• Net interest income decreased by $0.1 million compared to the previous quarter.
• Noninterest expense increased by $1 million, impacting profitability.

TALLAHASSEE, Fla., Jan. 26, 2021 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $7.7 million, or $0.46 per diluted share for the fourth quarter of 2020 compared to net income of $10.4 million, or $0.62 per diluted share for the third quarter of 2020, and $8.6 million, or $0.51 per diluted share, for the fourth quarter of 2019.

For the full year of 2020, net income totaled $31.6 million, or $1.88 per diluted share, compared to net income of $30.8 million, or $1.83 per diluted share, for 2019.

Fourth Quarter 2020 HIGHLIGHTS

• Operating revenues (excluding mortgage fees) improved 1.8%  
  • Net interest income held firm, declining $0.1 million
  • 7% increase in other fee revenues (deposit, bankcard, and wealth management)
• Noninterest expense included $0.9 million related to other real estate valuation adjustments ($0.5 million) and other expenses totaling $0.4 million (additional funding for our foundation and consulting/legal costs related to a strategic initiative)
• Period-end core loans (excluding SBA PPP) increased $20 million, or 1.1% sequentially
  • SBA PPP loan forgiveness pay-offs totaled $12 million - $178 million in balances and $3.2 million in related fees remain at period-end
• Credit quality remains strong with no significant problem loan migration
  • 97% of loan balances for pandemic related extensions have resumed payments – only $9 million remains on extension
• Capital City Home Loans (“CCHL”) contributed $0.10 per share
  

Full Year 2020 HIGHLIGHTS

• Operating revenues (excluding mortgage fees) held firm as unfavorable asset re-pricing was offset by SBA PPP loan fees and higher other fee revenues   
• Loan balances buoyed by SBA PPP loan originations which totaled $190 million
  • Core loan balances (excluding SBA PPP) held firm due to stronger loan production in the fourth quarter
• Reserve build of $6.6 million (provision of $9.0 million less net charge-offs of $2.4 million) in response to potential credit losses related to the pandemic
  • Allowance coverage ratio (excluding SBA PPP) was 1.30% at year-end
• Deposits grew $572 million (period-end) and $307 million (average) and reflected stimulus inflows as well as strong core deposit growth
• Acquired 51% ownership in Brand Mortgage, LLC on March 1, 2020 (renamed CCHL) – contributed $0.52 per share
  

“Our strategic alliance with CCHL and the origination of $190 million in SBA PPP loans more than offset the adverse impact of our reserve build and lower interest rates, resulting in year over year earnings growth,” said William G. Smith, Jr., Chairman, President and CEO.  “As we entered 2020, I certainly didn’t anticipate the difficulties we would face, but I could not be prouder of our team’s response to the COVID-19 pandemic.  We continue to put the safety and well-being of our associates and clients first, as we reach out to assist our communities through the origination of SBA PPP loans, grants and volunteer hours, and endeavor to meet the needs of our clients through both in-person and virtual delivery channels.  2021 will bring challenges and opportunities, but I am confident our team has the skills and capacity to successfully navigate the future, and we will continue to focus on implementing strategies that produce long-term value for our shareowners.  My outlook for Capital City remains optimistic, and I appreciate your continued support.”

COVID-19 Update

• We continue to monitor and adhere to national guidelines and local safety ordinances to protect both clients and associates and respond to changing conditions with the pandemic and its impact on client and associate interactions
• We continue to monitor COVID-19 case count trends in our markets and respond appropriately to help ensure client and associate safety
• On November 24, 2020 we proactively closed lobby access to clients in response to higher case count trends in our markets - banking services are being provided via drive-thru or in-person by appointment only (subject to safety protocols)
• On November 30, 2020 we reinstated remote work arrangements for non-retail associates
• We continue to provide enhanced digital banking options available for banking products and access to sales associates
• We continue to support clients with the Small Business Administration Payment Protection Program (“SBA PPP”) by actively assisting with the Round 1 forgiveness process and will offer funding for clients eligible for Round 2

Discussion of Operating Results

Summary Overview

Compared to the third quarter of 2020, the $5.6 million decrease in operating profit was attributable to a $4.5 million decrease in noninterest income, a $1.0 million increase in noninterest expense, and a $0.1 million decrease in net interest income.  

Compared to the fourth quarter of 2019, the $1.7 million increase in operating profit was attributable to a $16.7 million increase in noninterest income, partially offset by higher noninterest expense of $12.2 million, a $1.5 million increase in the provision for credit losses and lower net interest income of $1.3 million.

The $12.1 million increase in operating profit for the full year 2020 versus 2019 was attributable to higher noninterest income of $58.1 million, partially offset by higher noninterest expense of $36.4 million, a $7.6 million increase in the provision for credit losses and lower net interest income of $2.0 million.

The aforementioned year over year variances primarily reflect the acquisition of a 51% membership interest and consolidation of CCHL on March 1, 2020.

Our return on average assets (“ROA”) was 0.84% and our return on average equity (“ROE”) was 8.97% for the fourth quarter of 2020. These metrics were 1.17% and 12.16% for the third quarter of 2020, respectively, and 1.14% and 10.39% for the fourth quarter of 2019, respectively. For the full year 2020, our ROA was 0.93% and our ROE was 9.36% compared to 1.03% and 9.72%, respectively, for 2019.

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2020 was $25.1 million compared to $25.2 million for the third quarter of 2020 and $26.4 million for the fourth quarter of 2019. For the full year 2020, tax-equivalent net interest income totaled $101.8 million compared to $103.9 million for 2019. The decrease compared to all prior periods reflected lower rates earned on investment securities and variable/adjustable rate loans. The year-over-year decline also reflected lower rates on overnight funds. Partially offsetting these declines were higher volumes of earning assets, including lower yielding SBA PPP loans and overnight funds.

The federal funds target rate has remained in the range of 0.00%-0.25% since March 2020 when the Fed reduced its overnight rate by 150 basis points, and as a result we continue to experience lower repricing of our variable/adjustable rate earning assets and investment securities. Our overall cost of funds remained low during the fourth quarter of 2020 at 0.14%, an increase of one basis point compared to the third quarter of 2020, due to a higher mix of seasonal public deposits.   

Our net interest margin for the fourth quarter of 2020 was 3.00%, a decrease of 12 basis points from the third quarter of 2020 and 89 basis points from the fourth quarter of 2019. For the full year 2020, the net interest margin decreased 55 basis points to 3.30%. The decreases were primarily attributable to significant growth in overnight funds which reduced our margin. Our net interest margin for the fourth quarter of 2020, excluding the impact of overnight funds in excess of $200 million, was 3.50%. We discuss the effect of the pandemic related stimulus programs on our balance sheet in more detail below under Discussion of Financial Condition.

Provision for Credit Loss

The provision for credit losses was $1.3 million for both the third and fourth quarters of 2020, and was negative $0.2 million for the fourth quarter of 2019. For the full year 2020, the provision was $9.6 million ($9.0 million for loans held for investment (“HFI”) and $0.6 million for unfunded loan commitments) compared to $2.0 million in 2019. The higher provision in 2020 reflected expected losses due to deterioration in economic conditions related to COVID-19. We discuss the allowance for credit losses and COVID-19 exposure further below.

Noninterest Income and Noninterest Expense

CCHL’s mortgage banking operations impacted our noninterest income and noninterest expense for the three and twelve month periods ended December 31, 2020, and thus, the period over period comparisons reflect the impact of the CCHL consolidation, which occurred on March 1, 2020. The table below provides an overview of CCHL’s impact on our noninterest income and noninterest expense for 2020.

Noninterest income for the fourth quarter of 2020 totaled $30.5 million compared to $35.0 million for the third quarter of 2020 and $15.5 million for the fourth quarter of 2019. For the full year 2020, noninterest income totaled $111.2 million compared to $53.1 million for 2019. The decrease from the third quarter of 2020 was primarily due to lower mortgage banking revenues which reflected a seasonal slowdown in loan production and a lower gain on sale margin. The improvement over both periods of 2019 was primarily attributable to higher mortgage banking revenues at CCHL with higher wealth management fees and bank card fees contributing, but to a lesser extent. For the full year 2020, deposit fees declined primarily due to the impact of government stimulus in the second quarter related to the COVID-19 pandemic. The decline in fees realized in the second quarter reversed in the third and fourth quarters of 2020 reflecting higher utilization of our overdraft product.

Noninterest expense for the fourth quarter of 2020 totaled $41.3 million compared to $40.3 million for the third quarter of 2020 and $29.1 million for the fourth quarter of 2019.   The increase over the third quarter of 2020 was primarily attributable to higher compensation expense of $0.6 million and other real estate expense of $0.3 million. The increase in compensation reflected higher commission expense of $0.2 million, salary expense of $0.2 million, and cash incentive expense of $0.2 million.   Valuation adjustments totaling $0.5 million for two properties drove the increase in other real estate expense. In addition, we recognized $0.4 million in expenses during the fourth quarter of 2020 related to additional funding of our foundation and consulting/legal costs for a strategic initiative.  

For the full year 2020, noninterest expense totaled $150.0 million, an increase of $36.4 million over 2019 primarily attributable to the addition of expenses at CCHL, including compensation expense of $32.4 million, occupancy expense of $2.8 million, and other expense of $4.8 million. Core CCBG noninterest expense decreased $3.6 million and reflected lower compensation expense of $2.5 million, ORE expense of $0.4 million, and other expense of $2.2 million, partially offset by higher occupancy expense of $1.5 million.   The decrease in compensation expense was primarily attributable to lower commission expense of $2.2 million related to the transfer of our legacy mortgage production division to CCHL and to a lesser extent, higher realized loan cost of $0.4 million related to the aforementioned increase in SBA PPP loan originations. A $1.0 million gain from the sale of a banking office in the first quarter of 2020 drove the reduction in ORE expense. The decline in other expense was primarily attributable to lower service cost expense for our pension plan. Higher expense for FF&E depreciation and maintenance agreements (related to technology investment and upgrades), higher than normal premises maintenance, and pandemic related cleaning/supply costs drove the increase in occupancy.   The same aforementioned factors drove the decrease in compensation, occupancy, and other expense from the fourth quarter of 2019.   

Overall, CCHL contributed significantly to the improvement in our efficiency ratio for 2020.

		Three Months Ended												Twelve Months Ended
		Dec 31, 2020				Sep 30, 2020				Dec 31, 2019				Dec 31, 2020				Dec 31, 2019
(Dollars in thousands)		Core CCBG		CCHL		Core CCBG		CCHL		Core CCBG		CCHL		Core CCBG		CCHL		Core CCBG		CCHL
Deposit Fees	$	4,713		-	$	4,316	$	-	$	4,980	$	-	$	17,800	$	-	$	19,472	$	-
Bank Card Fees		3,462		-		3,389		-		3,131		-		13,044		-		11,994		-
Wealth Management Fees		3,069		-		2,808		-		2,761		-		11,035		-		10,480		-
Mortgage Banking Fees		302		17,409		208		22,775		1,542		-		1,889		61,455		5,321		-
Other		1,205		363		1,182		287		1,414		-		4,992		950		5,786		-
Total Noninterest Income	$	12,751	$	17,772	$	11,903	$	23,062	$	13,828	$	-	$	48,760	$	62,405	$	53,053	$	-
Salaries	$	12,384	$	10,398	$	11,603	$	10,753	$	13,374	$	-	$	49,072	$	31,774	$	50,688	$	-
Other Associate Benefits		3,470		200		3,616		192		3,989		-		14,789		645		15,664		-
Total Compensation		16,124		10,598		15,219		10,945		17,363		-		63,861		32,419		66,352		-
Occupancy, Net		5,056		920		5,061		845		4,680		-		19,895		2,764		18,436		-
Other		6,899		1,751		6,930		1,342		7,099		-		26,225		4,798		28,821		-
Total Noninterest Expense	$	28,079	$	13,269	$	27,210	$	13,132	$	29,142	$	-	$	109,981	$	39,981	$	113,609	$	-

Income Taxes

We realized income tax expense of $2.8 million (effective rate of 22%) for the fourth quarter of 2020 compared to $3.2 million (effective rate of 17%) for the third quarter of 2020 and $2.5 million (effective rate of 23%) for the fourth quarter of 2019. For the full year 2020, we realized income tax expense of $10.2 million (effective rate of 19%) compared to $10.0 million (effective rate of 24%) for the same period of 2019.   Tax expense for the fourth quarter of 2020 was unfavorably impacted by a $0.3 million discrete tax expense. The decrease in our effective tax rate in 2020 reflected the impact of converting CCHL to a partnership for tax purposes in the second quarter of 2020.   Absent discrete items, we expect our annual effective tax rate to approximate 18%-19% in 2021. 

Discussion of Financial Condition

Earning Assets

Average earning assets were $3.337 billion for the fourth quarter of 2020, an increase of $113.6 million, or 3.5%, over the third quarter of 2020, and an increase of $642.7 million, or 23.9% over the fourth quarter of 2019. The increase over both prior periods was primarily driven by higher deposit balances, which funded growth in both overnight funds sold and SBA PPP loans. Deposit balances increased as a result of strong core deposit growth, in addition to funding retained at the bank from SBA PPP loans, and various other stimulus programs.

We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $705.1 million during the fourth quarter of 2020 compared to an average net overnight funds sold position of $567.9 million in the third quarter of 2020 and $228.1 million in the fourth quarter of 2019. The increase compared to both prior periods was driven by strong core deposit growth, in addition to pandemic related stimulus programs (see below – Funding).

Average loans HFI decreased $11.7 million, or 0.6%, from the third quarter of 2020 and increased $159.4 million, or 8.7%, over the fourth quarter of 2019. In 2020, we originated SBA PPP loans totaling $190 million (reflected in the commercial loan category) which averaged $185 million in the fourth quarter and totaled $178 million at period-end. Compared to the third quarter of 2020, the decline in average loans was primarily due to lower commercial and commercial mortgage balances with the decline in commercial loans due to the reduction in SBA PPP loans and lower utilization of commercial lines of credit reflective of the economic slowdown.   Period-end HFI loans increased $8.3 million, or 0.4%, over the third quarter of 2020 and increased $170.5 million, or 9.3%, over the fourth quarter of 2019. The increase over the third quarter of 2020 reflected higher home equity, construction, and residential loan balances.

To date, approximately $12 million in SBA PPP loans have been forgiven and paid-off. Forgiveness applications are expected to accelerate over the next three to six months driven by the recent COVID Relief Bill which allows a streamlined forgiveness application process for loans of $150,000 and less. At December 31, 2020, SBA PPP loans of $150,000 or less totaled $69 million. SBA PPP loan fees totaled approximately $0.8 million for the fourth quarter of 2020, $0.6 million for the third quarter of 2020, and $0.4 million for the second quarter of 2020. At December 31, 2020 we had $3.2 million (net) in deferred SBA PPP loan fees.

Allowance for Credit Losses

At December 31, 2020, the allowance for credit losses totaled $23.8 million compared to $23.1 million at September 30, 2020 and $13.9 million at December 31, 2019. At December 31, 2020, the allowance represented 1.19% of HFI loans and provided coverage of 406% of nonperforming loans compared to 1.16% and 420%, respectively, at September 30, 2020 and 0.75% and 311%, respectively, at December 31, 2019. At December 31, 2020, excluding SBA PPP loans (100% government guaranteed), the allowance represented 1.30% of loans held for investment.

The adoption of ASC 326 (“CECL”) on January 1, 2020 had an impact of $4.0 million ($3.3 million increase in the allowance for credit losses and $0.7 million increase in the allowance for unfunded loan commitments (other liability account)). The $6.6 million build (provision of $9.0 million less net charge-offs of $2.4 million) in the allowance for credit losses in 2020 was attributable to stressed economic conditions related to the COVID-19 pandemic and its potential effect on rates of default.

Credit Quality/COVID-19 Exposure

Nonperforming assets (nonaccrual loans and OREO) totaled $6.7 million at December 31, 2020, comparable to September 30, 2020, and a $1.3 million increase over December 31, 2019. Nonaccrual loans totaled $5.9 million at December 31, 2020, a $0.4 million increase over September 30, 2020 and a $1.4 million increase over December 31, 2019. The balance of OREO totaled $0.8 million at December 31, 2020, a decrease of $0.4 million from September 30, 2020 and a $0.1 million decrease from December 31, 2019.

We continue to analyze our loan portfolio for segments that have been affected by the stressed economic and business conditions caused by the pandemic. Certain at-risk segments total 8% of our loan balances at December 31, 2020, including hotel (3%), restaurant (1%), retail and shopping centers (3%), and other (1%). The other segment includes churches, non-profits, education, and recreational. To assist our clients, in mid-March of 2020, we began allowing short term 60 to 90 day loan extensions for affected borrowers. We have extended loans totaling $333 million of which 75% were for commercial borrowers and 25% were for consumer borrowers. Approximately $324 million, or 97% of the loan balances associated with these borrowers have resumed making regularly scheduled payments. Of the $9 million that remains on extension, no loans were classified at December 31, 2020. Of the $324 million that have resumed payments, loan balances totaling $3.5 million were over 30 days delinquent and an additional $0.4 million was on nonaccrual status at December 31, 2020.             

Funding (Deposits/Debt)

Average total deposits were $3.066 billion for the fourth quarter of 2020, an increase of $94.9 million, or 3.2%, over the third quarter of 2020 and $541.2 million, or 21.4%, over the fourth quarter of 2019. The estimated deposit inflows related to the first round of pandemic related stimulus programs that occurred primarily during the second quarter were $179 million (SBA PPP) and $64 million (Economic Impact Payment stimulus checks). Average seasonal public funds increased $30 million over the third quarter of 2020 and $81 million over the fourth quarter of 2019.   For each quarter during 2020, we’ve also realized strong core deposit growth. Given these large increases as well as the incoming second round of stimulus checks, the potential exists for our deposit levels to be volatile in 2021 due to the uncertain timing of the outflows of the stimulus related balances and the economic recovery. It is anticipated that current liquidity levels will remain robust due to our strong overnight funds sold position.

Average short-term borrowings increased $20.7 million over the third quarter of 2020 and $87.8 million over the fourth quarter of 2019, which reflected warehouse line borrowings used to support CCHL’s loans held for sale.

Capital

Shareowners’ equity was $320.8 million at December 31, 2020 compared to $339.4 million at September 30, 2020 and $327.0 million at December 31, 2019.   For the full year of 2020, shareowners’ equity was positively impacted by net income of $31.6 million, a $1.8 million increase in the unrealized gain on investment securities, net adjustments totaling $1.4 million related to transactions under our stock compensation plans, stock compensation accretion of $0.9 million, and a $0.4 million increase in fair value of the interest rate swap related to subordinated debt. Shareowners’ equity was reduced by an $18.2 million increase in the accumulated other comprehensive loss for our pension plan, common stock dividends of $9.6 million ($0.57 per share), a $3.1 million (net of tax) adjustment to retained earnings for the adoption of CECL, reclassification of $9.4 million to temporary equity to increase the redemption value of the non-controlling interest in CCHL, and share repurchases of $2.0 million (99,952 shares).

At December 31, 2020, our total risk-based capital ratio was 17.30% compared to 17.88% at September 30, 2020 and 17.90% at December 31, 2019. Our common equity tier 1 capital ratio was 13.71%, 14.20%, and 14.47%, respectively, on these dates. Our leverage ratio was 9.33%, 9.64%, and 11.25%, respectively, on these dates. All of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio was 6.25% at December 31, 2020 compared to 7.16% and 8.06% at September 30, 2020 and December 31, 2019, respectively.   Our tangible capital ratio was unfavorably impacted at December 31, 2020 by the aforementioned annual adjustment to the other comprehensive loss for our pension plan which was negatively impacted due to the lower discount rate used to calculate the present value of the pension obligation. The lower discount rate reflected the significant decline in long-term interest rates in 2020.  

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $3.8 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 57 banking offices and 86 ATMs/ITMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; 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; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURES

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

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data)		Dec 31, 2020			Sep 30, 2020			Jun 30, 2020			Mar 31, 2020			Dec 31, 2019
Shareowners' Equity (GAAP)		$	320,837		$	339,425		$	335,057		$	328,507		$	327,016
Less: Goodwill (GAAP)			89,095			89,095			89,095			89,275			84,811
Tangible Shareowners' Equity (non-GAAP)	A		231,742			250,330			245,962			239,232			242,205
Total Assets (GAAP)			3,798,071			3,587,041			3,499,524			3,086,523			3,088,953
Less: Goodwill (GAAP)			89,095			89,095			89,095			89,275			84,811
Tangible Assets (non-GAAP)	B	$	3,708,976		$	3,497,946		$	3,410,429		$	2,997,248		$	3,004,142
Tangible Common Equity Ratio (non-GAAP)	A/B		6.25	%		7.16	%		7.21	%		7.98	%		8.06	%
Actual Diluted Shares Outstanding (GAAP)	C		16,844,997			16,800,563			16,821,743			16,845,462			16,855,161
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	13.76		$	14.90		$	14.62		$	14.20		$	14.37

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
		Three Months Ended						Twelve Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2020		Sep 30, 2020		Dec 31, 2019		Dec 31, 2020		Dec 31, 2019
EARNINGS
Net Income Attributable to Common Shareowners	$	7,746	$	10,397	$	8,565	$	31,576	$	30,807
Diluted Net Income Per Share	$	0.46	$	0.62	$	0.51	$	1.88	$	1.83
PERFORMANCE
Return on Average Assets		0.84	%	1.17	%	1.14	%	0.93	%	1.03	%
Return on Average Equity		8.97		12.16		10.39		9.36		9.72
Net Interest Margin		3.00		3.12		3.89		3.30		3.85
Noninterest Income as % of Operating Revenue		55.00		58.19		34.50		52.32		33.92
Efficiency Ratio		74.36	%	67.01	%	72.48	%	70.43	%	72.40	%
CAPITAL ADEQUACY
Tier 1 Capital		16.19	%	16.77	%	17.16	%	16.19	%	17.16	%
Total Capital		17.30		17.88		17.90		17.30		17.90
Leverage		9.33		9.64		11.25		9.33		11.25
Common Equity Tier 1		13.71		14.20		14.47		13.71		14.47
Tangible Common Equity (1)		6.25		7.16		8.06		6.25		8.06
Equity to Assets		8.45	%	9.46	%	10.59	%	8.45	%	10.59	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		405.66	%	420.30	%	310.99	%	405.66	%	310.99	%
Allowance as a % of Loans HFI		1.19		1.16		0.75		1.19		0.75
Net Charge-Offs as % of Average Loans HFI		0.09		0.11		0.05		0.12		0.13
Nonperforming Assets as % of Loans HFI and OREO		0.33		0.34		0.29		0.33		0.29
Nonperforming Assets as % of Total Assets		0.18	%	0.19	%	0.18	%	0.18	%	0.18	%
STOCK PERFORMANCE
High	$	26.35	$	21.71	$	30.95	$	30.62	$	30.95
Low		18.14		17.55		25.75		15.61		21.04
Close	$	24.58	$	18.79	$	30.50	$	24.58	$	30.50
Average Daily Trading Volume		22,271		28,517		41,247		35,125		27,496
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
	2020													2019
(Dollars in thousands)	Fourth Quarter				Third Quarter			Second Quarter			First Quarter			Fourth Quarter
ASSETS
Cash and Due From Banks	$	67,919		$	76,509		$	75,155		$	72,676		$	60,087
Funds Sold and Interest Bearing Deposits		860,630			626,104			513,273			196,936			318,336
Total Cash and Cash Equivalents		928,549			702,613			588,428			269,612			378,423
Investment Securities Available for Sale		324,870			328,253			341,180			382,514			403,601
Investment Securities Held to Maturity		169,939			202,593			232,178			251,792			239,539
Total Investment Securities		494,809			530,846			573,358			634,306			643,140
Loans Held for Sale ("HFS")		114,039			116,561			76,610			82,598			9,509
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		393,930			402,997			421,270			249,020			255,365
Real Estate - Construction		135,831			125,804			117,794			122,595			115,018
Real Estate - Commercial		648,393			656,064			662,434			656,084			625,556
Real Estate - Residential		342,664			335,713			353,831			354,150			353,642
Real Estate - Home Equity		205,479			197,363			194,479			196,443			197,360
Consumer		269,520			268,393			266,417			275,982			279,565
Other Loans		9,879			10,488			4,883			6,580			7,808
Overdrafts		730			1,339			1,069			1,533			1,615
Total Loans Held for Investment		2,006,426			1,998,161			2,022,177			1,862,387			1,835,929
Allowance for Credit Losses		(23,816	)		(23,137	)		(22,457	)		(21,083	)		(13,905	)
Loans Held for Investment, Net		1,982,610			1,975,024			1,999,720			1,841,304			1,822,024
Premises and Equipment, Net		86,791			87,192			87,972			87,684			84,543
Goodwill		89,095			89,095			89,095			89,275			84,811
Other Real Estate Owned		808			1,227			1,059			1,463			953
Other Assets		101,370			84,483			83,282			80,281			65,550
Total Other Assets		278,064			261,997			261,408			258,703			235,857
Total Assets	$	3,798,071		$	3,587,041		$	3,499,524		$	3,086,523		$	3,088,953
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,328,809		$	1,378,314		$	1,377,033		$	1,066,607		$	1,044,699
NOW Accounts		1,046,408			827,506			808,244			779,467			902,499
Money Market Accounts		266,649			247,823			240,754			210,124			217,839
Regular Savings Accounts		474,100			451,944			423,924			384,480			374,396
Certificates of Deposit		101,594			103,859			105,041			104,907			106,021
Total Deposits		3,217,560			3,009,446			2,954,996			2,545,585			2,645,454
Short-Term Borrowings		79,654			90,936			63,958			76,516			6,404
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		3,057			5,268			5,583			5,896			6,514
Other Liabilities		102,076			71,880			75,702			70,044			50,678
Total Liabilities		3,455,234			3,230,417			3,153,126			2,750,928			2,761,937
Temporary Equity		22,000			17,199			11,341			7,088			-
SHAREOWNERS' EQUITY
Common Stock		168			168			168			168			168
Additional Paid-In Capital		32,283			31,425			31,575			32,100			32,092
Retained Earnings		332,528			333,545			328,570			321,772			322,937
Accumulated Other Comprehensive Loss, Net of Tax		(44,142	)		(25,713	)		(25,256	)		(25,533	)		(28,181	)
Total Shareowners' Equity		320,837			339,425			335,057			328,507			327,016
Total Liabilities, Temporary Equity and Shareowners' Equity	$	3,798,071		$	3,587,041		$	3,499,524		$	3,086,523		$	3,088,953
OTHER BALANCE SHEET DATA
Earning Assets	$	3,475,904		$	3,271,672		$	3,185,418		$	2,776,228		$	2,806,913
Interest Bearing Liabilities		2,024,349			1,780,223			1,700,391			1,614,277			1,666,560
Book Value Per Diluted Share	$	19.05		$	20.20		$	19.92		$	19.50		$	19.40
Tangible Book Value Per Diluted Share(1)		13.76			14.90			14.62			14.20			14.37
Actual Basic Shares Outstanding		16,791			16,761			16,780			16,812			16,772
Actual Diluted Shares Outstanding		16,845			16,801			16,822			16,845			16,855
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
																	Twelve Months Ended
		2020												2019			December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2020			2019
INTEREST INCOME
Interest and Fees on Loans	$	23,878		$	23,594		$	23,687		$	23,593		$	23,842		$	94,752		$	94,215
Investment Securities		2,096			2,426			2,737			3,015			3,221			10,274			13,434
Funds Sold		180			146			88			757			945			1,171			5,187
Total Interest Income		26,154			26,166			26,512			27,365			28,008			106,197			112,836
INTEREST EXPENSE
Deposits		201			190			218			939			1,157			1,548			6,840
Short-Term Borrowings		639			498			421			132			16			1,690			109
Subordinated Notes Payable		311			316			374			471			525			1,472			2,287
Other Long-Term Borrowings		30			40			41			50			56			161			257
Total Interest Expense		1,181			1,044			1,054			1,592			1,754			4,871			9,493
Net Interest Income		24,973			25,122			25,458			25,773			26,254			101,326			103,343
Provision for Credit Losses		1,342			1,308			2,005			4,990			(162	)		9,645			2,027
Net Interest Income after Provision for Credit Losses		23,631			23,814			23,453			20,783			26,416			91,681			101,316
NONINTEREST INCOME
Deposit Fees		4,713			4,316			3,756			5,015			4,980			17,800			19,472
Bank Card Fees		3,462			3,389			3,142			3,051			3,131			13,044			11,994
Wealth Management Fees		3,069			2,808			2,554			2,604			2,761			11,035			10,480
Mortgage Banking Fees		17,711			22,983			19,397			3,253			1,542			63,344			5,321
Other		1,568			1,469			1,350			1,555			1,414			5,942			5,786
Total Noninterest Income		30,523			34,965			30,199			15,478			13,828			111,165			53,053
NONINTEREST EXPENSE
Compensation		26,722			26,164			23,658			19,736			17,363			96,280			66,352
Occupancy, Net		5,976			5,906			5,798			4,979			4,680			22,659			18,436
Other Real Estate, Net		567			219			116			(798	)		102			104			546
Other		8,083			8,053			7,731			7,052			6,997			30,919			28,275
Total Noninterest Expense		41,348			40,342			37,303			30,969			29,142			149,962			113,609
OPERATING PROFIT		12,806			18,437			16,349			5,292			11,102			52,884			40,760
Income Tax Expense		2,833			3,165			2,950			1,282			2,537			10,230			9,953
Net Income		9,973			15,272			13,399			4,010			8,565			42,654			30,807
Pre-Tax Income Attributable to Noncontrolling Interest		(2,227	)		(4,875	)		(4,253	)		277			-			(11,078	)		-
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	7,746		$	10,397		$	9,146		$	4,287		$	8,565		$	31,576		$	30,807
PER COMMON SHARE
Basic Net Income	$	0.46		$	0.62		$	0.55		$	0.25		$	0.51		$	1.88		$	1.84
Diluted Net Income		0.46			0.62			0.55			0.25			0.51			1.88			1.83
Cash Dividend	$	0.15		$	0.14		$	0.14		$	0.14		$	0.13		$	0.57		$	0.48
AVERAGE SHARES
Basic		16,763			16,771			16,797			16,808			16,750			16,785			16,770
Diluted		16,817			16,810			16,839			16,842			16,834			16,822			16,827

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES
AND RISK ELEMENT ASSETS
Unaudited
																		Twelve Months Ended
		2020												2019				December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter				2020			2019
ALLOWANCE FOR CREDIT LOSSES
Balance at Beginning of Period	$	23,137		$	22,457		$	21,083		$	13,905		$	14,319			$	13,905		$	14,210
Impact of Adopting ASC 326 (CECL)		-			-			-			3,269			-				3,269			-
Provision for Credit Losses - HFI		1,165			1,265			1,615			4,990			(162	)			9,035			2,027
Net Charge-Offs		486			585			241			1,081			252				2,393			2,332
Balance at End of Period(2)	$	23,816		$	23,137		$	22,457		$	21,083		$	13,905			$	23,816		$	13,905
As a % of Loans HFI		1.19	%		1.16	%		1.11	%		1.13	%		0.75	%			1.19	%		0.75	%
As a % of Nonperforming Loans		405.66	%		420.30	%		322.37	%		432.61	%		310.99	%			405.66	%		310.99	%
CHARGE-OFFS
Commercial, Financial and Agricultural	$	104		$	137		$	186		$	362		$	149			$	789		$	768
Real Estate - Construction		-			-			-			-			58				-			281
Real Estate - Commercial		-			17			-			11			33				28			214
Real Estate - Residential		38			1			1			110			27				150			400
Real Estate - Home Equity		10			58			52			31			-				151			430
Consumer		668			619			634			864			819				2,785			2,878
Overdrafts(3)		564			450			541			702			-				2,257			-
Total Charge-Offs	$	1,384		$	1,282		$	1,414		$	2,080		$	1,086			$	6,160		$	4,971
RECOVERIES
Commercial, Financial and Agricultural	$	64		$	74		$	74		$	40		$	127			$	252		$	345
Real Estate - Construction		50			-			-			-			-				50			-
Real Estate - Commercial		27			30			70			191			266				318			578
Real Estate - Residential		153			35			51			40			116				279			429
Real Estate - Home Equity		40			41			64			33			25				178			175
Consumer		306			280			365			268			300				1,219			1,112
Overdrafts(3)		258			237			549			427			-				1,471			-
Total Recoveries	$	898		$	697		$	1,173		$	999		$	834			$	3,767		$	2,639
NET CHARGE-OFFS	$	486		$	585		$	241		$	1,081		$	252			$	2,393		$	2,332
Net Charge-Offs as a % of Average Loans HFI(1)		0.09	%		0.11	%		0.05	%		0.23	%		0.05	%			0.12	%		0.13	%
RISK ELEMENT ASSETS
Nonaccruing Loans	$	5,871		$	5,505		$	6,966		$	4,874		$	4,472
Other Real Estate Owned		808			1,227			1,059			1,463			953
Total Nonperforming Assets ("NPAs")	$	6,679		$	6,732		$	8,025		$	6,337		$	5,425
Past Due Loans 30-89 Days	$	4,594		$	3,191		$	2,948		$	5,077		$	4,871
Past Due Loans 90 Days or More		-			-			-			-			-
Classified Loans		17,631			16,772			17,091			16,548			20,847
Performing Troubled Debt Restructuring's	$	13,887		$	14,693		$	15,133		$	15,934		$	16,888
Nonperforming Loans as a % of Loans HFI		0.29	%		0.28	%		0.34	%		0.26	%		0.24	%
NPAs as a % of Loans HFI and Other Real Estate		0.33	%		0.34	%		0.40	%		0.34	%		0.29	%
NPAs as a % of Total Assets		0.18	%		0.19	%		0.23	%		0.21	%		0.18	%
(1) Annualized
(2) Does not include $1.6 million for unfunded commitments recorded in other liabilities at 12/31/2020.
(3) Prior to the first quarter 2020, overdraft losses were reflected in noninterest income (deposit fees).

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
		Fourth Quarter 2020								Third Quarter 2020								Second Quarter 2020								First Quarter 2020								Fourth Quarter 2019								Dec 2020 YTD								Dec 2019 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 HFI and HFS	$	2,114,522		$	23,981		4.52	%	$	2,097,700		$	23,698		4.50	%	$	2,057,925		$	23,785		4.65	%	$	1,882,703			23,692		5.06	%	$	1,846,190		$	23,958		5.15	%	$	2,038,701		$	95,156		4.67	%	$	1,822,087		$	94,662		5.20	%
Investment Securities
Taxable Investment Securities		513,277			2,072		1.61			553,395			2,401		1.73			601,509			2,708		1.80			629,512			2,995		1.91			610,046			3,186		2.08			574,199			10,176		1.77			612,541			13,123		2.14
Tax-Exempt Investment Securities		4,485			30		2.71			4,860			32		2.66			5,865			37		2.51			5,293			25		1.86			10,327			43		1.67			5,123			124		2.42			24,471			390		1.60
Total Investment Securities		517,762			2,102		1.62			558,255			2,433		1.74			607,374			2,745		1.81			634,805			3,020		1.91			620,373			3,229		2.08			579,322			10,300		1.78			637,012			13,513		2.12
Funds Sold		705,125			180		0.10			567,883			146		0.10			351,473			88		0.10			234,372			757		1.30			228,137			945		1.64			465,652			1,171		0.25			237,999			5,187		2.18
Total Earning Assets		3,337,409		$	26,263		3.14	%		3,223,838		$	26,277		3.25	%		3,016,772		$	26,618		3.55	%		2,751,880		$	27,469		4.01	%		2,694,700		$	28,132		4.14	%		3,083,675		$	106,627		3.46	%		2,697,098		$	113,362		4.20	%
Cash and Due From Banks		73,968								69,893								72,647								56,958								53,174								68,386								52,453
Allowance for Loan Losses		(23,725	)							(22,948	)							(21,642	)							(14,389	)							(14,759	)							(20,690	)							(14,622	)
Other Assets		264,784								268,549								261,449								244,339								249,089								259,700								252,127
Total Assets	$	3,652,436							$	3,539,332							$	3,329,226							$	3,038,788							$	2,982,204							$	3,391,071							$	2,987,056
LIABILITIES:
Interest Bearing Deposits
NOW Accounts	$	879,564		$	66		0.03	%	$	826,776		$	61		0.03	%	$	789,378		$	78		0.04	%	$	808,811		$	725		0.36	%	$	755,625		$	889		0.47	%	$	826,280		$	930		0.11	%	$	805,134		$	5,502		0.68	%
Money Market Accounts		261,543			34		0.05			247,185			32		0.05			222,377			40		0.07			212,211			117		0.22			227,479			170		0.30			235,931			223		0.09			235,845			946		0.40
Savings Accounts		466,116			57		0.05			438,762			54		0.05			409,366			50		0.05			379,237			46		0.05			372,518			46		0.05			423,529			207		0.05			370,430			182		0.05
Time Deposits		102,809			44		0.17			104,522			43		0.16			104,718			50		0.19			105,542			51		0.19			108,407			52		0.19			104,393			188		0.18			113,499			210		0.19
Total Interest Bearing Deposits		1,710,032			201		0.05	%		1,617,245			190		0.05	%		1,525,839			218		0.06	%		1,505,801			939		0.25	%		1,464,029			1,157		0.31	%		1,590,133			1,548		0.10	%		1,524,908			6,840		0.45	%
Short-Term Borrowings		95,280			639		2.67	%		74,557			498		2.66	%		73,377			421		2.31	%		32,915			132		1.61	%		7,448			16		0.87	%		69,119			1,690		2.44	%		9,275			109		1.19	%
Subordinated Notes Payable		52,887			311		2.30			52,887			316		2.34			52,887			374		2.80			52,887			471		3.52			52,887			525		3.88			52,887			1,472		2.74			52,887			2,287		4.26
Other Long-Term Borrowings		3,700			30		3.18			5,453			40		2.91			5,766			41		2.84			6,312			50		3.21			6,723			56		3.33			5,304			161		3.03			7,393			257		3.48
Total Interest Bearing Liabilities		1,861,899		$	1,181		0.25	%		1,750,142		$	1,044		0.24	%		1,657,869		$	1,054		0.26	%		1,597,915		$	1,592		0.40	%		1,531,087		$	1,754		0.45	%		1,717,443		$	4,871		0.28	%		1,594,463		$	9,493		0.60	%
Noninterest Bearing Deposits		1,356,104								1,354,032								1,257,614								1,046,889								1,060,922								1,254,214								1,012,581
Other Liabilities		74,605								83,192								72,073								59,587								63,291								72,400								62,940
Total Liabilities		3,292,608								3,187,366								2,987,556								2,704,391								2,655,300								3,044,057								2,669,984
Temporary Equity		16,154								11,893								8,155								2,506.00								-								9,701								-
SHAREOWNERS' EQUITY:		343,674								340,073								333,515								331,891								326,904								337,313								317,072
Total Liabilities, Temporary Equity and Shareowners' Equity	$	3,652,436							$	3,539,332							$	3,329,226							$	3,038,788							$	2,982,204							$	3,391,071							$	2,987,056
Interest Rate Spread				$	25,082		2.88	%				$	25,233		3.01	%				$	25,564		3.30	%				$	25,877		3.61	%				$	26,378		3.69	%				$	101,756		3.18	%				$	103,869		3.61	%
Interest Income and Rate Earned(1)					26,263		3.14						26,277		3.25						26,618		3.55						27,469		4.01						28,132		4.14						106,627		3.46						113,362		4.20
Interest Expense and Rate Paid(2)					1,181		0.14						1,044		0.13						1,054		0.14						1,592		0.23						1,754		0.26						4,871		0.16						9,493		0.35
Net Interest Margin				$	25,082		3.00	%				$	25,233		3.12	%				$	25,564		3.41	%				$	25,877		3.78	%				$	26,378		3.89	%				$	101,756		3.30	%				$	103,869		3.85	%
(1) Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.
(2) Rate calculated based on average earning assets.

For Information Contact:
J. Kimbrough Davis 
Executive Vice President and Chief Financial Officer 
850.402.7820 

FAQ

What is Capital City Bank Group's net income for Q4 2020?

Capital City Bank Group reported a net income of $7.7 million for Q4 2020.

How did Capital City Bank Group perform in 2020 compared to 2019?

In 2020, Capital City Bank Group's net income increased to $31.6 million from $30.8 million in 2019.

What were the highlights of Capital City Bank Group's Q4 2020 earnings report?

Highlights include a 1.8% increase in operating revenues and a 7% rise in other fee revenues.

What impact did the SBA PPP loan program have on Capital City Bank Group?

The SBA PPP loan program contributed $190 million in loan originations, boosting overall loan balances.

What is the current credit quality status for Capital City Bank Group?

Credit quality remains strong, with 97% of pandemic-related loan extensions resuming payments.