SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter:
March 31, 1995 Commission File Number 0-13358
CAPITAL CITY BANK GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59 2273542
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
217 North Monroe Street, Tallahassee, Florida 32301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(904) 671-0610
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days.
Yes __X___ No _____
At April 30, 1995, 2,853,680 shares of the Registrant's Common Stock, $.01
par value, were outstanding.
<PAGE>
CAPITAL CITY BANK GROUP, INC.
I N D E X
PART I. FINANCIAL INFORMATION PAGE NUMBER
Consolidated Statements of Condition --
March 31, 1995 and December 31, 1994 3
Consolidated Statements of Income --
Three Months Ended March 31, 1995 4
and 1994
Consolidated Statements of Cash Flows --
Three Months Ended March 31, 1995
and 1994 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
Index to Exhibits 15
Signatures 15
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
AS OF MARCH 31, 1995 AND DECEMBER 31, 1994
(Dollars In Thousands, Except Per Share Amounts)
March 31, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
Cash & Due From Banks $ 66,467 $ 63,327
Investment Securities, Market Value
$147,563 and $145,003 as of
March 31, 1995 and December 31,
1994, respectively (Note 2) 150,058 150,441
Investment Securities Available for Sale 47,611 48,847
Federal Funds Sold 57,035 27,750
Loans: (Note 3) 426,840 426,013
Unearned Interest (4,814) (5,209)
Allowance for Loan Losses
Loans, Net (7,720) (7,551)
414,306 413,253
Premises & Equipment 25,108 24,292
Accrued Interest Receivable 6,134 5,546
Intangible Assets 1,312 1,379
Other Assets 7,853 9,805
TOTAL ASSETS $775,884 $742,630
LIABILITIES
Deposits:
Noninterest Bearing Deposits $175,755 $167,711
Interest Bearing Deposits (Note 4) 492,858 480,463
Total Deposits 668,613 648,174
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 24,706 13,964
Other Short-Term Borrowings 1,454 999
Other Liabilities 5,726 7,093
TOTAL LIABILITIES $700,499 $670,230
SHAREHOLDERS' EQUITY
Common Stock, $.01 Par Value;
4,000,000 shares authorized;
3,105,243 issued 31 31
Surplus 5,868 5,852
Retained Earnings 76,178 73,989
Treasury Stock: 251,563 shares at
March 31, 1995 and 259,428 at
December 31, 1994 (6,368) (6,588)
Unrealized Gains and Losses (324) (884)
TOTAL SHAREHOLDERS' EQUITY 75,385 72,400
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $775,884 $742,630
Book Value Per Share $ 26.42 $ 25.44
<PAGE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED MARCH 31
(Dollars in Thousands, Except Per Share Amounts)
1995 1994
Unaudited Unaudited
INTEREST INCOME
Interest and Fees on Loans $ 9,737 $ 8,271
Investment Securities:
U. S. Treasury 1,087 942
U. S. Government Agencies/Corp. 556 843
States and Political Subdivisions 839 882
Other Securities 67 80
Funds Sold 478 384
Total Interest Income 12,764 11,402
INTEREST EXPENSE
Deposits 4,205 3,303
Fed. Funds Purchased & Securities
Sold Under Repurchase Agreements 225 143
Other Short-Term Debt 12 6
Long-Term Borrowings - 20
Total Interest Expense 4,442 3,472
Net Interest Income 8,322 7,930
Provision for Loan Losses 274 330
Net Interest Income After Provision for
Loan Losses 8,048 7,600
NONINTEREST INCOME
Service Charges on Deposit Accounts 1,323 1,303
Data Processing 606 593
Income from Fiduciary Activities 337 191
Securities Transactions - (1)
Other 1,112 1,461
Total Noninterest Income 3,378 3,547
NONINTEREST EXPENSE
Salaries and Employee Benefits 4,426 4,252
Occupancy, Net 598 554
Furniture and Equipment 845 680
Other 2,515 2,413
Total Noninterest Expense 8,384 7,899
Income Before Income Taxes 3,042 3,248
Income Tax Expense 854 898
NET INCOME $ 2,188 $2,350
Net Income Per Share $ .77 $ .82
Cash Dividends Per Share -- --
Average Shares Outstanding 2,851,821 2,851,016
<PAGE>
CAPITAL CITY BANK GROUP, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Dollars in Thousands)
1995 1994
(Unaudited) (Unaudited)
NET INCOME $ 2,188 $2,350
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Provision for Loan Losses 274 330
Depreciation 583 419
Amortization of Intangible Assets 67 92
Net (Increase) Decrease in Interest
Receivable (588) 87
Net (Increase) Decrease in Other Assets 1,969 1,890
Net Increase (Decrease) in Other
Liabilities 910 304
Net Cash From Operating Activities 5,403 5,472
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Payments/Maturities of
Investment Securities 10,563 22,591
Purchase of Investment Securities (8,384) (23,980)
Net (Increase) Decrease in Loans (1,327) 5,490
Purchase of Premises & Equipment (1,411) (1,428)
Sales of Premises & Equipment 12 -
Net Cash from Investing Activities (547) 2,673
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Deposits 20,439 (3,885)
Net Increase (Decrease) in Federal
Funds Purchased 10,742 (8,357)
Net Increase (Decrease) in Other Short-Term
Borrowings 455 (202)
Repayment of Long-Term Debt - (500)
Dividends Paid (2,277) (2,134)
Sale (Purchase) of Treasury Stock 220 -
Net Cash From Financing Activities 29,579 (15,078)
Net Increase (Decrease) in Cash and
Cash Equivalents 34,435 (6,933)
Cash and Cash Equivalents at Beginning of
Period 89,067 113,891
Cash and Cash Equivalents at End of Period $123,502 $106,958
Supplemental Disclosure:
Interest Paid $ 4,163 $ 3,414
Taxes Paid - $ -
<PAGE>
CAPITAL CITY BANK GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) MANAGEMENT'S OPINION AND ACCOUNTING POLICIES
The consolidated financial statements, included herein, have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. Prior year financial statements have
been reformatted and/or amounts reclassified, as necessary, to conform with
the current year presentation.
In the opinion of management, the consolidated financial statements
contain all adjustments, which are those of a recurring nature, and
disclosures necessary to present fairly the financial position of the Company
as of March 31, 1995 and December 31, 1994, and the results of operations and
cash flows for the three month periods ended March 31, 1995 and 1994.
The Company and its subsidiaries follow generally accepted accounting
principles and reporting practices applicable to the banking industry. The
principles which materially affect the financial position, results of
operations and cash flows are set forth in Notes to Financial Statements
which are included in the Company's 1994 Annual Report and Form 10K. The
Company has not changed its accounting and reporting policies from those
disclosed in its 1994 Annual Report or Form 10K, except as described in Note
4.
(2) INVESTMENT SECURITIES
The carrying value and related market value/amortized cost of investment
securities in the held-to-maturity and available-for-sale portfolios at March
31, 1995 and December 31, 1994 were as follows (dollars in thousands):
March 31, 1995
Amortized Unrealized Unrealized Market
Held-To-Maturity Cost Gains Losses Value
U. S. Treasury $ 68,526 $ 29 $ 769 $ 67,786
U. S. Government Agencies
and Corporations 26,851 15 876 25,990
States and Political Subdivisions 49,426 289 1,049 48,666
Mortgage Backed Securities 2,945 8 113 2,840
Other Securities 2,310 - 29 2,281
Total $150,058 $ 341 $ 2,836 $147,563
March 31, 1995
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
U. S. Treasury $15,572 $ 113 $ 85 $ 15,600
U. S. Government Agencies
and Corporations 7,786 15 286 7,515
States and Political Subdivisions 19,615 152 419 19,348
Mortgage Backed Securities 3,164 16 19 3,161
Other Securities 1,981 7 1 1,987
Total $48,118 $ 303 $ 810 $ 47,611
<PAGE>
December 31, 1994
Amortized Unrealized Unrealized Market
Held To Maturity Cost Gains Losses Value
U.S. Treasury $ 72,979 $ - $ 1,681 $ 71,298
U.S. Government Agencies
and Corporations 23,018 3 1,415 21,606
States and Political
Subdivisions 49,125 135 2,027 47,233
Mortgaged Backed Securities 3,005 1 182 2,824
Other Securities 2,314 - 272 2,042
Total $150,441 $ 139 $ 5,577 $145,003
December 31, 1994
Amortized Unrealized Unrealized Market
Available For Sale Cost Gains Losses Value
U.S. Treasury $ 18,634 $ - $ 180 $ 18,454
U.S. Government Agencies
and Corporations 7,041 2 443 6,600
States and Political
Subdivisions 19,641 77 805 18,913
Mortgaged Backed Securities 2,932 - 32 2,900
Other Securities 1,981 1 2 1,980
Total $ 50,229 $ 80 $ 1,462 $ 48,847
(3) LOANS
The composition of the Company's loan portfolio at March 31, 1995 and
December 31, 1994 was as follows (dollars in thousands):
March 31, 1995 December 31, 1994
Commercial, Financial
and Agricultural $ 42,231 $ 39,288
Real Estate-Construction 24,651 24,315
Real Estate-Mortgage 255,722 255,754
Consumer 104,236 106,656
Gross Loans $426,840 $426,013
(4) ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses for the three
month period ended March 31, 1995 and 1994, is as follows:
March 31, 1995 March 31 1994
Balance, Beginning of the Period $ 7,551 $ 7,594
Provision for Loan Losses 274 330
Recoveries on Loans Previously
Charged-Off 183 120
Loans Charged-Off (288) (274)
Balance, End of Period $ 7,720 $ 7,770
<PAGE>
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS 114"), "Accounting by Creditors for Impairment of
a Loan," as amended. In accordance with SFAS 114, the value of a loan which
is deemed "impaired" is measured based on the present value of expected
future cash flows discounted at the loan's initial effective interest rate or
the fair value of the collateral, if the loan is collateral dependent. If
the value of a loan is less than its recorded investment, a valuation
allowance is established. This valuation allowance is included in the total
allowance for loan losses, which is established to cover losses inherent in
the portfolio as a whole. Certain loan categories including residential,
consumer and credit card loans are excluded from the scope of this Statement.
Adoption of SFAS 114 did not have a material impact on the level of the
allowance for loan losses.
The definition of insubstance foreclosure loans was also changed by SFAS 114.
As of March 31, 1995, loans which were previously deemed insubstance
foreclosures and classified as other real estate have been reclassified as
loans. Insubstance foreclosures are not material and have not been
reclassified for prior periods.
Impaired loans are primarily defined as all nonaccruing loans for the loan
categories which are included within the scope of SFAS 114. Selected
information pertaining to impaired loans is depicted in the table below.
_____March 31, 1995_______
Valuation
________________________________________________Balance______Allowance____
Impaired Loans:
With Related Credit Allowance $ 2,063 $ 431
Without Related Credit Allowance $ 1,480 $ --
Average Recorded Investment for the Period $ 4,501 $ *
* Not Applicable
__________________________________________________________________________
The Company recognizes income on impaired loans primarily on the cash basis.
Any change in the present value of expected cash flows is recognized through
the allowance for loan losses. For the period ended March 31, 1995, the
Company recognized $37,039 in interest income on impaired loans, of which
$30,588 was collected in cash.
(5) DEPOSITS
The composition of the Company's interest bearing deposits at March 31, 1995
and December 31, 1994 was as follows (dollars in thousands):
March 31, 1995 December 31, 1994
NOW Accounts $ 89,802 $ 95,540
Money Market Accounts 66,538 71,763
Savings Deposits 89,826 101,009
Other Time Deposits 246,692 212,151
Total Interest Bearing Deposits $492,858 $480,463
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion sets forth the major factors that have affected the
Company's financial condition and results of operations and should be read in
conjunction with the accompanying financial statements. The year-to-date
averages used in this report are based on daily balances for each respective
period.
RESULTS OF OPERATIONS
Net Income
Net income was $2.2 million, or $.77 per share for the first quarter of 1995,
a per share decrease of 6.1% over the $2.4 million, or $.82 per share for the
comparable period in 1994. Factors which impacted earnings include (1)
higher net interest income attributable to an increase in the Company's net
interest margin, (2) a reduction in noninterest income associated with
nonrecurring gains recognized during the first quarter of 1994 and lower
mortgage origination fees during 1995, and (3) higher noninterest expense
attributable to depreciation and expenses associated with completion of the
Company's corporate reorganization which was consummated on January 1, 1995.
Condensed statements of income for the respective periods are presented below
(dollars in thousands):
For The Three Months Ended March 31,
1995 1994
Interest and Dividend Income $12,764 $11,402
Taxable Equivalent Adjustment(1) 390 420
13,154 11,822
Interest Expense 4,442 3,472
Net Interest Income (FTE) 8,712 8,350
Provision for Loan Losses 274 330
Taxable Equivalent Adjustment 390 420
Net Int. Inc. After Provision 8,048 7,600
Noninterest Income 3,378 3,547
Noninterest Expense 8,384 7,899
Income Before Income Taxes 3,042 3,248
Income Taxes 854 898
Net Income 2,188 $ 2,350
Percent Change (6.89)% 57.51%
Return on Average Assets (2) 1.20% 1.28%
Return on Average Equity (2) 12.08% 13.90%
(1) Computed using a statutory tax rate of 34%
(2) Annualized
Net Interest Income
First quarter taxable equivalent net interest income increased $362,000, or
4.3%, over the same period for 1994. The increase is attributable to
improvement in the Company's net interest margin as average earning assets
declined over the comparable 1994 period. Table 1 on page 14 provides a
comparative analysis of the Company's average balances and interest rates.
<PAGE>
Taxable-equivalent interest income increased $1.3 million, or 11.3%, due to
rising interest rates and loan growth. The average yield on earning assets
increased 97 basis points from 7.20% in the first quarter of 1994 to 8.17% in
1995. Comparing the first quarter of 1995 to 1994, the Prime rate increased
300 basis points and the three-year Treasury Bill index increased over 200
basis points. Following the steep rise in interest rates in 1994, rate
indices retreated somewhat as the first quarter came to a close, perhaps
indicating a leveling off of interest rates during the second quarter.
Loans, which generally represent the Company's highest yielding asset,
increased (on average) $31.3 million, or 8.0%. As a percent of average
earning assets the loan portfolio increased from 58.9% to 64.8%. Interest
income generated from higher rates and loan growth more than offset the
decrease attributable to a $12.8 million reduction in average earning assets.
Interest expense increased $970,000, or 27.9%, due to a 89 basis point
increase in the average rate paid on interest bearing liabilities which rose
from 2.72% in the first quarter of 1994 to 3.61% in the first quarter of
1995. The increase in average rate paid is attributable to higher interest
rates and a shift in deposits from transaction and savings accounts to
certificates of deposit. Certificates of deposits, which generally represent
a higher cost of funds than other deposit offerings, increased as a percent
of average deposits from 32.1% in the first quarter of 1994 to 34.7% in the
first quarter of 1995, while savings deposits decreased from 17.1% to 15.0%.
This shift in mix further accentuated the overall increase in cost of funds
attributable to rising rates.
The Company's interest rate spread (defined as the average taxable equivalent
yield on earning assets less the average rate paid on interest bearing
liabilities) increased from 4.48% in the first quarter of 1994 to 4.56% in
the comparable quarter for 1995. The Company's net interest margin
percentage (defined as taxable-equivalent net interest income divided by
average earning assets) increased from 5.08% in the first quarter of 1994 to
5.41% in 1995. The increase in both the spread and margin is attributable to
rapidly rising interest rates during a period when market conditions and
competitive pressures did not justify a comparable increase in deposit
pricing. However, during the first quarter, competition increased
considerably and the Company experienced a reduction in margin between
January and March. If current market conditions persist, management does not
anticipate maintaining these relatively strong margins through the second
quarter.
Provisions for Loan Losses
The provision for loan losses for the three months ended March 31, 1995, was
$274,000 versus $330,000 for the first quarter of 1994. The lower provision
exceeded net charge-offs by $169,000 and reflects improved asset quality.
Relative to year-end, the reserve for loan losses increased slightly to $7.7
million, and represented 1.8% of total loans. Charge-off activity for the
respective periods is set forth below.
Three Months Ended
1995 1994
Net Charge-Offs $105,000 $154,000
Net Charge-Offs (Annualized) as a percent
of Average Loans Outstanding, Net of Unearned
Interest .10% .16%
<PAGE>
Noninterest Income
Noninterest income decreased $169,000, or 4.8%, over the first quarter of
1994. The decrease is attributable to a reduction in gains on the sale of
real estate and mortgage origination fees. During the first quarter of 1995,
the Company recognized gains from the sale of real estate totalling $82,000,
compared to $340,000 in 1994. Mortgage origination fees decreased $214,000
attributable to a reduction in mortgage volume of $11.8 million, or 77.4%.
In January 1995, the Company changed the method of income recognition for
Capital City Trust Company ("CCTC") from cash to accrual. This change in
method resulted in a one-time adjustment which increased CCTC revenues by
$166,000 in the first quarter.
Service charges on deposit accounts increased $20,000, or 1.5%. This was the
first favorable quarter-to-quarter comparison since the third quarter of
1992. The increase primarily reflects a higher level of activity subject to
service charge assessments.
Noninterest income as a percent of average earning assets was 2.1% for the
first quarter of 1995 versus 2.2% for the comparable quarter in 1994.
Noninterest Expense
Noninterest expense in the first quarter of 1995 increased $485,000, or 6.1%,
over the first quarter of 1994. Compensation expense, depreciation and
expenses associated with the Company's recent corporate reorganization where
the primary factors contributing to the overall increased.
Compensation expense increased $174,000, or 4.1%, reflecting annual raises
and an increase in full-time equivalent employees of 14.
Occupancy expense, including premises, furniture, fixtures and equipment
increased $209,000, or 16.9%. The increase is primarily attributable to
depreciation expense which is up $162,000. The increase reflects major
capital additions placed into service in 1994 including a new operations
center, opening of a new office, renovations and the purchase of furniture
and equipment. Capital additions are planned for 1995 which will add to the
current level of depreciation expense.
Other noninterest expense increased $102,000, or 4.2%. A portion of this
increase in associated with the recently completed corporate reorganization
and the newly consolidated Capital City Bank. The expense categories which
were primarily affected include advertising, printing/supplies, telephone and
postage.
Net noninterest expense (noninterest income minus noninterest expense) as a
percent of average earning assets was 3.1% in the first quarter of 1995
versus 2.7% for the first quarter of 1994. This increase is attributable to
the reduction in noninterest income and the higher level of noninterest
expense as discussed above.
Income Taxes
The provision for income taxes decreased $44,000, or 4.9%, over the first
quarter of 1994. The decrease in the provision is attributable to lower
taxable income. The Company's effective tax rate for the first quarter of
1995 was 28.1% compared to 27.6% for the same quarter in 1994.
<PAGE>
FINANCIAL CONDITION
The Company's average assets decreased to $735.9 million in the first quarter
of 1995 from $745.8 million in the first quarter of 1994. Average earning
assets were $652.2 million for the three months ended March 31, 1995 versus
$665.0 million for the comparable quarter of 1994. The decrease in assets
occurred primarily in the first quarter as the Company experienced a decline
in total deposits. Average loans were up $31.3 million, or 8.0%. Loan
growth was funded through a reduction in the investment portfolio and funds
sold which decreased $28.4 million (12.6%) and $15.6 million (32.2%),
respectively. Table I on page 14, presents average balances for the first
quarter of 1995 and 1994.
During the first quarter of 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 ("Accounting for Certain Investments in Debt and
Equity Securities"). To Afford greater flexibility in managing the
portfolio, management transferred approximately 30% of the portfolio to the
"Available-for-Sale" category. The available-for-sale securities portfolio
enables the Company to manage its liquidity position and interest rate risk
without adversely affecting the classification of securities in the "Held-to-
Maturity" portfolio, which are recorded at amortized costs. Securities in
the available-for-sale portfolio are recorded at fair value and represented
approximately 24% of the Company's total investment portfolio at March 31,
1995. See Note 2 in Notes to Consolidated Financial Statements for a further
breakdown of the Company's investments.
At March 31, 1995, the Company's nonperforming loans were $4.9 million versus
$6.0 million at year-end and $9.2 million at March 31, 1994. As a percent of
nonperforming loans, the allowance for loan losses represented 156.0% at
March 31, 1995 versus 126.6% at December 31, 1994 and 84.7% at March 31,
1994. Nonperforming loans include nonaccruing and restructured loans. Other
real estate, which includes property acquired either through foreclosure or
by receiving a deed in lieu of foreclosure, was $.7 million at March 31,
1995, versus $1.6 million at December 31, 1994, and $2.3 million at March 31,
1994.
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114 ("SFAS 114"), "Accounting by Creditors for
Impairment of a Loan," as amended. In accordance with SFAS 114, the
valuation allowance for loans which are deemed "impaired" is measured based
on the present value of expected future cash flows discounted at the loan's
initial effective interest rate or the fair value of the collateral, if the
loan is collateral dependent. See Note 4 in the Notes to Consolidated
Financial Statements for further information.
Average deposits decreased from $647.8 million in the first quarter of 1994,
to $635.1 million in the first quarter of 1995. Although interest rates
increased significantly during 1994, there was little competitive pressure to
increase pricing and total deposits remained relatively stable. The
reduction in deposits occurred almost exclusively during the first quarter of
1995 as competition increased and depositors sought higher yields. To combat
the deposit outflow management became more aggressive on pricing and by the
end of the first quarter had increased deposits to a level which exceeded
that of the fourth quarter of 1994.
Although the level of deposits remained relatively constant during 1994,
there was a gradual shift from transaction and savings accounts to
certificates of deposits as interest rates rose and depositors became more
<PAGE>
willing to invest in longer term, fixed rate maturities. During the first
quarter this shift was further accentuated. On average, certificates of
deposit, as a percent of total deposits increased to 34.7% from 32.1% for the
comparable quarter in 1994.
The ratio of average noninterest bearing deposits to total deposits was 24.4%
for the first quarter of 1995 compared to 23.6% for the first quarter of
1994. For the same periods, the ratio of average interest bearing liabilities
to average earning assets was 76.6% in 1995 versus 78.0 in 1994. These
ratios were impacted by the overall reduction in deposits which came
primarily from the interest bearing categories.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity, for a financial institution, is the availability of funds to meet
increased loan demand and/or excessive deposit withdrawals. Management has
implemented a financial structure that provides ready access to sufficient
liquid funds to meet normal transaction requirements, take advantage of
investment opportunities and cover unforeseen liquidity demands. In addition
to core deposit growth, sources of funds available to meet liquidity demands
for the subsidiary banks include federal funds sold, near-term loan and
investment maturities, including securities held in the available for sale
portfolio, and the ability to purchase federal funds through established
lines of credit with correspondent banks. Additionally the Parent Company
maintains two $6.0 million revolving lines of credit. As of March 31, 1995,
there was debt outstanding under either facility.
The Company's equity capital was $75.4 million as of March 31, 1995 compared
to $72.4 million as of December 31, 1994. Management continues to monitor
its capital position in relation to its level of assets with the objective of
maintaining a strong capital position. The leverage ratio was 9.6% at March
31, 1995 and December 31, 1994. Further, the Company's risk-adjusted capital
ratio of 17.2% significantly exceeds the 8.0% minimum requirement under the
risk-based regulatory guidelines.
State and federal regulations as well as the Company's long-term debt
agreements place certain restrictions on the payment of dividends by both the
Company and its Group banks. At March 31, 1995, these regulations and
covenants did not impair the Company's (or its Group banks') ability to
declare and pay dividends or to meet other existing obligations.
During the first three months of 1995, shareholders' equity increased $3.0
million, or 16.5%, on an annualized basis. At March 31, 1995, the Company's
common stock had a book value of $26.42 per share compared to $25.44 at
December 31, 1994. Pursuant to the Company's stock repurchase program
adopted in 1989, the Company has repurchased 251,563 shares of its common
stock, net of shares subsequently reissued. In the first quarter of 1995,
there were no shares repurchased and 7,865 treasury shares were reissued, a
majority of which represented performance awards issued in accordance with
the Company's Stock Incentive Plan.
<PAGE>
<TABLE>
TABLE I
AVERAGES BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)
<CAPTION>
1995 1994
Average Average Average Average
Balance Interest Rate Balance Interest Rate
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Loans, Net of Unearned Interest $422,880 9,749 9.35% $391,625 $8,276 8.57%
Taxable Investment Securities 128,478 1,710 5.40% 152,926 1,865 4.94%
Tax-Exempt Investment Securities 67,990 1,217 7.16% 71,959 1,297 7.21%
Funds Sold 32,909 478 5.89% 48,531 384 3.21%
Total Earning Assets 652,257 13,154 8.17% 665,041 11,822 7.20%
Cash & Due From Banks 51,071 50,248
Allowance for Loan Losses (7,646) (7,691)
Other Assets 40,283 38,256
TOTAL ASSETS $735,965 $745,854
LIABILITIES
NOW Accounts 93,424 529 2.30% 97,325 429 1.79%
Money Market Accounts 70,750 541 3.10% 79,038 387 1.98%
Savings Accounts 95,217 578 2.46% 110,933 656 2.40%
Other Time Deposits 220,230 2,557 4.71% 207,901 1,831 3.57%
Total Interest Bearing Deposits 479,621 4,205 3.56% 495,197 3,303 2.70%
Funds Purchased 18,647 225 4.90% 20,483 143 2.84%
Other Borrowed Funds 1,251 12 3.81% 1,099 6 2.33%
Long-Term Debt - - - 1,858 20 4.29%
Total Int. Bearing Liabilities 499,519 4,442 3.61% 518,637 3,472 2.72%
Noninterest Bearing Deposits 155,528 152,593
Other Liabilities 7,427 6,053
TOTAL LIABILITIES 662,475 677,283
SHAREHOLDERS' EQUITY
Common Stock 31 31
Surplus 5,863 5,854
Retained Earnings 67,596 62,686
TOTAL S'HOLDERS' EQUITY 73,490 68,571
TOTAL LIAB. & EQUITY 735,964 $745,854
Interest Rate Spread 4.56% 4.48%
Net interest Income $8,712 $8,350
Net Interest Margin 5.41% 5.08%
(1) Average balances include nonaccrual loans. Interest income includes fees on loans of approximately $419,000 and
$391,000, for the three months ended March 31, 1995 and 1994, respectively.
(2) Interest income includes the effects of taxable equivalent adjustments using a 34% tax rate.
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Items 1-5.
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
Not applicable
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
period ended March 31, 1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned Chief Financial Officer hereunto duly authorized.
CAPITAL CITY BANK GROUP, INC.
(Registrant)
/S/ J. KIMBROUGH DAVIS
J. Kimbrough Davis
Senior Vice President and
Chief Financial Officer
Date: May 12, 1995
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