FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter:
June 30, 1996
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 July 31, 1996, 2,871,553 shares of the Registrant's Common Stock,
$.01 par value, were outstanding.
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CAPITAL CITY BANK GROUP, INC.
I N D E X
PART I. FINANCIAL INFORMATION PAGE NUMBER
Consolidated Statements of Condition --
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Income --
Three and Six Months Ended June 30, 1996 4
and 1995
Consolidated Statements of Cash Flows --
Six Months Ended June 30, 1996
and 1995 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item IV Submission of Matters to a Vote of Security
Holders 14
Item V Other Information 16
Item VI Exhibits and Reports on Form 8-K 16
Signatures 16
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PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
AS OF JUNE 30, 1996 AND DECEMBER 31, 1995
(Dollars In Thousands, Except Per Share Amounts)
June 30, 1996 December 31, 1995
(Unaudited) (Audited)
ASSETS
Cash and Due From Banks $59,639 $ 61,613
Federal Funds Sold 53,100 41,150
Interest Bearing Deposits in Other Banks 1,982 300
Investment Securities Available-for-Sale 197,351 230,747
Loans 469,626 447,779
Unearned Interest (3,076) (3,806)
Allowance for Loan Losses (6,409) (6,474)
Loans, Net 460,141 437,499
Premises and Equipment 26,832 26,240
Accrued Interest Receivable 6,890 7,339
Intangibles 1,011 1,129
Other Assets 8,972 7,642
Total Assets $815,918 $813,659
LIABILITIES
Deposits:
Noninterest Bearing Deposits $175,776 $168,566
Interest Bearing Deposits 524,264 531,013
Total Deposits 700,040 699,579
Federal Funds Purchased and Securities Sold
Under Repurchase Agreements 20,781 17,367
Other Short-Term Borrowings 1,931 2,400
Long-Term Debt 1,927 1,982
Other Liabilities 7,829 11,173
Total Liabilities 732,508 732,501
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value; 30,000,000
shares authorized; 2,862,296 shares
outstanding at June 30, 1996 and
2,853,716 outstanding at December 31,
1995 29 29
Additional Paid In Capital 4,162 3,913
Retained Earnings 80,052 76,248
Net Unrealized Gain (Loss) on Available-
for-Sale Securities (833) 968
Total Shareholders' Equity 83,410 81,158
Total Liabilities and
Shareholders' Equity $815,918 $813,659
Book Value Per Share $ 29.14 $ 28.44
The accompanying notes to Consolidated Financial Statements are an integral part
of these statements.
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CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Dollars in Thousands, Except Per Share Amounts)
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1996 1995 1996 1995
INTEREST INCOME
Interest and Fees on Loans $10,784 $10,062 $21,459 $19,799
Investment Securities:
U. S. Treasury 985 1,032 2,029 2,119
U. S. Government Agencies/Corp. 993 744 2,004 1,300
States and Political Subdivisions 878 857 1,782 1,696
Other Securities 71 61 140 128
Federal Funds Sold 430 834 888 1,312
Total Interest Income 14,141 13,590 28,302 26,354
INTEREST EXPENSE
Deposits 4,593 5,064 9,363 9,269
Fed. Funds Purchased & Securities
Sold Under Repurchase Agreements 257 303 540 528
Long-Term Borrowings 29 - 59 -
Other Short-Term Debt 9 12 21 24
Total Interest Expense 4,888 5,379 9,983 9,821
Net Interest Income 9,253 8,211 18,319 16,533
Provision for Loan Losses 262 17 523 291
Net Interest Income After Provision
for Loan Losses 8,991 8,194 17,796 16,242
NONINTEREST INCOME
Income from Fiduciary Activities 252 165 540 502
Service Charges on Deposit Accounts 1,630 1,407 3,149 2,730
Data Processing 845 780 1,512 1,386
Securities Transactions 4 - 16 -
Other 1,095 896 2,167 1,985
Total Noninterest Income 3,826 3,248 7,384 6,603
NONINTEREST EXPENSE
Salaries and Employee Benefits 4,746 4,464 9,531 8,906
Occupancy, Net 609 628 1,226 1,219
Furniture and Equipment 972 790 1,863 1,631
Other 2,525 2,571 5,010 5,058
Total Noninterest Expense 8,852 8,453 17,630 16,814
Income Before Income Tax 3,965 2,989 7,550 6,031
Income Tax Expense 1,183 828 2,201 1,682
NET INCOME $ 2,782 $ 2,161 $ 5,349 $ 4,349
Net Income Per Share $ .97 $ .75 $ 1.87 $ 1.52
Cash Dividends Per Share $ .27 $ .11 $ .54 $ .11
Average Shares Outstanding 2,862,292 2,853,680 2,861,136 2,852,756
The accompanying notes to Consolidated Financial Statements are an integral part
of these statements.
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CAPITAL CITY BANK GROUP, INC.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30
(Dollars In Thousands)
1996 1995
(Unaudited) (Unaudited)
NET INCOME $ 5,349 $ 4,349
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Provision for Loan Losses 523 291
Depreciation 1,245 1,188
Net Amortization (Accretion) 555 674
Amortization of Intangible Assets 118 133
Non-Cash Compensation 90 72
Net (Increase) Decrease in Interest
Receivable 449 (1,045)
Net (Increase) Decrease in Other Assets (1,330) 1,466
Net Increase (Decrease) in Other
Liabilities (2,224) 1,332
Net Cash From Operating Activities 4,775 8,460
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Payments/Maturities of
Investment Securities-Held to Maturity - 20,368
Proceeds from Payments/Maturities of
Investment Securities-Available for Sale 55,884 7,435
Purchase of Investment Securities-Held
to Maturity - (25,382)
Purchase of Investment Securities-
Available for Sale (23,450) (12,450)
Net (Increase) Decrease in Loans (23,166) (6,315)
Purchase of Premises & Equipment (1,841) (2,585)
Sales of Premises & Equipment 4 22
Net Cash from Investing Activities 7,431 (18,907)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Deposits 461 18,339
Net Increase (Decrease) in Federal
Funds Purchased 3,414 6,288
Net Increase (Decrease) in Other Borrowed
Funds (469) 631
Repayment of Long-Term Debt (55) -
Dividends Paid (4,085) (2,277)
Issuance of Common Stock 186 220
Net Cash From Financing Activities (548) 23,201
Net Increase (Decrease) in Cash and
Cash Equivalents 11,658 12,754
Cash and Cash Equivalents at Beginning of
Period 103,063 89,067
Cash and Cash Equivalents at End of Period $ 114,721 $ 101,821
Supplemental Disclosure:
Interest Paid $11,366 $8,837
Taxes Paid $ 1,988 $1,542
The accompanying notes to Consolidated Financial Statements are an integral part
of these statements.
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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
June 30, 1996 and December 31, 1995, and the results of operations
for the three and six month periods ended June 30, 1996 and
1995, and cash flows for the six month period ended June 30, 1996 and 1995.
The Company and its subsidiaries follow generally accepted accounting
principles and reporting practices applicable to the banking industry. The
principles which materially affect its financial position, results of
operations and cash flows are set forth in Notes to Financial Statements
which are included in the Company's 1995 Annual Report and Form 10K.
(2) INVESTMENT SECURITIES
The carrying value and related market value of investment securities at
June 30, 1996 and December 31, 1995 were as follows (dollars in thousands):
June 30, 1996
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
U. S. Treasury $ 50,694 $ 129 $ 123 $ 50,700
U. S. Government Agencies
and Corporations 66,081 13 1,025 65,069
States and Political
Subdivisions 73,770 435 603 73,602
Mortgage Backed Securities 4,110 10 93 4,027
Other Securities 3,959 5 11 3,953
Total $198,614 $ 592 $ 1,855 $197,351
December 31, 1995
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
U.S. Treasury $ 72,289 $ 470 $ 54 $ 72,705
U.S. Government Agencies
and Corporations 70,883 264 96 71,051
States and Political
Subdivisions 75,986 1,037 143 76,880
Mortgage Backed Securities 5,965 47 26 5,986
Other Securities 4,107 19 1 4,125
Total $ 229,230 $ 1,837 $ 320 $230,747
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(3) LOANS
The composition of the Company's loan portfolio at June 30, 1996 and
December 31, 1995 was as follows (dollars in thousands):
June 30, 1996 December 31, 1995
Commercial, Financial
and Agricultural $ 50,935 $ 46,149
Real Estate-Construction 27,673 28,391
Real Estate-Mortgage 270,190 259,503
Consumer 120,828 113,736
Gross Loans $469,626 $447,779
(4) ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses for the six month
period ended June 30, 1996 and 1995, is as follows (dollars in thousands):
June 30, 1996 June 30, 1995
Balance, Beginning of the Period $ 6,474 $ 7,551
Provision for Loan Losses 523 291
Recoveries on Loans Previously
Charged-Off 306 297
Loans Charged-Off 894 795
Balance, End of Period $ 6,409 $ 7,344
Impaired loans are primarily defined as all nonaccruing loans for the loan
categories which are included within the scope of SFAS 114. Nonaccruing loans
at June 30, 1996 were $1.2 million compared to $4.7 million at December 31,
1995.
The Company recognizes income on nonaccrual loans primarily on the cash
basis. Any change in the present value of expected cash flows is
recognized through the allowance for loan losses.
(5) DEPOSITS
The composition of the Company's interest bearing deposits at June 30, 1996
and December 31, 1995 was as follows (dollars in thousands):
June 30, 1996 December 31, 1995
NOW Accounts $110,260 $122,517
Money Market Accounts 86,605 67,942
Savings Deposits 77,002 78,522
Other Time Deposits 250,397 262,032
Total Interest Bearing Deposits $524,264 $531,013
(6) SUBSEQUENT EVENT
On July 1, 1996, Capital City Bank Group, Inc. (the "Company"), consummated its
acquisition of First Financial Bancorp, Inc. a Florida corporation ("First
Financial"), parent company to First Federal Bank, Tallahassee, Florida. At
June 30, 1996, First Financial had assets of approximately $243.7 million,
deposits of approximately $205.1 million and stockholders' equity of
approximately $15.3 million.
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(7) RECLASSIFICATION
Pursuant to current state laws, treasury shares are treated as authorized,
but unissued. Accordingly, the Company canceled all existing treasury
shares and recorded the cancellation as charges to paid-in capital and
retained earnings and a credit to treasury stock. At the time the shares
previously recorded as treasury shares were originally issued, (January 1,
1984), the book value per share was $8.57. Upon cancellation of the
treasury shares, the book value of $8.57 was used to reduce the capital
stock accounts ($.01 per share for common stock and $8.56 per share for
additional paid-in-capital), and the difference between $8.57 and the cost
per share at which the treasury shares were repurchased was charged to
retained earnings. All prior period statements presented herein have been
reclassified to reflect the cancellation of treasury shares and to conform
with current period presentation.
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 $2.8 million, or $.97 per share for the second quarter of
1996, a per share increase of 29.3% over the $2.2 million, or $.75 per
share for the comparable period in 1995. Net income was $5.3 million, or
$1.87 per share for the six months ended June 30, 1996, a per share
increase of 23.0% over the $4.3 million, or $1.52 per share for comparable
period in 1995. Operating revenue, which includes net interest income and
noninterest income, increased $2.6 million, or 11.1%, over the first half
of 1995, and was the most significant factor contributing to the increase
in earnings.
For The Three For The Six
Months Ended Months Ended
June 30, June 30,
1996 1995 1996 1995
Interest and Dividend Income $14,141 $13,590 $28,302 $26,354
Taxable Equivalent Adjustment(1) 429 389 870 779
14,570 13,979 29,172 27,133
Interest Expense 4,888 5,379 9,983 9,821
Net Interest Income (FTE) 9,682 8,600 19,189 17,312
Provision for Loan Losses 262 17 523 291
Taxable Equivalent Adjustment 429 389 870 779
Net Int. Inc. After Provision 8,991 8,194 17,796 16,242
Noninterest Income 3,826 3,248 7,384 6,603
Noninterest Expense 8,852 8,453 17,630 16,814
Income Before Income Taxes 3,965 2,989 7,550 6,031
Income Taxes 1,183 828 2,201 1,682
Net Income $ 2,782 $ 2,161 $ 5,349 $ 4,349
Percent Change Over Comparable
Prior Year Period 28.74% (9.47%) 22.99% (8.19%)
Return on Average Assets (2) 1.42% 1.13% 1.36% 1.17%
Return on Average Equity (2) 13.33% 11.40% 13.05% 11.73%
(1) Computed using a statutory tax rate of 34%
(2) Annualized
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Net Interest Income
Second quarter taxable equivalent net interest income increased $1.1
million or 12.6%, over the comparable quarter in 1995. Taxable equivalent
net interest income for the first half of 1996 increased $1.9 million, or
10.8%, over the first half of 1995. The increase in both periods is attributable
to an improvement in the Company's net interest margin which has been bolstered
by loan growth and a reduction in the cost of funds. Table I on page 13
provides a comparative analysis of the Company's average balances and interest
rates.
For the three and six month periods ended June 30, 1996, taxable-equivalent
interest income increased $591,000, or 4.2%, and $2.0 million, or 7.5%,
respectively, over the comparable prior year periods. Interest
income has increased due to growth in earning assets and, in particular, loan
growth. Loans during the first half of 1996 averaged $458.6 million,
representing an increase of $31.6 million, or 7.4%, over the comparable period
in 1995, and loans as a percent of average earning assets increased to 65.1%
from 63.8%. This shift in the mix lead to a 16 basis point increase in the
yield on earning assets during the first six months of 1996 as compared to
the comparable prior year period.
Interest expense through the first six months of 1996 has increased
$162,000, or 1.6%, over the first half of 1995. However, second quarter
interest expense decreased $491,000 or 9.1%, over the comparable quarter in
1995. The decrease in the second quarter of 1996 is due to lower rates paid
on the Company's deposits, including both transaction and time accounts,
and repricing of approximately $31.0 million in promotional certificates of
deposit which were issued late in the first quarter of 1995. During the second
quarter of 1996, the average rate paid on interest bearing liabilities fell to
3.68% from 3.83% in the first quarter of 1996 and 4.12% in the second quarter
of 1995.
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 4.29% in the first half of 1995 to
4.57% in the comparable 1996 period. The Company's net interest margin
percentage (defined as taxable-equivalent net interest income divided by
average earning assets) increased from 5.21% in the first half of 1995 to
5.47% in the first half of 1996.
Provision for Loan Losses
The provision for loan losses was $262,000 and $523,000, respectively, for
the three and six month periods ended June 30, 1996, compared to $17,000
and $291,000 for the comparable periods in 1995. As a result of improving
credit quality and continued low net charge-off levels, management discontinued
recording a loan loss provision during the second quarter of 1995 and did
not resume the provision until the first quarter of 1996. The provision
recorded during the first six months of 1996 approximates net charge-offs.
For a discussion of the Company's nonperforming loans, see the section entitled
"Financial Condition".
As of June 30, 1996, the allowance for loan losses totaled $6.4 million compared
to $7.3 million at June 30, 1995. The allowance as a percent of loans,
represented 1.37% and 1.72% at the end of each respective period. Although the
allowance for the loan losses has declined over the prior year, it is
management's opinion, based on the low level of nonperforming loans and net
charge-offs, and current economic conditions, that the allowance of $6.4
million, or 1.37% of period-end loans, is sufficient to provide for losses
inherent in the loan portfolio at June 30, 1996.
Charge-off activity for the respective periods is set forth below.
Three Months Ended Six Months Ended
6/30/96 6/30/95 6/30/96 6/30/95
Net Charge-Offs $283,000 $393,000 $588,000 $498,000
Net Charge-Offs (Annualized)
as a percent of Average
Loans Outstanding, Net of
Unearned Interest .24% .36% .26% .23%
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Noninterest Income
Noninterest income increased $578,000, or 17.8%, in the second quarter of
1996 versus the comparable quarter for 1995, and $781,000, or
11.8%, for the six months ended June 30, 1996 versus the comparable period
for 1995. The increase in noninterest income is attributable to a greater
focus on revenue growth and several initiatives undertaken by management,
including the implementation of recommendations resulting from a profit
enhancement program conducted in 1995. On a prospective basis, fees for
deposit services were increased effective July 1, 1996, which will further
bolster growth in noninterest revenues.
Service charges on deposit accounts increased $223,000, or 15.8%, and
$419,000, or 15.3%, over the comparable three and six month periods for
1995. The increase primarily reflects a higher level of activity subject
to service charge assessments and tighter controls over waived fees.
Data processing revenues increased $65,000, or 8.3%, and $126,000, or 9.1%,
respectively, over the comparable three and six month periods in 1995. The
increase primarily reflects higher revenues associated with processing for
third party banks.
In the second quarter of 1996, income from fiduciary services increased
$87,000, or 52.7%, as compared to the second quarter of 1995. A price
increase, growth in assets under management and the collection of estate
fees all contributed to the higher revenues during the second quarter. In
January 1995, the Company changed its method of income recognition for
Capital City Trust Company ("CCTC") from cash to accrual. This change
resulted in a one-time adjustment which inflated CCTC revenues during the
first quarter of 1995. Despite the significant increase in revenues during
the second quarter, year-to-date revenues are only up $38,000, or 7.6%, as
a result of the one-time adjustment recognized during 1995.
Other income increased $199,000, or 22.2%, and $182,000, or 9.2%,
respectively, for the three and six month periods ended June 30, 1996 over
the comparable prior year periods. Mortgage origination fees increased $68,000
or 43.6% due to higher volume and check printing income increased $46,000, or
34.8%, due to a renegotiation of the contract which went into effect in March
1996. Additionally, other fees and commissions were up $61,000, or 18.9%.
Noninterest income as a percent of average earning assets was 2.1% for the
first half of 1996 versus 2.0% for the comparable quarter in 1995.
Noninterest Expense
Noninterest expense increased $399,000, or 4.7%, and $816,000, or 4.9%,
respectively, over the comparable three and six month periods in 1995.
Through the first six months, compensation expense increased $625,000, or
7.0%, reflecting annual raises and an increase in full-time equivalent
employees of 15.
Occupancy expense, including premises, furniture, fixtures and equipment
increased $163,000, or 11.5%, and $239,000, or 8.4%, respectively, over the
comparable three and six month periods in 1995. The increase is
attributable to depreciation, repairs/maintenance and other related expenses
which were up over the prior year by $57,000, $102,000 and $79,000,
respectively.
Other noninterest expense decreased $48,000, or .9%, during the first six
months of 1996. The overall decrease reflects a $720,000 reduction in FDIC
insurance premiums. Higher costs associated with legal and professional fees,
ORE expenses/losses, fraud losses and courier service offset a significant
portion of the favorable reduction in insurance premiums.
<PAGE>
Annualized net noninterest expense (noninterest income minus noninterest
expense) as a percent of average assets was 2.61% in the first half
of 1996 versus 2.74% for the first half of 1995. The decrease in this
percentage is attributable to the growth in noninterest income.
Income Taxes
The provision for income taxes increased $355,000, or 42.8%, during the
second quarter and $519,000, or 30.9%, during the first six months of 1996.
The increase in the provision over the prior year is attributable to higher
taxable income. The Company's effective tax rate for the first half of
1996 was 29.2% versus 27.9% for the comparable period in 1995. The increase
in the effective tax rate is attributable to a decrease in tax exempt
income as a percent of taxable income in the first half of 1996 as compared
to the first half of 1995.
FINANCIAL CONDITION
The Company's average assets increased to $790.9 million in the first half
of 1996 from $751.0 million in the first half of 1995. Average earning
assets were $704.7 million for the six months ended June 30, 1996 versus
$669.8 million for the comparable period in 1995. Average loans were up
$31.6 million, or 7.4%, over the comparable six month period in 1995.
The increase in loans was funded primarily through an increase in average
deposits which grew by $25.8 million or 4.0%. Average U.S. Government securities
increased $7.3 million, or 5.8%, while average municipal securities increased
$6.3 million, or 9.2%. Table I on page 13, presents average balances for the
three and six month periods of 1996 and 1995.
The investment portfolio is a significant component of the Company's
operations and, as such, it functions as a key element of liquidity and
asset/liability management. Securities in the Available-for-Sale portfolio
are recorded at fair value and unrealized gains and losses associated with
these securities are recorded, net of tax, as a separate component of
shareholders' equity. At June 30, 1996, shareholders' equity included a
net unrealized loss of $833,000 compared to a gain of $968,000 at December
31, 1995. The reduction in value reflects the rise in interest rates
which began late in the first quarter of 1996.
Average loans increased $31.6 million reflecting growth primarily in the
catagories of real estate mortgage and consumer loans. Based on the
averages for the first half of 1996, loans as a percent of earning assets
increased to 65.1% from 63.8% in 1995, which had a favorable impact on the
Company's net interest margin. For the second quarter of 1996, this percentage
increased further to 66.0%.
At June 30, 1996, the Company's nonperforming loans were $1.2 million
versus $4.7 million at year-end 1995. As a percent of nonperforming loans, the
allowance for loan losses represented 542.2% at June 30, 1996 versus 126.6%
at year-end 1995. 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 $1.1 million
at June 30, 1996, versus $1.0 million at December 31, 1995. The ratio of
nonperforming assets to loans plus other real estate was .48% at June 30,
1996 compared to 1.28% at December 31, 1995.
Average deposits increased to $673.5 million for the first half of 1996,
from $647.7 million for the first half of 1995. The growth in deposits was
primarily driven by deposit promotions which were initiated by the Company
during the second and fourth quarters of 1995. As a result of these
promotions, certificates of deposit represented $14.8 million, or 57.4%, of
the $25.8 million growth in average total deposits. Certificates of
deposit, as a percent of average total deposits, increased to 37.8% for the
first half of 1996 from 36.9% for the comparable period in 1995.
The ratio of average noninterest bearing deposits to total deposits was
24.4% for the first half of 1996 and 1995. For the same periods, the ratio
of average interest bearing liabilities to average earning assets was 75.9%
and 76.3%, respectively.
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
<PAGE>
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 the "Available-for-Sale"
investment portfolio, and the ability to purchase federal funds through
established lines of credit with correspondent banks. Additionally, the parent
company maintains a $25 million revolving line of credit. As of June 30, 1996,
there was no debt outstanding under this credit facility. However, on July 1,
the Company borrowed $15.0 million to fund the acquisition of First Financial
Bancorp, Inc. (See Item V)
The Company's equity capital was $83.4 million as of June 30, 1996,
compared to $81.2 million as of December 31, 1995. The Company's
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 10.1% at June 30, 1996 versus 9.8% at
December 31, 1995. Further, the Company's risk-adjusted capital ratio of
18.9% significantly exceeds the 8.0% minimum requirement under the risk-
based regulatory guidelines.
In 1996, the Board of Directors converted its dividend payment schedule
from semi-annual to quarterly. As of June 30, 1996, the Company had
declared and paid two quarterly dividends of $.27 each. State and federal
regulations as well as the Company's long-term debt agreement place certain
restrictions on the payment of dividends by both the Company and its Group
banks. At June 30, 1996, 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 six months of 1996, shareholders' equity increased $2.3
million, or 5.5%, on an annualized basis. The net increase in shareholders'
equity reflects net income of $5.3 million, dividends of $1.6 million and a
shift in the Company's unrealized gain(loss) on available-for-sale securities
from a gain of $968,000 at December 31, 1995 to a loss of $833,000 at June 30,
1996. The Company's common stock had a book value of $29.14 per share at June
30, 1996 compared to $28.44 at December 31, 1995. 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 half of 1996, there were no shares repurchased and 8,580
shares were issued, a majority of which were shares issued in accordance
with the Company's Associate Stock Purchase Plan.
<PAGE>
<TABLE>
AVERAGES BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)
<CAPTION>
FOR THREE MONTHS ENDED JUNE 30 FOR SIX MONTHS ENDED JUNE 30
1996 1995 1996 1995
Balance Interest Rate Balance Interest Rate Balance Interest Rate Balance Interest Rate
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans, Net of Unearned Interest $464,713 $10,812 9.36% $431,237 $ 10,069 9.37% $458,645 $21,521 9.44% $427,072 $19,818 9.36%
Taxable Investment Securities 132,218 2,049 6.23% 131,823 1,837 5.59% 137,283 4,173 6.11% 130,121 3,547 5.49%
Tax-Exempt Investment Securities 74,361 1,279 6.88% 69,691 1,238 7.11% 75,185 2,589 6.89% 68,845 2,456 7.13%
Funds Sold 32,524 430 5.32% 55,269 834 6.05 33,592 889 5.32% 43,749 1,312 6.05%
Total Earning Assets 703,816 14,570 8.32% 688,020 13,978 8.15% 704,705 29,172 8.32% 669,787 27,133 8.16%
Cash & Due From Banks 50,713 45,953 49,985 48,533
Allowance for Loan Losses (6,484) (7,688) (6,495) (7,667)
Other Assets 42,622 39,142 42,744 40,358
TOTAL ASSETS $790,667 $765,427 $790,939 $751,011
LIABILITIES
NOW Accounts $ 95,918 $ 353 1.47% $ 88,886 $ 461 2.08% $97,666 $ 783 1.61% $ 91,148 $ 990 2.19%
Money Market Accounts 84,319 664 3.17% 68,025 518 3.05% 78,268 1,188 3.05% 69,380 1,059 3.08%
Savings Accounts 78,305 399 2.05% 85,047 506 2.39% 78,762 808 2.06% 90,085 l,084 2.43%
Other Time Deposits 250,995 3,177 5.09% 258,336 3,578 5.55% 254,240 6,584 5.21% 239,400 6,135 5.17%
Total Int. Bearing Deposits 509,537 4,593 3.62% 500,294 5,063 4.06% 508,936 9,363 3.70% 490,013 9,268 3.81%
Funds Purchased 21,536 257 4.80% 21,777 303 5.58% 22,772 540 4.77% 19,810 529 5.38%
Other Borrowed Funds 1,279 9 3.15% 1,262 12 3.89% 1,294 21 3.41% 1,256 24 3.85%
Long-Term Debt 1,941 29 6.04% - - - 1,955 59 6.07% - - -
Total Interest Bearing
Liabilities 534,293 4,888 3.68% 523,333 5,378 4.12% 534,957 9,983 3.75% 511,079 9,821 3.87%
Noninterest Bearing Deposits 164,218 160,168 164,556 157,733
Other Liabilities 8,217 5,880 8,962 7,435
TOTAL LIABILITIES 706,728 689,381 708,475 676,247
SHAREHOLDERS' EQUITY
Common Stock 29 29 29 29
Surplus 4,163 3,912 4,080 3,833
Retained Earnings 79,747 72,105 78,355 70,902
TOTAL SHAREHOLDERS' EQUITY 83,939 76,046 82,464 74,764
TOTAL LIABILITIES & EQUITY $790,667 $765,427 $790,939 $751,011
Interest Rate Spread 4.64% 4.03% 4.57% 4.29%
Net interest Income $9,682 $8,600 $19,189 $17,312
Net Interest Margin 5.53% 5.02% 5.47% 5.21%
(1) Average balances include nonaccrual loans. Interest income includes fees on loans of approximately $ 480,000 and $ 956,000,
for the three and six months ended June 30, 1996, versus $ 238,000 and $697,000, for the comparable periods ended June 30, 1995.
(2) Interest income includes the effects of taxable equivalent adjustments using
a 34% tax rate.
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Items 1-3.
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of Capital City Bank Group, Inc. was
held on April 30, 1996. Proxies for the meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, and there was no
solicitation in opposition to management's solicitations. The following
summarizes all matters voted upon at this meeting.
(1) To fix the number of directors to be elected at seven (7) and the
election of the seven (7) persons listed as a group:
(1) DuBose Ausley (5) Payne H. Midyette, Jr.
(2) Thomas A. Barron (6) Godfrey Smith
(3) Cader B. Cox, III (7) William G. Smith, Jr.
(4) John K. Humphress
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,426,363 1,113 0
(2) To approve the Company's 1996 Associate Incentive Plan.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,405,558 21,918 0
(3) To approve and adopt an amendment to the Articles of
Incorporation of the Company to increase the number of authorized shares of
the Company's common stock to 30,000,000 and to authorize 3,000,000 shares
of preferred stock, which preferred stock would have rights and preferences
to be determined by the Board of Directors.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,416,824 4,215 6,437
(4) To approve and adopt amendments to the Articles of Incorporation
of the Company governing certain rights of shareholders; specifically, to
(a) establish a classified Board of Directors beginning with the 1997
Annual Meeting of Shareholders; (b) provide that the shareholders of the
Company may act only at a duly and validly called meeting and not by
written consent; (c) provide that only (i) a majority of the total number
of authorized directors on the Board of Directors (calculated without
regard to any vacant positions) or (ii) the holders of not less than fifty
percent (50%) of all the votes entitled to be cast on any issue at a
special meeting of shareholders, may call such a special meeting; and
(d) amend the procedures that shareholders must follow in order to nominate
directors.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,423,094 2,650 1,732
(5) To approve and adopt an amendment to the Articles of
Incorporation of the Company to specify factors to be considered by the
Board of Directors in evaluating acquisition offers.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,423,550 2,372 1,554
(6) To approve and adopt an amendment to the Articles of Incorporation of
the Company to require obligatory indemnification of the Company of its
officers and directors in certain instances.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,417,421 2,695 7,360
(7) To approve and adopt amendments to the Articles of Incorporation of
the Company to increase certain shareholder voting requirements;
specifically, to (a) provide that the affirmative vote of at least two-
thirds (66 2/3%) of the outstanding shares of the Company's Common Stock,
or a majority of such shares if a majority of disinterested directors also
approve, is required to amend or to repeal several of the articles or to
adopt any provision inconsistent therewith; and (b) provide that members of
the Board of Directors may be removed, other than in connection with the
annual election of directors, only for cause and then only by affirmative
vote of at least two-thirds (66 2/3%) of the outstanding shares of common
stock.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,419,880 1,368 6,228
(8) To ratify the appointment of Arthur Andersen as auditors for the
Company for the fiscal year ending December 31, 1996.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,425,693 269 1,514
(9) In the discretion of the proxies named above, to approve such
other business as may be brought before the meeting or any adjournment
thereof.
NUMBER OF VOTES CAST
AGAINST/ ABSTENTIONS/
FOR WITHHELD BROKER NON-VOTES
2,419,491 2,197 5,788
Item 5. Other Information
On July 1, 1996, Capital City Bank Group, Inc. (the Company), consummated
its acquisition of First Financial Bancorp, Inc. a Florida corporation
(First Financial), parent company to First Federal Bank, Tallahassee,
Florida. Pursuant to the terms of the Agreement and Plan of Merger dated
December 10, 1995, each share of common stock of First Financial issued and
outstanding on July 1, 1996 was converted into the right to receive from
the Company $22.00 in cash. Total consideration paid to First Financial
common stockholders and holders of options to acquire First Financial
common stock was $20.3 million. During the fourth quarter, First Federal
bank will be combined with and into Capital City Bank, a wholly owned
subsidiary of the Company. Prior to consummation of the merger, First
Financial, through First Federal Bank conducted business from its
headquarters and main office in Tallahassee, Florida and four other full
service offices in northern and west-central Florida. At June 30, 1996,
First Financial had assets of approximately $243.7 million, deposits of
approximately $205.1 million and stockholders' equity of approximately
$15.3 million.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
3G) Amended and Restated Articles of Incorporation of Capital City
Bank Group, Inc., dated as of May 1, 1996.
27) Financial Data Schedule
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the period ended
June 30, 1996.
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: August 14, 1996
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<PERIOD-START> JAN-01-1996
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<DEPOSITS> 700040
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0
0
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<INTEREST-INCOME-NET> 18319
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</TABLE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CAPITAL CITY BANK GROUP, INC.
Pursuant to Sections 607.1003 and 607.1007 of the Florida Business
Corporation Act, the Articles of Incorporation of Capital City Bank Group,
Inc., a Florida corporation (the "Corporation"), are hereby amended and
restated in their entirety as follows:
ARTICLE I
Name, Principal Place of Business and
Registered Agent
The name of the Corporation is Capital City Bank Group, Inc. The
principal place of business of this Corporation shall be 217 North Monroe
Street, Tallahassee, Florida 32301. The name of the registered agent is
J. Kimbrough Davis at 217 North Monroe Street, Tallahassee, Florida 32301.
ARTICLE II
Purpose
The purpose for which the Corporation is organized is to engage in or
transact any and all lawful activities or business for which a corporation
may be incorporated under the laws of the State of Florida.
ARTICLE III
Capital Stock
The aggregate number of shares of all classes of capital stock which
this Corporation shall have authority to issue is Thirty-Three Million
(33,000,000), consisting of (i) Thirty Million (30,000,000) shares of
common stock, par value $.01 per share (the "Common Stock"), and (ii) Three
Million (3,000,000) shares of preferred stock, par value $.01 per share
(the "Preferred Stock").
The designation and the preferences, limitations and relative rights
of the Common Stock and the Preferred Stock of the Corporation are as
follows:
A. Provisions Relating to the Common Stock.
1. Except as otherwise required by law or as may be provided by the
resolutions of the Board authorizing the issuance of any class or series of
Preferred Stock, as hereinbelow provided, all rights to vote and all voting
power shall be vested exclusively in the holders of the Common Stock.
2. Subject to the rights of the holders of the Preferred Stock,
the holders of the Common Stock shall be entitled to receive when, as and if
declared by the Board, out of funds legally available therefor, dividends
payable in cash, stock or otherwise.
3. Upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, and after the holders of the
Preferred Stock shall have been paid in full the amounts to which they
shall be entitled (if any) or a sum sufficient for such payment in full
shall have been set aside, the remaining net assets of the Corporation
shall be distributed pro rata to the holders of the Common Stock in
accordance with their respective rights and interests.
B. Provisions Relating to the Preferred Stock.
1. The Preferred Stock may be issued from time to time in one
ormore classes or series, the shares of each class or series to have such
designations and powers, preferences and rights, and qualifications,
limitations and restrictions thereof as are stated and expressed herein and
in the resolution or resolutions providing for the issue of such class or
series adopted by the Board of Directors as hereinafter prescribed.
2. Authority is hereby expressly granted to and vested in the Board
to authorize the issuance of the Preferred Stock from time to time in one
or more classes or series, to determine and take necessary proceedings
fully to effect the issuance and redemption of any such Preferred Stock
and, with respect to each class or series of the Preferred Stock, to fix
and state by the resolution or resolutions from time to time adopted
providing for the issuance thereof the following:
a. Whether or not the class or series is to have voting rights, full
or limited, or is to be without voting rights;
b. The number of shares to constitute the class or series and the
designations thereof;
c. The preferences and relative, participating, optional or other
special rights, if any, and the qualifications, limitations or restrictions
thereof, if any, with respect to any class or series;
d. Whether or not the shares of any class or series shall be
redeemable and if redeemable the redemption price or prices, and the time
or times at which and the terms and conditions upon which such shares shall
be redeemable and the manner of redemption;
e. Whether or not the shares of a class or series shall be
subject to the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares for retirement, and if such
retirement or sinking fund or funds be established, the annual amount
thereof and the terms and provisions relative to the operation thereof;
f. The dividend rate, whether dividends are payable in
cash, stoc of the Corporation, or other property, the conditions upon which
and the times when such dividends are payable, the preference to or the relation
to the payment of the dividends payable on any other class or classes or
series of stock, whether or not such dividend shall be cumulative or
noncumulative, and if cumulative, the date or dates from which such
dividends shall accumulate;
g. The preferences, if any, and the amounts thereof which the
holders of any class or series thereof shall be entitled to receive upon
the voluntary or involuntary dissolution of, or upon any distribution of
the assets of the Corporation;
h. Whether or not the shares of any class or series shall be
convertible into, or exchangeable for, the shares of any other class or
classes or of any other series of the same or any other class or classes of
stock of the Corporation and the conversion price or prices or ratio or
ratios or the rate or rates at which such conversion or exchange may be
made, with such adjustments, if any, as shall be stated and expressed or
provided for in such resolution or resolutions; and
i. Such other special rights and protective provisions with respect
to any class or series as the Board may deem advisable.
The shares of each class or series of the Preferred Stock may
vary from the shares of any other series thereof in any or all of the
foregoing respects. The Board may increase the number of shares of the
Preferred Stock designated for any existing class or series by a resolution
adding to such class or series authorized and unissued shares of the
Preferred Stock not designated for any other class or series. The Board
may decrease the number of shares of the Preferred Stock designated for any
existing class or series by a resolution, subtracting from such series
unissued shares of the Preferred Stock, designated for such class or
series, and the shares so subtracted shall become authorized, unissued and
undesignated shares of the Preferred Stock.
ARTICLE IV
Existence
The Corporation shall exist perpetually unless sooner dissolved according to
law.
ARTICLE V
Management of the Corporation
The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and
of its directors and shareholders:
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the
powers and authority expressly conferred upon them by Statute or by these
Amended and Restated Articles of Incorporation or the Bylaws of the
Corporation, the directors are hereby empowered to exercise all such powers
and do all such acts and things as may be exercised or done by the
Corporation.
B. Any action required or permitted to be taken by the shareholders
of the Corporation must be effected at a duly called Annual or Special
Meeting of Shareholders of the Corporation and may not be effected by any
consent in writing by such shareholders.
C. Special Meetings of Shareholders of the Corporation may be called
by the Board of Directors pursuant to a resolution adopted by a majority of
the total number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) (the "Full Board"), or
by the holders of not less than fifty percent (50%) of all the votes
entitled to be cast on any issue at the proposed special meeting if such
holders of stock sign, date and deliver to the Corporation's Secretary one
or more written demands for the meeting describing the purpose or purposes
for which the special meeting is to be held.
ARTICLE VI
Number of Directors; Vacancies and Removal
A. The initial number of directors of the Corporation shall be seven
(7). The number of directors may be either increased or diminished from
time to time in the manner provided in the Bylaws, but shall never be less
than one (1) nor more than twenty-five (25). Commencing with the 1997
annual meeting of shareholders, the directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third (33 1/3%) of the Full
Board. The term of the Class I directors shall terminate on the date of
the 1998 annual meeting of shareholders, the term of the Class II directors
shall terminate on the date of the 1999 annual meeting of shareholders and
the term of the Class III directors shall terminate on the date of the 2000
annual meeting of shareholders. At each annual meeting of shareholders
beginning in 1998, successors to the class of directors whose term expires
at that annual meeting shall be elected for a three (3) year term. If the
number of directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional directors of any
class elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining term of
that class, but in no case will a decrease in the number of directors
shorten the term of any incumbent director.
B. A director shall hold office until the annual meeting for
the year in which his term expires and until his successors shall be
elected and shall qualify, subject, however, to the director's prior death,
resignation, retirement, disqualification or removal from office. Subject
to the rights of the holders of any series of Preferred Stock then
outstanding, any vacancy on the Board of Directors, howsoever resulting
(including vacancies created as a result of a resolution of the Board of
Directors increasing the authorized number of directors), may be filled by
a majority of the directors then in office, even if less than a quorum, or
by a sole remaining director. Any director elected to fill a vacancy shall
hold office for a term that shall coincide with the term of the class to
which such director shall have been elected.
C. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, but only for cause and
only by the affirmative vote of the holders of at least two-thirds (66
2/3%) of the voting power of all of the then outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors. "Cause" shall be defined as a breach of fiduciary duty
involving personal dishonesty, an intentional failure to perform stated
duties as a director which results in substantial loss to the Corporation
or a willful violation of any law, rule, regulation or final cease and
desist order which results in substantial loss to the Corporation.
D. Advance notice of shareholder nominations for the election
of directors and of business to be brought by shareholders before any
meeting of the shareholders of the Corporation shall be given in the manner
provided in Article VII herein and the Bylaws of the Corporation.
ARTICLE VII
Shareholder Nomination of Director Candidates
Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the
Board at an annual or special meeting of shareholders may be made (i) by or
at the direction of the Board by any nominating committee of or person
appointed by the Board or (ii) by any shareholder of the Corporation
entitled to vote for the election of directors at the meeting who complies
with the procedures set forth in this Article VII; provided, however, that
nominations of persons for election to the Board at a special meeting may
be made only if the election of directors is one of the purposes described
in the special meeting notice required by Section 607.0705 of the Florida
Business Corporation Act. Nominations of persons for election at annual
meetings, other than nominations made by or at the direction of the Board,
including by any nominating committee, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than one hundred
twenty (120) days nor more than one hundred eighty (180) days in advance of
the date of the Corporation's notice of annual meeting provided with
respect to the previous year's annual meeting; provided, however, that if
no annual meeting was held in the previous year or the date of the annual
meeting has been changed to be more than thirty (30) calendar days earlier
than the date contemplated by the previous year's proxy statement, such
notice by the shareholder to be timely must be received no later than the
close of business on the tenth (10th) day following the date on which
notice of the date of the annual meeting is given to shareholders or made
public, whichever first occurs. Such shareholder's notice to the Secretary
shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a director at the annual meeting;
(i) the name, age, business address and residence address of the proposed
nominee, (ii) the principal occupation or employment of the proposed
nominee, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the proposed nominee, and (iv)
any other information relating to the proposed nominee that is required to
be disclosed in solicitations for proxies for election of directors
pursuant to Rule 14a under the Securities Exchange Act of 1934, as amended;
and (b) as to the shareholder giving the notice of nominees for election at
the annual meeting, (i) the name and record address of the shareholder, and
(ii) the class and number of shares of capital stock of the Corporation
which are beneficially owned by the shareholder. The Corporation may
require any proposed nominee for election at an annual or special meeting
of shareholders to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as a director of the Corporation. No person shall be
eligible for election as a director of the Corporation unless nominated in
accordance with the procedures set forth herein. The Chairman of the
meeting shall, if the facts warrant, determine and declare in the meeting
that a nomination was not made in accordance with the requirements of this
Article VII, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
ARTICLE VIII
Acquisition Offers
The Board of Directors of the
Corporation shall consider all factors it deems relevant in evaluating any
proposed tender offer or exchange offer for the Corporation or any
Subsidiary's stock, any proposed merger or consolidation of the Corporation
or a Subsidiary with or into another entity and any proposal to purchase or
otherwise acquire all or substantially all the assets of the Corporation or
any Subsidiary. The Board of Directors shall evaluate whether the proposal
is in the best interests of the Corporation and its subsidiaries by
considering the best interests of the shareholders and other factors the
directors determine to be relevant, including the social, legal and
economic effects on employees, customers, depositors, and communities
served by the Corporation and any Subsidiary. The Board of Directors shall
evaluate the consideration being offered to the shareholders in relation to
the then current market value of the Corporation or any Subsidiary in a
freely negotiated transaction, and the Board of Directors' estimate of the
future value of stock of the Corporation or any Subsidiary as an
independent entity.
ARTICLE IX
Indemnification
Provided the person proposed to be indemnified satisfies the requisite standard
of conduct for permissive indemnification by a corporation as specifically set
forth in the applicable provisions of the Florida Business Corporation Act
(currently, Sections 607.0850(1) and (2) of the Florida Statutes), as the same
may be amended from time to time, the Corporation shall indemnify its officers
and directors, and may indemnify its employees and agents, to the fullest
extent permitted by the provisions of the Florida Business Corporation Act
and the Bylaws of the Corporation, as the same may be amended and
supplemented, from and against any and all of the expenses or liabilities
incurred in defending a civil or criminal proceeding, or other matters
referred to in or covered by said provisions, including advancement of
expenses prior to the final disposition of such proceedings and amounts
paid in settlement of such proceedings, both as to action in his or her
official capacity and as to action in another capacity while an officer,
director, employee or other agent. The indemnification provided for herein
shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or Disinterested Directors or otherwise. Such indemnification
shall continue as to a person who has ceased to be a director, officer,
employee or agent, and shall inure to the benefit of the heirs and personal
representatives of such a person. Except as otherwise required by law, an
adjudication of liability shall not affect the right to indemnification for
those indemnified.
ARTICLE X
Amendment
The Corporation reserves the right to amend or repeal any provision contained in
these Amended and Restated Articles of Incorporation in the manner prescribed by
the laws of the State of Florida and all rights conferred upon shareholders are
granted subject to this reservation; provided, however, that, notwithstanding
any other provision of these Amended and Restated Articles of Incorporation or
any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any votes of the holders of any class or series of the stock
of this Corporation required by law or by these Amended and Restated
Articles of Incorporation, the affirmative vote of (a) the holders of at
least two-thirds (66 2/3%) of the voting power of all of the then
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class;
or (b) a majority of "Disinterested Directors", as defined in Florida
Statutes Section 607.0901(1)(h) as in effect on the date hereof, and the
holders of at least a majority of the voting power of the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally
in the election of directors, voting together as a single class, shall be
required to amend or repeal any of Articles V, VI, VII, VIII, IX and X.
IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating
the Corporation's Articles of Incorporation pursuant to the laws of the State of
Florida, has executed these Amended and Restated Articles of Incorporation as of
May 1, 1996.
CAPITAL CITY BANK GROUP, INC.
/s/ William G. Smith, Jr.
William G. Smith, Jr.
President
CERTIFICATE
RE
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CAPITAL CITY BANK GROUP, INC.
Capital City Bank Group, Inc., a Florida corporation (the "Corporation"),
hereby certifies, pursuant to and in accordance with Section 607.1007 of the
Florida Business Corporation Act for the purpose of filing its Amended and
Restated Articles of Incorporation (the "Amended and Restated Articles") with
the Department of State of the State of Florida, that:
1. The name of the Corporation is Capital City Bank Group, Inc.
2. The Amended and Restated Articles contain certain amendments to the
Corporation's Articles of Incorporation which require shareholder approval, and
the Amended and Restated Articles were unanimously adopted and approved by the
Corporation's Board of Directors and, pursuant to Sections 607.0725(6) and
607.1003(5)(b) of the Florida Statutes, by the holders of two-thirds (66_%)
of the issued and outstanding shares of the Corporation's Common Stock of
the Corporation, which was sufficient for approval and which was the only
class of capital stock authorized to vote on such issue, as of April 30,
1996.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
May 1, 1996.
CAPITAL CITY BANK GROUP, INC.
/s/ Willaim G. Smith, Jr.
William G. Smith, Jr.
President
