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, 1999
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)
Registrant's telephone number, including area code:
(850) 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, 1999, 8,862,044 shares of the Registrant's
Common Stock, $.01 par value, were outstanding.
CAPITAL CITY BANK GROUP, INC.
FORM 10-Q I N D E X
ITEM PART I. FINANCIAL INFORMATION PAGE NUMBER
1. Financial Statements 3
2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
3. Qualitative and Quantitative Disclosure of
Market Risk 19
ITEM PART II. OTHER INFORMATION
1. Legal Proceedings Not Applicable
2. Changes in Securities and Use of Proceeds Not Applicable
3. Defaults Upon Senior Securities Not Applicable
4. Submission of Matters to a Vote of
Security Holders Not Applicable
5. Other Information 21
6. Exhibits and Reports on Form 8-K 21
Signatures 21
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31
(Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
1999 1998
(Unaudited) (Unaudited)
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $ 16,708 $ 16,610
Investment Securities:
U. S. Treasury 396 368
U. S. Government Agencies and Corporations 2,191 812
States and Political Subdivisions 1,023 714
Other Securities 621 85
Funds Sold 964 771
Total Interest Income $ 21,903 $ 19,360
INTEREST EXPENSE
Deposits 8,762 6,773
Short-Term Borrowings 332 537
Long-Term Debt 286 280
Total Interest Expense 9,380 7,590
Net Interest Income 12,523 11,770
Provision for Loan Losses 680 486
Net Interest Income After Provision for
Loan Losses 11,843 11,284
NONINTEREST INCOME
Service Charges on Deposit Accounts 2,314 1,941
Data Processing 748 852
Income from Fiduciary Activities 523 328
Securities Transactions - 9
Other 2,299 1,856
Total Noninterest Income 5,884 4,986
NONINTEREST EXPENSE
Salaries and Associate Benefits 6,981 6,360
Occupancy, Net 989 781
Furniture and Equipment 1,325 1,174
Other 3,878 3,254
Total Noninterest Expense 13,173 11,569
Income Before Income Taxes 4,554 4,701
Income Taxes 1,390 1,600
NET INCOME $ 3,164 $ 3,101
Basic Net Income Per Share $ .36 $ .35
Diluted Net Income Per Share $ .36 $ .35
Cash Dividends Per Share $ .12 $ .11
Average Shares Outstanding - Basic 8,859,983 8,812,338
Average Shares Outstanding - Diluted 8,875,514 8,812,338
</TABLE>
<TABLE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF MARCH 31, 1999 AND DECEMBER 31, 1998
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
March 31, December 31,
1999 1998
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Cash and Due From Banks $ 60,894 $ 65,000
Funds Sold 100,382 63,651
Investment Securities Available-for-Sale 318,784 352,922
Loans, Net of Unearned Interest 779,358 763,667
Allowance for Loan Losses (8,780) (8,459)
Loans, Net 770,578 755,208
Premises and Equipment, Net 33,655 35,026
Intangibles, Net 28,063 28,763
Other Assets 29,096 28,835
Total Assets $1,341,452 $1,329,405
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 251,180 $ 272,838
Interest Bearing Deposits 901,650 887,446
Total Deposits 1,152,830 1,160,284
Short-Term Borrowings 44,854 25,199
Long-Term Debt 17,234 16,329
Other Liabilities 13,369 15,893
Total Liabilities 1,228,287 1,217,705
SHAREOWNERS' EQUITY
Preferred Stock, $.01 par value, 3,000,000
shares authorized; no shares outstanding - -
Common Stock, $.01 par value; 90,000,000 shares
authorized; 8,862,041 issued and outstanding
at March 31, 1999 and 8,854,354 issued and
outstanding at December 31, 1998 89 88
Additional Paid-In Capital 8,756 8,524
Retained Earnings 104,595 102,495
Accumulated Other Comprehensive
(Loss) Income, Net of Tax (275) 593
Total Shareowners' Equity 113,165 111,700
Total Liabilities and Shareowners' Equity $1,341,452 $1,329,405
</TABLE>
<TABLE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Dollars in Thousands)
<CAPTION>
1999 1998
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,164 $ 3,101
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Provision for Loan Losses 680 486
Depreciation 833 800
Net Securities Amortization 258 163
Amortization of Intangible Assets 696 247
Gain on Sale of Investment Securities - (9)
Non-Cash Compensation Expense 49 1,201
Net Increase in Interest Receivable (581) (520)
Net Decrease (Increase) in Other Assets 324 (5,312)
Net (Decrease) Increase in Other Liabilities (2,021) 145
Net Cash Provided by Operating Activities 3,402 302
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Payments/Maturities of
Investment Securities Available-for-Sale 62,020 15,670
Purchase of Investment Securities (29,512) (8,080)
Net (Increase) Decrease in Loans (16,050) 4,417
Net Cash Received from Acquisition - 7,022
Purchase of Premises & Equipment (776) (480)
Sales of Premises & Equipment 1,314 243
Net Cash Provided by Investing Activities 16,996 18,792
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Decrease) Increase in Deposits (7,453) 287
Net Increase (Decrease) in
Short-Term Borrowings 19,655 (721)
Borrowing of Long-Term Debt 1,525 1,000
Repayment of Long-Term Debt (620) (544)
Dividends Paid (1,063) (971)
Issuance of Common Stock 183 143
Net Cash Provided by (Used in) Financing Activities 12,227 (806)
Net Increase in Cash and Cash Equivalents 32,625 18,288
Cash and Cash Equivalents at Beginning of Period 128,651 113,789
Cash and Cash Equivalents at End of Period $161,276 $132,077
Supplemental Disclosure:
Interest Paid on Deposits $ 8,611 $ 5,617
Interest Paid on Debt $ 618 $ 817
Transfer of Loans to ORE $ 379 $ 452
Income Taxes Paid $ 1,372 $ 652
</TABLE>
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 S-X and S-K 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,
1999 and December 31, 1998, and the results of operations
and cash flows for the three month periods ended March 31,
1999 and 1998.
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 Consolidated Financial
Statements which are included in the Company's 1998 Annual
Report and Form 10-K.
(2) INVESTMENT SECURITIES
The carrying values and related market value of investment securities at March
31, 1999 and December 31, 1998 were as follows (dollars in thousands):
March 31, 1999
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
U. S. Treasury $ 23,577 $ 110 $ - $ 23,687
U. S. Government Agencies
and Corporations 67,953 63 687 67,329
States and Political Subdivisions 93,117 201 726 92,592
Mortgage-Backed Securities 96,820 1,005 102 97,723
Other Securities 37,752 27 326 37,453
Total $319,219 $1,406 $1,841 $318,784
December 31, 1998
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
U. S. Treasury $ 28,606 $ 203 $ - $ 28,809
U. S. Government Agencies
and Corporations 66,954 139 309 66,784
States and Political Subdivisions 91,644 1,083 24 92,703
Mortgage-Backed Securities 90,124 196 418 89,902
Other Securities 74,658 159 93 74,724
Total $351,986 $1,780 $844 $352,922
(3) LOANS
The composition of the Company's loan portfolio at March 31, 1999 and
December 31, 1998 was as follows (dollars in thousands):
March 31, 1999 December 31, 1998
Commercial, Financial
and Agricultural $ 75,409 $ 67,463
Real Estate-Construction 44,604 45,283
Real Estate-Mortgage 507,752 499,394
Consumer 151,593 151,527
Loans, Net of Unearned Interest $779,358 $763,667
(4) ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses for the three
month period ended March 31, 1999 and 1998, was as follows
(dollars in thousands):
March 31,
1999 1998
Balance, Beginning of the Period $8,459 $8,322
Provision for Loan Losses 680 486
Recoveries on Loans Previously
Charged-Off 175 165
Loans Charged-Off (534) (453)
Balance, End of Period $8,780 $8,520
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
(dollars in thousands):
<TABLE>
March 31,
1999 1998
Impaired Loans: Valuation Valuation
<CAPTION> Balance Allowance Balance Allowance
<S> <C> <C> <C> <C>
With Related Credit Allowance $2,372 $268 $2,972 $305
Without Related Credit Allowance 757 - 1,211 -
Average Recorded Investment
for the Period 3,950 * 4,183 *
Interest Income:
Recognized $ 43 $ 31
Collected $ 34 $ 31
* Not Applicable
</TABLE>
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.
(5) DEPOSITS
The composition of the Company's interest bearing deposits at March 31, 1999 and
December 31, 1998 were as follows (dollars in thousands):
March 31, 1999 December 31, 1998
NOW Accounts $135,191 $144,018
Money Market Accounts 155,251 121,383
Savings Deposits 106,685 109,207
Other Time Deposits 504,523 512,838
Total Interest Bearing Deposits $901,650 $887,446
(6) ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133 "Accounting for
Derivative Instruments of Hedging Activities". The statement
establishes accounting and reporting standards for
derivative instruments (including certain derivative
instruments imbedded in other contracts). The statement is
effective for fiscal years beginning after June 15, 1999.
The adoption of this standard is not expected to have a
material impact on reported results of operations of the
Company.
(7) COMPREHENSIVE INCOME
Total comprehensive income is defined as net income and all
other changes in equity which, for Capital City Bank Group,
consists solely of changes in unrealized gains (losses) on
available-for-sale securities. The Company reported total
comprehensive income, net of tax, for the three month
periods ended March 31, 1999 and 1998, as follows (dollars
in thousands):
THREE MONTHS ENDED
MARCH 31
1999 1998
Net Income $3,164 $3,101
Other Comprehensive Income, Net of Tax
Unrealized Gains (Losses) on Securities:
Unrealized Gains (Losses) on Securities
Arising During the Period (868) 28
Less: Reclassification Adjustments for
Gains (Losses) Included in Net Income - 19
Total Unrealized Gains (Losses)
On Securities (868) 9
Total Comprehensive Income, Net of Tax $2,296 $3,110
(8) ACQUISITION OF GRADY HOLDING COMPANY
The Company completed its acquisition of Grady Holding
Company and its majority-owned subsidiary First National
Bank of Grady County on May 7, 1999. First National Bank is
a $112 million asset institution with offices in Cairo and
Whigham, Georgia. The transaction was accounted for as a
pooling-of-interests. First National Bank shareowners
received 21.5 shares and Grady Holding Company shareowners
received 115.885 shares of CCBG common stock in exchange for
each of their respective shares. A total of 1,309,565
shares of CCBG were issued in the transaction.
<TABLE>
QUARTERLY FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)(1)
<CAPTION>
1999 1998 1997
First Fourth Third Second First Fourth Third Second
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Interest Income $ 21,903 $ 20,477 $ 19,483 $ 19,933 $ 19,360 $ 19,008 $ 19,362 $ 18,865
Interest Expense 9,380 8,235 7,686 7,831 7,590 7,302 7,402 7,360
Net Interest Income 12,523 12,242 11,797 12,102 11,770 11,706 11,960 11,505
Provision for
Loan Loss 680 558 558 558 486 437 449 446
Net interest Income
After Provision
for Loan Loss 11,843 11,684 11,239 11,544 11,284 11,269 11,511 11,059
Noninterest Income 5,884 6,062 5,059 5,644 4,986 4,895 4,394 4,852
Noninterest Expense 13,173 12,503 11,271 11,966 11,569 12,012 10,974 10,978
Income Before
Provision for
Income Taxes 4,554 5,243 5,027 5,222 4,701 4,152 4,931 4,933
Provision for
Income Taxes 1,390 1,871 1,759 1,775 1,600 1,299 1,664 1,657
Net Income $ 3,164 $ 3,372 $ 3,268 $ 3,447 $ 3,101 $ 2,853 $ 3,267 $ 3,276
Net Interest
Income (FTE) $ 13,030 $ 12,637 $ 12,147 $ 12,445 $ 12,131 $ 12,059 $ 12,366 $ 11,929
Per Common Share:
Net Income Basic $ .36 $ .38 $ .37 $ .39 $ .35 $ .33 $ .37 $ .38
Net Income Diluted .36 .38 .37 .39 .35 .32 .37 .38
Dividends Declared .12 .12 .11 .11 .11 .11 .10 .10
Book Value 12.77 12.62 12.38 12.08 11.77 11.45 11.23 10.91
Market Price:
High 27.63 31.00 33.13 32.67 32.67 27.33 23.50 21.50
Low 22.00 24.13 19.00 29.75 29.25 23.00 20.83 19.33
Close 23.31 27.63 29.13 31.38 31.67 27.00 23.17 20.83
Selected Average
Balances:
Total Assets $1,319,055 $1,146,673 $1,052,301 $1,046,842 $1,038,806 $1,001,661 $1,003,170 $999,888
Earning Assets 1,176,742 1,025,916 946,601 938,970 933,052 898,383 905,722 902,970
Loans, Net of Unearned 767,729 752,312 745,257 741,914 731,204 700,158 704,222 687,280
Total Deposits 1,141,296 968,301 875,938 872,087 862,875 828,239 838,732 842,847
Total Shareowners'
Equity 112,417 110,585 107,545 104,580 102,393 98,920 96,448 92,375
Common Equivalent
Shares 8,860 8,849 8,848 8,830 8,812 8,757 8,745 8,694
Ratios:
ROA .97% 1.27% 1.23% 1.32% 1.21% 1.13% 1.29% 1.31%
ROE 11.41% 12.09% 12.06% 13.22% 12.28% 11.45% 13.44% 14.22%
Net Interest
Margin (FTE) 4.49% 4.89% 5.10% 5.31% 5.27% 5.33% 5.42% 5.30%
(1) All share and per share data have been adjusted to reflect the 3-for-2
stock split effective June 1, 1998.
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
The following analysis discusses important factors affecting
the financial condition and results of operations of Capital
City Bank Group, Inc., for the three month periods ended
March 31, 1999 and 1998. This report contains forward-
looking statements within the meaning of the federal
securities laws such as interest rate sensitivity
projections, revenue and expense trends, and long-term
objectives. The forward-looking statements in this report
are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in
or implied by the statements.
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.
The Financial Review is divided into three subsections
entitled Earnings Analysis, Financial Condition, and
Liquidity and Capital Resources. Information therein should
facilitate a better understanding of the major factors and
trends which affect the Company's earnings performance and
financial condition, and how the Company's performance
during 1999 compares with prior years. Throughout this
section, Capital City Bank Group, Inc., and its subsidiary,
collectively, are referred to as "CCBG" or the "Company."
On May 7, 1999, the Company completed its acquisition of
Grady Holding Company and its majority-owned subsidiary
First National Bank of Grady County. First National Bank is
a $112 million asset institution with offices in Cairo and
Whigham, Georgia. The transaction was accounted for as a
pooling of interests. First National Bank shareowners
received 21.5 shares and Grady Holding Company shareowners
received 115.885 shares of CCBG common stock in exchange for
each of their respective shares. A total of 1,309,565
shares of CCBG were issued in the transaction.
On December 4, 1998, the Company completed its purchase and
assumption transaction with First Union National Bank
("First Union") and acquired eight of First Union's branch
offices which included deposits. The Company paid a deposit
premium of $16.9 million, and assumed $219 million in
deposits and acquired certain real estate. The deposit
premium is being amortized over ten years.
On January 31, 1998, the Company completed its purchase and
assumption transaction with First Federal Savings & Loan
Association of Lakeland, Florida ("First Federal-Florida")
and acquired five of First Federal-Florida's branch
facilities which included loans and deposits. The Company
paid a deposit premium of $3.6 million, or 6.33%, and
assumed approximately $55 million in deposits and purchased
loans equal to approximately $44 million. Four of the five
offices were merged into existing offices of Capital City
Bank. The deposit premium is being amortized over fifteen
years.
RESULTS OF OPERATIONS
Net Income
Net income of $3.2 million, or $.36 per basic and diluted
share for the first quarter of 1999, was $63,000, or 2.0%,
higher than the $3.1 million, or $.35 per basic and diluted
share reported for the comparable period in 1998. Operating
revenues, which include net interest income and noninterest
income, increased $1.8 million, or 10.5%, over the first
quarter of 1998, and are the most significant factor
contributing to the increase in net income (dollars in
thousands):
For The Three Months Ended March 31,
1999 1998
Interest Income $21,903 $19,360
Taxable Equivalent Adjustment(1) 507 361
Interest Income (FTE) 22,410 19,721
Interest Expense 9,380 7,590
Net Interest Income (FTE) 13,030 12,131
Provision for Loan Losses 680 486
Taxable Equivalent Adjustment 507 361
Net Int. Inc. After Provision 11,843 11,284
Noninterest Income 5,884 4,986
Noninterest Expense 13,173 11,569
Income Before Income Taxes 4,554 4,701
Income Taxes 1,390 1,600
Net Income $ 3,164 $ 3,101
Percent Change 2.03% 1.94%
Return on Average Assets (2) .97% 1.21%
Return on Average Equity (2) 11.41% 12.28%
(1) Computed using a statutory tax rate of 35%
(2) Annualized
Net Interest Income
First quarter taxable equivalent net interest income
increased $900,000, or 7.4%, over the comparable period for
1998. The increase in taxable equivalent net interest
income over the comparable period in 1998 is attributable to
growth in earning assets, primarily investment securities.
The favorable impact of asset growth was partially offset by
declining yields. Table I on page 18 provides a comparative
analysis of the Company's average balances and interest
rates.
Taxable-equivalent interest income increased $2.7 million,
or 13.6%, due to growth in the loan portfolio and purchase
of investment securities. Loans, which represent the
Company's highest yielding asset, increased (on average)
$36.5 million, or 5.0%, and represented 65.3 of total
earning assets in the first quarter of 1999 versus 78.4% for
the comparable quarter in 1998. The Company's investment
income increased significantly due to the purchase of $200
million of investment securities during the fourth quarter
of 1998 as a result of the assumption of deposits from First
Union. The shift in mix of earning assets contributed to a
decrease of 85 basis points in the yield on earning assets
which declined from 8.56% in the first quarter of 1998 to
7.71% in 1999.
Interest expense increased $1.8 million, or 23.6%, primarily
due to the assumption of $200 million in deposits from First
Union during the fourth quarter of 1998. The 17 basis point
decrease in the average rate is the result of a lower rate
environment. The Company continued to promote a higher
yielding money market product during the first quarter of
1999, which partially offsetting the rate environment
reduction. Certificates of deposit represent a higher cost
deposit product to the Company. Based on averages,
certificates as a percent of average deposits decreased from
46.2% in the first quarter of 1998 to 44.7% in the first
quarter of 1999.
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) declined from
4.35% in the first quarter of 1998 to 3.67% in the
comparable quarter for 1999 due to the lower yield on
earning assets. The Company's net interest margin
percentage (defined as taxable-equivalent net interest
income divided by average earning assets) was 5.27% in the
first quarter of 1998, versus 4.49% in the first quarter of
1999. The decrease in the margin reflects the lower yield
on earning assets, resulting from the shift in the mix of
earning assets.
Provisions for Loan Losses
The provision for loan losses for the three months ended
March 31, 1999, was $680,000 versus $486,000 for the first
quarter of 1998. Net charge-offs were higher during the
first quarter of 1999, but remain at a low level relative to
the size of the loan portfolio. Nonperforming loans
increased $451,000, or 10.2%, during the first quarter. The
Company's nonperforming asset ratio declined slightly from
.80% at year-end to .78%. As compared to year-end, the
reserve for loan losses increased slightly to $8.8 million
and represented 1.13% of total loans versus 1.11%.
For a discussion of the Company's nonperforming loans, see
the section entitled "Financial Condition."
Based on current economic conditions, the low level of
nonperforming loans and net charge-offs, it is management's
opinion that the allowance for loan losses as of March 31,
1999, is sufficient to provide for losses inherent in the
portfolio as of that date.
Charge-off activity for the respective periods is set forth
below.
Three Months Ended
March 31,
1999 1998
Net Charge-Offs $359,000 $288,000
Net Charge-Offs (Annualized) as a Percent
of Average Loans Outstanding, Net of
Unearned Interest .19% .16%
Noninterest Income
Noninterest income increased $898,000, or 18.0%, over the
first quarter of 1998, which included increases in all major
categories except data processing revenues.
Service charges on deposit accounts increased $373,000, or
19.2%. Service charge revenues in any one year are dependent
on the number of accounts, primarily transaction accounts
and the level of activity subject to service charges. The
increase in the first quarter of 1999, compared to the
comparable quarter in 1998, reflects the increase in fees
implemented late in the fourth quarter of 1998.
Data processing revenues decreased $105,000, or 12.3%, over
the first quarter of 1998. The decrease reflects lower
processing revenues associated with government agencies.
Income from fiduciary activities increased $196,000, or
59.8%, over the comparable quarter in 1998. The increase is
attributable to growth in managed assets and a slight fee
increase implemented in January. At March 31, 1999, assets
under management totaled $264.2 million compared to $229.4
million at March 31, 1998.
Other income increased $302,000, or 18.9%, over the
comparable quarter of 1998. Gains on the sale of
residential real estate loans increased $141,000, which
continues to reflect increase volume attributable to the low
rate environment and a higher level of fixed rate lending.
ATM fees, brokerage fees, interchange commissions and check
printing income account for the remaining $134,000 favorable
variance over the comparable quarter in 1998.
Noninterest income as a percent of average assets was 1.81%
for the first quarter of 1999 versus 1.95% for the
comparable quarter in 1998.
Noninterest Expense
Noninterest expense in the first quarter of 1999 increased
$1.6 million, or 13.9%, over the first quarter of 1998,
which included higher costs in all major expenses
categories.
Compensation expense increased $621,000, or 9.8%, over the
first quarter of 1999 reflecting annual raises and an
increase in full-time equivalent employees of 51. During
the fourth quarter of 1998, the Company increased staff due
to the addition of eight offices as a result of the
assumption of deposits from First Union.
Occupancy expense, including premises, furniture, fixtures
and equipment increased $359,000, or 18.4%. All categories
have increased from the first quarter of 1998, resulting
from the addition of eight offices acquired from first
Union. The most significant increases have occurred in
premises rental, equipment maintenance and repairs, and
utilities.
Other noninterest expense increased $624,000, or 19.2%. The
increase is attributable to higher intangible amortization
of $449,000 due to the First Union deposits acquired,
telephone expense of $75,000 resulting from the addition of
the new offices, and commission fees of $132,0000,
respectively.
Net noninterest expense (noninterest income minus
noninterest expense, net of intangibles) as a percent of
average assets was 2.03% in the first quarter of 1999 versus
2.47% for the first quarter of 1998. The Company's
efficiency ratio (noninterest expense expressed as a percent
of the sum of taxable-equivalent net interest income plus
noninterest income) was 65.81% in the first quarter 1999
compared to 66.14% for the comparable quarter in 1998. The
slight decrease in the efficiency ratio is attributable to
higher operating revenues.
Income Taxes
The provision for income taxes decreased $210,000, or 13.2%,
over the first quarter of 1998. The Company's effective tax
rate for the first quarter of 1999 was 30.5% compared to
34.0% for the same quarter in 1998. The decrease in the
effective tax rate is attributable to an increase in tax-
exempt income as a percent of taxable income in the first
quarter of 1999 as compared to first quarter of 1998.
FINANCIAL CONDITION
Average balances for the first quarter of 1999 reflect the
assumption of deposits from First Union which was completed
during the fourth quarter of 1998. Table I on page 18
presents average balances for the three months ended March
31, 1999 and 1998.
The Company's average assets increased to $1.32 billion in
the first quarter of 1999 from $1.04 billion in the first
quarter of 1998. Average earning assets were $1.18 billion
for the three months ended March 31, 1999 versus $933.1
million for the comparable quarter of 1998. The change in
the mix of earning assets reflects the purchase of $200
million in investment securities to offset the deposits
assumed from First Union.
Average loans increased $36.5 million, or 5.0%, over the
comparable period in 1998. Price and product competition
remain strong and there continues to be an increased demand
for fixed-rate, longer term financing. Loan growth has
occurred in all of the portfolios, with the most significant
increase in real estate. Loans as a percent of average
earning assets decreased to 65.2% for the first quarter of
1999, compared to 78.4% for the first quarter of 1998,
reflecting the increase in investment securities purchased
as a result of the First Union transaction.
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. As of
March 31, 1999, the average investment portfolio increased
$182.2 million, or 127.4%, from the first quarter of 1998.
The increase in the investment portfolio was used to invest
the deposits acquired from First Union. 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
shareowners' equity. At March 31, 1999, shareowners' equity
included a net unrealized loss of $275,000 compared to a
gain of $576,000 at December 31, 1998. The decrease in
value reflects an increase in interest rates during the
first quarter.
At March 31, 1999, the Company's nonperforming loans were
$4.8 million versus $4.6 million at year-end 1998. As a
percent of nonperforming loans, the allowance for loan
losses represented 180% at March 31, 1999 versus 183% at
December 31, 1998 and 174% at March 31, 1998. 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 $1.2 million at March 31, 1999, versus $1.5 million at
December 31, 1998, and $1.8 million at March 31, 1998. The
ratio of nonperforming assets as a percent of loans plus
other real estate was .78% at March 31, 1999 compared to
.80% at December 31, 1998 and .91% at March 31, 1998.
Average deposits increased 32.3% from $862.9 million in the
first quarter of 1998, to $1.14 billion in the first quarter
of 1999. The growth in deposits is attributable to the
assumption of deposits acquired from First Union and the
success of the CashPower account. The Company continues to
experience a notable increase in competition for deposits,
in terms of both rate and product. The CashPower account,
introduced during the fourth quarter, continues to attract
deposits and represents 41.5% of the money market balance at
March 31, 1999.
The ratio of average noninterest bearing deposits to total
deposits was 22.0% for the first quarter of 1999 compared to
22.2% for the first quarter of 1998. For the same periods,
the ratio of average interest bearing liabilities to average
earning assets was 80.0% and 78.4%, respectively. The
change in both ratios is primarily attributable to the mix
of deposits assumed from First Union.
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
maturities, 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 a $25.0 million
revolving line of credit. As of March 31, 1999, there was
$7.5 million outstanding under this facility. During the
first quarter of 1999, principal reductions on the line of
credit totaled $500,000.
The Company's equity capital was $113.2 million as of March
31, 1999 compared to $111.7 million as of December 31, 1998.
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 6.45% at March 31, 1999 compared to 7.23% at December
31, 1998. Further, the Company's risk-adjusted capital
ratio of 11.08% at March 31, 1999, 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 subsidiary
bank. At March 31, 1999, these regulations and covenants
did not impair the Company's (or its subsidiary's) ability
to declare and pay dividends or to meet other existing
obligations in the normal course of business.
During the first three months of 1999, shareowners' equity
increased $1.5 million, or 5.3%, on an annualized basis.
Growth in equity during the first quarter was positively
impacted by net income of $3.2 million, issuance of common
stock of $300,000 and from a gain of $593,000 at year-end to
a loss of $868,000 in the Company's net unrealized gain on
available-for-sale securities. Dividends paid during the
first quarter totaled $1.1 million or $.12 per share.
At March 31, 1999, the Company's common stock had a book
value of $12.77 per share compared to $12.62 at December 31,
1998. Pursuant to the Company's stock repurchase program
adopted in 1989, the Company has repurchased 790,740 (split
adjusted) shares of its common stock. No shares have been
repurchased in 1999.
YEAR 2000 COMPLIANCE
Introduction
The YEAR 2000 issue creates challenges with respect to the
automated systems used by financial institutions and other
companies. Many programs and systems are not able to
recognize the year 2000, or that the new millennium is a
leap year. The problem is not limited to computer systems.
YEAR 2000 issues will potentially effect every system that
has an embedded microchip containing this flaw.
The YEAR 2000 challenge impacts the Company as many of its
transactions are date sensitive. The Company also is
effected by the ability of its vendors, suppliers, customers
and other third parties to be YEAR 2000 compliant.
State of Readiness
The Company is committed to addressing the YEAR 2000
challenges in a prompt and responsible manner and has
dedicated significant resources to do so. An assessment of
the Company's automated systems and third party operations
was completed and a plan has been implemented. The
Company's YEAR 2000 compliance plan ("Y2K Plan") has nine
phases. These phases are (1) project management, (2)
awareness, (3) assessment, (4) renovation, (5) testing and
implementation, (6) risk assessment, (7) customer
awareness, (8) contingency planning, and (9) verification.
The Company has substantially completed phases one, two,
three, four, five, six, and eight, although appropriate
follow-up activities are continuing to occur. The Company
will continue the testing and implementation phases of the
Y2K Plan throughout the remainder of the year, and has
adopted a comprehensive customer awareness program (phase
seven).
(1) Project Management: The Company has assigned primary
responsibility for the YEAR 2000 project to the President of
Capital City Services Company, a wholly owned subsidiary of
Capital City Bank Group, Inc. Also, the Company has hired
an outside consultant to assist in project administration.
Monthly updates are provided to senior management and
quarterly updates are provided to the Board of Directors in
order to assist them in overseeing the Company's readiness.
(2) Awareness: The Company has defined the YEAR 2000
problem and gained executive level support for allocation of
the resources necessary to renovate and/or upgrade all
systems. A YEAR 2000 team has been established and meets
regularly. The strategy developed for YEAR 2000 compliance
covers in-house systems, service bureaus for systems that
are outsourced, vendors, auditors, customers, and suppliers.
(3) Assessment: The Company has completed this phase of
the compliance plan. Information Technology "IT" and non-IT
systems have been assessed and mission critical applications
that could potentially be affected have been identified.
Mission critical is defined as anything that may have a
material adverse effect on the Company if not YEAR 2000
compliant.
(4) Renovation: The Company is upgrading and
replacing IT and non-IT systems where appropriate, and all
such replacements were substantially complete by March 31,
1999.
(5) Testing and Implementation: The Company's testing of
Mission Critical systems was approximately 90% complete by
March 31, 1999. Throughout 1999, the Company will continue
to test IT and non-IT systems and applications already
implemented for YEAR 2000 compliance. As systems test
successfully for YEAR 2000 compliance, they will be
certified as compliant and accepted for implementation.
(6) Risk Assessment: Lending officers have been trained on
YEAR 2000 issues and have documented YEAR 2000 readiness of
borrowers. Significant borrowers were mailed a
questionnaire and have been assigned a YEAR 2000 risk rating
by the Company. Appropriate response to current and future
credit requests will take their YEAR 2000 status into
consideration. A similar assessment was conducted of
deposit customers relative to liquidity risk. Investment
and funding strategies have been planned to ameliorate any
potential risk in this area.
(7) Customer Awareness: During the first quarter of 1999,
the Company adopted a comprehensive plan to increase
customer awareness of the YEAR 2000 issue and to inform
customers of the bank's efforts to become compliant. This
plan includes posting information on the Company's web site,
distribution of quarterly press releases, statement stuffers
and lobby brochures. Associate training is also underway to
assure that customers are provided with accurate information
about the Company's Y2K readiness.
(8) Contingency Planning: The Company has drafted a
Business Resumption/Contingency Plan for the YEAR 2000.
This plan will incorporate back-up systems and procedures
for Core business processes, should any unforeseen
disruptions occur. This plan should be completed by June
30, 1999.
(9) Verification: The Verification process will take place
subsequent to the actual Century Date Change. This will
involve verifying successful transition to the YEAR 2000 of
all systems and applications, at all critical dates and
functions to the YEAR 2000. Monitoring and reporting
protocol has been established for this phase.
Estimated Costs to Address the Company's YEAR 2000 Issues
Costs directly related to YEAR 2000 issues are estimated to
be $750,000 from 1998 to 2000, of which approximately 70%
has been spent as of March 31, 1999. Approximately 75% of
the total spending represents costs to modify existing
systems. Costs incurred by the Company prior to 1998 were
immaterial. This estimate assumes that the Company will not
incur significant YEAR 2000 related costs on behalf of its
vendors, suppliers, customers and other third parties.
Risks of the Company's YEAR 2000 Issues
The YEAR 2000 presents certain risks to the Company and its
operations. Some risks are present because the Company
purchased technology applications from other parties who
face YEAR 2000 challenges and additional risks that are
inherent in the business of banking. Management has
identified the following potential risks which could have a
material adverse effect on the Company's business.
1. The Company's subsidiary bank may experience a liquidity
problem if there are a significant amount of deposits
withdrawn by customers who have uncertainties associated
with the YEAR 2000. The Company has implemented a
contingency plan to ensure there are appropriate levels of
funding available.
2. The Company's operations could be materially affected by
the failure of third parties who provide mission critical IT
and non-IT systems. The Company has identified its mission
critical third parties and will monitor their Y2K Plan
progress. In response to this concern, the Company has
identified and contacted the third parties who provide
mission critical applications. The Company has received
YEAR 2000 compliance assurances from third parties who
provide mission critical applications and will continue to
monitor and test their efforts for YEAR 2000 compliance.
3. The Company's ability to operate effectively in the YEAR
2000 could be adversely affected by the ability to
communicate and to access utilities. The Company is in the
process of incorporating a contingency plan for addressing
this situation.
4. The Company's subsidiary bank lends significant amounts
to businesses and contractors in our market area. If the
businesses are adversely affected by the YEAR 2000 issues,
their ability to repay loans could be impaired and increased
credit risk could affect the Company's financial
performance. As part of the Company's Y2K Plan, the Company
has identified its significant borrowers, and has documented
their YEAR 2000 readiness and risk to the Company.
5. Sanctions could be imposed against the Company if it
does not meet deadlines or follow timetables established by
the federal and state governmental agencies which regulate
the Company and its subsidiaries. The Company has
incorporated the regulatory guidelines for YEAR 2000 into
its Y2K Plan.
Contingency Plan
Contingency plans for YEAR 2000 related interruptions are
being developed and will include, but not be limited to, the
development of emergency backup and recovery procedures,
remediation of existing systems parallel with installation
of new systems, replacing electronic applications with
manual processes, and identification of alternate suppliers.
All plans are expected to be completed by June 30, 1999.
<TABLE>
TABLE I
AVERAGES BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)
<CAPTION>
For Three Months Ended March 31 1999 1998
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans, Net of Unearned Interest(1)(2) $ 767,729 $16,739 8.84% $ 731,204 $16,644 9.23%
Taxable Investment Securities 228,111 3,207 5.68% 79,925 1,265 6.41%
Tax-Exempt Investment Securities (2) 97,064 1,500 6.18% 63,081 1,041 6.60%
Funds Sold 83,838 964 4.65% 58,842 771 5.31%
Total Earning Assets 1,176,742 22,410 7.71% 933,052 19,721 8.56%
Cash & Due From Banks 61,074 49,797
Allowance for Loan Losses (8,658) (8,390)
Other Assets 89,897 64,347
TOTAL ASSETS $1,319,055 $1,038,806
LIABILITIES
NOW Accounts $ 134,223 611 1.85% $ 109,903 $ 514 1.90%
Money Market Accounts 139,652 1,295 3.76% 76,948 538 2.84%
Savings Accounts 106,273 509 1.94% 85,706 440 2.08%
Other Time Deposits 510,493 6,347 5.04% 398,839 5,281 5.37%
Total Interest Bearing Deposits 890,641 8,762 3.99% 671,396 6,773 4.09%
Short-Term Borrowings 33,221 332 4.09% 43,685 537 4.98%
Long-Term Debt 17,365 286 6.69% 16,014 280 7.09%
Total Int. Bearing Liabilities 941,227 9,380 4.04% 731,095 7,590 4.21%
Noninterest Bearing Deposits 250,655 191,479
Other Liabilities 14,756 13,839
TOTAL LIABILITIES 1,206,638 936,413
SHAREOWNERS' EQUITY
Common Stock 89 89
Surplus 8,661 7,433
Retained Earnings 103,667 94,871
TOTAL SHAREOWNERS' EQUITY 112,417 102,393
TOTAL LIABILITIES & EQUITY $1,319,055 $1,038,806
Net Interest Rate Spread 3.67% 4.35%
Net Interest Income $13,030 $12,131
Net Interest Margin 4.49% 5.27%
(1) Average balances include nonaccrual loans. Interest income includes fees
on loans of approximately $688,000 and $766,000, for the three months
ended March 31, 1999 and 1998, respectively.
(2) Interest income includes the effects of taxable equivalent adjustments
using a 35% tax rate.
</TABLE>
Item 3. Qualitative and Quantitative Disclosure for Market
Risk
Overview
Market risk management arises from changes in interest
rates, exchange rates, commodity prices and equity prices.
The Company has risk management policies to monitor and
limit exposure to market risk. Capital City Bank Group does
not actively participate in exchange rates, commodities or
equities. In asset and liability management activities,
policies are in place that are designed to minimize
structural interest rate risk.
Interest Rate Risk Management
The normal course of business activity exposes Capital City
Bank Group to interest rate risk. Fluctuations in interest
rate risk may result in changes in the fair market value of
the Company's financial instruments, cash flows and net
interest income. Capital City Bank Group's asset/liability
management process manages the Company's interest rate risk.
The financial assets and liabilities of the Company are
classified as other-than-trading. An analysis of the other-
than-trading financial components, including the fair
values, are presented in Table II on page 20. This table
presents the Company's consolidated interest rate
sensitivity position as of March 31, 1999, based upon
certain assumptions as set-forth in the Notes to the Table.
The objective of interest rate sensitivity analysis is to
measure the impact on the Company's net interest income due
to fluctuations in interest rates. The asset and liability
fair values presented in Table II may not necessarily be
indicative of the Company's interest rate sensitivity over
an extended period of time.
The Company is currently liability sensitive which generally
indicates that in a period of rising interest rates the net
interest margin will be adversely impacted as the velocity
and/or volume of liabilities being repriced exceeds assets.
However, as general interest rates rise or fall, other
factors such as current market conditions and competition
may impact how the Company responds to changing rates and
thus impact the magnitude of change in net interest income.
<TABLE>
Table II
FINANCIAL ASSETS AND LIABILITIES MARKET RISK ANALYSIS (1)
(Dollars in Thousands)
<CAPTION>
Other Than Trading Portfolio March 31, 1999 Fair
Year 1 Year 2 Year 3 Year 4 Year 5 Beyond Total Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans
Fixed Rate $ 41,282 $ 23,919 $ 45,113 $ 43,799 $ 46,569 $ 65,778 $ 266,460 $ 268,846
Average Interest Rate 8.79% 10.01% 9.58% 9.04% 8.64% 7.25% 8.66%
Floating Rate (2) 384,794 33,267 27,672 14,171 21,117 31,877 512,898 517,490
Average Interest Rate 8.48% 8.21% 8.09% 8.64% 7.97% 7.61% 8.37%
Investment Securities (3)
Fixed Rate 53,284 59,854 21,778 36,900 15,862 119,925 307,603 307,603
Average Interest Rate 5.89% 5.62% 6.49% 6.27% 5.54% 5.73% 5.84%
Floating Rate - 5,596 5,080 - - 505 11,181 11,181
Average Interest Rate - 6.19% 6.51% - - 6.29% 6.34%
Other Earning Assets
Fixed Rates - - - - - - - -
Average Interest Rates - - - - - - -
Floating Rates 89,000 - - - - 11,382 100,382 100,382
Average Interest Rates 5.23% - - - - 4.66% 5.17%
Total Financial Assets $568,360 $122,636 $ 99,643 $ 94,870 $ 83,548 $229,467 $1,198,524 $1,205,502
Average Interest Rates 7.75% 7.20% 8.33% 7.90% 7.88% 6.37% 7.50%
Deposits (4)
Fixed Rate Deposits $430,543 $ 55,210 $ 10,762 $ 5,080 $ 2,714 $ 214 $ 504,523 $ 507,543
Average Interest Rates 4.96% 5.15% 5.16% 5.16% 4.96% 5.56% 4.99%
Floating Rate Deposits 397,127 - - - - - 397,127 387,127
Average Interest Rates 1.88% - - - - - 1.88%
Other Interest Bearing
Liabilities
Fixed Rate Debt 603 560 431 447 462 7,231 9,734 9,717
Average Interest Rate 5.38% 5.83% 5.99% 5.99% 5.99% 5.97% 5.95%
Floating Rate Debt 52,355 - - - - - 52,355 52,261
Average Interest Rate 4.78% - - - - - 4.78%
Total Financial Liabilities $880,628 $ 55,770 $ 11,193 $ 5,527 $ 3,176 $ 7,445 $ 963,739 $ 966,648
Average interest Rate 3.56% 5.16% 5.19% 5.23% 5.11% 5.96% 3.71%
(1) Based upon expected cashflows, unless otherwise indicated.
(2) Based upon a combination of expected maturities and repricing opportunities.
(3) Based upon contractual maturity, except for callable and floating rate
securities, which are based on expected maturity and weighted average
life, respectively.
(4) Savings, NOW and money market accounts can be repriced at any time,
therefore, all such balances are included as
floating rates deposits in 1999. Other time deposit balances are classified
according to maturity.
</TABLE>
PART II. OTHER INFORMATION
Items 1-4.
Not applicable
Item 5. Other
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
Not applicable
(B) Reports on Form 8-K
On March 26, 1999, the Company reported on February 12,
1999, it entered into a definitive agreement to acquire
Grady Holding Company and its subsidiary, First National
Bank of Grady County in Cairo, Georgia. First National Bank
of Grady County is a $112 million asset institution with
offices in Cairo and Whigham, Georgia. The transaction was
completed on May 7, 1999, and was accounted for as a pooling-
of-interests. The Company issued 21.50 shares for each
share of First National Bank and 115.885 shares for each
share of Grady Holding Company.
SIGNATURES
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
Executive Vice President and
Chief Financial Officer
Date: May 13, 1999
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000726601
<NAME> CAPITAL CITY BANK GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 60,894
<INT-BEARING-DEPOSITS> 11,382
<FED-FUNDS-SOLD> 89,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 319,219
<INVESTMENTS-MARKET> 318,784
<LOANS> 779,358
<ALLOWANCE> (8,780)
<TOTAL-ASSETS> 1,341,452
<DEPOSITS> 1,152,830
<SHORT-TERM> 44,854
<LIABILITIES-OTHER> 13,369
<LONG-TERM> 17,234
0
0
<COMMON> 89
<OTHER-SE> 113,076
<TOTAL-LIABILITIES-AND-EQUITY> 1,341,452
<INTEREST-LOAN> 16,708
<INTEREST-INVEST> 4,231
<INTEREST-OTHER> 964
<INTEREST-TOTAL> 21,903
<INTEREST-DEPOSIT> 8,762
<INTEREST-EXPENSE> 9,380
<INTEREST-INCOME-NET> 12,523
<LOAN-LOSSES> 680
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 13,173
<INCOME-PRETAX> 4,554
<INCOME-PRE-EXTRAORDINARY> 3,164
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,164
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
<YIELD-ACTUAL> 4,349
<LOANS-NON> 4,882
<LOANS-PAST> 1,017
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 105
<ALLOWANCE-OPEN> 8,459
<CHARGE-OFFS> 534
<RECOVERIES> 175
<ALLOWANCE-CLOSE> 8,780
<ALLOWANCE-DOMESTIC> 8,780
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
