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:
June 30, 2000
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:
(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 July 31, 2000, 10,191,845 shares of the Registrant's Common Stock, $.01
par value, were outstanding.
<PAGE>
CAPITAL CITY BANK GROUP, INC.
FORM 10-Q INDEX
ITEM PART I. FINANCIAL INFORMATION PAGE NUMBER
1. Consolidated Financial Statements 3
2. Management's Discussion and Results of Operations
and Analysis of Financial Condition 10
3. Quantitative and Qualitative Disclosure for
Market Risk 18
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 20
5. Other Information Not Applicable
6. Exhibits and Reports on Form 8-K Not Applicable
Signatures 21
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED JUNE 30
(UNAUDITED)
(Dollars in Thousands, Except Per Share Amounts)
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
-------------------------- ------------------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME
---------------
Interest and Fees on Loans $22,585 $19,388 $43,704 $38,141
Investment Securities:
U. S. Treasury 161 336 409 756
U. S. Government Agencies/Corp. 2,193 2,349 4,461 4,685
States and Political Subdivisions 1,016 1,088 2,097 2,154
Other Securities 592 587 1,196 1,256
Funds Sold & Interest Bearing Deposits 342 1,068 732 2,092
------- ------- ------- -------
Total Interest Income 26,889 24,816 52,599 49,084
INTEREST EXPENSE
----------------
Deposits $ 9,647 $ 9,776 $18,822 $19,448
Short-Term Borrowings 1,205 399 1,989 731
Long-Term Borrowings 218 301 435 611
------- ------- ------- -------
Total Interest Expense 11,070 10,476 21,246 20,790
------- ------- ------- -------
Net Interest Income 15,819 14,340 31,353 28,294
Provision for Loan Losses 950 580 1,560 1,320
------- ------- ------- -------
Net Interest Income After Provision
for Loan Losses 14,869 13,760 29,793 26,974
------- ------- ------- -------
NONINTEREST INCOME
------------------
Service Charges on Deposit Accounts 2,314 2,455 4,651 4,901
Data Processing 650 747 1,330 1,495
Trust Fees 600 439 1,260 962
Securities Transactions - - 2 -
Other 3,111 2,993 5,834 5,829
------- ------- ------- -------
Total Noninterest Income 6,675 6,634 13,077 13,187
------- ------- ------- -------
NONINTEREST EXPENSE
-------------------
Salaries and Associate Benefits 7,485 7,605 15,040 15,083
Occupancy, Net 1,113 1,111 2,209 2,148
Furniture and Equipment 1,479 1,394 2,871 2,791
Merger Expense 751 1,277 751 1,277
Other 4,426 4,930 8,735 9,460
------- ------- ------- -------
Total Noninterest Expense 15,254 16,317 29,606 30,759
------- ------- ------- -------
Income Before Income Tax 6,290 4,077 13,264 9,402
Income Tax Expense 2,124 1,182 4,485 2,842
------- ------- ------- -------
NET INCOME $ 4,166 $ 2,895 $ 8,779 $ 6,560
======= ======= ======= =======
Basic Net Income Per Share $ .41 $ .28 $ .86 $ .64
======= ======= ======= =======
Diluted Net Income Per Share $ .41 $ .28 $ .86 $ .64
======= ======= ======= =======
Cash Dividends Per Share(1) $ .1325 $ .12 $ .2650 $ .30
======= ======= ======= =======
Average Shares Outstanding - Basic 10,195,637 10,171,693 10,195,449 10,170,626
========== ========== ========== ==========
Average Shares Outstanding - Diluted 10,211,150 10,187,224 10,210,980 10,186,157
========== ========== ========== ==========
(1) The dividend for the six months ended June 30, 1999 includes a one-time distribution
paid to Grady Holding Company shareowners of approximately $563,000.
<PAGE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
(Dollars In Thousands, Except Share Data)
June 30, December 31,
2000 1999
(Unaudited) (Audited)
----------- -----------
ASSETS
Cash and Due From Banks $ 70,329 $ 79,454
Funds Sold and Interest Bearing Deposits 3,371 13,618
Investment Securities, Available-for-Sale 288,538 321,192
Loans, Net of Unearned Interest 1,032,422 928,486
Allowance for Loan Losses (10,478) (9,929)
---------- ----------
Loans, Net 1,021,944 918,557
Premises and Equipment, Net 36,833 37,834
Intangibles 23,726 25,149
Other Assets 36,524 34,716
---------- ----------
Total Assets $1,481,265 $1,430,520
========== ==========
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 292,139 $ 253,140
Interest Bearing Deposits 941,009 949,518
---------- ----------
Total Deposits 1,233,148 1,202,658
Short-Term Borrowings 80,957 66,275
Long-Term Debt 13,858 14,258
Other Liabilities 15,357 15,113
---------- ----------
Total Liabilities 1,343,320 1,298,304
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; 10,191,842 shares outstanding
at June 30, 2000 and 10,190,069 outstanding at
December 31, 1999 102 102
Additional Paid-In-Capital 9,329 9,249
Retained Earnings 135,133 129,055
Accumulated Other Comprehensive (Loss), Net of Tax (6,619) (6,190)
---------- ----------
Total Shareowners' Equity 137,945 132,216
---------- ----------
Total Liabilities and Shareowners' Equity $1,481,265 $1,430,520
========== ==========
<PAGE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30
(Dollars in Thousands)
2000 1999
(Unaudited) (Unaudited)
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
Net Income $ 8,779 $ 6,560
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Provision for Loan Losses 1,560 1,320
Depreciation 2,021 1,804
Net Securities Amortization 700 646
Amortization of Intangible Assets 1,404 1,389
Gains on Sales of Investment Securities (2) -
Non-Cash Compensation 50 74
Net Decrease (Increase) in Interest Receivable 133 (98)
Net (Increase) Decrease in Other Assets (1,567) 2,251
Net Increase (Decrease) in Other Liabilities 243 (2,988)
-------- --------
Net Cash Provided by Operating Activities 13,321 10,958
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Proceeds from Payments/Maturities of
Investment Securities 31,666 77,272
Purchase of Investment Securities,
Available-for-Sale (492) (40,701)
Net Increase in Loans (104,947) (42,690)
Purchase of Premises & Equipment (1,024) (2,604)
Sales of Premises & Equipment 4 149
-------- --------
Net Cash Used in Investing Activities (74,793) (8,574)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Net Increase (Decrease) in Deposits 30,492 (2,691)
Net Increase in Short-Term Borrowings 14,681 14,450
Borrowing from Long-Term Debt 928 2,262
Repayment of Long-Term Debt (1,328) (3,368)
Dividends Paid (2,702) (3,147)
Issuance of Common Stock 29 183
-------- --------
Net Cash Provided by Financing Activities 42,100 7,689
-------- --------
Net (Decrease) Increase in Cash and
Cash Equivalents (19,372) 10,073
Cash and Cash Equivalents at Beginning
of Period 93,072 141,024
-------- --------
Cash and Cash Equivalents at End of Period $ 73,700 $151,097
======== ========
Supplemental Disclosure:
Interest Paid $ 18,943 $ 18,418
======== ========
Interest Paid on Debt $ 2,460 $ 1,295
======== ========
Transfer of Loans to ORE $ 689 $ 865
======== ========
Income Tax Paid $ 7,489 $ 3,486
======== ========
<PAGE>
CAPITAL CITY BANK GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) MANAGEMENT'S OPINION AND ACCOUNTING POLICIES
--------------------------------------------
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of 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 accounting principles generally accepted in the United
States 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, including restatement to reflect the pooling of interest of
Grady Holding Company and its subsidiaries.
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, 2000 and December 31, 1999, the results of operations for the six
month periods ended June 30, 2000 and 1999, and cash flows for the six
month periods ended June 30, 2000 and 1999.
The Company and its subsidiaries follow accounting principles generally
accepted in the United States 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
Consolidated Financial Statements which are included in the Company's 1999
Annual Report and Form 10-K.
(2) INVESTMENT SECURITIES
---------------------
The carrying value and related market value of investment securities at
June 30, 2000 and December 31, 1999 were as follows (dollars in thousands):
June 30, 2000
------------------------------------------
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
------------------ --------- ---------- ---------- --------
U. S. Treasury $ 10,024 $ - $ 98 $ 9,926
U. S. Government Agencies
and Corporations 74,092 - 2,607 71,485
States and Political
Subdivisions 95,141 22 2,243 92,920
Mortgage-Backed Securities 79,469 15 4,149 75,335
Other Securities 40,355 - 1,483 38,872
-------- --- ------- --------
Total $299,081 $37 $10,580 $288,538
======== === ======= ========
December 31, 1999
-------------------------------------------
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
------------------ --------- ---------- ---------- --------
U. S. Treasury $ 20,047 $ 4 $ 70 $ 19,981
U. S. Government Agencies
and Corporations 79,181 - 2,557 76,624
States and Political
Subdivisions 104,312 74 1,895 102,491
Mortgage-Backed Securities 85,040 88 3,728 81,400
Other Securities 42,372 - 1,676 40,696
-------- ---- ------ --------
Total $330,952 $166 $9,926 $321,192
<PAGE>
(3) LOANS
-----
The composition of the Company's loan portfolio at June 30, 2000 and
December 31, 1999 was as follows (dollars in thousands):
June 30, 2000 December 31, 1999
------------- -----------------
Commercial, Financial
and Agricultural $135,084 $ 98,894
Real Estate-Construction 67,730 62,166
Real Estate-Mortgage 219,024 214,036
Real Estate-Residential 433,390 383,536
Consumer 177,194 169,854
---------- --------
Loans, Net of Unearned Interest $1,032,422 $928,486
========== ========
(4) ALLOWANCE FOR LOAN LOSSES
-------------------------
An analysis of the changes in the allowance for loan losses for the six
month period ended June 30, 2000 and 1999, is as follows (dollars in
thousands):
June 30,
----------------------
2000 1999
------- -------
Balance, Beginning of the Period $ 9,929 $ 9,827
Provision for Loan Losses 1,560 1,320
Recoveries on Loans Previously
Charged-Off 329 418
Loans Charged-Off 1,340 1,505
------- -------
Balance, End of Period $10,478 $10,060
======= =======
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):
June 30,
----------------------------------------------
2000 1999
-------------------- ---------------------
Impaired Loans: Valuation Valuation
Balance Allowance Balance Allowance
-------------------- ---------------------
With Related Credit Allowance $ - $ - $2,072 $194
Without Related Credit Allowance 2,052 - 518 -
Average Recorded Investment
for the Period 2,176 * 3,592 *
Interest Income:
Recognized $ 63 $ 57
Collected $ 33 $ 46
The Company recognizes income on impaired loans primarily on the cash
basis. Any change in the present value of expected cash flows on impaired
loans is recognized through the allowance for loan losses.
<PAGE>
(5) DEPOSITS
--------
The composition of the Company's interest bearing deposits at June 30, 2000
and December 31, 1999 was as follows (dollars in thousands):
June 30, 2000 December 31, 1999
------------- -----------------
NOW Accounts $187,383 $182,794
Money Market Accounts 156,374 157,825
Savings Deposits 106,083 105,498
Other Time Deposits 491,169 503,401
-------- --------
Total Interest Bearing Deposits $941,009 $949,518
======== ========
(6) ACCOUNTING PRONOUNCEMENTS
-------------------------
In June 1998, the Financial Accounting Standards Board "FASB" issued
Statement of Financial Accounting Standards "SFAS" No. 133 "Accounting for
Derivative Instruments and Hedging Activities" as amended. 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, 2000.
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 and six
month periods ended June 30, 2000 and 1999, was as follows (dollars in
thousands):
</TABLE>
<TABLE>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
-------------------------- ---------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Income $4,166 $2,895 $8,779 $6,560
Other Comprehensive Income, Net of Tax
Unrealized Gains (Losses) on Securities:
Unrealized Gains (Losses) on Securities
During the Period 415 (3,493) (429) (4,466)
Less: Reclassification Adjustments for
Gains Included in Net Income - - 2 -
Total Unrealized Gains (Losses)
On Securities 415 (3,493) (427) (4,466)
Other Comprehensive Income, Net of Tax $4,581 $ (598) $8,352 $2,094
</TABLE>
The change in the three months ended June 30, 2000 represents a market
value increase in available-for-sale securities, compared to a decrease in
market value for the comparable period in 1999. For the six month periods
ended June 30, 2000 and 1999, the change reflects a market value decrease.
(8) ACQUISITION OF GRADY HOLDING COMPANY
------------------------------------
On May 7, 1999, the Company completed its acquisition of Grady Holding
Company and its subsidiary, First National Bank of Grady County in Cairo,
Georgia. FNBGC is a $114 million asset institution with offices in Cairo
and Whigham, Georgia. The Company issued 21.50 shares for each of the
60,910 shares of FNBGC. The consolidated financial statements of the
Company give effect to the merger which has been accounted for as a pooling-
of-interests. Accordingly, financial statements for the prior periods have
been restated to reflect the results of operations of these entities on a
combined basis from the earliest period presented.
<PAGE>
<TABLE>
QUARTERLY FINANCIAL DATA (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
<CAPTION>
2000 1999 1998
---------------------- ------------------------------------------- ----------------------
Second First Fourth Third Second First Fourth Third
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Interest Income $ 26,889 $ 25,710 $ 25,366 $ 25,236 $ 24,816 $ 24,267 $ 22,904 $ 21,974
Interest Expense 11,070 10,176 10,171 10,287 10,476 10,313 9,224 8,673
Net Interest Income 15,819 15,534 15,195 14,949 14,340 13,954 13,680 13,301
Provision for
Loan Loss 950 610 510 610 580 740 657 618
Net interest Income
After Provision
for Loan Loss 14,869 14,924 14,685 14,339 13,760 13,214 13,023 12,683
Noninterest Income 6,675 6,402 6,654 6,719 6,634 6,553 6,710 5,721
Merger Expense 751 - 10 74 1,277 - 115 -
Noninterest Expense 14,503 14,352 14,462 14,522 15,040 14,442 13,600 12,540
Income Before
Provision for
Income Taxes 6,290 6,974 6,867 6,462 4,077 5,325 6,018 5,864
Provision for
Income Taxes 2,124 2,361 2,548 2,089 1,182 1,660 2,146 2,057
Net Income $ 4,166 $ 4,613 $ 4,319 $ 4,373 $ 2,895 $ 3,665 $ 3,872 $ 3,807
Net Interest
Income (FTE) $ 16,217 $ 15,962 $ 15,521 $ 15,435 $ 14,822 $ 14,420 $ 14,046 $ 13,640
Per Common Share:
Net Income Basic $ .41 $ .45 $ .42 $ .43 $ .28 $ .36 $ .39 $ .37
Net Income Diluted .41 .45 .42 .43 .28 .36 .39 .37
Dividends Declared(1) .1325 .1325 .1325 .12 .12 .18 .12 .11
Book Value 13.51 13.20 12.96 12.78 12.56 12.80 12.65 12.40
Market Price:
High 20.50 23.00 25.00 30.00 25.00 27.63 31.00 33.13
Low 18.00 15.00 20.19 21.00 20.25 22.00 24.13 19.00
Close 19.50 19.63 21.50 22.75 25.00 23.31 27.63 29.13
Selected Average
Balances:
Total Assets $1,454,098 $1,430,620 $1,446,815 $1,446,505 $1,452,215 $1,430,533 $1,257,934 $1,148,404
Earning Assets 1,303,633 1,277,894 1,280,746 1,297,481 1,304,093 1,282,679 1,131,933 1,038,981
Loans 989,695 938,351 915,194 892,161 878,976 850,161 834,315 819,755
Total Deposits 1,202,770 1,198,608 1,235,002 1,234,360 1,247,452 1,232,816 1,059,192 954,652
Total Shareowners'
Equity 137,014 133,836 131,932 130,134 131,234 130,929 128,250 123,728
Common Equivalent
Shares:
Basic 10,196 10,195 10,179 10,179 10,172 10,170 10,158 10,158
Diluted 10,211 10,211 10,201 10,195 10,187 10,185 10,179 10,158
Ratios:
ROA 1.15% 1.30% 1.18% 1.20% .80% 1.04% 1.22% 1.32%
ROE 12.23% 13.86% 12.99% 13.33% 8.85% 11.35% 11.98% 12.20%
Net Interest
Margin (FTE) 5.00% 5.02% 4.82% 4.73% 4.56% 4.56% 4.92% 5.21%
Efficiency Ratio 60.30% 60.91% 60.67% 62.30% 61.70% 65.46% 63.50% 63.33%
(1) First quarter 1999 dividend includes a one-time distribution paid to
Grady Holding Company shareowners of approximately $563,000.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND RESULTS OF OPERATIONS
AND ANALYSIS OF FINANCIAL CONDITION
The following analysis reviews important factors affecting the financial
condition and results of operations of Capital City Bank Group, Inc., for
the periods shown below. The Company, has made, and may continue to make,
various forward-looking statements with respect to financial and business
matters that involve numerous assumptions, risks and uncertainties. The
following is a list of factors, among others, that could cause actual
results to differ materially from the forward-looking statements: general
and local economic conditions, competition for the Company's customers from
other banking and financial institutions, government legislation and
regulation, changes in interest rates, the impact of rapid growth,
significant changes in the loan portfolio composition, and other risks
described in the Company's filings with the Securities and Exchange
Commission, all of which are difficult to predict and many of which are
beyond the control of the Company.
The following discussion sets forth the major factors that have affected
the Company's results of operations and financial condition and should be
read in conjunction with the accompanying consolidated financial
statements. All prior period financial information has been restated to
reflect the pooling-of-interests of Grady Holding Company and its
subsidiaries. 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 2000 compares
with prior years. Throughout this section, Capital City Bank Group, Inc.,
and its subsidiaries, collectively, are referred to as "CCBG" or the
"Company." The two subsidiary banks are referred to as the "Capital City
Bank" or "CCB", and "First National Bank of Grady County" or "FNBGC".
On March 30, 2000, the Company announced the authorization to repurchase
500,000 shares of the outstanding common stock. The purchases will be made
in the open market or in privately negotiated transactions.
On May 7, 1999, the Company completed its acquisition of Grady Holding
Company and its subsidiary, First National Bank of Grady County in Cairo,
Georgia. FNBGC is a $114 million asset institution with offices in Cairo
and Whigham, Georgia. The Company issued 21.50 shares for each of the
60,910 shares of FNBGC. The consolidated financial statements of the
Company give effect to the merger which has been accounted for as a pooling-
of-interests. Accordingly, financial statements for the prior periods have
been restated to reflect the results of operations of these entities on a
combined basis from the earliest period presented.
RESULTS OF OPERATIONS
Net Income
----------
Earnings, including the effects of merger-related expenses and intangible
amortization, for the three and six months ended June 30, 2000 were $4.2
million, or $0.41 per diluted share and $8.8 million, or $0.86 per diluted
share. This compares to $2.9 million, or $0.28 per diluted share and $6.6
million, or $0.64 per diluted share in 1999. At June 30, 2000, merger-
related expenses, net of taxes, totaled $476,000, or $0.05 per diluted
share, versus $1.2 million, or $.12 per diluted share for the comparable
period in 1999. Amortization of intangible assets, net of taxes, for the
first six months in 2000 totaled $953,000. or $0.0910 per diluted share,
compared to $945,000, or $.10 per diluted share in 1999.
<PAGE>
In 2000, excluding merger-related expenses, net income for the three and
six month periods ended June 30, 2000 increased $925,000, or 25.0%, and
$1.9 million, or 25.5%, respectively, due primarily to revenue growth.
Operating revenues (defined as taxable equivalent net interest income plus
noninterest income) in 2000 grew $1.4 million, or 6.7%, and $2.8 million,
or 6.7%, respectively, over the three and six month periods in 1999. This
and other factors are discussed throughout the Financial Review. A
condensed earnings summary is presented below.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2000 1999 2000 1999
-------- ------- ------- -------
Interest and Dividend Income $26,889 $24,816 $52,599 $49,084
Taxable Equivalent Adjustment(1) 398 482 826 949
------- ------- ------- -------
Interest Income (FTE) 27,287 25,298 53,425 50,033
Interest Expense 11,070 10,476 21,246 20,790
------- ------- ------- -------
Net Interest Income (FTE) 16,217 14,822 32,179 29,243
Provision for Loan Losses 950 580 1,560 1,320
Taxable Equivalent Adjustment 398 482 826 949
------- ------- ------- -------
Net Int. Inc. After Provision 14,869 13,760 29,793 26,974
Noninterest Income 6,675 6,634 13,077 13,187
Merger Expense 751 1,277 751 1,277
Noninterest Expense 14,503 15,040 28,855 29,482
------- ------- ------- -------
Income Before Income Taxes 6,290 4,077 13,264 9,402
Income Taxes 2,124 1,182 4,485 2,842
------- ------- ------- -------
Net Income $ 4,166 $ 2,895 $ 8,779 $ 6,560
======= ======= ======= =======
Percent Change 43.94% (27.58)% 33.83% (13.87)%
Return on Average Assets(2) 1.15% .80% 1.22% .92%
Return on Average Equity(2) 12.23% 8.85% 13.04% 10.09%
(1) Computed using a statutory tax rate of 35%
(2) Annualized
Net Interest Income
-------------------
Second quarter taxable equivalent net interest income increased $1.4
million, or 9.4%, over the comparable quarter in 1999. Taxable equivalent
net interest income for the first half of 2000 increased $2.9 million or
10.0%, over the first half of 1999. The increase in both periods is
attributable to a change in the mix of earning assets, primarily loans.
The favorable impact of the shift in mix of earning assets was partially
offset by increasing yields on interest bearing liabilities. Table I on
page 17 provides a comparative analysis of the Company's average balances
and interest rates.
For the three and six month periods ended June 30, 2000, taxable-equivalent
interest income increased $2.0 million, or 7.9%, and $3.4 million, or 6.8%,
respectively, over the comparable prior year periods. Loans which
represent the Company's highest yielding asset, increased (on average)
$99.4 million, or 11.5% and represented 74.7% of total earning assets for
the six months ended June 30, 2000 versus 66.8% for the comparable period
in 1999. Offsetting this increase was a decline in income from investment
securities and funds sold. Rising interest rates and the favorable shift
in mix contributed to a 52 basis point increase in the yield on earning
assets which increased from 7.80% during the first six months of 1999 to
8.32% for the comparable period in 2000.
<PAGE>
Interest expense for the three and six month periods ended June 30, 2000
increased $594,000, or 5.7%, and $456,000, or 2.2%, respectively, over the
comparable prior year periods. The 12 basis point increase in the average
rate is the result of rising interest rates and increased competition for
deposits. Certificates of deposit, which generally represent a higher cost
deposit product to the Company, decreased from 45.4% of average deposits in
the first half of 1999 to 41.2% in 2000.
The Company's interest rate spread (defined as the average federal taxable
equivalent yield on earning assets less the average rate paid on interest
bearing liabilities) increased from 3.73% in the first half of 1999 to
4.13% in the comparable period of 2000 due to the higher yield on earning
assets. The Company's net interest margin percentage (defined as taxable-
equivalent net interest income divided by average earning assets) was 4.56%
in the first half of 1999, versus 5.01% in the first half of 2000. The
increase in margin represents the higher yield on earning assets resulting
from the favorable shift in the mix of earning assets.
Provision for Loan Losses
-------------------------
The provision for loan losses was $950,000 and $1.6 million, respectively,
for the three and six month periods ended June 30, 2000, compared to
$580,000 and $1.3 million for the comparable periods in 1999. Net charge-
offs were down slightly from the first half of 1999, and remain at low
levels relative to the size of the loan portfolio. The higher provision
reflects the significant increase in the loan portfolio during the first
half of 2000. Nonperforming loans increased $248,000, or 8.3%, during the
first six months of 2000. The Company's nonperforming asset ratio
increased from .42% at year-end to .43% at June 30, 2000. As compared to
year-end, the reserve for loan losses increased to $10.5 million, and
represented 1.01% of total loans versus 1.07% at the prior year-end.
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 reserve for loan
losses as of June 30, 2000, 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 Six Months Ended
June 30, June 30,
---------------------- ----------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
Net Charge-Offs $698,000 $728,000 $1,011,000 $1,087,000
Net Charge-Offs (Annualized)
as a percent of Average
Loans Outstanding, Net of
Unearned Interest .28% .33% .21% .25%
Noninterest Income
------------------
Noninterest income increased $41,000, or 0.6%, in the second quarter of
2000 versus the comparable quarter for 1999, and decreased $110,000, or
0.8%, for the six months ended June 30, 2000 versus the comparable period
for 1999. During both periods, trust fees and other income posted higher
revenues, while service charges and data processing revenues declined.
<PAGE>
Service charges on deposit accounts decreased $141,000, or 5.7%, and
$250,000, or 5.1%, respectively, over the comparable three and six month
periods for 1999. 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 decrease in the first half on
2000 compared to 1999, reflects higher compensating balances and a decline
in the number of transaction accounts.
Data processing revenues decreased $97,000, or 13.0%, and $165,000, or
11.0%, respectively, over the comparable three and six month periods in
1999. The decrease reflects lower processing revenues associated with
government agencies.
Revenue from trust activities increased $161,000, or 36.7%, compared to the
second quarter of 1999, and increased $298,000, or 31.0%, over the
comparable six month period in 1999. The increase in revenues during the
first half is attributable to growth in managed assets. At June 30, 2000,
assets under management totaled $320.7 million compared to 292.3 million at
June 30, 1999.
Other income increased $118,000, or 3.9%, and $5,000, or 0.1%,
respectively, for the three and six month periods ended June 30, 2000 over
the comparable prior year periods. The increase is partially attributable
to higher credit card merchant fees of $214,000 and interchange commissions
of $287,000. Gains on the sale of residential real estate loans decreased
$501,000, attributable to the higher interest rate environment, resulting
in fewer fixed rate loans being originated and sold in the secondary
market.
Noninterest income as a percent of average assets was 1.82% and 1.84%,
respectively, for the first half of 2000 and 1999.
Noninterest Expense
-------------------
Noninterest expense decreased $1.1 million, or 6.5%, and 1.2 million, or
3.7%, respectively, over the comparable three and six month periods in
1999. The decrease primarily reflects lower merger-related expense and
initiatives undertaken bt management to streamline operating costs.
Compensation expense decreased $121,000, or 1.6%, and $42,000, or 0.3%,
respectively, over the comparable three and six month periods of 1999,
reflecting a reduction in total salaries. For the comparable first half
periods in 2000 and 1999, FTE's decreased by 6 associates.
Occupancy expense, including premises, furniture, fixtures and equipment
increased $87,000, or 3.5%, and $140,000, or 2.8%, respectively, over the
comparable three and six month periods in 1999. Depreciation expense,
utilities and property taxes increased $217,000, $14,000 and $25,000,
respectively, for the comparable six month periods. These increases were
partially offset by a decline in maintenance and repairs costs of $115,000,
net premises rental of $30,000, and building insurance of $16,000.
Merger expense of $751,000 for the three and six month periods ended June
30, 2000, decreased $526,000 from the comparable periods in 1999. Costs
attributable to the acquisition of Grady Holding Company and its
subsidiaries were recognized in the second quarter of both years.
Other noninterest expense (excluding merger related costs) decreased
$504,000, or 10.2%, and $726,000, or 7.7%, respectively, over the
comparable three and six month periods in 1999. The decrease is
primarily due to a reduction in telephone, postage, other losses and the
elimination of the Florida intangible tax. The decline in telephone costs
is attributable to the completion of the wide-area network.
<PAGE>
Annualized net noninterest expense (noninterest income minus noninterest
expense, net of intangibles and merger expense) as a percent of average
assets was 2.00% in the first half of 2000 versus 2.09% for the first half
of 1999. The Company's efficiency ratio (noninterest expense, net of
intangibles and merger expense, expressed as a percent of the sum of
taxable-equivalent net interest income plus noninterest income) was 60.60%
in the first half of 2000 compared to 66.17% for the comparable period in
1999. The increase in the efficiency ratio reflects rising costs as noted
above.
Income Taxes
------------
The provision for income taxes increased $942,000, or 79.7%, during the
second quarter and $1.6 million, or 57.8%, during the first six months of
2000, relative to the comparable prior year periods. The Company's
effective tax rate for the first half of 2000 was 33.8% versus 30.2% for
the comparable period in 1999. The increase in the provision and the
effective tax rate is attributable to higher taxable income and a change in
how state taxes are assessed.
Prior to 2000, intangible taxes paid to the State of Florida (recorded as
noninterest expense on the Company's books) qualified as an offset or
credit against the Company's state tax liability. In 2000, the State's
intangible tax on banks was eliminated. While this did not materially
change the total amount of taxes paid to the State, it does result in the
full amount being reflected in the provision for income taxes.
FINANCIAL CONDITION
The Company's average assets were $1.4 billion for the first six months of
2000 and 1999. Average earning assets were $1.3 billion for the six months
ended June 30, 2000, constant with the comparable period in 1999. The mix
of earning assets shifted as loan growth accelerated and was primarily
funded by a reduction in investment securities and funds sold. Table I on
Page 17 presents average balances for the three and six month periods ended
June 30, 2000 and 1999.
Average loans increased $99.4 million, or 11.5%, over the comparable period
in 1999. Price and product competition remains strong in all markets. Loan
growth has occurred in all categories, with the most significant increase
in real estate. Loans which represent the Company's highest yielding
asset, represented 74.7% of total earning assets for the six months ended
June 30, 2000 versus 66.8% for the comparable period in 1999.
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 June 30, 2000, the average investment
portfolio decreased $36.7 million, or 10.8%, from the comparable period in
1999. The decrease in the investment portfolio was used to fund the growth
in loans. 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 June 30, 2000, shareowners' equity included an accumulated other
comprehensive loss of $6.6 million compared to a loss of $6.2 million at
December 31, 1999. The decrease in value reflects an increase in interest
rates during the first half of 2000.
At June 30, 2000, the Company's nonperforming loans were $3.2 million
versus $3.0 million at year-end 1999. As a percent of nonperforming loans,
the allowance for loan losses represented 324% at June 30, 2000 versus 332%
at December 31, 1999 and 220% at June 30, 1999, respectively. 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 June 30, 2000, compared to
$934,000 at December 31, 1999, and $1.6 million at June 30, 1999. The ratio
of nonperforming assets as a percent of loans plus other real estate was
.43% at June 30, 2000, compared to .42% at December 31, 1999, and .69% at
June 30, 1999.
<PAGE>
Average deposits decreased 3.2% from the $1.24 billion for the first half
of 1999, to $1.20 billion for the first half of 2000. The decrease in
deposits is attributable to the decline in certificates of deposits,
partially reflecting maturities of high yielding, promotional certificates.
This decline was partially offset by increases in money market and NOW
accounts. The Company continues to experience a notable increase in
competition for deposits, in terms of both rate and product.
The ratio of average noninterest bearing deposits to total deposits was
22.6% for the first half of 2000 compared to 21.3% for the first half of
1999. For the same periods, the ratio of average interest bearing
liabilities to average earning assets was 78.9% and 79.7%, 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
demands. In addition to core deposits, 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 million revolving line of credit. As of June 30, 2000 there was $3.0
million outstanding under this facility. The Company did not reduce the
outstanding principal on the line of credit during the first half of 2000.
The Company's equity capital was $137.9 million as of June 30, 2000,
compared to $132.2 million as of December 31, 1999. Management continues
to monitor its capital position in relation to its level of assets with the
objective of maintaining a "well capitalized" position. The leverage ratio
was 8.16% at June 30, 2000 versus 7.92% at December 31, 1999. Further, the
Company's risk-adjusted capital ratio of 11.56% significantly exceeds the
8.0% minimum requirement under the risk-based regulatory guidelines.
During the first six months of 2000, shareowners' equity increased $5.7
million, or 8.7%, on an annualized basis. Growth in equity during the
first half was positively impacted by net income of $8.8 million and
issuance of common stock of $79,000. Equity was reduced by an increase in
the net unrealized loss on available-for-sale securities of $429,000 and
dividends paid during the first quarter of $2.7 million, or $.265 per
share.
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, 2000, 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.
The Company's common stock had a book value of $13.51 per share at June 30,
2000 compared to $12.96 at December 31, 1999. On March 30, 2000, the
Company announced the authorization to repurchase 500,000 shares of its
outstanding common stock. The purchases will be made in the open market or
in privately negotiated transactions. During the second quarter, 17,000
shares have been repurchased.
<APGE>
YEAR 2000 COMPLIANCE
The YEAR 2000 issue created challenges with respect to the automated
systems used by financial institutions and other companies. Many programs
and systems were not able to recognize the year 2000, or that the new
millennium is a leap year. The problem was not limited to computer
systems. YEAR 2000 issues could have potentially affected every system
that had an embedded microchip containing this flaw.
Costs directly related to YEAR 2000 issues were $780,000 from 1998 to 2000,
of which approximately 100% had been spent as of December 31, 1999.
Approximately 75% of the total spending represented costs to modify
existing systems. Costs incurred by the Company prior to 1998 were
immaterial. This expense does not reflect any significant YEAR 2000
related costs incurred on behalf of the Company's vendors, suppliers,
customers or other third parties.
Contingency plans for YEAR 2000 related interruptions were developed and
included, but were not 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.
As of June 30, 2000, the Company experienced no known Year 2000 problems
that were material.
<PAGE>
</TABLE>
<TABLE>
TABLE I
AVERAGE BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)
<CAPTION>
FOR THREE MONTHS ENDED JUNE 30,
2000 1999
-------------------------- --------------------------
Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans, Net of Unearned Interest(1) $ 989,695 $22,631 9.20% $ 878,976 $19,455 8.88%
Taxable Investment Securities 198,511 2,946 5.97% 232,585 3,278 5.65%
Tax-Exempt Investment Securities(2) 93,813 1,368 5.83% 101,991 1,498 5.89%
Funds Sold 21,614 342 6.36% 90,541 1,067 4.73%
---------- ------- ---------- -------
Total Earning Assets 1,303,633 27,287 8.42% 1,304,093 25,298 7.78%
Cash & Due From Banks 63,059 63,430
Allowance for Loan Losses (10,442) (10,229)
Other Assets 97,848 94,921
---------- ----------
TOTAL ASSETS $1,454,098 $1,452,215
========== ==========
LIABILITIES
NOW Accounts $ 170,322 $ 1,025 2.42% $ 151,844 $ 844 2.23%
Money Market Accounts 160,356 1,634 4.10% 154,690 1,404 3.64%
Savings Accounts 105,663 584 2.22% 115,316 598 2.08%
Other Time Deposits 491,178 6,404 5.24% 560,804 6,930 4.96%
---------- ------- ---------- -------
Total Int. Bearing Deposits 927,519 9,647 4.18% 982,654 9,776 3.99%
Short-Term Borrowings 83,579 1,205 5.80% 40,151 399 3.99%
Long-Term Debt 13,970 218 6.28% 18,424 301 6.55%
---------- ------- ---------- -------
Total Interest Bearing
Liabilities 1,025,068 11,070 4.34% 1,041,229 10,476 4.04%
Noninterest Bearing Deposits 275,251 264,798
Other Liabilities 16,765 14,954
---------- ----------
TOTAL LIABILITIES 1,317,084 1,320,981
SHAREOWNERS' EQUITY
Common Stock 102 101
Surplus 9,400 8,801
Other Comprehensive Income (7,318) (1,044)
Retained Earnings 134,830 123,376
---------- ----------
TOTAL SHAREOWNERS' EQUITY 137,014 131,234
---------- ----------
TOTAL LIABILITIES & EQUITY $1,454,098 $1,452,215
========== ==========
Interest Rate Spread 4.08% 3.74%
==== ====
Net Interest Income $16,217 $14,822
======= =======
Net Interest Margin 5.00% 4.56%
==== ====
FOR SIX MONTHS ENDED JUNE 30,
2000 1999
-------------------------- --------------------------
Balance Interest Rate Balance Interest Rate
---------- -------- ----- ---------- -------- -----
ASSETS
Loans, Net uf Unearned Interest(1) $ 964,023 $43,792 9.14% $ 964,648 $38,289 8.93%
Taxable Investment Securities 205,823 6,066 5.93% 237,428 6,697 5.69%
Tax-Exempt Investment Securities(2) 96,407 2,835 5.84% 101,548 2,955 5.87%
Funds Sold 24,511 732 6.01% 89,821 2,092 4.70%
---------- ------- ---------- -------
Total Earning Assets 1,290,754 53,425 8.32% 1,293,446 50,033 7.80%
Cash & Due From Banks 64,192 63,731
Allowance for Loan Losses (10,263) (10,143)
Other Assets 97,666 94,400
---------- ----------
TOTAL ASSETS $1,442,359 $1,441,434
========== ==========
LIABILITIES
NOW Accounts $ 169,092 $ 1,973 2.35% $ 148,491 $ 1,507 2.05%
Money Market Accounts 161,242 3,226 4.02% 149,025 2,723 3.68%
Savings Accounts 104,740 1,120 2.15% 115,430 1,175 2.05%
Other Time Deposits 494,237 12,503 5.09% 562,734 14,043 5.03%
---------- ------- ---------- -------
Total Int. Bearing Deposits 929,311 18,822 4.07% 975,680 19,448 4.02%
Short-Term Borrowings 75,540 1,989 5.29% 36,706 731 4.02%
Long-Term Debt 14,069 435 6.22% 18,627 611 6.61%
---------- ------- ---------- -------
Total Interest Bearing
Libilities 1,018,920 21,246 4.19% 1,031,013 20,790 4.07%
Noninterest Bearing Deposits 271,377 264,494
Other Liabilities 16,637 14,845
---------- ----------
TOATAL LIABILITIES 1,306,934 1,310,352
SHAREOWNERS' EQUITY
Common Stock 102 101
Surplus 9,358 8,750
Other Comprehensive Income (7,127) (215)
Retained Earnings 133,092 122,446
---------- ----------
TOTAL SHAREOWNERS' EQUITY 135,425 131,082
---------- ----------
TOTAL LIABILITIES & EQUITY $1,442,359 $1,441,434
========== ==========
Interest Rate Spread 4.13% 3.73%
==== ====
Net Interest Income $32,179 $29,243
======= =======
Net Interest Margin 5.01% 4.56%
==== ====
(1) Average balances include nonaccrual loans. Interest income includes fees on loans
of approximately $1.0 million and $2.0 million, for the three and six months ended
June 30, 2000, versus $847,000 and $1.6 million, for the comparable periods ended
June 30, 1999.
(2) Interest income includes the effects of taxable equivalent adjustments using a 35%
tax rate.
<PAGE>
Item 3. Quantitative and Qualitative 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 rates 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 19. This
table presents the Company's consolidated interest rate sensitivity
position as of June 30, 2000 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.
<PAGE>
</TABLE>
<TABLE>
Table II
FINANCIAL ASSETS AND LIABILITIES MARKET RISK ANALYSIS
(Dollars in Thousands)
<CAPTION>
Other Than Trading Portfolio June 30, 2000
---------------------------- ------------------------------------------------------- Fair
Year 1 Year 2 Year 3 Year 4 Year 5 Beyond Total Value
--------- --------- --------- ---------- --------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Loans
Fixed Rate $101,240 $ 32,137 $ 42,147 $ 42,996 $ 40,688 $ 85,587 $ 344,795 $ 346,414
Average Interest Rate 9.76% 9.97% 8.35% 8.62% 8.88% 8.04% 9.24%
Floating Rate(2) 423,682 40,119 47,750 41,128 50,698 84,250 687,627 690,855
Average Interest Rate 9.42% 8.13% 8.52% 7.95% 8.27% 7.09% 8.80%
Investment Securities(3)
Fixed Rate 78,713 42,773 25,837 25,681 24,888 82,145 280,037 280,037
Average Interest Rate 5.87% 5.76% 5.23% 5.76% 5.83% 6.71% 6.02%
Floating Rate - - 7,997 - - 504 8,501 8,501
Average Interest Rate - - 6.88% - - 6.29% 6.84%
Other Earning Assets
Fixed Rates - - - - - - - -
Average Interest Rates - - - - - - -
Floating Rate 3,371 - - - - - 3,371 3,371
Average Interest Rates 7.52% - - - - - 7.52%
Total Financial Assets $607,006 $115,029 $123,731 $109,805 $116,274 $252,486 $1,324,331 $1,329,178
Average Interest Rates 9.01% 7.76% 7.67% 7.70% 7.96% 7.29% 8.31%
Deposits(4)
Fixed Rate Deposits $442,205 $ 33,622 $ 9,687 $ 3,419 $ 2,221 $ 15 $ 491,169 $ 489,971
Average Interest Rates 5.16% 5.69% 5.01% 5.04% 4.94% 4.79% 5.19%
Floating Rate Deposits 449,840 - - - - - 449,840 449,840
Average Interest Rates 2.88% - - - - - 2.88%
Other Interest Bearing
Liabilities
Fixed Rate Debt 794 703 718 731 747 7,165 10,858 11,551
Average Interest Rate 6.09% 6.19% 6.18% 6.18% 6.17% 6.07% 6.10%
Floating Rate Debt 83,957 - - - - - 83,957 89,314
Average Interest Rate 6.69% - - - - - 6.69%
Total Financial Liabilities $976,796 $ 34,325 $ 10,405 $ 4,150 $ 2,968 $ 7,180 $1,035,824 $1,040,676
Average interest Rate 4.24% 5.70% 5.09% 5.24% 5.25% 6.07% 4.32%
(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 2000. Other time deposit balances are classified according to maturity.
</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 25, 2000. 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. The following directors were elected for terms expiring as noted.
These individuals served on the Board of Directors prior to the Annual
Meeting. The number of votes cast were as follows:
For terms to expire at Against/ Abstentions/
the 2003 annual meeting: For Withheld Broker Non-Votes
DuBose Ausley 8,675,306 4,179 -
John K. Humphress 8,675,692 3,793 -
2. The shareowners ratified the selection of Arthur Andersen LLP as the
independent auditors for the Company for 2000. The number of votes cast
were as follows:
Against/ Abstentions/
For Withheld Broker Non-Votes
8,678,308 1,143 34
Item 5. Other Information
-------------------------
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
(A) Exhibits
Not applicable
(B) Reports on Form 8-K
Capital City Bank Group, Inc., filed no Form 8-K during the second quarter 2000.
<PAGE>
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)
J. Kimbrough Davis
Executive Vice President and
Chief Financial Officer
Date: August , 2000
