Capital City Bank Group (CCBG, Financial) filed Quarterly Report for the period ended 2009-08-09.
Capital City Bank Group Inc. is a financial holding company with banking subsidiaries and numerous indirect subsidiaries. The Banks are full service banks engaged in the commercial and retail banking business including accepting demand savings and time deposits; extending credit; originating residential mortgage loans; and providing data processing services asset management services trust services retail brokerage services and a broad range of other financial services to corporate and individual customers governmental entities and correspondent banks. Capital City Bank Group has a market cap of $265.36 million; its shares were traded at around $15.6 with a P/E ratio of 57.78 and P/S ratio of 1.26. The dividend yield of Capital City Bank Group stocks is 4.87%. Capital City Bank Group had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Capital City Bank Group the business predictability rank of 4.5-star.
On October 14, 2008, the Secretary of the Department of the Treasury announced that the Department of the Treasury would purchase equity stakes in a wide variety of banks and thrifts. Under the program, known as the Troubled Asset Relief Program Capital Purchase Program (the “TARP Capital Purchase Program”), from the $700 billion authorized by the EESA, the Treasury made $250 billion of capital available to U.S. financial institutions in the form of preferred stock. In conjunction with the purchase of preferred stock, the Treasury received, from participating financial institutions, warrants to purchase common stock with an aggregate market price equal to 15% of the preferred investment. Participating financial institutions were required to adopt the Treasury s standards for executive compensation and corporate governance for the period during which the Treasury holds equity issued under the TARP Capital Purchase Program. On November 13, 2008, we announced that we would not apply for funds available through the TARP Capital Purchase Program. In March 2009, the U.S. Treasury announced a public-private investment program (commonly known as P-PIP), which is designed to (1) remedy the illiquidity in the secondary markets for certain mortgage-backed securities and (2) create a market for troubled loans on the balance sheets of U.S. banks and thrifts. At this time, we have no plans to participate in the P-PIP.
Net income for the second quarter of 2009 totaled $0.8 million ($0.04 per diluted share) compared to $0.6 million or ($0.04 per diluted share) for the first quarter of 2009 and $4.8 million ($0.28 per diluted share) for the second quarter of 2008. For the first six months of 2009, net income totaled $1.4 million ($0.08 per diluted share) compared to $12.1 million ($0.70 per diluted share), for the same period of 2008.
Earnings for the three and six month periods of 2009 reflect loan loss provisions of $8.4 million ($0.30 per diluted share) and $16.8 million ($0.61 per diluted share), respectively, and a one-time special FDIC assessment of approximately $1.2 million ($0.04 per diluted share) recorded in the second quarter of 2009. An increase in noninterest income of $0.6 million, or 4.2%, driven by higher deposit fees and mortgage banking fees as well as a reduction in our incentive plan expense of approximately $0.8 million drove the improvement in net income over the linked first quarter.
Year over year, the $4.0 million decline in net income for the three month period is primarily attributable to an increase in our loan loss provision ($3.0 million), lower noninterest income ($1.1 million), higher noninterest expense ($2.2 million), partially offset by lower income tax expense ($2.6 million). A slight reduction in net interest income of $0.4 million also contributed to the unfavorable variance. The unfavorable variance in noninterest income was driven primarily by lower merchant fees ($1.4 million) due to a July 2008 sale of a major portion of our merchant services portfolio, partially offset by higher mortgage banking fees ($0.4 million). The increase in noninterest expense primarily reflects higher pension expense ($1.0 million), higher FDIC insurance premiums ($2.0 million), an increase in other real estate owned expenses ($1.2 million), partially offset by lower interchange fees ($1.3 million) related to the lower costs for processing our merchant services portfolio, a reduction in intangible amortization ($0.4 million), and lower incentive plan expense ($0.3 million).
For the six month period, the decline in net income of $10.7 million is attributable to a higher loan loss provision ($7.3 million), lower noninterest income ($4.8 million), higher noninterest expense ($4.6 million), partially offset by lower income tax expense ($5.9 million). A slight reduction in net interest income of $0.2 million also contributed to the unfavorable variance. The unfavorable variance in noninterest income reflects a one-time pre-tax gain of $2.4 million from the redemption of Visa shares in the first quarter of 2008 as well as lower merchant fees ($2.7 million) attributable to the aforementioned sale of a major portion of our merchant services portfolio, partially offset by higher mortgage banking fees ($0.5 million). The increase in noninterest expense was primarily attributable to higher pension expense ($2.1 million), higher FDIC insurance premiums ($2.7 million), an increase in other real estate owned expenses ($1.8 million), partially offset by lower interchange fees ($2.4 million) related to the lower costs for processing our merchant services portfolio, and a reduction in intangible amortization ($0.9 million). A one-time entry of $1.1 million in the first quarter of 2008 to reverse a portion of our Visa litigation accrual also contributed to the unfavorable variance for the six month period.
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Capital City Bank Group Inc. is a financial holding company with banking subsidiaries and numerous indirect subsidiaries. The Banks are full service banks engaged in the commercial and retail banking business including accepting demand savings and time deposits; extending credit; originating residential mortgage loans; and providing data processing services asset management services trust services retail brokerage services and a broad range of other financial services to corporate and individual customers governmental entities and correspondent banks. Capital City Bank Group has a market cap of $265.36 million; its shares were traded at around $15.6 with a P/E ratio of 57.78 and P/S ratio of 1.26. The dividend yield of Capital City Bank Group stocks is 4.87%. Capital City Bank Group had an annual average earning growth of 9.1% over the past 10 years. GuruFocus rated Capital City Bank Group the business predictability rank of 4.5-star.
Highlight of Business Operations:
Our long-term vision is to continue our expansion, emphasizing a combination of growth in existing markets and acquisitions. Acquisitions will continue to be focused on a three state area including Florida, Georgia, and Alabama with a particular focus on financial institutions, which are $100 million to $400 million in asset size and generally located on the outskirts of major metropolitan areas. Five markets have been identified, four in Florida and one in Georgia, in which management will proactively pursue expansion opportunities. These markets include Alachua, Marion, and Hernando and Pasco counties in Florida and the western panhandle in Florida and Bibb and surrounding counties in central Georgia. We continue to evaluate de novo expansion opportunities in attractive new markets in the event that acquisition opportunities are not feasible. Other expansion opportunities that will be evaluated include asset management and mortgage banking.On October 14, 2008, the Secretary of the Department of the Treasury announced that the Department of the Treasury would purchase equity stakes in a wide variety of banks and thrifts. Under the program, known as the Troubled Asset Relief Program Capital Purchase Program (the “TARP Capital Purchase Program”), from the $700 billion authorized by the EESA, the Treasury made $250 billion of capital available to U.S. financial institutions in the form of preferred stock. In conjunction with the purchase of preferred stock, the Treasury received, from participating financial institutions, warrants to purchase common stock with an aggregate market price equal to 15% of the preferred investment. Participating financial institutions were required to adopt the Treasury s standards for executive compensation and corporate governance for the period during which the Treasury holds equity issued under the TARP Capital Purchase Program. On November 13, 2008, we announced that we would not apply for funds available through the TARP Capital Purchase Program. In March 2009, the U.S. Treasury announced a public-private investment program (commonly known as P-PIP), which is designed to (1) remedy the illiquidity in the secondary markets for certain mortgage-backed securities and (2) create a market for troubled loans on the balance sheets of U.S. banks and thrifts. At this time, we have no plans to participate in the P-PIP.
Net income for the second quarter of 2009 totaled $0.8 million ($0.04 per diluted share) compared to $0.6 million or ($0.04 per diluted share) for the first quarter of 2009 and $4.8 million ($0.28 per diluted share) for the second quarter of 2008. For the first six months of 2009, net income totaled $1.4 million ($0.08 per diluted share) compared to $12.1 million ($0.70 per diluted share), for the same period of 2008.
Earnings for the three and six month periods of 2009 reflect loan loss provisions of $8.4 million ($0.30 per diluted share) and $16.8 million ($0.61 per diluted share), respectively, and a one-time special FDIC assessment of approximately $1.2 million ($0.04 per diluted share) recorded in the second quarter of 2009. An increase in noninterest income of $0.6 million, or 4.2%, driven by higher deposit fees and mortgage banking fees as well as a reduction in our incentive plan expense of approximately $0.8 million drove the improvement in net income over the linked first quarter.
Year over year, the $4.0 million decline in net income for the three month period is primarily attributable to an increase in our loan loss provision ($3.0 million), lower noninterest income ($1.1 million), higher noninterest expense ($2.2 million), partially offset by lower income tax expense ($2.6 million). A slight reduction in net interest income of $0.4 million also contributed to the unfavorable variance. The unfavorable variance in noninterest income was driven primarily by lower merchant fees ($1.4 million) due to a July 2008 sale of a major portion of our merchant services portfolio, partially offset by higher mortgage banking fees ($0.4 million). The increase in noninterest expense primarily reflects higher pension expense ($1.0 million), higher FDIC insurance premiums ($2.0 million), an increase in other real estate owned expenses ($1.2 million), partially offset by lower interchange fees ($1.3 million) related to the lower costs for processing our merchant services portfolio, a reduction in intangible amortization ($0.4 million), and lower incentive plan expense ($0.3 million).
For the six month period, the decline in net income of $10.7 million is attributable to a higher loan loss provision ($7.3 million), lower noninterest income ($4.8 million), higher noninterest expense ($4.6 million), partially offset by lower income tax expense ($5.9 million). A slight reduction in net interest income of $0.2 million also contributed to the unfavorable variance. The unfavorable variance in noninterest income reflects a one-time pre-tax gain of $2.4 million from the redemption of Visa shares in the first quarter of 2008 as well as lower merchant fees ($2.7 million) attributable to the aforementioned sale of a major portion of our merchant services portfolio, partially offset by higher mortgage banking fees ($0.5 million). The increase in noninterest expense was primarily attributable to higher pension expense ($2.1 million), higher FDIC insurance premiums ($2.7 million), an increase in other real estate owned expenses ($1.8 million), partially offset by lower interchange fees ($2.4 million) related to the lower costs for processing our merchant services portfolio, and a reduction in intangible amortization ($0.9 million). A one-time entry of $1.1 million in the first quarter of 2008 to reverse a portion of our Visa litigation accrual also contributed to the unfavorable variance for the six month period.
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