Capital City Bank Group(CCBG) - 2022 Q2 - Quarterly Report

Financial Performance - Total assets increased to $4,354,297 thousand as of June 30, 2022, compared to $4,263,849 thousand at December 31, 2021, reflecting a growth of approximately 2.1%[6] - Total deposits reached $3,786,258 thousand, a rise from $3,712,862 thousand, indicating a growth of approximately 2%[6] - Net income attributable to common shareholders was $8,713,000 for the three months ended June 2022, an increase of 17.3% from $7,427,000 in the same period of 2021[9] - Basic net income per share for the three months ended June 2022 was $0.51, compared to $0.44 for the same period in 2021, reflecting a 15.9% increase[8] - Net income attributable to common shareholders for the six months ended June 30, 2022, was $17,168,000, compared to $16,933,000 for the same period in 2021, representing an increase of 1.39%[13] - Net interest income remains a significant factor affecting profitability, driven by the difference between interest earned on assets and interest paid on liabilities[69] - Net Interest Income After Provision for Credit Losses was $26,791 million, up from $24,696 million year-over-year, representing an increase of 8.5%[74] - Net Income Attributable to CCBG reached $8,713 million, compared to $8,455 million in the previous year, reflecting a growth of 3.1%[74] Loans and Credit Quality - Loans held for investment rose to $2,213,653 thousand, up from $1,931,465 thousand, representing an increase of about 14.6%[6] - The total allowance for credit losses at the end of June 30, 2022, was $21,281 thousand, down from $22,175 thousand at the end of June 30, 2021[29] - The provision for credit losses was $1,542,000 for the three months ended June 30, 2022, compared to a negative provision of $(571,000) in the same period of 2021[8] - The net charge-offs for the six months ended June 30, 2022, amounted to $1,916 thousand, reflecting a decrease in the allowance for HFI loans due to the release of reserves for pandemic-related losses[29] - The company has established comprehensive lending policies and underwriting standards to manage credit risk effectively[35] - The total amount of loans categorized as "Substandard" in the Real Estate - Commercial Mortgage category was $11,446,000[38] - The allowance for credit losses represented 0.96% of HFI loans and provided coverage of 678% of nonperforming loans, compared to 1.05% and 761% respectively at March 31, 2022[95] Deposits and Liabilities - Total liabilities amounted to $3,972,539 thousand, up from $3,868,925 thousand, reflecting an increase of approximately 2.7%[6] - Noninterest bearing deposits increased to $1,724,671 thousand, compared to $1,668,912 thousand, marking a growth of about 3.3%[6] - The net increase in deposits for the six months ended June 30, 2022, was $73,396,000, while short-term borrowings increased by $4,784,000[13] - Average total deposits were $3.765 billion for Q2 2022, an increase of $51.3 million, or 1.4%, from Q1 2022[78] Investment and Securities - Investment securities available for sale totaled $601,405 thousand, down from $654,611 thousand, representing a decrease of approximately 8.1%[6] - The investment portfolio had an amortized cost of $643.7 million and a fair value of $601.4 million as of June 30, 2022, reflecting unrealized losses of $42.6 million[18] - The total unrealized gains on held-to-maturity securities amounted to $528.3 million as of June 30, 2022[21] - The company reported unrealized losses of $35,317 thousand on available-for-sale securities as of June 30, 2022, compared to $7,105 thousand at December 31, 2021, indicating a significant increase in unrealized losses[24] Shareholders' Equity - Shareholders' equity decreased to $371,675 thousand from $383,166 thousand, a decline of about 3%[6] - Tangible shareholders' equity (non-GAAP) for Q2 2022 was $278,502,000, compared to $278,932,000 in Q1 2022[70] - The company had a total accumulated other comprehensive loss of $(40,765) thousand as of June 30, 2022, compared to $(16,214) thousand at the beginning of the year[67] Noninterest Income and Expenses - Noninterest income totaled $24,903,000 for the three months ended June 2022, a decrease of 5.4% from $26,473,000 in the prior year[8] - Total noninterest expense decreased to $40,498,000 for the three months ended June 2022, down from $42,123,000 in the same period of 2021, representing a 3.9% reduction[8] - Noninterest income as a percentage of Operating Revenue was 46.78%, down from 51.11% year-over-year, a decrease of 4.33 percentage points[74] - Noninterest expense for Q2 2022 totaled $40.5 million, an increase from $39.2 million in Q1 2022[78] Capital and Liquidity - The company had the ability to generate $1.589 billion in additional liquidity through available resources, excluding $603 million in overnight funds sold[103] - The company maintained average short-term borrowings of $31.8 million in Q2 2022, compared to $32.4 million in Q1 2022 and $46.4 million in Q4 2021, due to lower warehouse borrowing needs[105] - The company expects its annual effective tax rate to approximate 20-21% in 2022[91] Economic and Market Conditions - The company is evaluating the impact of ASU 2022-02 on its consolidated financial statements, effective for fiscal years beginning after December 15, 2022[16] - The economic value of equity (EVE) was favorable in all rising rate environments and unfavorable in falling rate environments as of June 30, 2022[102] - The percentage change in net interest income for a 12-month shock at +400 bp was 19.3%, while at -100 bp it was -10.3%[100]