Capital City Bank Group(US:CCBG)2023-12-21 16:00Shareholders' Equity and Capital Ratios - Shareholders' equity increased to $419.7 million in Q3 2023, up from $412.4 million in Q2 2023, reflecting a growth of 0.3%[124] - The total risk-based capital ratio was 16.30% at September 30, 2023, compared to 15.68% at June 30, 2023[130] - Shareowners' equity rose to $419.7 million at September 30, 2023, up from $412.4 million at June 30, 2023, and $387.3 million at December 31, 2022, driven by net income of $40.5 million for the first nine months of 2023[147] - Total risk-based capital ratio improved to 16.30% at September 30, 2023, compared to 15.68% at June 30, 2023, and 15.30% at December 31, 2022[147] - Common equity tier 1 capital ratio was 13.26% at September 30, 2023, compared to 12.73% at June 30, 2023, and 12.38% at December 31, 2022[147] - Tangible common equity ratio was 8.08% at September 30, 2023, compared to 7.43% at June 30, 2023, and 6.65% at December 31, 2022[147] Income and Expenses - Net interest income (FTE) for Q3 2023 was $39.367 million, a decrease from $40.224 million in Q2 2023[131] - Noninterest income for Q3 2023 was $16.728 million, down from $19.967 million in Q2 2023[131] - Noninterest expense for Q3 2023 totaled $39.1 million, a decrease of $1.2 million from $40.3 million in Q2 2023[128] - Net income attributable to common shareholders for Q3 2023 was $12.655 million, compared to $14.174 million in Q2 2023[131] - Income tax expense for Q3 2023 was $3.0 million with an effective rate of 20.7%, compared to $3.4 million (19.4%) in Q2 2023 and $2.5 million (20.7%) in Q3 2022[139] - Noninterest income for Q3 2023 totaled $16.7 million, down from $20.0 million in Q2 2023 and $18.5 million in Q3 2022, with a total of $54.5 million for the first nine months of 2023 compared to $59.9 million in the same period of 2022[134] - Total noninterest expense for Q3 2023 was $39.1 million, compared to $40.3 million in Q2 2023 and $37.7 million in Q3 2022, with a total of $117.1 million for the first nine months of 2023 compared to $112.4 million in the same period of 2022[137] Loans and Assets - Average loans held for investment (HFI) rose by $15.0 million, or 0.6%, to $2.646 billion in Q3 2023 compared to Q2 2023[129] - Total assets decreased to $4,218,855,000 from $4,357,678,000 year-over-year, representing a decline of approximately 3.2%[148] - Loans held for investment increased to $2,672,653,000, up from $2,264,075,000, reflecting a growth of approximately 18.0%[148] - Average total deposits decreased by $122.7 million, or 3.3%, to $3.597 billion in Q3 2023 compared to Q2 2023[130] - Total deposits decreased to $3,596,816,000 from $3,769,864,000 year-over-year, a decline of about 4.6%[148] - Nonperforming assets decreased to $4.7 million at September 30, 2023, from $6.6 million at June 30, 2023[130] Interest and Margins - Net interest margin for Q3 2023 was 4.03%, down 3 basis points from Q2 2023, but up 71 basis points from Q3 2022[132] - Tax-equivalent net interest income for Q3 2023 was $39.4 million, a decrease from $40.2 million in Q2 2023 but an increase from $33.5 million in Q3 2022[132] - The interest rate spread improved to 3.54% compared to 3.14% in the previous year[148] Credit Losses and Provisions - Provision for credit losses increased to $2.4 million in Q3 2023 from $2.2 million in both Q2 2023 and Q3 2022, with a total of $7.7 million for the first nine months of 2023 compared to $3.9 million in the same period of 2022[133] - The allowance for credit losses increased to $(29,172,000) from $(21,509,000) year-over-year, indicating a rise in provisions for potential loan losses[148] - The allowance for credit losses is adjusted by a credit loss provision and reduced by charge-offs, reflecting management's estimates based on historical loan default and loss experience[141] Operational Changes and Future Outlook - The company is implementing remediation efforts to address identified material weaknesses in internal controls over financial reporting[150] - Capital expenditures are expected to be approximately $8.0 million over the next 12 months, primarily for new office construction, remodeling, and technology purchases[146] - The company maintained a liquidity source through its investment portfolio, with options to pledge securities or sell selected securities as needed[146] - Average net overnight funds position decreased to $136.6 million in Q3 2023 from $218.9 million in Q2 2023 and $469.4 million in Q4 2022, reflecting growth in average loans and lower average deposit balances[146] - Average short-term borrowings increased to $49.7 million in Q3 2023 compared to $35.7 million in Q2 2023 and $50.8 million in Q4 2022, primarily due to an increase in short-term repurchase agreements[147] Investment Portfolio - At September 30, 2023, 33.6% of the investment portfolio was classified as Available-for-Sale (AFS) and 65.2% as Held-to-Maturity (HTM)[140] - The economic value of equity (EVE) was favorable in all rising rate environments as of September 30, 2023, with EVE ratios exceeding the policy minimum of 5.0%[144] - The net pension liability reflected in other comprehensive loss was $4.6 million at September 30, 2023, compared to $4.7 million at June 30, 2023[147]