Capital City Bank Group · NASDAQ:CCBG
Capital City Bank — Q2 2020 Earnings Presentation
33 slides from Capital City Bank's earnings presentation, Jul 27, 2020
Slide 1: Investor Presentation Second Quarter 2020
INVESTOR » PRESENTATION SECOND QUARTER 2020
Slide 2: Forward-Looking Statement
]FORWARD-LOOKING STATEMENT } This presentation includes forward-looking statements, including statements about future results. These statements are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could caus
Slide 3: Corporate Profile
CORPORATE PROFILE —. * Oldest Florida-based Publicly Traded Bank ¢ Managed Multiple Business Cycles Successfully * $3.5B Assets * Loans HFI: $2.0B/Deposits: $3.0B * 85% Florida/15% Georgia ¢ 50/50 Mix of Consumer and 57 OFFICES Commercial Clients ¢ $1.8B Assets Under Management
Slide 4: Corporate Profile
CORPORATE PROFILE Ownership ~60% Retail/40% Institutional ~ 17% Insider 25 Years Market Cap” $352 Million Experienced Management Average of 25 Years’ Experience with CCBG
Slide 5: Florida at a Glance
FLORIDA AT A GLANCE N Highest Migration Rate in U.S. N 3rd Most Populous State - Projected Population Growth 2X National Average N Projected Population Change (2020-2025) of 6.6% N Business-friendly State with No Personal Income Tax Government Higher Education Healthcare Agriculture Manufacturing Re
Slide 6: Growth Markets
ROWTH MARKE TALLAHASSEE MSA MACON MSA Total Deposits (in Thousands) $1,276,973 Total Deposits (in Thousands) $87,076 Market Share” 14.7% Market Share” 2.3% Market Share Rank” #2 Market Share Rank” #8 Top 3 Industries Government, Education, Professional Education, Healthcare, Top 3 Industries aunts P
Slide 7: Deposit Portfolio Detail
DEPOSIT PORTFOLIO DETAIL Deposit Portfolio Composition Total Deposit Growth @ Noninterest Bearing Deposits © NOW Accouns — Fi ccmparie nao asco 2018 H20 sens @ Certificates of Deposit of Funds-CCBG” = — 0.13% 0.16% 0.27% 0.35% 0.18% teal Peer eee eerie bh a ee * CAGR of ~ 10% DA, ~ 2.3% MMA/SAV/NOW
Slide 8: Loan Portfolio Diversification
N PORTFOLIO DIVERSIFICATION Loan Portfolio” $2,022,177 1% CRE Composition $559,689 170% of Tier 1 Capital @ Improved Property Construction @ Vacant Land @ Condos @ Land Development 17% Improved Property Composition $371,600 ® Commercial R/E s Home Equity R/E @ Commercial Loans ‘onstruction R/E Resid
Slide 9: Credit Quality
CREDIT ITY * Proven strong underwriting and risk management * 5 year average annual credit losses of 12 basis points * Strong credit quality metrics at June 30, 2020 * Reserve build of $5.3 million in response to Pandemic exposure * Brings ACL coverage to 1.23% of loans (ex-SBA/PPP) * COVID-19: 70%
Slide 10: Strong Capital Position
TRONG CAPITAL POSITION Capital To Execute $350M [- $300M $250M $200M $150M $100M 50M $oM 2016-2017 @ Common Equity * Excess Regulatory Capital () Adjusted Non-GAAP, See Appendix for Reconciliation. Staying Power 2017 2018 §=2019: 2Q20 Risk Based Capital -CCBG @ Tongible Common Equity-CCBG” @ Tangibl
Slide 11: Strategic Initiatives: Three Pillars of Execution
STRATEGIC INITIATIVES: Three Pillars of Execution DRIVE REVENUES > Generate Loan Growth > Interest Rate Profile > Grow & Diversify Fee Income EFFECTIVELY DEPLOY CAPITAL >>> Organic Growth > Return Capital > Leverage Capital > Executed Under a Strong Risk Management & Credit Culture <
Slide 12: Drive Revenues: Diversified Revenues
RIVE REVENUES > biveritied Reveruey INTEREST INCOME” FEE INCOME” 2%1% 2% 47.1% of Operating Revenues $53.8 Million $45.6 Million @ Commercial R/E @ Commercial Loans @ Mortgage Banking Fees - © Residential B/E © Construction R/E CCHL (51% ownership) Investment Securities @ Funds Sold @ Deposit Fees H
Slide 13: Drive Revenues: Generate Loan Growth
DRIVE REVENUES Generate Loan Growth Period End Loans 2) ($ In Millions /% Growth®) Grewth BySeament $2500 -$20M -$10M © $20M S40M S6OM S80M S100M $120M si4oM Si6oM FI $2000 onstructionR/E — 16.2% ercial R/E 7.8% Residential R/E 1.1% Home Equity R/E Direct Consumer $1500 $1000 $500 Indirect Auto $0 O
Slide 14: Drive Revenues: Interest Rate Profile
RIVE REVENUES > irteraae Rane Praié Loan Repricing Rate Mix 2% 1% @ Overnight @ 12 Months” 24 Months er $2,022 @ 48 Months (in millions) 60 Months @ >60 Months * 61% of Loan Portfolio is Variable or Adjustable * 70% of Loan Portfolio Reprices within One Year * Deposit Beta”) of 12% in Last Up-Rate C
Slide 15: Drive Revenues: Grow and Diversify Fee Income
DRIVE REVENUES > Grow and Diverstiy Pee heone Fee Income Mix Growth Initiatives (In Millions) $50M $45,677 Grow Wealth Management ASSES move Card sam Freeto Fee Utilization $40M - Checking $30M - $25,322 $20M - Leverage Working $10M Conti Rance pesidertil Originations 2019 2020") @ Deposit Fees @ We
Slide 16: Continued Focus on Expense Control
PAD > cominued Focus on Expense Control Noninterest Expense Trend HIGHLIGHTS. $113.2 s3.6M, * Continued control of expenses at _ 2 Core CBG $29.3m e “+ Integration of CCHL late in 1.2020 added expenses, but improved efficiency due to revenues gains $18.3M $17.8M + Efficiency Ratio of 66.9% for $68.2
Slide 17: Banking Office Optimization, Process Improvement, Digital Growth
Banking Office Process Support Seems Digital Optimization Improvement 9 Growth = a ~™ | . : | Consolidate eeeilan ‘Account | pening Sale/Leaseback | Platforms Acquisition Reduce SF | Account | Electronic Opening Onboarding Close/Sell | Documents | Virtual Tellers Client Profitability Office/Market |
Slide 18: Expense Management: Digital Technology
EXPENSE MANAGEMEN > toNealgy © 7:1 digital client interactions to in-office transactions — June 2020 * 30% of offices with extended-hours Interactive Teller Machines ° 49% of offices offering instant issue debit cards ° P2P-June 2019 ¢ 37% increase in mobile logins from January 2018 to June 2020 * R
Slide 19: Effectively Deploy Capital
ORGANIC GROWTH RETURN CAPITAL LEVERAGE CAPITAL Technology Investments Leverage Infrastructure Dividend Share Repurchase Program M&A Opportunities Non-Bank Businesses
Slide 20: Acquisition Targets Profile
Zn >>> PROFILE * Banks with $100-500M Assets ~250 Total Banks * TBV Pricing Attractive TARGETS * Strong Core Deposit Base * Lack of Scale to Absorb Regulatory Cost * Succession Plan Unclear Macon Tallahassee ' ‘BB Expansion Area Gainesville
Slide 21: Priorities: Loan Growth, Fee Income, Acquisitions
BROADER BASED ¢ Small Business, Commercial Real Estate, Residential LOAN GROWTH Real Estate, WCF/ABL, and Participations/Pools IMPLEMENT FEE * New Checking Account Platform, Account Acquisition, INCOME INITIATIVES and Strategies to Drive Interchange Revenues EVALUATE ACQUISITION : ; ie OPPORTUNITIES
Slide 22: Why CCBG?
WHY CCBG? NFlorida is Growing NGrowth Measures Nearing Prior Peaks NStable Markets NStrong Deposit Franchise NAsset Sensitive Balance Sheet NStrong Capital — Ability to Deploy NInsider Ownership NSeasoned and Experienced Bankers Now Execution Risk NCCBG is One of the Few Remaining “Pure Plays” in Fl
Slide 23: Capital City Bank Group
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Slide 24: Capital City Bank Group
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Slide 25: Quarterly Results
QUARTERLY RESULTS 0.60, O15 © 0.002017 4a siaie™—2aie” gate" gare = 1019. 2019019 I Diluted Earnings PerShare (Ml Pre-Tax Pre-Credit Costs (’PTPCC”) per diluted share ‘includes Deferred Tax Re-Measurement Expense of $0.24 per Share “Includes Tax Benefits $0.09, $0.08, and $0.02 per share for 10, 20,
Slide 26: Second Quarter 2020
SECOND QUARTER 2020 | 20.2020 10.2020 | S$change | %Change (Coltarsintnousonds) | _coreccac | ccut_| cormccac | coreccac | coreccec Mer Mel NetInterestincome 25,349 109 25,757 (408) + Return on assets improved to Provision for Credit Losses 005 5 4990, 385) 98% 2 298) 110% and efficiency ratio to 67
Slide 27: Supporting Our Clients
SUPPORTING OUR CLIENTS LOAN EXTENSIONS - COVID-19 | Disvertaanstandea Loan Number | ,toan Through July 9, 2020 Stioeas | Amount, | Number | _ Loan | ofLoans | Amount Taira tended 2ai7__ 3330406 ewido (70) eo) Tassie Esenson Bo 8586 me Silex Eneraon, Henetienson canal ve a8 a consumer 207 16 We Slog
Slide 28: Financial Highlights
FINANCIAL HIGHLIGHTS 2018 | 2019 Interest Income $78,221 $79,658 $81,154 $86,930 $99,395 $112,836 $53,877, Interest Expense 3,580 3,307 3,189 3,948 6,891 9,493, 2,646 Net Interest Income 74,641 76,351 77,965 82,982 92,504 103,343, 51,231 Provision for Credit Losses. 1,905, 1,594 819 2,215 2,921 2,02
Slide 29: Financial Highlights
FINANCIAL HIGHLIGHTS As of Period-End 2018 | 2019 Fg a IR 2014 2015 2016 2017 | 2Q20 Investments $505,129 $638,920 $700,099 $697,590 $663,477 $643,140 $573,358 Loans Held for Investment 1,431,375 1,492,275 1,561,289 1,653,492 1,774,225 1,835,929 2,022,177 Total Assets 2,627,169 2,797,860 2,845,197 2
Slide 30: Market Demographics
ARKET DEMOGRAPHIC ANCHOR AND SMALL-TOWN AMERICA MARKETS MORE STABLE AND PREDICTABLE. Tallahassee MSA 700% : 450% : $55,732 91% CCBG Florida Markets 13.15% 5.59% $52,521 9.59% Florida 15.92% 6.63% $58,586 11.56% Us 7.00% 3.27% $66,010 9.87% Sources: SAP Global Market Intelligence; ESR US Census Burea
Slide 31: Deposit Market Share
POSIT MARKET SHARE Ranking: Counties Nomtces | “Market 6000)" crear Florida 47 $2,283,096 87.04% 12 of 18 8.26% Georgia 8 $286,551 11.03% 20f4 5.09% Alabama 2 $29,390 1.13% me 8.70% TOTALS 57 $2,599,037 100.00% - ¢ Market Share Gives Pricing Leverage ¢ Keeps Cost of Funds Low * Organic Growth Going
Slide 32: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES We presenta tangible common equity ratio that removes the effect of goodwill resulting from merger and acquisition Dollars in Thousands ‘TANGIBLE COMMON EQUITY RATIO Shareowners’ Equity 2015 2016 2017 2018 2019 activity. We believe this measure is useful to investors beca
Slide 33: Capital City Bank Group
29 Bank Group Corporate Headquarters 217 North Monroe Street Tallahassee, FL 32301 www.ccbg.com
Capital City Bank Group — Q2 2020 Earnings Presentation on 6ix