Capital City Bank Group, Inc. (“CCBG”) is a financial holding company
headquartered in Tallahassee, Florida. CCBG was incorporated under Florida law
on December 13, 1982, to acquire five national banks and one state bank that all
subsequently became part of CCBG’s bank subsidiary, Capital City Bank (“CCB”
or the “Bank”).
We provide traditional deposit and credit services, asset management, trust,
mortgage banking, merchant services, bank cards, data processing, and securities
brokerage services through 61 banking offices in Florida, Georgia, and Alabama
operated by CCB. The majority of our revenue, approximately 84%, is derived
from our Florida market areas while approximately 15% and 1% of our revenue
is derived from our Georgia and Alabama market areas, respectively.
The Bank originates 1-4 family, owner-occupied residential real estate loans
in its Residential Real Estate line of business. The Bank’s policy is
to underwrite these loans in accordance with secondary market guidelines in
effect at the time of origination, including loan-to-value (“LTV”)
and documentation requirements. The Bank originates fixed-rate, adjustable-rate
and variable- rate residential real estate loans. Over the past five years,
the vast majority of residential loan originations have been fixed-rate loans
which are sold in the secondary market on a non-recourse basis with related
servicing rights (i.e., the Bank generally does not service sold loans). Adjustable
rate mortgage (“ARM”) loans with an initial fixed interest rate
period greater than five years are sold in the secondary market on a non-recourse
basis.
The Bank also originates certain residential real estate loans throughout its
banking office network that are generally not eligible for sale into the secondary
market due to not meeting a specific secondary market underwriting requirement.
This includes our variable rate 3/1 and 5/1 ARM loans which typically have a
maximum term of 30 years and maximum LTV of 80%.
Residential real estate loans also include home equity lines of credit and home
equity loans (“HELOCs”). The Bank’s home equity portfolio
includes revolving open-ended equity loans with interest-only or minimal monthly
principal payments and closed-end amortizing loans. Open-ended equity loans
typically have an interest only ten year draw period followed by a five year
repayment period of 0.75% of principal balance monthly and balloon payment at
maturity.
The Bank’s policy sets forth guidelines for debt service coverage ratios,
LTV ratios and documentation standards. Commercial loans are primarily made
based on identified cash flows of the borrower with consideration given to underlying
collateral and personal or other guarantees. The Bank’s policy establishes
debt service coverage ratio limits that require a borrower’s cash flow
to be sufficient to cover principal and interest payments on all new and existing
debt. The majority of the Bank’s commercial loans are secured by the assets
being financed or other business assets such as accounts receivable or inventory.
Many of the loans in the commercial portfolio have variable interest rates tied
to the Prime Rate or U.S. Treasury indices.
The Bank’s policy sets forth guidelines for debt service coverage ratios,
LTV ratios and documentation standards. Commercial real estate loans are primarily
made based on identified cash flows of the borrower with consideration given
to underlying real estate collateral and personal guarantees. The Bank’s
policy establishes a maximum LTV specific to property type and minimum debt
service coverage ratio limits that require a borrower’s cash flow to be
sufficient to cover principal and interest payments on all new and existing
debt. Commercial real estate loans may be fixed or variable-rate loans with
interest rates tied to the Prime Rate or U.S. Treasury indices. Bank policy
requires appraisals for loans in excess of $250,000 that are secured by real
property.
The Bank’s consumer loan portfolio includes personal installment loans,
direct and indirect automobile financing, and overdraft lines of credit. The
majority of the consumer loan portfolio consists of indirect and direct automobile
loans. The majority of the Bank’s consumer loans are short-term and have
fixed rates of interest that are priced based on current market interest rates
and the financial strength of the borrower. The Bank’s policy establishes
maximum debt-to-income ratios, minimum credit scores, and includes guidelines
for verification of applicants’ income and receipt of credit reports.
Our philosophy is to build long-term client relationships based on quality
service, high ethical standards, and safe and sound banking practices. We maintain
a locally oriented, community-based focus, which is augmented by experienced,
centralized support in select specialized areas. Our local market orientation
is reflected in our network of banking office locations, experienced community
executives with a dedicated President for each market, and community boards
which support our focus on responding to local banking needs. We strive to offer
a broad array of sophisticated products and to provide quality service by empowering
associates to make decisions in their local markets.
We have sought to build a franchise in small- to medium-sized markets, located
on the outskirts of the larger metropolitan markets where we are positioned
as a market leader. Many of our markets are on the outskirts of these larger
markets in close proximity to major interstate thoroughfares such as Interstates
I-10 and I-75. Our three largest markets are Tallahassee (Leon, Florida), Gainesville
(Alachua, Florida), and Macon (Bibb, Georgia). The larger employers in many
of our markets are state and local governments, healthcare providers, educational
institutions, and small businesses. While we realize that the markets in our
footprint do not provide for a level of potential growth that the larger metropolitan
markets may provide, our markets do provide good growth dynamics and have historically
grown in excess of the national average. We strive to provide value added services
to our clients by being their banker, not just a bank. This element of our strategy
distinguishes Capital City Bank from our competitors.
Our long-term vision remains to profitably expand our franchise through a combination
of organic growth in existing markets and acquisitions. We have long understood
that our core deposit funding base is a predominant driver of our profitability
and overall franchise value, and have focused extensively on this component
of our organic growth efforts in recent years. While we have not been an active
acquirer of banks since 2005, this component of our strategy is still in place.
When evaluating potential acquisition opportunities, we will continue to weigh
the value of organic growth initiatives versus potential acquisition returns
and pursue the strategies that we believe provide the best overall return to
our shareowners.