Cap­i­tal City Bank re­ports 3Q re­sults

The Pak Banker - - Front Page -

TAL­LA­HAS­SEE

Cap­i­tal City Bank Group Inc to­day re­ported net in­come of $1.1 mil­lion, or $0.07 per di­luted share, for the third quar­ter of 2012, com­pared to a net loss of $1.7 mil­lion, or $0.10 per di­luted share, for the sec­ond quar­ter of 2012, and net in­come of $2.0 mil­lion, or $0.12 per di­luted share, for the third quar­ter of 2011. For the first nine months of 2012, the Com­pany re­ported a net loss of $1.8 mil­lion, or $0.10 per di­luted share, com­pared to net in­come of $5.4 mil­lion, or $0.32 per di­luted share, for the same pe­riod in 2011.

Com­pared to the sec­ond quar­ter of 2012, the in­crease in earn­ings re­flects a lower loan loss pro­vi­sion of $2.9 mil­lion, and a $2.1 mil­lion de­cline in non­in­ter­est ex­pense, par­tially off­set by lower oper­at­ing rev­enues (net in­ter­est in­come plus non­in­ter­est in­come) of $0.4 mil­lion and higher in­come taxes of $1.8 mil­lion.

Com­pared to the third quar­ter of 2011, the re­duc­tion in earn­ings was due to lower oper­at­ing rev­enues of $2.7 mil­lion par­tially off­set by a $0.9 mil­lion de­crease in the loan loss pro­vi­sion, a $0.4 mil­lion re­duc­tion in non­in­ter­est ex­pense, and lower in­come taxes of $0.5 mil­lion.

The de­crease in earn­ings for the nine month pe­riod ended Septem­ber 30, 2012 is at­trib­ut­able to lower oper­at­ing rev­enues of $9.7 mil­lion, and a higher loan loss pro­vi­sion of $2.0 mil­lion, par­tially off­set by lower non­in­ter­est ex­pense of $0.1 mil­lion and in­come taxes of $4.4 mil­lion. Earn­ings in 2011 re­flect the sale of our Visa Class B shares of stock which re­sulted in a net pre-tax gain of $2.6 mil­lion ($3.2 mil­lion pre-tax gain in­cluded in non­in­ter­est in­come and recog­ni­tion of a $0.6 mil­lion swap li­a­bil­ity in­cluded in non­in­ter­est ex­pense).

“While the econ­omy re­mains chal­leng­ing, our pre-tax, pre-credit cost oper­at­ing in­come im­proved as we con­tin­ued to trim ex­penses,” said Wil­liam G. Smith, Jr., Chair­man, Pres­i­dent and CEO. “Credit qual­ity re­mains a top pri­or­ity and con­tin­ues to im­prove. Non­per­form­ing as­sets de­clined as did our past due loans and net charge-offs; and our re­tail strat­egy for the dis­po­si­tion of prob­lem as­sets con­tin­ues to pro­duce re­sults, which we be­lieve are in the best in­ter­est of our share­own­ers. A mod­est level of loss in newly iden­ti­fied prob­lem loans cou­pled with less se­vere val­u­a­tion ad­just­ments on our other real es­tate owned prop­er­ties have con­trib­uted to lower credit costs and im­proved prof­itabil­ity. As we have stated all along, we don’t ex­pect the path for­ward to be lin­ear and an­tic­i­pate quar­terly per­for­mance will continue to be choppy, but when viewed on an an­nual ba­sis, we are clearly mak­ing progress and are op­ti­mistic about the fu­ture,” said Smith.

The Re­turn on Av­er­age As­sets was 0.17% and the Re­turn on Av­er­age Eq­uity was 1.77% for the third quar­ter of 2012. These met­rics were -0.26% and -2.75% for the sec­ond quar­ter of 2012, and 0.31% and 2.97% for the third quar­ter of 2011, re­spec­tively. For the first nine months of 2012, the Re­turn on Av­er­age As­sets was -0.09% and the Re­turn on Av­er­age Eq­uity was - 0.93% com­pared to 0.28% and 2.77%, re­spec­tively, for the same pe­riod in 2011.

Av­er­age earn­ing as­sets were $2.209 bil­lion for the third quar­ter of 2012, a de­crease of $53.7 mil­lion, or 2.4%, from the sec­ond quar­ter of 2012, and an in­crease of $62.7 mil­lion, or 2.9%, over the fourth quar­ter of 2011. As com­pared to the sec­ond quar­ter of 2012, the de­cline in av­er­age earn­ing as­sets is at­trib­ut­able to a lower level of overnight funds re­sult­ing from a de­cline in de­posits and the res­o­lu­tion of prob­lem loans. The shift in the mix of earn­ing as­sets con­tin­ued as the loan port­fo­lio de­clined when com­pared to the prior quar­ter. The in­crease in av­er­age earn­ing as­sets com­pared to the fourth quar­ter of 2011 pri­mar­ily re­flects the higher level of de­posits re­sult­ing.

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