TALLAHASSEE, Fla., July 20, 2010 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2010 totaling $0.7 million ($0.04 per diluted share) compared to a net loss of $3.5 million ($0.20 per diluted share) for the first quarter of 2010 and net income of $0.8 million ($0.04 per diluted share) for the second quarter of 2009. For the first six months of 2010, the Company reported a net loss of $2.7 million ($0.16 per diluted share) compared to net income of $1.4 million ($0.08 per diluted share) for the same period in 2009.   

Net income for the second quarter reflects a loan loss provision of $3.6 million compared to $10.7 million for the first quarter of 2010 and $8.4 million for the second quarter of 2009. The decline in the loan loss provision was the primary factor driving earnings improvement over the first quarter. Operating revenues (net interest income plus noninterest income) increased $1.1 million, or 2.8%, over the first quarter due to higher fee income and an improved net interest margin, but were offset by higher noninterest expense of $1.2 million, or 3.7%. Compared to the second quarter of 2009, a $4.8 million reduction in the loan loss provision was offset by a decline in net interest income of $2.7 million, or 10.1%, and higher noninterest expense of $1.7 million, or 5.1%.

The decline in earnings for the first half of 2010 is attributable to lower net interest income of $5.7 million, or 10.5%, as well as higher noninterest expense of $2.8 million, or 4.3%. For the first six months of 2010, the Company recorded a loan loss provision of $14.4 million compared to $16.8 million for the same period of 2009. 

"Improvement in our credit quality metrics was an encouraging sign during the second quarter," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. "While we continue to anticipate the road to recovery will be bumpy, we are encouraged by our return to profitability and overall performance in the second quarter.

"Other positive aspects of the quarter include healthy capital ratios, which were essentially unchanged quarter over quarter, ample liquidity affording us flexibility in an uncertain market and a very stable, low cost core deposit base. Although we have worked hard to continue to originate loans throughout this prolonged cycle, the availability of quality new credits remains limited and has resulted in a net reduction in our loan portfolio over the last three quarters," Smith stated.

The Return on Average Assets was .11% and the Return on Average Equity was 1.11% for the second quarter of 2010. These metrics were -.52% and -5.23% for the first quarter of 2010, and .12% and 1.12% for the second quarter of 2009, respectively.

For the first half of 2010, the Return on Average Assets was -.20% and the Return on Average Equity was -2.07% compared to .12% and 1.03%, respectively, for the first half of 2009.

Discussion of Financial Condition

Average earning assets were $2.329 billion for the second quarter of 2010, a decrease of $28.9 million, or 1.2%, from the first quarter of 2010, and an increase of $91.8 million, or 4.1%, from the fourth quarter of 2009. The decrease from the first quarter is primarily attributable to a reduction in the funds position of $35.7 million and a decline in the loan portfolio of $45.0 million, partially offset by an increase to the investment portfolio of $51.8 million. Growth over the fourth quarter is primarily attributable to an increase in the overnight funds position of $154.8 million and a higher investment portfolio of $40.5 million, partially offset by a $103.5 million decline in the loan portfolio. Average loans have declined throughout the portfolio, driven primarily by reductions in the commercial real estate and construction loan categories. The portfolio continues to be impacted by diminished loan demand, attributable to the weak economy, as we have experienced lower production levels in recent quarters. In addition to lower production and normal amortization and payoffs, the reduction in the portfolio is also attributable to charge-offs and the transfer of loans to the Other Real Estate Owned category, which collectively, accounted for $43.7 million, or 42%, of the net reduction during the first half of 2010.

At the end of the second quarter, nonperforming assets (including nonaccrual loans, restructured loans and other real estate owned) totaled $149.8 million, a decrease of $3.9 million from the first quarter of 2010, driven primarily by a decrease in restructured loans of $3.6 million. Nonaccrual loans decreased $1.9 million in the current quarter reflecting the continued slowing of loans migrating into our problem loan pool and the transfer of loans to the other real estate owned category, which increased $1.7 million. Quarter over quarter, gross additions to our problem loan pool fell by more than 50%. Nonperforming assets represented 8.01% of loans and other real estate at the end of the second quarter compared to 8.10% at the prior quarter-end and 7.38% at year-end 2009.

Average total deposits were $2.234 billion for the second quarter, a decrease of $14.6 million, or 0.7%, from the first quarter of 2010 and an increase of $144.2 million, or 6.9%, from the fourth quarter of 2009. Deposit levels remain strong but down slightly from the first quarter level, primarily attributable to lower money market balances and public funds. Our money market account promotion, which was launched during the third quarter of 2009 and concluded in the fourth quarter, has experienced runoff as rates were eased during the current quarter, but has generated in excess of $50.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank's overall liquidity position. Public funds balances have declined slightly from the linked quarter reflecting anticipated seasonality within this deposit category. Our Absolutely Free Checking ("AFC") products continue to be successful as both balances and the number of accounts continue to post growth quarter over quarter. We continue to pursue prudent pricing discipline and to manage the mix of our deposits. Therefore, we are not attempting to compete with higher rate paying competitors for deposits. The improvement from the fourth quarter reflects higher public funds of $80.2 million and core deposits of $58.6 million fueled primarily by the success of the AFC products. 

We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $262.2 million during the second quarter of 2010 compared to an average net overnight funds sold position of $112.8 million in the fourth quarter of 2009 and an average overnight funds sold position of $297.0 million in the prior quarter. The favorable variance as compared to year-end is primarily attributable to the growth in deposits and net reductions in the loan portfolios, partially offset by higher balance in the investment portfolio. The lower balance when compared to the linked quarter primarily reflects the purchase of investment securities. If appropriate, we will continue to look to deploy a portion of the funds sold position in the investment portfolio during the second half of 2010.

Equity capital was $261.7 million as of June 30, 2010, compared to $262.0 million as of March 31, 2010 and $267.9 million as of December 31, 2009. Our leverage ratio was 9.58%, 9.64%, and 10.39%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.14% at June 30, 2010 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At June 30, 2010, our tangible common equity ratio was 6.80%, compared to 6.62% at March 31, 2010 and 6.84% at December 31, 2009.   

Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2010 was $24.7 million compared to $24.5 million for the first quarter of 2010 and $27.7 million for the second quarter of 2009. For the first half of 2010, tax equivalent net interest income totaled $49.2 million compared to $55.3 million in 2009.

The increase of $0.2 million in tax equivalent net interest income on a linked quarter basis was due to one additional calendar day, a decrease in foregone interest on nonaccrual loans and lower interest expense, partially offset by a reduction in loan income, attributable to declining loan balances, and continued unfavorable asset repricing. Lower interest expense reflects a reduction in deposit rates primarily in the categories of money market accounts and certificates of deposit.   

The decrease of $6.1 million in tax equivalent net interest income for the first half of 2010, as compared to the same period in 2009, resulted from a reduction in loans outstanding, lower earning assets yields reflecting unfavorable asset repricing, higher foregone interest and lower loan fees, partially offset by a reduction in interest expense.

The net interest margin in the second quarter of 2010 was 4.26%, an increase of five basis points over the linked quarter and a decline of 85 basis points from the second quarter of 2009. The increase in the margin when compared to the linked quarter was a result of a 10 basis point reduction in the cost of funds, partially offset by a lower yield on earning assets of five basis points. The lower cost of funds was a result of a reduction in the rates on the money market promotional accounts and certificates of deposit. The decline from the second quarter of 2009 is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a favorable variance in our average cost of funds. Strong deposit growth in recent quarters has improved our liquidity position, but has adversely impacted our margin in the short term as a significant portion of this growth is currently invested in overnight funds. As we determine what portion of this growth is permanent, if appropriate, we will begin deploying the overnight funds into the investment portfolio.    

The provision for loan losses for the second quarter of 2010 was $3.6 million compared to $10.7 million in the first quarter of 2010 and $8.4 million for the second quarter of 2009. For the first six months of 2010, the loan loss provision totaled $14.4 million compared to $16.8 million for the same period in 2009. The lower provision for the current quarter and first half of the year primarily reflects a significant reduction in the level of loans migrating into our problem loan pool.   A lower level of inherent losses for the non-impaired portion of our loan portfolio, driven by improving risk factors, also favorably impacted the provision for the current quarter. Net charge-offs in the second quarter totaled $6.4 million, or .55% of average loans, compared to $13.5 million, or 2.91%, in the first quarter of 2010. The reduction in net charge-offs compared to the first quarter primarily reflects charge-offs realized in the prior quarter for three large real estate loans that were migrating to the other real estate category. At quarter-end, the allowance for loan losses was 2.11% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 2.23% and 38%, respectively, at the end of the prior quarter.

Noninterest income for the second quarter of 2010 increased $707,000, or 5.1%, from the first quarter of 2010 attributable to higher deposit fees of $411,000 and retail brokerage fees of $281,000. The improvement in deposit fees reflects a favorable one-day calendar variance and higher activity levels. The increase in retail brokerage fees was primarily driven by higher trading volume. For the first six months of 2010, we realized a $34,000, or 0.1%, decline in noninterest income, primarily reflecting lower deposit and mortgage banking fees, partially offset by an increase in retail brokerage fees and debit card fees. 

Noninterest expense increased $1.2 million, or 3.7%, from the first quarter of 2010 driven by higher expense for other real estate properties of $1.3 million, which includes holding costs as well as valuation adjustments due to property devaluation, and increased FDIC insurance premiums of $795,000. Lower expense for cash and stock incentives of $800,000, attributable to lower than expected associate and company performance, partially offset the aforementioned increases. For the first six months of 2010, as compared to the same period in 2009, noninterest expense increased $2.8 million, or 4.3%, due primarily to higher expense for other real estate properties of $4.8 million, partially offset by lower pension expense of $1.2 million and intangible amortization of $0.6 million. 

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.7 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 70 banking offices and 79 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this press release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the frequency and magnitude of foreclosure of the Company's loans; the effects of the Company's lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company's financial statement estimates and assumptions, including the estimate for the Company's loan loss provision; the Company's ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company's computer systems; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and the Company's other filings with the SEC, which are available at the SEC's internet site ( http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.
EARNINGS HIGHLIGHTS
  Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2010 Mar 31, 2010 Jun 30, 2009 Jun 30, 2010 Jun 30, 2009
EARNINGS          
Net Income(Loss) $731 $(3,463) $774 $(2,732) $1,424
Net Income(Loss) Per Common Share $0.04 $(0.20) $0.04 $(0.16) $0.08
PERFORMANCE          
Return on Average Equity 1.11% -5.23% 1.12% -2.07% 1.03%
Return on Average Assets 0.11% -0.52% 0.12% -0.20% 0.12%
Net Interest Margin 4.26% 4.21% 5.11% 4.24% 5.13%
Noninterest Income as % of Operating Revenue 37.58% 36.77% 35.07% 37.18% 34.65%
Efficiency Ratio 86.06% 85.00% 75.44% 85.54% 75.26%
CAPITAL ADEQUACY          
Tier 1 Capital Ratio 12.78% 12.81% 12.85% 12.78% 12.85%
Total Capital Ratio 14.14% 14.16% 14.20% 14.14% 14.20%
Tangible Capital Ratio 6.80% 6.62% 7.47% 6.80% 7.47%
Leverage Ratio 9.58% 9.64% 11.07% 9.58% 11.07%
Equity to Assets 9.87% 9.65% 10.80% 9.87% 10.80%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 37.80% 38.42% 33.71% 37.80% 33.71%
Allowance as a % of Loans 2.11% 2.23% 2.12% 2.11% 2.12%
Net Charge-Offs as % of Average Loans 1.39% 2.91% 1.39% 2.16% 1.23%
Nonperforming Assets as % of Loans and ORE 8.01% 8.10% 7.19% 8.01% 7.19%
STOCK PERFORMANCE          
High   $18.25  $14.61  $17.35  $18.25  $27.31
Low  $12.36  $11.57  $11.01  $11.57  $9.50
Close  $12.38  $14.25  $16.85  $12.38  $16.85
Average Daily Trading Volume  46,507  26,854 40,130  36,917  57,342
               
CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF INCOME              
Unaudited              
 
            Six Months Ended
            June 30
(Dollars in thousands, except per share data) 2010 Second Quarter 2010 First Quarter 2009 Fourth Quarter 2009 Third Quarter 2009 Second Quarter 2010 2009
               
INTEREST INCOME              
Interest and Fees on Loans $26,644 $26,992 $28,582 $29,463 $29,742 $53,636 $59,279
Investment Securities  1,114  990  1,097  1,323  1,437  2,104  2,950
Funds Sold  176  172  77  1  1  348  4
Total Interest Income  27,934  28,154  29,756  30,787  31,180  56,088  62,233
               
INTEREST EXPENSE              
Deposits  2,363  2,938  2,964  2,626  2,500  5,301  4,995
Short-Term Borrowings  12  17  22  113  88  29  156
Subordinated Notes Payable  639  651  936  936  931  1,290  1,858
Other Long-Term Borrowings  551  526  542  560  566  1,077  1,134
Total Interest Expense  3,565  4,132  4,464  4,235  4,085  7,697  8,143
Net Interest Income  24,369  24,022  25,292  26,552  27,095  48,391  54,090
Provision for Loan Losses  3,633  10,740  10,834  12,347  8,426  14,373  16,836
Net Interest Income after Provision for Loan Losses  20,736  13,282  14,458  14,205  18,669  34,018  37,254
               
NONINTEREST INCOME              
Service Charges on Deposit Accounts  7,039  6,628  7,183  7,099  7,162  13,667  13,860
Data Processing Fees  919  900  948  914  896  1,819  1,766
Asset Management Fees  1,080  1,020  1,065  960  930  2,100  1,900
Retail Brokerage Fees  846  565  772  765  625  1,411  1,118
Gain on Sale of Investment Securities  --  5  --  4  6  5  6
Mortgage Banking Revenues  641  508  550  663  902  1,149  1,486
Merchant Fees  384  665  345  393  663  1,049  1,621
Interchange Fees  1,289  1,212  1,129  1,129  1,118  2,501  2,174
ATM/Debit Card Fees  1,073  963  892  876  884  2,036  1,747
Other   1,403  1,501  1,527  1,501  1,448  2,904  2,998
Total Noninterest Income  14,674  13,967  14,411  14,304  14,634  28,641  28,676
               
NONINTEREST EXPENSE              
Salaries and Associate Benefits  15,584  16,779  16,121  15,660  16,049  32,363  33,286
Occupancy, Net  2,585  2,408  2,458  2,455  2,540  4,993  4,885
Furniture and Equipment  2,192  2,181  2,261  2,193  2,304  4,373  4,642
Intangible Amortization  710  710  1,010  1,011  1,010  1,420  2,021
Other   13,558  11,306  13,463  10,296  11,027  24,864  20,353
Total Noninterest Expense  34,629  33,384  35,313  31,615  32,930  68,013  65,187
               
OPERATING PROFIT(LOSS)  781  (6,135)  (6,444)  (3,106)  373  (5,354)  743
Provision for Income Taxes  50  (2,672)  (3,037)  (1,618)  (401)  (2,622)  (681)
NET INCOME(LOSS) $731 $(3,463) $(3,407) $(1,488) $774 $(2,732) $1,424
               
PER SHARE DATA              
Basic Earnings $0.04 $(0.20) $(0.20) $(0.08) $0.04 $(0.16) $0.08
Diluted Earnings $0.04 $(0.20) $(0.20) $(0.08) $0.04 $(0.16) $0.08
Cash Dividends  0.100  0.190  0.190  0.190  0.190  0.290  0.380
AVERAGE SHARES              
Basic   17,063  17,057  17,034  17,024  17,010  17,060  17,059
Diluted   17,074  17,070  17,035  17,025  17,010  17,071  17,060
           
CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION        
Unaudited          
 
(Dollars in thousands, except per share data) 2010 Second Quarter 2010 First Quarter 2009 Fourth Quarter 2009 Third Quarter 2009 Second Quarter
           
ASSETS          
Cash and Due From Banks  $ 52,380  $ 52,615  $ 57,877  $ 79,275  $ 92,394
Funds Sold and Interest Bearing Deposits  250,508  293,413  276,416  828  2,016
Total Cash and Cash Equivalents  302,888  346,028  334,293  80,103  94,410
           
Investment Securities, Available-for-Sale  218,785  217,606  176,673  183,944  194,002
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural  161,268  169,766  189,061  203,813  201,589
Real Estate - Construction  56,910  79,145  111,249  128,476  153,507
Real Estate - Commercial  676,516  729,011  716,791  704,595  686,420
Real Estate - Residential  450,997  394,132  406,262  424,715  447,652
Real Estate - Home Equity  247,726  245,185  246,722  243,808  235,473
Consumer  215,723  224,793  233,524  241,672  241,467
Other Loans  9,498  6,888  10,207  7,790  7,933
Overdrafts  3,144  2,701  2,124  3,163  3,022
Total Loans, Net of Unearned Interest  1,821,782  1,851,621  1,915,940  1,958,032  1,977,063
Allowance for Loan Losses  (38,442)  (41,198)  (43,999)  (45,401)  (41,782)
Loans, Net  1,783,340  1,810,423  1,871,941  1,912,631  1,935,281
           
Premises and Equipment, Net  116,802  117,055  115,439  111,797  109,050
Intangible Assets  87,421  88,131  88,841  89,851  90,862
Other Real Estate Owned  48,110  46,444  36,134  33,371  19,671
Other Assets  93,398  89,416  85,003  80,240  82,563
Total Other Assets  345,731  341,046  325,417  315,259  302,146
           
Total Assets  $ 2,650,744  $ 2,715,103  $ 2,708,324  $ 2,491,937  $ 2,525,839
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits  $ 460,168  $ 446,855  $ 427,791  $ 397,943  $ 424,125
NOW Accounts  891,636  890,570  899,649  687,679  733,526
Money Market Accounts  303,369  376,091  373,105  301,662  300,683
Regular Savings Accounts  132,174  130,936  122,370  122,040  123,257
Certificates of Deposit  412,964  438,488  435,319  440,666  424,339
Total Deposits  2,200,311  2,282,940  2,258,234  1,949,990  2,005,930
           
Short-Term Borrowings  21,376  18,900  35,841  103,711  73,989
Subordinated Notes Payable  62,887  62,887  62,887  62,887  62,887
Other Long-Term Borrowings  55,605  50,679  49,380  50,665  52,354
Other Liabilities  48,885  37,738  34,083  56,269  57,973
           
Total Liabilities 2,389,064 2,453,144 2,440,425 2,223,522 2,253,133
           
SHAREOWNERS' EQUITY          
Common Stock  171  171  170  170  170
Additional Paid-In Capital  36,633  36,816  36,099  36,065  35,698
Retained Earnings  238,779  239,755  246,460  253,104  257,828
Accumulated Other Comprehensive Loss, Net of Tax  (13,903)  (14,783)  (14,830)  (20,924)  (20,990)
           
Total Shareowners' Equity  261,680  261,959  267,899  268,415  272,706
           
Total Liabilities and Shareowners' Equity  $ 2,650,744  $ 2,715,103  $ 2,708,324  $ 2,491,937  $ 2,525,839
           
OTHER BALANCE SHEET DATA          
Earning Assets  $ 2,291,075  $ 2,362,640  $ 2,369,029  $ 2,142,804  $ 2,173,081
Intangible Assets          
Goodwill  84,811  84,811  84,811  84,811  84,811
Core Deposits  1,910  2,572  3,233  4,196  5,159
Other  700  748  797  844  892
Interest Bearing Liabilities  1,880,011  1,968,551  1,978,551  1,769,310  1,771,035
           
Book Value Per Diluted Share  $ 15.32  $ 15.34  $ 15.72  $ 15.76  $ 16.03
Tangible Book Value Per Diluted Share  10.21  10.18  10.51  10.48  10.70
           
Actual Basic Shares Outstanding  17,067  17,063  17,036  17,032  17,010
Actual Diluted Shares Outstanding  17,078  17,076  17,037  17,033  17,010
           
CAPITAL CITY BANK GROUP, INC.          
ALLOWANCE FOR LOAN LOSSES           
AND NONPERFORMING ASSETS          
Unaudited
  2010 2010 2009 2009 2009
(Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
           
ALLOWANCE FOR LOAN LOSSES          
Balance at Beginning of Period  $ 41,199  $ 43,999  $ 45,401  $ 41,782  $ 40,172
Provision for Loan Losses  3,633  10,740  10,834  12,347  8,426
Transfer of Unfunded Reserve to Other Liability  --  --  392  --  --
Net Charge-Offs  6,390  13,540  11,844  8,728  6,816
           
Balance at End of Period  $ 38,442  $ 41,199  $ 43,999  $ 45,401  $ 41,782
As a % of Loans 2.11% 2.23% 2.30% 2.32% 2.12%
As a % of Nonperforming Loans 37.80% 38.42% 40.77% 40.90% 33.71%
As a % of Nonperforming Assets 25.66% 26.81% 30.54% 31.45% 29.09%
           
CHARGE-OFFS          
Commercial, Financial and Agricultural  $ 405  $ 842  $ 712  $ 633  $ 388
Real Estate - Construction  1,220  3,722  2,040  2,315  3,356
Real Estate - Commercial  920  4,631  1,584  1,707  123
Real Estate - Residential  4,725  3,727  7,377  3,394  2,379
Consumer  360  1,507  1,324  1,324  1,145
           
Total Charge-Offs  $ 7,630  $ 14,429  $ 13,037  $ 9,373  $ 7,391
           
RECOVERIES          
Commercial, Financial and Agricultural  $ 181  $ 77  $ 343  $ 64  $ 84
Real Estate - Construction  8  --  5  150  --
Real Estate - Commercial  43  157  43  8  1
Real Estate - Residential  638  114  331  92  51
Consumer  370  541  471  331  439
           
Total Recoveries  $ 1,240  $ 889  $ 1,193  $ 645  $ 575
           
NET CHARGE-OFFS  $ 6,390  $ 13,540  $ 11,844  $ 8,728  $ 6,816
           
Net Charge-Offs as a % of Average Loans (1) 1.39% 2.91% 2.42% 1.76% 1.39%
           
RISK ELEMENT ASSETS          
Nonaccruing Loans  $ 74,504  $ 76,382  $ 86,274  $ 91,880  $ 111,039
Restructured Loans  27,200  30,843  21,644  19,121  12,916
Total Nonperforming Loans  101,704  107,225  107,918  111,001  123,955
Other Real Estate  48,110  46,444  36,134  33,371  19,671
Total Nonperforming Assets  $ 149,814  $ 153,669  $ 144,052  $ 144,372  $ 143,626
           
Past Due Loans 90 Days or More  $ --  $ --  $ --  $ 486  $ --
           
Nonperforming Loans as a % of Loans 5.58% 5.79% 5.63% 5.67% 6.27%
Nonperforming Assets as a % of          
Loans and Other Real Estate 8.01% 8.10% 7.38% 7.25% 7.19%
Nonperforming Assets as a % of Capital (2) 49.92% 50.69% 46.19% 46.01% 45.67%
           
(1) Annualized
(2) Capital includes allowance for loan losses. 
 
AVERAGE BALANCE AND INTEREST RATES (1)
Unaudited
 
                   
  Second Quarter 2010 First Quarter 2010 Fourth Quarter 2009
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate Average Balance Interest Average Rate
                   
ASSETS:                  
Loans, Net of Unearned Interest $1,841,379  26,795 5.84% $1,886,367  27,180 5.84% $1,944,873  28,813 5.88%
                   
Investment Securities                  
Taxable Investment Securities  128,268  708 2.21%  71,325  500 2.81%  72,537  498 2.74%
Tax-Exempt Investment Securities  92,140  624 2.71%  97,316  753 3.10%  107,361  921 3.43%
                   
Total Investment Securities  220,408  1,332 2.42%  168,641  1,253 2.98%  179,898  1,419 3.15%
                   
Funds Sold  267,578  176 0.26%  303,280  172 0.23%  112,790  77 0.27%
                   
Total Earning Assets  2,329,365 $28,303 4.87%  2,358,288 $28,605 4.92%  2,237,561 $30,309 5.38%
                   
Cash and Due From Banks  50,739      54,873      69,687    
Allowance for Loan Losses  (41,074)      (44,584)      (46,468)    
Other Assets  339,458      329,842      314,470    
                   
Total Assets $2,678,488     $2,698,419     $2,575,250    
                   
LIABILITIES:                  
Interest Bearing Deposits                  
NOW Accounts $879,329 $400 0.18% $867,004 $384 0.18% $740,550 $308 0.17%
Money Market Accounts  333,976  331 0.40%  374,161  689 0.75%  361,104  625 0.69%
Savings Accounts  131,333  17 0.05%  126,352  15 0.05%  122,158  16 0.05%
Time Deposits  430,571  1,615 1.50%  438,112  1,850 1.71%  439,654  2,015 1.82%
Total Interest Bearing Deposits  1,775,209  2,363 0.53%  1,805,629  2,938 0.66%  1,663,466  2,964 0.71%
                   
Short-Term Borrowings  22,694  12 0.20%  30,673  17 0.22%  47,114  22 0.18%
Subordinated Notes Payable  62,887  639 4.02%  62,887  651 4.14%  62,887  936 5.83%
Other Long-Term Borrowings  52,704  551 4.20%  49,981  526 4.27%  50,026  542 4.30%
                   
Total Interest Bearing Liabilities  1,913,494 $3,565 0.75%  1,949,170 $4,132 0.86%  1,823,493 $4,464 0.97%
                   
Noninterest Bearing Deposits  458,969      443,131      426,542    
Other Liabilities  42,152      37,563      56,659    
                   
Total Liabilities  2,414,615      2,429,864      2,306,694    
                   
SHAREOWNERS' EQUITY: $263,873     $268,555     $268,556    
                   
Total Liabilities and Shareowners' Equity $2,678,488     $2,698,419     $2,575,250    
                   
Interest Rate Spread   $24,738 4.12%   $24,473 4.06%   $25,845 4.41%
                   
Interest Income and Rate Earned (1)   $28,303 4.87%   $28,605 4.92%   $30,309 5.38%
Interest Expense and Rate Paid (2)    3,565 0.61%    4,132 0.71%    4,464 0.79%
                   
Net Interest Margin   $24,738 4.26%   $24,473 4.21%   $25,845 4.59%
 
             
  Third Quarter 2009 Second Quarter 2009
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate
             
ASSETS:            
Loans, Net of Unearned Interest $1,964,984  29,695 6.00% $1,974,197  29,954 6.09%
             
Investment Securities            
Taxable Investment Securities 81,777  682 3.32%  89,574  742 3.31%
Tax-Exempt Investment Securities 107,307  985 3.67%  106,869  1,067 4.00%
             
Total Investment Securities  189,084  1,667 3.52%  196,443  1,809 3.68%
             
Funds Sold  3,294  1 0.11%  4,641  1 0.10%
             
Total Earning Assets  2,157,362  $31,363 5.77%  2,175,281  $31,764 5.86%
             
Cash and Due From Banks  76,622      81,368    
Allowance for Loan Losses  (42,774)      (41,978)    
Other Assets  306,759      291,681    
             
Total Assets  $2,497,969      $2,506,352    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts  $678,292  $257 0.15%  $709,039  $249 0.14%
Money Market Accounts  301,230  281 0.37%  298,007  192 0.26%
Savings Accounts  122,934  15 0.05%  123,034  15 0.05%
Time Deposits  430,944  2,073 1.91%  417,545  2,044 1.96%
Total Interest Bearing Deposits  1,533,400  2,626 0.68%  1,547,625  2,500 0.65%
             
Short-Term Borrowings  97,305  113 0.45%  87,768  88 0.40%
Subordinated Notes Payable  62,887  936 5.83%  62,887  931 5.86%
Other Long-Term Borrowings  51,906  560 4.28%  52,775  566 4.30%
             
Total Interest Bearing Liabilities  1,745,498  $4,235 0.96%  1,751,055  $4,085 0.94%
             
Noninterest Bearing Deposits  416,770      423,566    
Other Liabilities  60,674      54,617    
             
Total Liabilities  2,222,942      2,229,238    
             
SHAREOWNERS' EQUITY:  $275,027      $277,114    
             
Total Liabilities and Shareowners' Equity $2,497,969      $2,506,352    
             
Interest Rate Spread   $27,128 4.81%   $27,679 4.92%
             
Interest Income and Rate Earned (1)    $31,363 5.77%    $31,764 5.86%
Interest Expense and Rate Paid (2)    4,235 0.78%    4,085 0.75%
             
Net Interest Margin    $27,128 4.99%    $27,679 5.11%
 
             
  June 2010 YTD June 2009 YTD
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate
             
ASSETS:            
Loans, Net of Unearned Interest  $1,863,749  53,975 5.84%  $1,969,169  59,678 6.11%
             
Investment Securities            
Taxable Investment Securities  99,954  1,208 2.42%  90,248  1,518 3.37%
Tax-Exempt Investment Securities  94,713  1,377 2.91%  104,005  2,200 4.23%
             
Total Investment Securities  194,667  2,585 2.66%  194,253  3,718 3.83%
             
Funds Sold  285,331  348 0.24%  7,363  4 0.12%
             
Total Earning Assets  2,343,747  $56,908 4.90%  2,170,785  $63,400 5.89%
             
Cash and Due From Banks  52,795      79,109    
Allowance for Loan Losses  (42,820)      (40,003)    
Other Assets  334,677      286,801    
             
Total Assets  $2,688,399      $2,496,692    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts  $873,200  $784 0.18%  $714,123  $474 0.13%
Money Market Accounts  353,958  1,020 0.58%  309,719  382 0.25%
Savings Accounts  128,856  32 0.05%  120,601  29 0.05%
Time Deposits  434,321  3,465 1.61%  404,847  4,110 2.05%
Total Interest Bearing Deposits  1,790,335  5,301 0.60%  1,549,290  4,995 0.65%
             
Short-Term Borrowings  26,662  29 0.21%  86,550  156 0.36%
Subordinated Notes Payable  62,887  1,290 4.08%  62,887  1,858 5.88%
Other Long-Term Borrowings  51,350  1,077 4.23%  52,997  1,134 4.31%
             
Total Interest Bearing Liabilities  1,931,234  $7,697 0.80%  1,751,724  $8,143 0.94%
             
Noninterest Bearing Deposits  451,094      415,020    
Other Liabilities  39,870      50,586    
             
Total Liabilities  2,422,198      2,217,330    
             
SHAREOWNERS' EQUITY:  $266,201      $279,362    
             
Total Liabilities and Shareowners' Equity  $2,688,399      $2,496,692    
             
Interest Rate Spread   $49,211 4.10%   $55,257 4.95%
             
Interest Income and Rate Earned (1)    $56,908 4.90%    $63,400 5.89%
Interest Expense and Rate Paid (2)    7,697 0.66%    8,143 0.76%
             
Net Interest Margin    $49,211 4.24%    $55,257 5.13%
             
(1) Interest and average rates are calculated on a tax-equivalent basis using the 35% Federal tax rate.
(2) Rate calculated based on average earning assets.
CONTACT:  Capital City Bank Group, Inc.          J. Kimbrough Davis, Executive Vice President           and Chief Financial Officer          850.402.7820