TALLAHASSEE, Fla., Oct. 26, 2010 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the third quarter of 2010 totaling $0.4 million, or $0.02 per diluted share, compared to net income of $0.7 million, or $0.04 per diluted share, for the second quarter of 2010 and a net loss of $1.5 million, or $0.08 per diluted share, for the third quarter of 2009. For the first nine months of 2010, the Company reported a net loss of $2.3 million, or $0.14 per diluted share compared to a net loss of $0.1 million, or $0.00 per diluted share for the same period in 2009.

Net income for the third quarter reflects a loan loss provision of $5.7 million compared to $3.6 million for the second quarter of 2010. The increase in the loan loss provision and lower noninterest income of $1.2 million, partially offset by higher net interest income of $0.4 million and lower noninterest expense of $2.3 million, were the primary factors driving the reduction in earnings from the linked second quarter. Compared to the third quarter of 2009, a $6.7 million reduction in the loan loss provision, partially offset by a decline in net interest income of $1.8 million, lower noninterest income of $0.9 million and higher noninterest expense of $0.7 million, drove the improvement in earnings.

For the first nine months of 2010, lower net interest income of $7.5 million, a decline in noninterest income of $0.9 million, and higher noninterest expense of $3.6 million were the primary reasons for the decline in earnings over 2009.  A lower loss provision of $9.1 million helped offset the aforementioned unfavorable variances. 

"Given the current state of our economy, we were pleased to report a profit for the second consecutive quarter.  Credit related costs continue to be elevated, but our diligence and focus on resolving problem assets is paying benefits as our nonperforming assets fell $4.2 million to $145.6 million as of quarter-end.  Our capital levels remain strong and we believe we are well positioned to capitalize on opportunities evolving in our markets.  While resolving problem assets is a high priority, it is not to the detriment of serving our existing clients and growing our business," said William G. Smith, Jr., Chairman, President and Chief Executive Officer.

The Return on Average Assets was 0.06% and the Return on Average Equity was 0.60% for the third quarter of 2010. These metrics were 0.11% and 1.11% for the second quarter of 2010, and -0.24% and -2.15% for the third quarter of 2009, respectively.

For the first nine months of 2010, the Return on Average Assets was -0.12% and the Return on Average Equity was -1.17% compared to 0.00% and -0.03%, respectively, for the same period in 2009.

Discussion of Financial Condition

Average earning assets were $2.273 billion for the third quarter of 2010, a decrease of $56.2 million, or 2.4%, from the second quarter of 2010, and an increase of $35.6 million, or 1.6%, from the fourth quarter of 2009. The decrease from the second quarter is primarily attributable to a lower level of overnight funds of $15.1 million (reflecting the reduction in deposits), and problem loan resolutions, which have the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned category. Growth over the fourth quarter is attributable to increases in overnight funds and investment securities of $139.6 million and $33.4 million, respectively, which were primarily funded by higher deposit balances. These increases were partially offset by problem loan resolutions. Average loans have declined throughout the portfolio, driven by reductions in the commercial real estate and construction loan categories. The portfolio continues to be impacted by weak loan demand attributable to the sluggish economy, but not at the levels we have experienced in recent quarters. In addition to lower production and normal amortization and payoffs, the reduction in the portfolio is also attributable to gross charge-offs and the transfer of loans to the other real estate owned category, which collectively accounted for $60.9 million, or 53%, of the net reduction of $114.7 million 1 in the portfolio during the first nine months of 2010.

At the end of the third quarter, nonperforming assets (including nonaccrual loans, restructured loans and other real estate owned) totaled $145.6 million, a decrease of $4.2 million from the second quarter of 2010, driven primarily by a decrease in restructured loans of $6.9 million - two large loans were restored to performing status due to paying as agreed under restructured terms. Nonaccrual loans realized a net decrease of $0.4 million in the current quarter as the volume of loans migrating to nonaccrual status was essentially offset by resolutions and transfers to the other real estate owned category. The $3.1 million increase in the other real estate owned balance reflects the aforementioned migration of nonaccrual loans through the foreclosure process as well as a slight slowdown in property dispositions. Nonperforming assets represented 7.86% of loans and other real estate at the end of the third quarter compared to 8.01% at the prior quarter-end and 7.38% at year-end 2009.

Average total deposits were $2.172 billion for the third quarter, a decrease of $62.0 million, or 2.8%, from the second quarter of 2010 and an increase of $82.2 million, or 3.9%, from the fourth quarter of 2009. Deposit levels are strong, but down slightly from the second quarter level, primarily attributable to lower money market account and certificates of deposit balances, and a decline in public funds. The money market account promotion launched during the third quarter of 2009 and concluded in the fourth quarter, experienced runoff as rates were eased during the current quarter to standard levels. Despite the lowering of rates, the bank has retained in excess of $24.4 million in new deposit balances. This initiative served to support our core deposit growth strategy while succeeding in further strengthening the Bank's overall liquidity position. Certificates of deposit declined primarily due to the maturity of one large public fund CD and a reduction in the number of single relationship, higher yielding certificates of deposit with the Bank.   Public funds balances have declined as anticipated from the linked quarter reflecting seasonality within this deposit category. Our Absolutely Free Checking ("AFC") products continue to be successful as both balances and the number of accounts increased quarter over quarter. 

We continue to pursue prudent pricing discipline to manage the mix of our deposits. Therefore, we are not attempting to compete with higher rate paying competitors for deposits. The increase from the fourth quarter of 2009 reflects higher public funds of $37.3 million and core deposits of $44.9 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 $246.9 million during the third quarter of 2010 compared to an average net overnight funds sold position of $262.2 million in the prior quarter and an average overnight funds sold position of $112.8 million in the fourth quarter of 2009. The lower balance when compared to the linked quarter primarily reflects the decline in deposits mentioned above, partially offset by the lower investment and loan portfolios. The favorable variance as compared to year-end is primarily attributable to the growth in deposits and net reductions in the loan portfolio, partially offset by a higher balance in the investment portfolio. Late in the third quarter, a portion of the funds sold position was deployed into the investment portfolio.   We will continue to evaluate deploying the excess funds sold position into the investment portfolio during the fourth quarter of 2010.

Equity capital was $260.7 million as of September 30, 2010, compared to $261.7 million as of June 30, 2010 and $267.9 million as of December 31, 2009. Our leverage ratio was 9.75%, 9.58%, and 10.39%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.29% at September 30, 2010 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At September 30, 2010, our tangible common equity ratio was 6.98%, compared to 6.80% at June 30, 2010 and 6.84% at December 31, 2009.   

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2010 was $25.1 million compared to $24.7 million for the second quarter of 2010 and $27.1 million for the third quarter of 2009. For the first nine months of 2010, tax equivalent net interest income totaled $74.3 million compared to $82.4 million in 2009.

The increase of $0.4 million in tax equivalent net interest income on a linked quarter basis was due to lower interest expense, one additional calendar day, and a continued decrease in foregone interest on nonaccrual loans, 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 NOWs, money market accounts and certificates of deposit.  

The decrease of $8.1 million in tax equivalent net interest income for the first nine months 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 third quarter of 2010 was 4.38%, an increase of 12 basis points over the linked quarter and a decline of 61 basis points from the third quarter of 2009. The increase in the margin when compared to the linked quarter was a result of a 12 basis point reduction in the cost of funds, as the yield on earning assets remained constant. The lower cost of funds resulted from a reduction in the rates on NOW accounts primarily to comply with the Transaction Account Guarantee Program changes. Rates were lowered on the money market promotional accounts while certificates of deposit rates were significantly reduced in all markets. The decline in the margin for the first nine months of 2010 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 experienced in the fourth quarter of 2009 and the first half of 2010 improved our liquidity position, but has also adversely impacted our margin in the short term as a significant portion of this growth is currently invested in overnight funds.  

The provision for loan losses for the third quarter of 2010 was $5.7 million compared to $3.6 million in the second quarter of 2010 and $12.3 million for the third quarter of 2009. For the first nine months of 2010, the loan loss provision totaled $20.0 million compared to $29.2 million for the same period in 2009. The higher provision over the second quarter primarily reflects an increase in the volume of loans migrating to impaired status and collateral devaluation on existing impaired loans. The lower provision for the first nine months of the year primarily reflects a reduction in the level of loans migrating into our problem loan pool as well as other stabilizing trends within the loan portfolio. Net charge-offs in the third quarter totaled $6.4 million, or 1.40% of average loans, compared to $6.4 million, or 1.39%, in the second quarter of 2010. At quarter-end, the allowance for loan losses was 2.10% of outstanding loans (net of overdrafts) and provided coverage of 40% of nonperforming loans compared to 2.11% and 38%, respectively, at the end of the prior quarter.

Noninterest income for the third quarter decreased $1.2 million, or 8.3%, from the linked quarter attributable to lower deposit fees ($0.6 million), retail brokerage fees ($0.2 million), and other income ($0.5 million). The decline in deposit fees was attributable to a lower level of overdraft fees due to reduced activity and to a lesser extent a higher level of overdraft charge-offs. The reduction in overdraft activity reflects current economic conditions and a higher level of consumer awareness that have both impacted consumer and business spending habits, as well as the recent implementation of new rules under Regulation E, which regulate our ability to post one-time debit card/ATM transactions for clients who have not opted in to our overdraft protection service. The lower level of retail brokerage fees is primarily reflective of lower trading activity. The decline in other income is due to a reduced level of merchant fees - a substantial portion of our merchant portfolio was sold in July 2008 and over the course of 2009 our merchants migrated to a new processor. For 2010, we continued to service our largest remaining merchant who migrated to a new processor during the third quarter of 2010. The reduction in this revenue source has been substantially offset by a reduction in processing costs which is reflected in noninterest expense (interchange fees). For the first nine months of 2010, noninterest income declined $0.9 million, or 2.1%, from the same period in 2009 attributable to lower deposit fees ($0.9 million) and other income ($1.2 million), partially offset by an increase in debit card and interchange fees ($0.9 million). The declines in deposit and merchant fees are attributable the same aforementioned factors for the current quarter. The higher level of debit card fees reflect a new rewards program implemented in early 2010 as well as a higher level of card activation and utilization.   

Total noninterest expense decreased $2.3 million, or 6.5%, from the linked quarter driven by a reduction in expense for other real estate properties ($0.8 million), FDIC insurance ($0.4 million), advertising costs ($0.5 million), pension plan expense ($0.4 million), and interchange fees ($0.3 million). The decline in other real estate expense reflects a lower level of property valuation write-downs. The favorable variance in FDIC insurance reflects a higher required expense in the prior quarter due to an adjustment in our premium rate. The lower level of pension expense reflects a year-to-date adjustment after receipt of accounting reports from our actuary which included better than estimated asset return performance. The decline in interchange fees reflects the migration of our last merchant services client to a new processor – this decline is substantially offset by a corresponding decline in merchant fee revenue. For the first nine months of 2010, as compared to the same period in 2009, noninterest expense increased $3.6 million, or 3.7%, due primarily to higher expense for other real estate properties ($6.2 million), partially offset by lower pension expense ($1.4 million), advertising expense ($0.4 million), and intangible asset amortization ($0.9 million). A higher level of other real estate owned properties drove the increase in other real estate expenses. The decline in pension expense reflects improved return on pension plan assets. Closer management of costs related to our free checking products as well as lower public relations expense contributed to the decline in advertising expense. The lower level of intangible asset amortization reflects the full amortization of a core deposit intangible.   

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 $2.6 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 and the valuation allowance on deferred tax assets; restrictions on our operations, including the inability to pay dividends without our regulators' consent; continued depression of the market value of the Company that could result in an impairment of goodwill; 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 and manmade disasters; 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.

1 The $114.7 million reduction in the loan portfolio and the $60.9 million in loan resolutions are based on "as of" balances not averages.
 
EARNINGS HIGHLIGHTS
  Three Months Ended Nine Months Ended
(Dollars in thousands, except per share data) Sep 30, 2010 Jun 30, 2010 Sep 30, 2009 Sep 30, 2010 Sep 30, 2009
EARNINGS          
Net Income(Loss) $ 401 $ 731 $ (1,488) $ (2,331) $ (64)
Net Income(Loss) Per Common Share $ 0.02 $ 0.04 $ (0.08) $ (0.14) $ 0.00
PERFORMANCE          
Return on Average Equity 0.60% 1.11% -2.15% -1.17% -0.03%
Return on Average Assets 0.06% 0.11% -0.24% -0.12% 0.00%
Net Interest Margin 4.38% 4.26% 4.99% 4.29% 5.09%
Noninterest Income as % of Operating Revenue 35.17% 37.58% 35.01% 36.52% 34.75%
Efficiency Ratio 82.08% 86.06% 73.86% 84.39% 74.82%
CAPITAL ADEQUACY          
Tier 1 Capital Ratio 12.93% 12.78% 12.76% 12.93% 12.76%
Total Capital Ratio 14.29% 14.14% 14.12% 14.29% 14.12%
Tangible Capital Ratio 6.98% 6.80% 7.43% 6.98% 7.43%
Leverage Ratio 9.75% 9.58% 10.96% 9.75% 10.96%
Equity to Assets 10.10% 9.87% 10.77% 10.10% 10.77%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 39.94% 37.80% 40.90% 39.94% 40.90%
Allowance as a % of Loans 2.10% 2.11% 2.32% 2.10% 2.32%
Net Charge-Offs as % of Average Loans 1.40% 1.39% 1.76% 1.91% 1.41%
Nonperforming Assets as % of Loans and ORE 7.86% 8.01% 7.25% 7.86% 7.25%
STOCK PERFORMANCE          
High  $ 14.24 $ 18.25 $ 17.10 $ 18.25 $ 27.31
Low $ 10.76 $ 12.36 $ 13.92 $ 10.76 $ 9.50
Close $ 12.14 $ 12.38 $ 14.20 $ 12.14 $ 14.20
Average Daily Trading Volume  29,747  46,507  33,823  34,489  44,127
       
       
CAPITAL CITY BANK GROUP, INC.      
CONSOLIDATED STATEMENT OF OPERATIONS      
Unaudited        
 
            Nine Months Ended September 30
(Dollars in thousands, except per share data) 2010 Third Quarter 2010 Second Quarter 2010 First Quarter 2009 Fourth Quarter 2009 Third Quarter 2010 2009
               
INTEREST INCOME              
Interest and Fees on Loans $ 26,418 $ 26,644 $ 26,992 $ 28,582 $ 29,463 $ 80,054 $ 88,742
Investment Securities  1,014  1,114  990  1,097  1,323  3,118  4,273
Funds Sold  144  176  172  77  1  492  5
Total Interest Income  27,576  27,934  28,154  29,756  30,787  83,664  93,020
               
INTEREST EXPENSE              
Deposits  1,820  2,363  2,938  2,964  2,626  7,121  7,621
Short-Term Borrowings  31  12  17  22  113  60  269
Subordinated Notes Payable  376  639  651  936  936  1,666  2,794
Other Long-Term Borrowings  565  551  526  542  560  1,642  1,694
Total Interest Expense  2,792  3,565  4,132  4,464  4,235  10,489  12,378
Net Interest Income  24,784  24,369  24,022  25,292  26,552  73,175  80,642
Provision for Loan Losses  5,668  3,633  10,740  10,834  12,347  20,041  29,183
Net Interest Income after Provision for Loan Losses  19,116  20,736  13,282  14,458  14,205  53,134  51,459
               
NONINTEREST INCOME              
Service Charges on Deposit Accounts  6,399  7,039  6,628  7,183  7,099  20,066  20,959
Data Processing Fees  911  919  900  948  914  2,730  2,680
Asset Management Fees  1,040  1,080  1,020  1,065  960  3,140  2,860
Retail Brokerage Fees  671  846  565  772  765  2,082  1,883
Gain on Sale of Investment Securities  3  --  5  --  4  8  10
Mortgage Banking Revenues  772  641  508  550  663  1,921  2,149
Interchange Fees  1,291  1,289  1,212  1,129  1,129  3,792  3,303
ATM/Debit Card Fees  1,036  1,073  963  892  876  3,072  2,623
Other   1,326  1,787  2,166  1,872  1,894  5,279  6,513
Total Noninterest Income  13,449  14,674  13,967  14,411  14,304  42,090  42,980
               
NONINTEREST EXPENSE              
Salaries and Associate Benefits  15,003  15,584  16,779  16,121  15,660  47,366  48,946
Occupancy, Net  2,611  2,585  2,408  2,458  2,455  7,604  7,340
Furniture and Equipment  2,288  2,192  2,181  2,261  2,193  6,661  6,835
Intangible Amortization  709  710  710  1,010  1,011  2,129  3,032
Other   11,752  13,558  11,306  13,463  10,296  36,616  30,649
Total Noninterest Expense  32,363  34,629  33,384  35,313  31,615  100,376  96,802
               
OPERATING PROFIT(LOSS)  202  781  (6,135)  (6,444)  (3,106)  (5,152)  (2,363)
Provision for Income Taxes  (199)  50  (2,672)  (3,037)  (1,618)  (2,821)  (2,299)
NET INCOME(LOSS) $ 401 $ 731 $ (3,463) $ (3,407) $ (1,488) $ (2,331) $ (64)
               
PER SHARE DATA              
Basic Earnings $ 0.02 $ 0.04 $ (0.20) $ (0.20) $ (0.08) $ (0.14) $ 0.00
Diluted Earnings $ 0.02 $ 0.04 $ (0.20) $ (0.20) $ (0.08) $ (0.14) $ 0.00
Cash Dividends  0.100  0.100  0.190  0.190  0.190  0.390  0.570
AVERAGE SHARES              
Basic   17,087  17,063  17,057  17,034  17,024  17,069  17,047
Diluted   17,088  17,074  17,070  17,035  17,025  17,070  17,048
 
 
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
 
(Dollars in thousands, except per share data) 2010 Third Quarter 2010 Second Quarter 2010 First Quarter 2009 Fourth Quarter 2009 Third Quarter
           
ASSETS          
Cash and Due From Banks  $ 48,701  $ 52,380  $ 52,615  $ 57,877  $ 79,275
Funds Sold and Interest Bearing Deposits  193,415  250,508  293,413  276,416  828
Total Cash and Cash Equivalents  242,116  302,888  346,028  334,293  80,103
           
Investment Securities, Available-for-Sale  231,303  218,785  217,606  176,673  183,944
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural  156,049  161,268  169,766  189,061  203,813
Real Estate - Construction  45,346  56,910  79,145  111,249  128,476
Real Estate - Commercial  680,639  676,516  729,011  716,791  704,595
Real Estate - Residential  448,704  450,997  394,132  406,262  424,715
Real Estate - Home Equity  250,795  247,726  245,185  246,722  243,808
Consumer  207,207  215,723  224,793  233,524  241,672
Other Loans  9,828  9,498  6,888  10,207  7,790
Overdrafts  2,669  3,144  2,701  2,124  3,163
Total Loans, Net of Unearned Interest  1,801,237  1,821,782  1,851,621  1,915,940  1,958,032
Allowance for Loan Losses  (37,720)  (38,442)  (41,198)  (43,999)  (45,401)
Loans, Net  1,763,517  1,783,340  1,810,423  1,871,941  1,912,631
           
Premises and Equipment, Net  115,689  116,802  117,055  115,439  111,797
Intangible Assets  86,712  87,421  88,131  88,841  89,851
Other Real Estate Owned  51,208  48,110  46,444  36,134  33,371
Other Assets  89,451  93,398  89,416  85,003  80,240
Total Other Assets  343,060  345,731  341,046  325,417  315,259
           
Total Assets  $ 2,579,996  $ 2,650,744  $ 2,715,103  $ 2,708,324  $ 2,491,937
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits  $ 479,887  $ 460,168  $ 446,855  $ 427,791  $ 397,943
NOW Accounts  830,297  891,636  890,570  899,649  687,679
Money Market Accounts  282,848  303,369  376,091  373,105  301,662
Regular Savings Accounts  135,143  132,174  130,936  122,370  122,040
Certificates of Deposit  393,268  412,964  438,488  435,319  440,666
Total Deposits  2,121,443  2,200,311  2,282,940  2,258,234  1,949,990
           
Short-Term Borrowings  38,138  21,376  18,900  35,841  103,711
Subordinated Notes Payable  62,887  62,887  62,887  62,887  62,887
Other Long-Term Borrowings  46,456  55,605  50,679  49,380  50,665
Other Liabilities  50,383  48,885  37,738  34,083  56,269
           
Total Liabilities 2,319,307 2,389,064 2,453,144 2,440,425 2,223,522
           
SHAREOWNERS' EQUITY          
Common Stock  171  171  171  170  170
Additional Paid-In Capital  36,864  36,633  36,816  36,099  36,065
Retained Earnings  237,471  238,779  239,755  246,460  253,104
Accumulated Other Comprehensive Loss, Net of Tax  (13,817)  (13,903)  (14,783)  (14,830)  (20,924)
           
Total Shareowners' Equity  260,689  261,680  261,959  267,899  268,415
           
Total Liabilities and Shareowners' Equity  $ 2,579,996  $ 2,650,744  $ 2,715,103  $ 2,708,324  $ 2,491,937
           
OTHER BALANCE SHEET DATA          
Earning Assets  $ 2,225,955  $ 2,291,075  $ 2,362,640  $ 2,369,029  $ 2,142,804
Intangible Assets          
Goodwill  84,811  84,811  84,811  84,811  84,811
Core Deposits  1,248  1,910  2,572  3,233  4,196
Other  653  700  748  797  844
Interest Bearing Liabilities  1,789,037  1,880,011  1,968,551  1,978,551  1,769,310
           
Book Value Per Diluted Share  $ 15.25  $ 15.32  $ 15.34  $ 15.72  $ 15.76
Tangible Book Value Per Diluted Share  10.18  10.21  10.18  10.51  10.48
           
Actual Basic Shares Outstanding  17,095  17,067  17,063  17,036  17,032
Actual Diluted Shares Outstanding  17,096  17,078  17,076  17,037  17,033
           
           
CAPITAL CITY BANK GROUP, INC.          
ALLOWANCE FOR LOAN LOSSES           
AND NONPERFORMING ASSETS          
Unaudited          
  2010 2010 2010 2009 2009
(Dollars in thousands) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
           
ALLOWANCE FOR LOAN LOSSES          
Balance at Beginning of Period  $ 38,442  $ 41,199  $ 43,999  $ 45,401  $ 41,782
Provision for Loan Losses  5,668  3,633  10,740  10,834  12,347
Transfer of Unfunded Reserve to Other Liability  --  --  --  392  --
Net Charge-Offs  6,390  6,390  13,540  11,844  8,728
           
Balance at End of Period  $ 37,720  $ 38,442  $ 41,199  $ 43,999  $ 45,401
As a % of Loans 2.10% 2.11% 2.23% 2.30% 2.32%
As a % of Nonperforming Loans 39.94% 37.80% 38.42% 40.77% 40.90%
As a % of Nonperforming Assets 25.90% 25.66% 26.81% 30.54% 31.45%
           
CHARGE-OFFS          
Commercial, Financial and Agricultural  $ 242  $ 405  $ 842  $ 712  $ 633
Real Estate - Construction  701  1,220  3,722  2,040  2,315
Real Estate - Commercial  1,741  920  4,631  1,584  1,707
Real Estate - Residential  3,175  4,725  3,727  7,377  3,394
Consumer  1,057  360  1,507  1,324  1,324
           
Total Charge-Offs  $ 6,916  $ 7,630  $ 14,429  $ 13,037  $ 9,373
           
RECOVERIES          
Commercial, Financial and Agricultural  $ 65  $ 181  $ 77  $ 343  $ 64
Real Estate - Construction  --  8  --  5  150
Real Estate - Commercial  6  43  157  43  8
Real Estate - Residential  181  638  114  331  92
Consumer  274  370  541  471  331
           
Total Recoveries  $ 526  $ 1,240  $ 889  $ 1,193  $ 645
           
NET CHARGE-OFFS  $ 6,390  $ 6,390  $ 13,540  $ 11,844  $ 8,728
           
Net Charge-Offs as a % of Average Loans(1) 1.40% 1.39% 2.91% 2.42% 1.76%
           
RISK ELEMENT ASSETS          
Nonaccruing Loans  $ 74,168  $ 74,504  $ 76,382  $ 86,274  $ 91,880
Restructured Loans  20,267  27,200  30,843  21,644  19,121
Total Nonperforming Loans  94,435  101,704  107,225  107,918  111,001
Other Real Estate  51,208  48,110  46,444  36,134  33,371
Total Nonperforming Assets  $ 145,643  $ 149,814  $ 153,669  $ 144,052  $ 144,372
           
Past Due Loans 30-89 Days   $ 24,904  $ 21,192  $ 18,768  $ 36,501  $ 32,553
Past Due Loans 90 Days or More  $ --  $ --  $ --  $ --  $ 486
           
Nonperforming Loans as a % of Loans 5.24% 5.58% 5.79% 5.63% 5.67%
Nonperforming Assets as a % of Loans and Other Real Estate 7.86% 8.01% 8.10% 7.38% 7.25%
Nonperforming Assets as a % of Capital(2) 48.81% 49.92% 50.69% 46.19% 46.01%
           
(1) Annualized          
(2) Capital includes allowance for loan losses.           
     
     
AVERAGE BALANCE AND INTEREST RATES(1)    
Unaudited                  
 
                   
  Third Quarter 2010 Second Quarter 2010 First Quarter 2010
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate Average Balance Interest Average Rate
                   
ASSETS:                  
Loans, Net of Unearned Interest  $ 1,807,483  26,568 5.83%  $ 1,841,379  26,795 5.84%  $ 1,886,367  27,180 5.84%
                   
Investment Securities                  
Taxable Investment Securities  124,625  674 2.15%  128,268  708 2.21%  71,325  500 2.81%
Tax-Exempt Investment Securities  88,656  521 2.35%  92,140  624 2.71%  97,316  753 3.10%
                   
Total Investment Securities  213,281  1,195 2.23%  220,408  1,332 2.42%  168,641  1,253 2.98%
                   
Funds Sold  252,434  144 0.22%  267,578  176 0.26%  303,280  172 0.23%
                   
Total Earning Assets  2,273,198  $ 27,907 4.87%  2,329,365  $ 28,303 4.87%  2,358,288  $ 28,605 4.92%
                   
Cash and Due From Banks  50,942      50,739      54,873    
Allowance for Loan Losses  (39,584)      (41,074)      (44,584)    
Other Assets  342,202      339,458      329,842    
                   
Total Assets $ 2,626,758     $ 2,678,488     $ 2,698,419    
                   
LIABILITIES:                  
Interest Bearing Deposits                  
NOW Accounts $ 871,158 $ 326 0.15% $ 879,329 $ 400 0.18% $ 867,004 $ 384 0.18%
Money Market Accounts  293,424  145 0.20%  333,976  331 0.40%  374,161  689 0.75%
Savings Accounts  133,690  17 0.05%  131,333  17 0.05%  126,352  15 0.05%
Time Deposits  402,880  1,332 1.31%  430,571  1,615 1.50%  438,112  1,850 1.71%
Total Interest Bearing Deposits  1,701,152  1,820 0.42%  1,775,209  2,363 0.53%  1,805,629  2,938 0.66%
                   
Short-Term Borrowings  23,388  31 0.54%  22,694  12 0.20%  30,673  17 0.22%
Subordinated Notes Payable  62,887  376 2.34%  62,887  639 4.02%  62,887  651 4.14%
Other Long-Term Borrowings  54,258  565 4.13%  52,704  551 4.20%  49,981  526 4.27%
                   
Total Interest Bearing Liabilities  1,841,685 $ 2,792 0.60%  1,913,494 $ 3,565 0.75%  1,949,170 $ 4,132 0.86%
                   
Noninterest Bearing Deposits  471,013      458,969      443,131    
Other Liabilities  50,318      42,152      37,563    
                   
Total Liabilities  2,363,016      2,414,615      2,429,864    
                   
SHAREOWNERS' EQUITY: $ 263,742     $ 263,873     $ 268,555    
                   
Total Liabilities and Shareowners' Equity $ 2,626,758     $ 2,678,488     $ 2,698,419    
                   
Interest Rate Spread   $ 25,115 4.27%   $ 24,738 4.12%   $ 24,473 4.06%
                   
Interest Income and Rate Earned(1)    $ 27,907 4.87%   $ 28,303 4.87%   $ 28,605 4.92%
Interest Expense and Rate Paid(2)    2,792 0.49%    3,565 0.61%    4,132 0.71%
                   
Net Interest Margin   $ 25,115 4.38%   $ 24,738 4.26%   $ 24,473 4.21%
                   
(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.    
 
 
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited            
             
 
  Fourth Quarter 2009 Third Quarter 2009
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate
             
ASSETS:            
Loans, Net of Unearned Interest  $ 1,944,873  28,813 5.88%  $ 1,964,984  29,695 6.00%
             
Investment Securities            
Taxable Investment Securities  72,537  498 2.74%  81,777  682 3.32%
Tax-Exempt Investment Securities  107,361  921 3.43%  107,307  985 3.67%
             
Total Investment Securities  179,898  1,419 3.15%  189,084  1,667 3.52%
             
Funds Sold  112,790  77 0.27%  3,294  1 0.11%
             
Total Earning Assets  2,237,561  $ 30,309 5.38%  2,157,362  $ 31,363 5.77%
             
Cash and Due From Banks  69,687      76,622    
Allowance for Loan Losses  (46,468)      (42,774)    
Other Assets  314,470      306,759    
             
Total Assets $ 2,575,250     $ 2,497,969    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts $ 740,550 $ 308 0.17% $ 678,292 $ 257 0.15%
Money Market Accounts  361,104  625 0.69%  301,230  281 0.37%
Savings Accounts  122,158  16 0.05%  122,934  15 0.05%
Time Deposits  439,654  2,015 1.82%  430,944  2,073 1.91%
Total Interest Bearing Deposits  1,663,466  2,964 0.71%  1,533,400  2,626 0.68%
             
Short-Term Borrowings  47,114  22 0.18%  97,305  113 0.45%
Subordinated Notes Payable  62,887  936 5.83%  62,887  936 5.83%
Other Long-Term Borrowings  50,026  542 4.30%  51,906  560 4.28%
             
Total Interest Bearing Liabilities  1,823,493 $ 4,464 0.97%  1,745,498 $ 4,235 0.96%
             
Noninterest Bearing Deposits  426,542      416,770    
Other Liabilities  56,659      60,674    
             
Total Liabilities  2,306,694      2,222,942    
             
SHAREOWNERS' EQUITY: $ 268,556     $ 275,027    
             
Total Liabilities and Shareowners' Equity $ 2,575,250     $ 2,497,969    
             
Interest Rate Spread   $ 25,845 4.41%   $ 27,128 4.81%
             
Interest Income and Rate Earned(1)   $ 30,309 5.38%   $ 31,363 5.77%
Interest Expense and Rate Paid(2)    4,464 0.79%    4,235 0.78%
             
Net Interest Margin   $ 25,845 4.59%   $ 27,128 4.99%
             
(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.
 
 
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited            
 
             
  September 2010 YTD September 2009 YTD
(Dollars in thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate
             
ASSETS:            
Loans, Net of Unearned Interest  $ 1,844,788  80,543 5.84%  $ 1,967,759  89,373 6.07%
             
Investment Securities            
Taxable Investment Securities  108,268  1,882 2.32%  87,393  2,200 3.35%
Tax-Exempt Investment Securities  92,672  1,898 2.73%  105,117  3,185 4.04%
             
Total Investment Securities  200,940  3,780 2.51%  192,510  5,385 3.73%
             
Funds Sold  274,245  492 0.24%  5,992  5 0.12%
             
Total Earning Assets  2,319,973  $ 84,815 4.89%  2,166,261  $ 94,763 5.85%
             
Cash and Due From Banks  52,170      78,271    
Allowance for Loan Losses  (41,729)      (40,937)    
Other Assets  337,212      293,528    
             
Total Assets $ 2,667,626     $ 2,497,123    
             
LIABILITIES:            
Interest Bearing Deposits            
NOW Accounts $ 872,512 $ 1,110 0.17% $ 702,048 $ 731 0.14%
Money Market Accounts  333,558  1,165 0.47%  306,858  663 0.29%
Savings Accounts  130,485  49 0.05%  121,389  44 0.05%
Time Deposits  423,726  4,797 1.51%  413,641  6,183 2.00%
Total Interest Bearing Deposits  1,760,281  7,121 0.54%  1,543,936  7,621 0.66%
             
Short-Term Borrowings  25,558  60 0.31%  90,174  269 0.39%
Subordinated Notes Payable  62,887  1,666 3.49%  62,887  2,794 5.86%
Other Long-Term Borrowings  52,330  1,642 4.20%  52,629  1,694 4.30%
             
Total Interest Bearing Liabilities  1,901,056  $ 10,489 0.74%  1,749,626 $ 12,378 0.95%
             
Noninterest Bearing Deposits  457,807      415,610    
Other Liabilities  43,391      53,986    
             
Total Liabilities  2,402,254      2,219,222    
             
SHAREOWNERS' EQUITY: $ 265,372     $ 277,901    
             
Total Liabilities and Shareowners' Equity $ 2,667,626     $ 2,497,123    
             
Interest Rate Spread   $ 74,326 4.15%   $ 82,385 4.90%
             
Interest Income and Rate Earned(1)   $ 84,815 4.89%   $ 94,763 5.85%
Interest Expense and Rate Paid(2)    10,489 0.60%    12,378 0.76%
             
Net Interest Margin   $ 74,326 4.29%   $ 82,385 5.09%
             
(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

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