Capital City Bank Group, Inc. Reports First Quarter 2010 Results

TALLAHASSEE, Fla., April 19, 2010 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported a net loss of $3.5 million, or $0.20 per diluted share for the first quarter of 2010 compared to a net loss of $3.4 million, or $0.20 per diluted share in the fourth quarter of 2009 and net income of $0.7 million, or $0.04 per diluted share for the first quarter of 2009.

The net loss reported for the first quarter of 2010 reflects a loan loss provision of $10.7 million, or $0.39 per diluted share versus $10.8 million, or $0.39 per diluted share for the linked fourth quarter of 2009 and $8.4 million, or $0.30 per diluted share in the first quarter of 2009. Compared to the linked fourth quarter of 2009, lower operating expenses of $1.9 million contributed to earnings, but were offset by a $1.7 million reduction in operating revenues (net interest income plus noninterest income) and a lower tax benefit of $0.3 million.

"We believe many of the economic indicators across our footprint appear to be in the early stages of stabilization, but uncertainty and a weak economy continue to affect our banking markets," said William G. Smith, Jr., Chairman, President and Chief Executive Officer. "Consumers and businesses alike appear to be waiting for more economic certainty and confidence before resuming traditional spending patterns or business expansion plans. Although our margin remains strong at 4.21%, these market realities have adversely impacted loan volume and thereby our margin in recent quarters. Concerning credit quality, we are encouraged by positive developments in some of our underlying credit metrics, specifically, a slowdown in the level of gross additions to our problem loans. Nonaccrual loans have declined for three consecutive quarters. The slight increase in total nonperforming assets this quarter was driven by migration into restructured loans, which are accruing interest and other real estate, which is an end stage to resolution. Migration of the problem loans from nonaccruing to the restructured and other real estate categories simply puts us in a stronger position to ultimately resolve these situations.

"Without question, this is the most difficult operating environment our team has faced during our 20-30 year careers. We believe the collective experience of our management team, knowledge of our local markets, strength of our brand, healthy capital and the company's underlying performance metrics will enable us to successfully manage through this current economic cycle and capitalize on opportunities as our markets recover," said Smith.

The Return on Average Assets was -0.52% and the Return on Average Equity was -5.23% for the first quarter of 2010. These metrics were -0.52% and -5.03%, respectively for the fourth quarter of 2009, and 0.11% and 0.94%, respectively for the comparable quarter in 2009.

Discussion of Financial Condition

Average earning assets were $2.358 billion for the first quarter of 2010, an increase of $120.7 million, or 5.4% from the fourth quarter of 2009, and an increase of $192.1 million, or 8.9% from the first quarter of 2009. The improvement from the fourth quarter is primarily attributable to an increase in the overnight funds position of $190.5 million, partially offset by an $11.3 million and $58.5 million decrease in the investment and loan portfolios, respectively. The improvement in the funds position primarily reflects core deposit growth and to a lesser extent an influx of public funds. Average loans declined throughout the portfolio driven by reduction in the residential real estate and construction loan categories primarily reflecting the transfer of loans to the other real estate category as well as loan charge-offs. Additionally, the portfolio has been impacted by diminished loan demand, primarily attributable to the weak economy, as we have experienced lower production levels in recent quarters. Compared to the first quarter of 2009, the increase in average earning assets primarily reflects growth in the overnight funds position partially offset by a reduction in the loan portfolio and investment securities. Our loan production levels began to decline during the second half of 2009 with the trend continuing through the recent quarter.

Nonperforming assets of $153.7 million increased from the linked fourth quarter by $9.6 million and from the first quarter of 2009 by $26.9 million. Nonaccrual loans decreased $9.9 million and $33.8 million, respectively, from the same prior-year periods. For the first quarter, the migration of loans into our problem loan pool slowed as the gross additions declined for the second straight quarter and the level of our past due loans improved significantly. More specifically, gross additions to our portfolio of nonaccruing loans have declined in four of the last five quarters, including the first quarter of 2010. Furthermore, our collection and loan work-out efforts continue to produce positive momentum reflective of the increased level of loans migrating into both the restructured loan and other real estate categories. Restructured loans totaled $30.8 million at the end of the first quarter reflecting an increase of $9.2 million over year-end 2009 and $25.7 million over the first quarter of 2009. Four large loans were added to the restructured category during the first quarter and reflect our efforts to alleviate these borrowers near term cash flow strains. Our current restructured loan portfolio consists of 150 loans that are all on fully accruing status and maintain a weighted average interest rate of 5.86%. Other real estate owned totaled $46.4 million at the end of the quarter compared to $36.1 million at year-end 2009 and $11.4 million at the end of the first quarter of 2009, reflecting the continued migration of our problem loan pool through the foreclosure process which has picked up momentum over the last two quarters. Nonperforming assets represented 8.10% of loans and other real estate at the end of the first quarter compared to 7.38% at year-end 2009 and 6.39% at the end of the first quarter of 2009. The increase in this percentage is partially attributable to a decline in loans outstanding.

Average total deposits were $2.249 billion for the first quarter, an increase of $158.8 million, or 7.6%, from the fourth quarter and an increase of $291.4 million, or 14.9%, from the first quarter of 2009. On a linked quarter basis, the increase reflects core deposit growth of approximately $66.3 million resulting from a successful money market promotion, higher deposit balances maintained by several larger, non-public depositors, as well as continued growth in our Absolutely Free Checking ("AFC") accounts. Additionally, average public funds increased approximately $92.0 million from the linked quarter attributable to seasonal inflow and the addition of new relationships. The money market account promotion, which was launched during the third quarter and concluded in the fourth quarter, has generated in excess of $100.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank's overall liquidity position. Our AFC products continue to be successful as both balances and the number of accounts continue to post growth quarter over quarter. The improvement from the first quarter of 2009 primarily reflects the increase in core deposits mentioned above.

We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $303.3 million during the first 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 purchased position of $33.9 million in the first quarter of 2009. The favorable variance as compared to both the fourth and first quarters of 2009, is primarily attributable to the growth in core deposits mentioned above and net reductions in both the loan and investment portfolios. The investment portfolio was expanded at the end of the first quarter with the purchase of $50.0 million of US Treasuries in relatively short maturities. If appropriate, we will continue to look to deploy a portion of the funds sold position in the investment portfolio during the second quarter.

Equity capital was $262.0 million as of March 31, 2010, compared to $267.9 million as of December 31, 2009 and $275.5 million as of March 31, 2009. Our leverage ratio was 9.64%, 10.39%, and 11.25%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.16% at March 31, 2010 exceeds the 10.0% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. At March 31, 2010, our tangible common equity ratio was 6.62%, compared to 6.84% at December 31, 2009 and 7.63% at March 31, 2009.

Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2010 was $24.5 million compared to $25.8 million for the fourth quarter of 2009 and $27.6 million for the first quarter of 2009. The decrease of $1.3 million in net interest income on a linked quarter basis was due to two less calendar days, a shift in earning asset mix and unfavorable asset repricing, partially offset by a decrease in foregone interest on nonaccrual loans and lower interest expense. Interest income was primarily impacted by declining balances in our investment and loan portfolios as well as continued unfavorable repricing in each of these portfolios. These unfavorable volume and rate variances were partially offset by a favorable variance in foregone interest on nonaccrual loans and a reduction in interest expense, primarily attributable to lower rates on certificates of deposit and subordinated notes payable. With the exception of calendar days, the $3.1 million unfavorable variance over the first quarter of 2009 is primarily attributable to the trends as noted above in comparing the first quarter 2010 to fourth quarter 2009.

The net interest margin in the first quarter of 2010 was 4.21%, a decline of 38 basis points over the linked quarter and 95 basis points over the first quarter of 2009. The lower margin 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. When we determine what portion of this growth is permanent we will begin deploying the overnight funds into higher yielding earning assets. As noted earlier, late in the first quarter we invested an additional $50 million in the investment portfolio.

The provision for loan losses for the current quarter was $10.7 million compared to $10.8 million in the linked fourth quarter of 2009 and $8.4 million for the first quarter of 2009. The provision for the current quarter primarily reflects required reserves for loans added to impaired status during the quarter and to a lesser extent collateral devaluation on existing impaired loans. An increase in loan loss factors also impacted the level of loan loss provision for the quarter. Net charge-offs in the first quarter totaled $13.5 million, or 2.91%, of average loans compared to $11.8 million, or 2.42% in the linked fourth quarter of 2009 and $5.2 million, or 1.08% in the first quarter of 2009. The increase in net charge-offs compared to the linked fourth quarter reflects losses recorded on three large previously impaired loans that are working through the foreclosure process -- these loans were substantially reserved for in the prior quarter. At quarter-end, the allowance for loan losses was 2.23% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 2.30% and 41%, respectively, at the end of the prior quarter.

Noninterest income for the first quarter decreased $444,000, or 3.1%, from the fourth quarter of 2009 and declined $75,000, or 0.53%, from the first quarter of 2009. Compared to the linked fourth quarter, the decrease is attributable to lower deposit fees ($554,000) and retail brokerage fees ($207,000), partially offset by higher merchant fees ($320,000). The reduction in deposit fees compared to the prior linked quarter reflects a two-day calendar variance, and a lower level of NSF/overdraft activity reflective of current economic conditions and a higher level of consumer awareness that have both impacted consumer and business spending habits. The decline in retail brokerage fees was driven by lower trading volume by clients. The increase in merchant fees reflects higher processing volume for our sole remaining merchant that is scheduled to convert to another processor early in the third quarter. Compared to the first quarter of 2009, the slight decline is attributable to a lower level of merchant fees ($293,000) reflective of a higher number of remaining merchants in early 2009. Partially offsetting the reduction in merchant fees was an increase in bank card fees ($256,000) primarily driven by growth in transaction accounts as well as a debit card rewards program that was implemented in late 2009.

Noninterest expense decreased $1.9 million, or 5.5%, from the fourth quarter of 2009 and increased $1.1 million, or 3.5%, over the first quarter of 2009. The decrease compared to the fourth quarter was driven by lower expense for other real estate properties ($700,000), which includes holding costs as well as valuation adjustments due to property devaluation. Lower expense for loan collection legal support ($215,000), professional fees ($554,000), advertising ($272,000), and intangible amortization ($301,000) also contributed to the decline for the quarter. The reduction in legal expense was due to a lower level of legal assistance needed for complex loan work-out arrangements as well as various cost control strategies implemented to reduce this cost. Professional fees was elevated in the fourth quarter due to a one-time payment to a consulting firm for services related to a review of our vendor maintenance contracts that will result in future cost reductions. The decline in advertising expense primarily reflects lower direct mail costs for our ongoing AFC product promotion and, to a lesser extent, costs incurred in support of our money market account promotion, which was recognized in the fourth quarter of 2009. Intangible amortization declined due to the fact that the scheduled amortization of one of our core deposit intangible assets concluded during the fourth quarter of 2009. Compared to the first quarter of 2009, the increase in noninterest expense was attributable to higher expense for other real estate properties ($1.8 million), partially offset by lower pension plan expense ($618,000).

We realized a tax benefit of $2.7 million for the first quarter of 2010 and a tax benefit of $3.0 million for the fourth quarter of 2009, both of which primarily reflect the impact of a higher level of permanent book/tax differences (primarily tax exempt income) in relation to our book operating profit. The reduction in benefit for the current quarter primarily reflects a lower level of tax exempt income.

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 69 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
                            ----------------------------

  (Dollars in thousands,     Mar 31,    Dec 31,  Mar 31,
   except per share data)      2010      2009     2009
  ------------------------  ---------  --------  -------
  EARNINGS
  Net Income                 $(3,463)   (3,407)     $650

  Diluted Earnings Per
   Common Share               $(0.20)    (0.20)    $0.04
  ------------------------  ---------  --------  -------
  PERFORMANCE
  Return on Average Equity     -5.23%    -5.03%    0.94%
  Return on Average Assets     -0.52%    -0.52%    0.11%
  Net Interest Margin           4.21%     4.59%    5.16%
  Noninterest Income as %
   of Operating Revenue        36.77%    36.30%   34.22%

  Efficiency Ratio             85.00%    85.21%   75.07%
  ------------------------  ---------  --------  -------
  CAPITAL ADEQUACY
  Tier 1 Capital Ratio         12.81%    12.76%   13.09%
  Total Capital Ratio          14.16%    14.11%   14.40%
  Tangible Capital Ratio        6.62%     6.84%    7.63%
  Leverage Ratio                9.64%    10.39%   11.25%

  Equity to Assets              9.65%     9.89%   11.02%
  ------------------------  ---------  --------  -------
  ASSET QUALITY
  Allowance as % of
   Non-Performing Loans        38.42%    40.77%   34.82%
  Allowance as a % of
   Loans                        2.23%     2.30%    2.04%
  Net Charge-Offs as % of
   Average Loans                2.91%     2.42%    1.08%

  Nonperforming Assets as
   % of Loans and ORE           8.10%     7.38%    6.39%
  ------------------------  ---------  --------  -------
  STOCK PERFORMANCE
  High                         $14.61    $14.34   $27.31
  Low                          $11.57    $11.00    $9.50
  Close                        $14.25    $13.84   $11.46

  Average Daily Trading
   Volume                      26,854    39,672   75,117
  ------------------------  ---------  --------  -------


  CAPITAL CITY BANK GROUP,
   INC.
  CONSOLIDATED STATEMENT OF
   INCOME
  Unaudited


  --------------------------  --------  --------  --------  -------  -------


                                2010      2009      2009     2009     2009
  (Dollars in thousands,       First     Fourth    Third     Second   First
   except per share data)      Quarter   Quarter   Quarter  Quarter  Quarter
  --------------------------  --------  --------  --------  -------  -------

  INTEREST INCOME
  Interest and Fees on Loans   $26,992   $28,582   $29,463  $29,742  $29,537
  Investment Securities            990     1,097     1,323    1,437    1,513

  Funds Sold                       172        77         1        1        3
  --------------------------  --------  --------  --------  -------  -------

  Total Interest Income         28,154    29,756    30,787   31,180   31,053
  --------------------------  --------  --------  --------  -------  -------

  INTEREST EXPENSE
  Deposits                       2,938     2,964     2,626    2,500    2,495
  Short-Term Borrowings             17        22       113       88       68
  Subordinated Notes Payable       651       936       936      931      927

  Other Long-Term Borrowings       526       542       560      566      568
  --------------------------  --------  --------  --------  -------  -------

  Total Interest Expense         4,132     4,464     4,235    4,085    4,058
  --------------------------  --------  --------  --------  -------  -------
  Net Interest Income           24,022    25,292    26,552   27,095   26,995

  Provision for Loan Losses     10,740    10,834    12,347    8,426    8,410
  --------------------------  --------  --------  --------  -------  -------

  Net Interest Income after
   Provision for Loan Losses    13,282    14,458    14,205   18,669   18,585
  --------------------------  --------  --------  --------  -------  -------

  NONINTEREST INCOME
  Service Charges on Deposit
   Accounts                      6,628     7,183     7,099    7,162    6,698
  Data Processing Fees             900       948       914      896      870
  Asset Management Fees          1,020     1,065       960      930      970
  Retail Brokerage Fees            565       772       765      625      493
  Gain on Sale of Investment
   Securities                        5        --         4        6       --
  Mortgage Banking Revenues        508       550       663      902      584
  Merchant Fees                    665       345       393      663      958
  Interchange Fees               1,212     1,129     1,129    1,118    1,056
  Gain on Sale of Portion of
   Merchant Services
   Portfolio                        --        --        --       --       --
  ATM/Debit Card Fees              963       892       876      884      863

  Other                          1,501     1,527     1,501    1,448    1,550
  --------------------------  --------  --------  --------  -------  -------

  Total Noninterest Income      13,967    14,411    14,304   14,634   14,042
  --------------------------  --------  --------  --------  -------  -------

  NONINTEREST EXPENSE
  Salaries and Associate
   Benefits                     16,779    16,121    15,660   16,049   17,237
  Occupancy, Net                 2,408     2,458     2,455    2,540    2,345
  Furniture and Equipment        2,181     2,261     2,193    2,304    2,338
  Intangible Amortization          710     1,010     1,011    1,010    1,011

  Other                         11,306    13,463    10,296   11,027    9,326
  --------------------------  --------  --------  --------  -------  -------

  Total Noninterest Expense     33,384    35,313    31,615   32,930   32,257
  --------------------------  --------  --------  --------  -------  -------

  OPERATING PROFIT             (6,135)   (6,444)   (3,106)      373      370

  Provision for Income Taxes   (2,672)   (3,037)   (1,618)    (401)    (280)
  --------------------------  --------  --------  --------  -------  -------

  NET INCOME                  $(3,463)  $(3,407)  $(1,488)     $774     $650
  --------------------------  --------  --------  --------  -------  -------

  PER SHARE DATA
  Basic Earnings               $(0.20)   $(0.20)   $(0.08)    $0.04    $0.04
  Diluted Earnings             $(0.20)   $(0.20)   $(0.08)    $0.04    $0.04
  Cash Dividends                 0.190     0.190     0.190    0.190    0.190
  AVERAGE SHARES
  Basic                         17,057    17,034    17,024   17,010   17,109

  Diluted                       17,070    17,035    17,025   17,010   17,131
  --------------------------  --------  --------  --------  -------  -------


  CAPITAL CITY BANK GROUP, INC.
  CONSOLIDATED STATEMENT OF FINANCIAL
   CONDITION
  Unaudited


  -----------------------------  ------------  ------------  ------------  ------------  ------------

                                     2010          2009          2009          2009          2009
  (Dollars in thousands, except     First         Fourth        Third         Second        First
   per share data)                  Quarter       Quarter       Quarter       Quarter       Quarter
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  ASSETS
  Cash and Due From Banks            $ 52,615      $ 57,877      $ 79,275      $ 92,394      $ 81,317

  Funds Sold and Interest
   Bearing Deposits                   293,413       276,416           828         2,016         4,241
  -----------------------------  ------------  ------------  ------------  ------------  ------------
   Total Cash and Cash
    Equivalents                       346,028       334,293        80,103        94,410        85,558

  Investment Securities,
   Available-for-Sale                 217,606       176,673       183,944       194,002       195,767

  Loans, Net of Unearned
   Interest
   Commercial, Financial, &
    Agricultural                      169,766       189,061       203,813       201,589       202,038
   Real Estate - Construction          79,145       111,249       128,476       153,507       154,102
   Real Estate - Commercial           729,011       716,791       704,595       686,420       673,066
   Real Estate - Residential          394,132       406,262       424,715       447,652       464,358
   Real Estate - Home Equity          245,185       246,722       243,808       235,473       223,505
   Consumer                           224,793       233,524       241,672       241,467       243,280
   Other Loans                          6,888        10,207         7,790         7,933         8,068

  Overdrafts                            2,701         2,124         3,163         3,022         3,195
  -----------------------------  ------------  ------------  ------------  ------------  ------------
   Total Loans, Net of Unearned
    Interest                        1,851,621     1,915,940     1,958,032     1,977,063     1,971,612

  Allowance for Loan Losses          (41,198)      (43,999)      (45,401)      (41,782)      (40,172)
  -----------------------------  ------------  ------------  ------------  ------------  ------------
   Loans, Net                       1,810,423     1,871,941     1,912,631     1,935,281     1,931,440

  Premises and Equipment, Net         117,055       115,439       111,797       109,050       107,259
  Intangible Assets                    88,131        88,841        89,851        90,862        91,872

  Other Assets                        135,860       121,137       113,611       102,234        87,483
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  Total Other Assets                  341,046       325,417       315,259       302,146       286,614
  -----------------------------  ------------  ------------  ------------  ------------  ------------


  Total Assets                    $ 2,715,103   $ 2,708,324   $ 2,491,937   $ 2,525,839   $ 2,499,379
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  LIABILITIES
  Deposits:
   Noninterest Bearing Deposits     $ 446,855     $ 427,791     $ 397,943     $ 424,125     $ 413,608
   NOW Accounts                       890,570       899,649       687,679       733,526       726,069
   Money Market Accounts              376,091       373,105       301,662       300,683       312,541
   Regular Savings Accounts           130,936       122,370       122,040       123,257       121,245

  Certificates of Deposit             438,488       435,319       440,666       424,339       416,326
  -----------------------------  ------------  ------------  ------------  ------------  ------------
   Total Deposits                   2,282,940     2,258,234     1,949,990     2,005,930     1,989,789

  Short-Term Borrowings                18,900        35,841       103,711        73,989        68,193
  Subordinated Notes Payable           62,887        62,887        62,887        62,887        62,887
  Other Long-Term Borrowings           50,679        49,380        50,665        52,354        53,448

  Other Liabilities                    37,738        34,083        56,269        57,973        49,518
  -----------------------------  ------------  ------------  ------------  ------------  ------------


  Total Liabilities                 2,453,144     2,440,425     2,223,522     2,253,133     2,223,835
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  SHAREOWNERS' EQUITY
  Common Stock                            171           170           170           170           170
  Additional Paid-In Capital           36,816        36,099        36,065        35,698        35,841
  Retained Earnings                   239,755       246,460       253,104       257,828       260,287

  Accumulated Other
   Comprehensive Loss, Net of
   Tax                               (14,783)      (14,830)      (20,924)      (20,990)      (20,754)
  -----------------------------  ------------  ------------  ------------  ------------  ------------


  Total Shareowners' Equity           261,959       267,899       268,415       272,706       275,544
  -----------------------------  ------------  ------------  ------------  ------------  ------------


  Total Liabilities and
   Shareowners' Equity            $ 2,715,103   $ 2,708,324   $ 2,491,937   $ 2,525,839   $ 2,499,379
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  OTHER BALANCE SHEET DATA
  Earning Assets                  $ 2,362,640   $ 2,369,029   $ 2,142,804   $ 2,173,081   $ 2,171,620
  Intangible Assets
   Goodwill                            84,811        84,811        84,811        84,811        84,811
   Deposit Base                         2,572         3,233         4,196         5,159         6,121
   Other                                  748           797           844           892           940

  Interest Bearing Liabilities      1,968,551     1,978,551     1,769,310     1,771,035     1,760,709
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  Book Value Per Diluted Share        $ 15.34       $ 15.72       $ 15.76       $ 16.03       $ 16.18

  Tangible Book Value Per
   Diluted Share                        10.18         10.51         10.48         10.70         10.80
  -----------------------------  ------------  ------------  ------------  ------------  ------------

  Actual Basic Shares
   Outstanding                         17,063        17,036        17,032        17,010        17,010

  Actual Diluted Shares
   Outstanding                         17,076        17,037        17,033        17,010        17,031
  -----------------------------  ------------  ------------  ------------  ------------  ------------


  CAPITAL CITY BANK GROUP, INC.
  ALLOWANCE FOR LOAN LOSSES
  AND NONPERFORMING ASSETS

  Unaudited
  ------------------------------  ----------  ----------  ----------  ----------  ----------
                                     2010        2009        2009        2009        2009

                                  First       Fourth      Third       Second      First
  (Dollars in thousands)          Quarter     Quarter     Quarter     Quarter     Quarter
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  ALLOWANCE FOR LOAN LOSSES
  Balance at Beginning of Period    $ 43,999    $ 45,401    $ 41,782    $ 40,172    $ 37,004
  Provision for Loan Losses           10,740      10,834      12,347       8,426       8,410
  Transfer of Unfunded Reserve
   to Other Liability                      5         392          --          --          --

  Net Charge-Offs                     13,536      11,844       8,728       6,816       5,242
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  Balance at End of Period          $ 41,198    $ 43,999    $ 45,401    $ 41,781    $ 40,172
  ------------------------------  ----------  ----------  ----------  ----------  ----------
  As a % of Loans                      2.23%       2.30%       2.32%       2.12%       2.04%
  As a % of Nonperforming Loans       38.42%      40.77%      40.90%      33.71%      34.82%

  As a % of Nonperforming Assets      26.81%      30.54%      31.45%      29.09%      31.69%
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  CHARGE-OFFS
  Commercial, Financial and
   Agricultural                        $ 842       $ 712       $ 633       $ 388       $ 857
  Real Estate - Construction           3,722       2,040       2,315       3,356         320
  Real Estate - Commercial             4,631       1,584       1,707         123       1,002
  Real Estate - Residential            3,727       7,377       3,394       2,379       1,975

  Consumer                             1,507       1,324       1,324       1,145       2,117
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  Total Charge-Offs                 $ 14,429    $ 13,037     $ 9,373     $ 7,391     $ 6,271
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  RECOVERIES
  Commercial, Financial and
   Agricultural                         $ 77       $ 343        $ 64        $ 84        $ 74
  Real Estate - Construction              --           5         150          --         385
  Real Estate - Commercial               157          43           8           1          --
  Real Estate - Residential              114         331          92          51          58

  Consumer                               545         471         331         439         512
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  Total Recoveries                     $ 893     $ 1,193       $ 645       $ 575     $ 1,029
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  NET CHARGE-OFFS                   $ 13,536    $ 11,844     $ 8,728     $ 6,816     $ 5,242
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  Net Charge-Offs as a % of
   Average Loans(1)                    2.91%       2.42%       1.76%       1.39%       1.08%
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  RISK ELEMENT ASSETS
  Nonaccruing Loans                 $ 76,382    $ 86,274    $ 91,880   $ 111,039   $ 110,200

  Restructured Loans                  30,843      21,644      19,121      12,916       5,157
  ------------------------------  ----------  ----------  ----------  ----------  ----------
  Total Nonperforming Loans          107,225     107,918     111,001     123,955     115,357

  Other Real Estate                   46,444      36,134      33,371      19,671      11,425
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  Total Nonperforming Assets       $ 153,669   $ 144,052   $ 144,372   $ 143,626   $ 126,783
  ------------------------------  ----------  ----------  ----------  ----------  ----------


  Past Due Loans 90 Days or More        $ --        $ --       $ 486        $ --        $ --
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  Nonperforming Loans as a % of
   Loans                               5.79%       5.63%       5.67%       6.27%       5.85%
  Nonperforming Assets as a % of

  Loans and Other Real Estate          8.10%       7.38%       7.25%       7.19%       6.39%

  Nonperforming Assets as a % of
   Capital(2)                         50.69%      46.19%      46.01%      45.67%      40.16%
  ------------------------------  ----------  ----------  ----------  ----------  ----------

  (1) Annualized
  (2) Capital includes allowance
   for loan losses.

  AVERAGE BALANCE AND INTEREST RATES(1)

  Unaudited
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------


                               First Quarter 2010             Fourth Quarter 2009               Third Quarter 2009
                         ------------------------------  ------------------------------  -------------------------------

  (Dollars in              Average              Average    Average              Average    Average               Average
   thousands)              Balance    Interest   Rate      Balance    Interest   Rate      Balance     Interest   Rate
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------

  ASSETS:
  Loans, Net of
   Unearned Interest     $ 1,886,367    27,180    5.84%  $ 1,944,873    28,813    5.88%  $ 1,964,984     29,695    6.00%

  Investment Securities
   Taxable Investment
    Securities                71,325       500    2.81%       72,537       498    2.74%       81,777        682    3.32%

   Tax-Exempt
    Investment
    Securities                97,316       753    3.10%      107,361       921    3.43%      107,307        985    3.67%
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------

  Total Investment
   Securities                168,641     1,253    2.98%      179,898     1,419    3.15%      189,084      1,667    3.52%


  Funds Sold                 303,280       172    0.23%      112,790        77    0.27%        3,294          1    0.11%
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------


  Total Earning Assets     2,358,288  $ 28,605    4.92%               $ 30,309    5.38%                $ 31,363    5.77%
                                      --------  -------    2,237,561  --------  -------    2,157,362  ---------  -------

  Cash and Due From
   Banks                      54,873                          69,687                          76,622
  Allowance for Loan
   Losses                   (44,584)                        (46,468)                        (42,774)

  Other Assets               329,842                         314,470                         306,759
  ---------------------  -----------                     -----------                     -----------


  Total Assets           $ 2,698,419                     $ 2,575,250                     $ 2,497,969
  ---------------------  -----------                     -----------                     -----------

  LIABILITIES:
  Interest Bearing
   Deposits
  NOW Accounts             $ 867,004     $ 384    0.18%    $ 740,550     $ 308    0.17%    $ 678,292        257    0.15%
  Money Market Accounts      374,161       689    0.75%      361,104       625    0.69%      301,230        281    0.37%
  Savings Accounts           126,352        15    0.05%      122,158        16    0.05%      122,934         15    0.05%

  Time Deposits              438,112     1,850    1.71%      439,654     2,015    1.82%      430,944      2,073    1.91%
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------
  Total Interest
   Bearing Deposits        1,805,629     2,938    0.66%    1,663,466     2,964    0.71%    1,533,400      2,626    0.68%

  Short-Term Borrowings       30,673        17    0.22%       47,114        22    0.18%       97,305        113    0.45%
  Subordinated Notes
   Payable                    62,887       651    4.14%       62,887       936    5.83%       62,887        936    5.83%

  Other Long-Term
   Borrowings                 49,981       526    4.27%       50,026       542    4.30%       51,906        560    4.28%
  ---------------------  -----------  --------  -------  -----------  --------  -------  -----------  ---------  -------

  Total Interest
   Bearing Liabilities     1,949,170   $ 4,132    0.86%                $ 4,464    0.97%                 $ 4,235    0.96%
                                      --------  -------    1,823,493  --------  -------    1,745,498  ---------  -------

  Noninterest Bearing
   Deposits                  443,131                         426,542                         416,770

  Other Liabilities           37,563                          56,659                          60,674
  ---------------------  -----------                     -----------                     -----------

  Total Liabilities        2,429,864                       2,306,694                       2,222,942


  SHAREOWNERS' EQUITY:     $ 268,555                       $ 268,556                       $ 275,027
  ---------------------  -----------                     -----------                     -----------


  Total Liabilities and
   Shareowners' Equity   $ 2,698,419                     $ 2,575,250                     $ 2,497,969
  ---------------------  -----------                     -----------                     -----------


  Interest Rate Spread                $ 24,473    4.06%               $ 25,845    4.41%                $ 27,128    4.81%
  ---------------------  -----------  --------  -------               --------  -------               ---------  -------

  Interest Income and
   Rate Earned(1)                     $ 28,605    4.92%               $ 30,309    5.38%                $ 31,363    5.77%

  Interest Expense and
   Rate Paid(2)                          4,132    0.71%                  4,464    0.79%                   4,235    0.78%
  ---------------------  -----------  --------  -------               --------  -------               ---------  -------


  Net Interest Margin                 $ 24,473    4.21%               $ 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
  ----------------------------  -----------  --------  -------  -----------  --------  -------


                                     Second Quarter 2009              First Quarter 2009
                                ------------------------------  ------------------------------

                                  Average              Average    Average              Average
  (Dollars in thousands)          Balance    Interest   Rate      Balance    Interest   Rate
  ----------------------------  -----------  --------  -------  -----------  --------  -------

  ASSETS:
  Loans, Net of Unearned
   Interest                     $ 1,974,197    29,954    6.09%  $ 1,964,086    29,724    6.14%

  Investment Securities
   Taxable Investment
    Securities                       89,574       742    3.31%       90,927       776    3.43%

   Tax-Exempt Investment
    Securities                      106,869     1,067    4.00%      101,108     1,133    4.48%
  ----------------------------  -----------  --------  -------  -----------  --------  -------

  Total Investment Securities       196,443     1,809    3.68%      192,035     1,909    3.98%


  Funds Sold                          4,641         1    0.10%       10,116         3    0.13%
  ----------------------------  -----------  --------  -------  -----------  --------  -------


  Total Earning Assets            2,175,281  $ 31,764    5.86%               $ 31,636    5.92%
                                             --------  -------    2,166,237  --------  -------

  Cash and Due From Banks            81,368                          76,826
  Allowance for Loan Losses        (41,978)                        (38,007)

  Other Assets                      291,681                         281,869
  ----------------------------  -----------                     -----------


  Total Assets                  $ 2,506,352                     $ 2,486,925
  ----------------------------  -----------                     -----------

  LIABILITIES:
  Interest Bearing Deposits
  NOW Accounts                    $ 709,039     $ 249    0.14%    $ 719,265     $ 225    0.13%
  Money Market Accounts             298,007       192    0.26%      321,562       190    0.24%
  Savings Accounts                  123,034        15    0.05%      118,142        14    0.05%

  Time Deposits                     417,545     2,044    1.96%      392,006     2,066    2.14%
  ----------------------------  -----------  --------  -------  -----------  --------  -------
  Total Interest Bearing
   Deposits                       1,547,625     2,500    0.65%    1,550,975     2,495    0.65%

  Short-Term Borrowings              87,768        88    0.40%       85,318        68    0.32%
  Subordinated Notes Payable         62,887       931    5.86%       62,887       927    5.89%

  Other Long-Term Borrowings         52,775       566    4.30%       53,221       568    4.33%
  ----------------------------  -----------  --------  -------  -----------  --------  -------

  Total Interest Bearing
   Liabilities                    1,751,055   $ 4,085    0.94%                $ 4,058    0.94%
                                             --------  -------    1,752,401  --------  -------

  Noninterest Bearing Deposits      423,566                         406,380

  Other Liabilities                  54,617                          46,510
  ----------------------------  -----------                     -----------

  Total Liabilities               2,229,238                       2,205,291


  SHAREOWNERS' EQUITY:            $ 277,114                       $ 281,634
  ----------------------------  -----------                     -----------


  Total Liabilities and
   Shareowners' Equity          $ 2,506,352                     $ 2,486,925
  ----------------------------  -----------                     -----------


  Interest Rate Spread                       $ 27,679    4.92%               $ 27,578    4.98%
  ----------------------------  -----------  --------  -------               --------  -------

  Interest Income and Rate
   Earned(1)                                 $ 31,764    5.86%               $ 31,636    5.92%

  Interest Expense and Rate
   Paid(2)                                      4,085    0.75%                  4,058    0.76%
  ----------------------------  -----------  --------  -------               --------  -------


  Net Interest Margin                        $ 27,679    5.11%               $ 27,578    5.16%
  ----------------------------  -----------  --------  -------               --------  -------

  (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