Capital City Bank Group, Inc. Reports Second Quarter 2009 Results

TALLAHASSEE, Fla., July 21, 2009 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income for the second quarter of 2009 totaling $0.8 million ($0.04 per diluted share) compared to net income of $0.6 million ($0.04 per diluted share) for the first quarter of 2009 and $4.8 million ($0.28 per diluted share) for the second quarter of 2008. Earnings for the first six months of 2009 totaled $1.4 million ($.08 per diluted share) compared to $12.1 million ($0.70 per diluted share) for 2008.

Earnings for the three and six month periods reflect loan loss provisions of $8.4 million ($0.30 per diluted share) and $16.8 million ($0.61 per diluted share), respectively, and a one-time special FDIC assessment of approximately $1.2 million ($0.04 per diluted share) recorded in the second quarter.

"Given the very tough ongoing operating environment in Florida, we are pleased to be reporting net income for each of the first two quarters," said William G. Smith, Jr., Chairman, President and Chief Executive Officer of Capital City Bank Group. "Quarter over quarter, excluding the special FDIC insurance assessment, our operating revenues were up and expenses were down, reflecting the underlying strength of our overall business strategy.

"At June 30, nonperforming assets (which include nonaccrual loans, restructured loans, and other real estate owned) were up $16.8 million, or 13% over the first quarter. However, we were encouraged to see past due loans and gross additions to the nonaccrual loan portfolio decline for two consecutive quarters. This, coupled with continued improvement in problem loan resolutions resulted in a net increase of $0.8 million in the nonaccrual portfolio. Restructured loans and other real estate owned, which increased $7.8 million and $8.2 million, respectively, accounted for essentially all of the increase in nonperforming assets, which is a favorable and natural progression as problem loans migrate through the resolution phase. Consequently, we believe we are in an improved position to ultimately collect on these loans or dispose of the properties.

"While we view the slowdown in gross additions to nonaccruing loans and the migration among nonperforming categories as positive changes in the status of our nonperforming assets, it may still be too early to call a peak in nonperforming loans. However, we believe these recent developments suggest a trend towards more stability at this point in the credit cycle.

"Also, on a positive note, loan and deposit growth have been steady during the second quarter and the first half of the year, reflecting the fact that our associates are doing a good job recognizing quality opportunities in this disrupted banking marketplace. Lenders are successfully converting clients who are interested in moving or expanding their banking relationships. On the deposit side, core deposits are higher primarily in noninterest demand accounts and CDs, as our free checking product continues to grow in both balances and number of accounts, and competitive rate pressure affecting our CD production has eased in many markets. Our net interest margin was 5.11% for the second quarter," said Smith.

The Return on Average Assets was .12% and the Return on Average Equity was 1.12% for the second quarter of 2009. These metrics were .11% and .94% for the first quarter of 2009 and .73% and 6.43% for the second quarter of 2008, respectively.

For the first half of 2009, the Return on Average Assets was .12% and the Return on Average Equity was 1.03% compared to .92% and 8.14%, respectively, for the first half of 2008.

Discussion of Financial Condition

Average earning assets were $2.175 billion for the second quarter of 2009, an increase of $9.0 million, or 0.4% from the first quarter of 2009, and an increase of $24.4 million, or 1.1% from the fourth quarter of 2008. The increase from the first quarter is primarily attributable to a $4.4 million and $10.1 million increase in the investment and loan portfolios, respectively. An increase in deposits funded the earning asset growth. Compared to the fourth quarter of 2008, the increase in earning assets primarily reflects growth in the loan portfolio partially offset by a reduction in short-term investments. We have now experienced loan growth for four consecutive quarters as production has increased and loan payoffs and paydowns have slowed. We believe this trend continued through the recent quarter due to the efforts of our bankers to reach clients who are interested in moving or expanding their banking relationships. Loan growth was primarily attributable to commercial real estate mortgages and home equity loans.

At the end of the second quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $143.6 million, an increase of $16.8 million, or 13% from the first quarter and $35.8 million, or 33% from the fourth quarter of 2008. The increase from the prior linked quarter reflects an increase of $7.8 million in restructured loans and an increase of $8.2 million in other real estate owned properties. Nonaccrual loans totaled $111.0 million at the end of the second quarter, a net increase of $0.8 million from the prior linked quarter. The level of gross additions to non-accruing loans has declined by $15.2 million and $6.8 million, respectively, for the last two quarters and the volume of problem loan resolutions has improved including the resolutions of several larger credits during the second quarter. Nonperforming assets represented 7.19% of loans and other real estate at the end of the second quarter compared to 6.39% at the prior quarter-end and 5.48% at year-end 2008.

Average total deposits were $1.971 billion for the second quarter, an increase of $13.8 million, or 0.7%, from the first quarter and an increase of $25.3 million, or 1.3%, from the fourth quarter of 2008. On a linked quarter basis, the increase in deposits reflects higher core deposits primarily in noninterest demand accounts and certificates of deposit, which have been partially offset by declining public fund balances. Our absolutely free checking product continues to be successful as both balances and the number of accounts continue to post growth quarter over quarter. Certificates of deposit balances have grown as rate pressures from higher paying institutions have eased in most of our markets. Compared to year-end 2008, the increase in average deposits reflects higher core deposits and public funds. Core deposits have increased as discussed above and, while an influx of public funds was experienced late in the first quarter of 2009, there has been an easing in these balances, which began in late April. Additionally, money market balances have experienced a steady decline during the first half of 2009. 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 these deposits.

We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) purchased position of $49.8 million during the second quarter of 2009 compared to an average net overnight funds purchased position of $33.9 million in the first quarter and an average overnight funds purchased position of $3.2 million at year-end 2008. The unfavorable variance in funds purchased position during both periods is attributable to an increase in the investment and loan portfolios, higher non-earning assets and lower equity. Deposit growth partially offset this decline.

Equity capital was $272.7 million as of June 30, 2009, compared to $275.5 million as of March 31, 2009 and $278.8 million as of December 31, 2008. Our leverage ratio was 11.07%, 11.25%, and 11.51%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.20% at June 30, 2009 exceeds the 8.0% minimum requirement and the 10% threshold to be designated as "well-capitalized" under the risk-based regulatory guidelines. During the first quarter 2009, we repurchased approximately 146,000 shares of our common stock at a weighted average stock price of $10.65; no shares were repurchased during the second quarter. Our strong capital position has allowed us to continue paying a quarterly dividend to our shareowners despite lower earnings performance. We will continue to monitor our capital and liquidity position to ensure that continuation of our dividend does not place unnecessary strain on our capital levels.

Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2009 was $27.7 million compared to $27.6 million for the first quarter of 2009 and $28.1 million for the second quarter of 2008. For the first half of 2009, tax equivalent net interest income totaled $55.3 million compared to $55.2 million in 2008.

The increase in the net interest income on a linked quarter basis was partially due to one additional calendar day in the second quarter and was favorably impacted by the recovery of interest on several larger loans, which were resolved during the quarter. Higher foregone interest on nonaccrual loans and a decline in loan fees partially offset the improvement in net interest income. The decline in loan fees resulted from a one-time write-off totaling $175,000. Additionally, the loan portfolio continued to reprice lower without the offsetting benefit in funding costs.

The decline from the second quarter of 2008 reflects the downward repricing of earning assets, higher foregone interest on nonaccrual loans, and lower loan fees. Partially offsetting the decline was the lower costs of funds. We have responded aggressively to the federal funds rate reductions, which began in September 2007. This, coupled with a favorable shift in mix of deposits, has resulted in a significantly lower cost of funds year over year.

The net interest margin of 5.11% declined five basis points over the linked quarter, attributable to lower earning assets yields. As compared to the second quarter of 2008, the margin improved 21 basis points reflecting the favorable shift in the mix of deposits and aggressive deposit repricing.

The slight increase in net interest income for the first half of 2009 as compared to the same period in 2008 resulted from lower costs of funds discussed above; mostly offset by lower earning assets yields, higher foregone interest and lower loan fees.

The provision for loan losses was $8.4 million for both the second and first quarters of 2009 compared to $5.4 million for the second quarter of 2008. The loan loss provision for both quarters and the first half of the year reflects a higher level of required general reserves driven by an increased level of net loan charge-offs and higher loss ratios associated with real estate loans, primarily loans to builders/investors secured by residential houses and vacant land. For the same comparable periods, our level of specific reserves on impaired loans has also increased due to both a higher level of nonaccrual loans and real estate collateral devaluation, though not as significant in the current quarter due to the resolution of some larger problem loans and the slowing of loans migrating to nonaccrual status. Net charge-offs in the second quarter totaled $6.8 million, or 1.39%, of average loans compared to $5.2 million, or 1.08% in the first quarter. At quarter-end, the allowance for loan losses was 2.12% of outstanding loans (net of overdrafts) and provided coverage of 34% of nonperforming loans.

Noninterest income for the second quarter increased $0.6 million, or 4.2%, from the first quarter reflective of higher deposit fees ($464,000) and mortgage banking fees ($317,000), partially offset by lower merchant fees ($295,000). The increase in deposit fees primarily reflects an adjustment to our deposit fees midway through the first quarter. Mortgage banking fees increased due to higher secondary market loan production, which was driven by the historically low interest rate environment. The lower level of merchant fees is an expected seasonal variance for our sole remaining merchant who has historically had lower sales during the summer months. Compared to the second quarter of 2008, noninterest income declined by $1.1 million, or 6.9%, primarily due to lower merchant fees related to the sale of a major portion of the bank's merchant services portfolio in July, 2008. For the first six months of 2009, as compared to the comparable period of 2008, noninterest income decreased $4.8 million, or 14.4%, due to the aforementioned merchant services portfolio sale as well as a $2.4 million pre-tax gain from the redemption of Visa shares realized in the first quarter of 2008.

Noninterest expense increased $0.7 million, or 2.1%, from the first quarter due to the one-time FDIC special assessment ($1.2 million) and a higher level ($550,000) of expense associated with other real estate owned properties, including write-downs due to valuation declines. Lower compensation expense of $1.2 million, primarily reflective of the adjustments to our stock and cash incentive plans partially offset these unfavorable variances. Compared to the second quarter of 2008, noninterest expense increased $2.2 million, or 7.1%, primarily reflective of the higher FDIC insurance premiums of $2.0 million, which includes the special assessment, higher expense ($1.2 million) for other real estate properties owned, and an increase in our pension expense ($1.0 million). The adjustments to our stock and cash incentive plans as well as a lower level of interchange fees partially offset these unfavorable variances. For the first six months of 2009, as compared to the comparable period for 2008, noninterest expense increased $4.6 million, or 7.7%, due to the same aforementioned factors, including the impact of the reversal of a portion ($1.1 million) of our Visa litigation accrual in the first quarter of 2008.

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 $2.5 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 68 banking offices and 79 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. 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, 2008, 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,    Jun 30,  Mar 31,  Jun 30,  Jun 30,  Jun 30,
  except per share data)     2009     2009     2008     2009     2008
 ----------------------------------------------------------------------
 EARNINGS
 Net Income                $   774  $   650  $ 4,810  $ 1,424  $12,090
 Diluted Earnings Per
  Common Share             $  0.04  $  0.04  $  0.28  $  0.08  $  0.70
 ----------------------------------------------------------------------
 PERFORMANCE
 Return on Average Equity     1.12%    0.94%    6.43%    1.03%    8.14%
 Return on Average Assets     0.12%    0.11%    0.73%    0.12%    0.92%
 Net Interest Margin          5.11%    5.16%    4.90%    5.13%    4.81%
 Noninterest Income as % of
  Operating Revenue          35.07%   34.22%   36.39%   34.65%   38.33%
 Efficiency Ratio            75.44%   75.07%   66.89%   75.26%   65.00%
 ----------------------------------------------------------------------
 CAPITAL ADEQUACY
 Tier 1 Capital Ratio        12.85%   13.09%   13.15%   12.85%   13.15%
 Total Capital Ratio         14.20%   14.40%   14.35%   14.20%   14.35%
 Tangible Capital Ratio       7.47%    7.63%    7.87%    7.47%    7.87%
 Leverage Ratio              11.07%   11.25%   10.61%   11.07%   10.61%
 Equity to Assets            10.80%   11.02%   11.19%   10.80%   11.19%
 ----------------------------------------------------------------------
 ASSET QUALITY
 Allowance as % of
  Non-Performing Loans       33.71%   34.82%   51.80%   33.71%   51.80%
 Allowance as a % of Loans    2.12%    2.04%    1.18%    2.12%    1.18%
 Net Charge-Offs as % of
  Average Loans               1.39%    1.08%    0.67%    1.23%    0.54%
 Nonperforming Assets as %
  of Loans and ORE            7.19%    6.39%    2.49%    7.19%    2.49%
 ----------------------------------------------------------------------
 STOCK PERFORMANCE
 High                      $ 17.35  $ 27.31  $ 30.19  $ 27.31  $ 30.19
 Low                       $ 11.01  $  9.50  $ 21.76  $  9.50  $ 21.76
 Close                     $ 16.85  $ 11.46  $ 21.76  $ 16.85  $ 21.76
 Average Daily Trading
  Volume                    40,130   75,117   36,196   57,342   34,064
 ----------------------------------------------------------------------


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

 ---------------------------------------------------------------------
                             2009     2009     2008     2008     2008
 (Dollars in thousands,     Second   First    Fourth   Third    Second
  except per share data)   Quarter  Quarter  Quarter  Quarter  Quarter
 ---------------------------------------------------------------------
 INTEREST INCOME
 Interest and Fees on
  Loans                    $29,742  $29,537  $31,570  $32,435  $33,422
 Investment Securities       1,437    1,513    1,627    1,744    1,810
 Funds Sold                      1        3       32      475    1,028
 ---------------------------------------------------------------------
  Total Interest Income     31,180   31,053   33,229   34,654   36,260
 ---------------------------------------------------------------------
 INTEREST EXPENSE
 Deposits                    2,500    2,495    3,848    5,815    7,162
 Short-Term Borrowings          88       68      110      230      296
 Subordinated Notes Payable    931      927      937      936      931
 Other Long-Term Borrowings    566      568      587      488      396
 ---------------------------------------------------------------------
  Total Interest Expense     4,085    4,058    5,482    7,469    8,785
 ---------------------------------------------------------------------
 Net Interest Income        27,095   26,995   27,747   27,185   27,475
 Provision for Loan Losses   8,426    8,410   12,497   10,425    5,432
 ---------------------------------------------------------------------
 Net Interest Income after
  Provision for Loan Losses 18,669   18,585   15,250   16,760   22,043
 ---------------------------------------------------------------------
 NONINTEREST INCOME
 Service Charges on Deposit
  Accounts                   7,162    6,698    6,807    7,110    7,060
 Data Processing Fees          896      870      937      873      812
 Asset Management Fees         930      970      935    1,025    1,125
 Retail Brokerage Fees         625      493      630      565      735
 Gain on Sale of Investment
  Securities                     6       --        3       27       30
 Mortgage Banking Revenues     902      584      292      331      506
 Merchant Fees                 663      958      650      616    2,074
 Interchange Fees            1,118    1,056    1,007    1,073    1,076
 Gain on Sale of Portion of
  Merchant Services
  Portfolio                     --       --       --    6,250       --
 ATM/Debit Card Fees           884      863      744      742      758
 Other                       1,448    1,550    1,306    1,600    1,542
 ---------------------------------------------------------------------
  Total Noninterest Income  14,634   14,042   13,311   20,212   15,718
 ---------------------------------------------------------------------
 NONINTEREST EXPENSE
 Salaries and Associate
  Benefits                  16,049   17,237   15,492   15,417   15,318
 Occupancy, Net              2,540    2,345    2,503    2,373    2,491
 Furniture and Equipment     2,304    2,338    2,368    2,369    2,583
 Intangible Amortization     1,010    1,011    1,308    1,459    1,459
 Other                      11,027    9,326    9,331    8,298    8,905
 ---------------------------------------------------------------------
  Total Noninterest
   Expense                  32,930   32,257   31,002   29,916   30,756
 ---------------------------------------------------------------------
 OPERATING PROFIT              373      370   (2,441)   7,056    7,005
 Provision for Income Taxes   (401)    (280)    (738)   2,218    2,195
 ---------------------------------------------------------------------
 NET INCOME                $   774  $   650  $(1,703) $ 4,838  $ 4,810
 ---------------------------------------------------------------------
 PER SHARE DATA
 Basic Earnings            $  0.04  $  0.04  $ (0.10) $ 0.29   $  0.28
 Diluted Earnings          $  0.04  $  0.04  $ (0.10) $ 0.29   $  0.28
 Cash Dividends              0.190    0.190    0.190   0.185     0.185
 AVERAGE SHARES
 Basic                      17,010   17,109   17,126   17,124   17,146
 Diluted                    17,010   17,131   17,135   17,128   17,147
 ---------------------------------------------------------------------

                                                      Six Months Ended
                                                          June 30
 (Dollars in thousands, except per share data)          2009    2008
 ---------------------------------------------------------------------
 INTEREST INCOME
 Interest and Fees on Loans                           $59,279  $68,677
 Investment Securities                                  2,950    3,703
 Funds Sold                                                 4    2,603
 ---------------------------------------------------------------------
  Total Interest Income                                62,233   74,983
 ---------------------------------------------------------------------
 INTEREST EXPENSE
 Deposits                                               4,995   17,643
 Short-Term Borrowings                                    156      817
 Subordinated Notes Payable                             1,858    1,862
 Other Long-Term Borrowings                             1,134      727
 ---------------------------------------------------------------------
  Total Interest Expense                                8,143   21,049
 ---------------------------------------------------------------------
 Net Interest Income                                   54,090   53,934
 Provision for Loan Losses                             16,836    9,574
 ---------------------------------------------------------------------
 Net Interest Income after Provision for Loan Loss     37,254   44,360
 ---------------------------------------------------------------------
 NONINTEREST INCOME
 Service Charges on Deposit Accounts                   13,860   13,825
 Data Processing Fees                                   1,766    1,625
 Asset Management Fees                                  1,900    2,275
 Retail Brokerage Fees                                  1,118    1,204
 Gain on Sale of Investment Securities                      6       95
 Mortgage Banking Revenues                              1,486    1,000
 Merchant Fees                                          1,621    4,282
 Interchange Fees                                       2,174    2,085
 Gain on Sale of Portion of Merchant Services Port         --       --
 ATM/Debit Card Fees                                    1,747    1,502
 Other                                                  2,998    5,624
 ---------------------------------------------------------------------
  Total Noninterest Income                             28,676   33,517
 ---------------------------------------------------------------------
 NONINTEREST EXPENSE
 Salaries and Associate Benefits                       33,286   30,922
 Occupancy, Net                                         4,885    4,853
 Furniture and Equipment                                4,642    5,165
 Intangible Amortization                                2,021    2,918
 Other                                                 20,353   16,696
 ---------------------------------------------------------------------
  Total Noninterest Expense                            65,187   60,554
 ---------------------------------------------------------------------
 OPERATING PROFIT                                         743   17,323
 Provision for Income Taxes                              (681)   5,233
 ---------------------------------------------------------------------
 NET INCOME                                           $ 1,424  $12,090
 ---------------------------------------------------------------------
 PER SHARE DATA
 Basic Earnings                                       $  0.08  $  0.70
 Diluted Earnings                                     $  0.08  $  0.70
 Cash Dividends                                         0.380    0.370
 AVERAGE SHARES
 Basic                                                 17,059   17,158
 Diluted                                               17,060   17,159
 ---------------------------------------------------------------------


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

 ---------------------------------------------------------------------
 (Dollars in
  thousands,       2009       2008       2008       2008       2008
  except per      Second     First      Fourth     Third      Second
  share data)     Quarter    Quarter    Quarter    Quarter    Quarter
 ---------------------------------------------------------------------
ASSETS
 Cash and Due
  From Banks    $   92,394 $   81,317 $   88,143 $   71,062 $  108,672
 Funds Sold and
  Interest
  Bearing
  Deposits           2,016      4,241      6,806     27,419    192,786
 ---------------------------------------------------------------------
  Total Cash and
   Cash
   Equivalents      94,410     85,558     94,949     98,481    301,458

 Investment
  Securities,
  Available-for-
  Sale             194,002    195,767    191,569    193,978    185,971

 Loans, Net of
  Unearned
  Interest
  Commercial,
   Financial, &
   Agricultural    201,589    202,038    206,230    189,676    196,075
  Real Estate -
   Construction    153,507    154,102    141,973    148,160    150,907
  Real Estate -
   Commercial      686,420    673,066    656,959    639,443    622,282
  Real Estate -
   Residential     447,652    464,358    468,399    473,962    481,397
  Real Estate -
   Home Equity     235,473    223,505    218,500    212,118    205,536
  Consumer         241,467    243,280    246,973    252,743    244,071
  Other Loans        7,933      8,068     15,838      7,378      9,436
  Overdrafts         3,022      3,195      2,925      3,749      7,111
 ---------------------------------------------------------------------
  Total Loans,
   Net of
   Unearned
   Interest      1,977,063  1,971,612  1,957,797  1,927,229  1,916,815
  Allowance for
   Loan Losses     (41,782)   (40,172)   (37,004)   (30,544)   (22,518)
 ---------------------------------------------------------------------
  Loans, Net     1,935,281  1,931,440  1,920,793  1,896,685  1,894,297

 Premises and
  Equipment, Net   109,050    107,259    106,433    104,806    102,559
 Intangible
  Assets            90,862     91,872     92,883     94,192     95,651
 Other Assets      102,234     87,483     82,072     66,308     69,479
 ---------------------------------------------------------------------
 Total Other
  Assets           302,146    286,614    281,388    265,306    267,689
 ---------------------------------------------------------------------
 Total Assets   $2,525,839 $2,499,379 $2,488,699 $2,454,450 $2,649,415
 ---------------------------------------------------------------------
 LIABILITIES
 Deposits:
  Noninterest
   Bearing
   Deposits     $  424,125 $  413,608 $  419,696 $  382,878 $  416,992
  NOW Accounts     733,526    726,069    758,976    698,509    814,380
  Money Market
   Accounts        300,683    312,541    324,646    368,453    387,011
  Regular
   Savings
   Accounts        123,257    121,245    115,261    116,858    118,307
  Certificates
   of Deposit      424,339    416,326    373,595    396,086    426,236
 ---------------------------------------------------------------------
  Total
   Deposits      2,005,930  1,989,789  1,992,174  1,962,784  2,162,926

 Short-Term
  Borrowings        73,989     68,193     62,044     47,069     51,783
 Subordinated
  Notes Payable     62,887     62,887     62,887     62,887     62,887
 Other Long-Term
  Borrowings        52,354     53,448     51,470     53,074     36,857
 Other
  Liabilities       57,973     49,518     41,294     29,841     38,382
 ---------------------------------------------------------------------
 Total
  Liabilities    2,253,133  2,223,835  2,209,869  2,155,655  2,352,835
 ---------------------------------------------------------------------
 SHAREOWNERS'
  EQUITY
 Common Stock          170        170        171        171        171
 Additional
  Paid-In
  Capital           35,698     35,841     36,783     36,681     36,382
 Retained
  Earnings         257,828    260,287    262,890    267,853    266,171
 Accumulated
  Other
  Comprehensive
  Loss, Net of
  Tax              (20,990)   (20,754)   (21,014)    (5,910)    (6,144)
 ---------------------------------------------------------------------
 Total
  Shareowners'
  Equity           272,706    275,544    278,830    298,795    296,580
 ---------------------------------------------------------------------
 Total
  Liabilities
  and
  Shareowners'
  Equity        $2,525,839 $2,499,379 $2,488,699 $2,454,450 $2,649,415
 ---------------------------------------------------------------------
 OTHER BALANCE
  SHEET DATA
 Earning Assets $2,173,081 $2,171,620 $2,156,172 $2,148,626 $2,295,572
 Intangible
  Assets
  Goodwill          84,811     84,811     84,811     84,811     84,811
  Deposit Base       5,159      6,121      7,084      8,345      9,756
  Other                892        940        988      1,036      1,084
 Interest
  Bearing
  Liabilities    1,771,035  1,760,709  1,748,879  1,742,936  1,897,461
 ---------------------------------------------------------------------
 Book Value Per
  Diluted Share $    16.03 $    16.18 $    16.27 $    17.45 $    17.33
 Tangible Book
  Value Per
  Diluted Share      10.70      10.80      10.85      11.94      11.74
 ---------------------------------------------------------------------
 Actual Basic
  Shares
  Outstanding       17,010     17,010     17,127     17,125     17,111
 Actual Diluted
  Shares
  Outstanding       17,010     17,031     17,136     17,129     17,112
 ---------------------------------------------------------------------


 CAPITAL CITY BANK GROUP, INC.
 ALLOWANCE FOR LOAN LOSSES
 AND NONPERFORMING ASSETS
 Unaudited
 ----------------------------------------------------------------------
                        2009      2009      2008      2008      2008
 (Dollars in           Second     First    Fourth     Third    Second
  thousands)           Quarter   Quarter   Quarter   Quarter   Quarter
 ----------------------------------------------------------------------

 ALLOWANCE FOR LOAN
  LOSSES
 Balance at Beginning
  of Period           $ 40,172  $ 37,004  $ 30,544  $ 22,518  $ 20,277
 Provision for Loan
  Losses                 8,426     8,410    12,497    10,425     5,432
 Net Charge-Offs         6,816     5,242     6,037     2,399     3,191
 ----------------------------------------------------------------------

 Balance at End of
  Period              $ 41,782  $ 40,172  $ 37,004  $ 30,544  $ 22,518
 ----------------------------------------------------------------------
 As a % of Loans          2.12%     2.04%     1.89%     1.59%     1.18%
 As a % of
  Nonperforming Loans    33.71%    34.82%    37.52%    48.55%    51.80%
 As a % of
  Nonperforming Assets   29.09%    31.69%    34.31%    45.10%    47.12%
 ----------------------------------------------------------------------

 CHARGE-OFFS
 Commercial, Financial
  and Agricultural    $    388  $    857  $    331  $    275  $    407
 Real Estate -
  Construction           3,356       320     1,774        77       158
 Real Estate -
  Commercial               123     1,002       293       (35)    1,115
 Real Estate -
  Residential            2,379     1,975     2,264       797       817
 Consumer                1,145     2,117     1,993     1,797     1,232
 ----------------------------------------------------------------------

 Total Charge-Offs    $  7,391  $  6,271  $  6,655  $  2,911  $  3,729
 ----------------------------------------------------------------------

 RECOVERIES
 Commercial, Financial
  and Agricultural    $     84  $     74  $     68  $     68  $     55
 Real Estate -
  Construction              --       385        --         4        --
 Real Estate -
  Commercial                 1        --        --         1        13
 Real Estate -
  Residential               51        58       128         6        24
 Consumer                  439       512       422       433       446
 ----------------------------------------------------------------------

 Total Recoveries     $    575  $  1,029  $    618  $    512  $    538
 ----------------------------------------------------------------------

 NET CHARGE-OFFS      $  6,816  $  5,242  $  6,037  $  2,399  $  3,191
 ----------------------------------------------------------------------

 Net Charge-Offs as a
  % of Average
  Loans(1)                1.39%     1.08%     1.24%     0.50%     0.67%
 ----------------------------------------------------------------------

 RISK ELEMENT ASSETS
 Nonaccruing Loans    $111,039  $110,200  $ 96,876  $ 61,509  $ 41,738
 Restructured Loans     12,916     5,157     1,744     1,403     1,733
 ----------------------------------------------------------------------
 Total Nonperforming
  Loans                123,955   115,357    98,620    62,912    43,471
 Other Real Estate      19,671    11,425     9,222     4,813     4,322
 ----------------------------------------------------------------------
 Total Nonperforming
  Assets              $143,626  $126,782  $107,842  $ 67,725  $ 47,793
 ----------------------------------------------------------------------

 Past Due Loans 90
  Days or More        $     --  $     --  $     88  $     50  $    896
 ----------------------------------------------------------------------

 Nonperforming Loans
  as a % of Loans         6.27%     5.85%     5.04%     3.26%     2.27%
 Nonperforming Assets
  as a % of Loans and
  Other Real Estate       7.19%     6.39%     5.48%     3.51%     2.49%
 Nonperforming Assets
  as a % of Capital(2)   45.67%    40.16%    34.15%    20.56%    14.98%
 ----------------------------------------------------------------------

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


 AVERAGE BALANCE AND INTEREST RATES(1)
 Unaudited
 ----------------------------------------------------------------------
                     Second Quarter 2009         First Quarter 2009
                 --------------------------- --------------------------
 (Dollars in      Average            Average  Average           Average
  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%   2,166,237  $31,636  5.92%
                             --------------              --------------

 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%   1,752,401  $ 4,058  0.94%
                             --------------              --------------

 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%
 ------------------------------------------              --------------

                                               Fourth Quarter 2008
                                           ----------------------------
                                             Average            Average
 (Dollars in thousands)                      Balance  Interest   Rate
 ---------------------------------------------------- --------  -------

 ASSETS:
 Loans, Net of Unearned Interest           $1,940,083   31,772   6.52%

 Investment Securities
  Taxable Investment Securities                90,296      813   3.59%
  Tax-Exempt Investment Securities            103,817    1,252   4.82%
 ---------------------------------------------------------------------

 Total Investment Securities                  194,113    2,065   4.25%

 Funds Sold                                    16,645       32   0.74%
 ---------------------------------------------------------------------

 Total Earning Assets                       2,150,841  $33,869   6.27%
                                                       ---------------

 Cash and Due From Banks                       76,027
 Allowance for Loan Losses                    (30,347)
 Other Assets                                 266,797
 ----------------------------------------------------

 Total Assets                              $2,463,318
 ----------------------------------------------------

 LIABILITIES:
 Interest Bearing Deposits

 NOW Accounts                              $  684,246  $   636   0.37%
 Money Market Accounts                        360,940      716   0.79%
 Savings Accounts                             117,311       28   0.09%
 Time Deposits                                379,266    2,468   2.59%
 ---------------------------------------------------------------------
 Total Interest Bearing Deposits            1,541,763    3,848   0.99%

 Short-Term Borrowings                         69,079      110   0.62%
 Subordinated Notes Payable                    62,887      937   5.83%
 Other Long-Term Borrowings                    53,261      587   4.39%
 ---------------------------------------------------------------------

 Total Interest Bearing Liabilities         1,726,990  $ 5,482   1.26%
                                                       ---------------

 Noninterest Bearing Deposits                 404,103
 Other Liabilities                             29,998
 ----------------------------------------------------

 Total Liabilities                          2,161,091

 SHAREOWNERS' EQUITY:                      $  302,227
 ----------------------------------------------------

 Total Liabilities and Shareowners' Equity $2,463,318
 ----------------------------------------------------

 Interest Rate Spread                                  $28,387   5.01%
                                                       ---------------

 Interest Income and Rate Earned(1)                    $33,869   6.27%
 Interest Expense and Rate Paid(2)                       5,482   1.01%
                                                       ---------------

 Net Interest Margin                                   $28,387   5.26%
                                                       ---------------

 (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
 ----------------------------------------------------------------------

                     Third Quarter 2008          Second Quarter 2008
                 --------------------------- --------------------------
 (Dollars in      Average            Average  Average           Average
  thousands)      Balance   Interest  Rate    Balance  Interest   Rate
 -------------------------  -------- ------- --------- -------- -------

 ASSETS:
 Loans, Net of
  Unearned
  Interest       $1,915,008   32,622  6.78%  $1,908,802   33,610  7.08%

 Investment
  Securities
  Taxable
   Investment
   Securities        93,723      940  3.99%     93,814    1,028   4.38%
  Tax-Exempt
   Investment
   Securities        98,966    1,234  4.99%     94,371    1,200   5.09%
 ----------------------------------------------------------------------

 Total Investment
  Securities        192,689    2,174  4.50%    188,185    2,228   4.73%

 Funds Sold          99,973      475  1.86%    206,984    1,028   1.96%
 ----------------------------------------------------------------------

 Total Earning
  Assets          2,207,670  $35,271  6.36%   2,303,971  $36,866  6.43%
                             --------------              --------------

 Cash and Due
  From Banks         77,309                      82,182
 Allowance for
  Loan Losses       (22,851)                    (20,558)
 Other Assets       266,510                     269,176
 --------------------------                  ----------

 Total Assets    $2,528,638                  $2,634,771
 --------------------------                  ----------

 LIABILITIES:
 Interest Bearing
  Deposits
 NOW Accounts    $  727,754  $ 1,443  0.79%  $  788,237  $ 1,935  0.99%
 Money Market
  Accounts          369,544    1,118  1.20%     376,996    1,210  1.29%
 Savings Accounts   117,970       30  0.10%     117,182       29  0.10%
 Time Deposits      410,101    3,224  3.13%     443,006    3,988  3.62%
 ----------------------------------------------------------------------
 Total Interest
  Bearing
  Deposits        1,625,369    5,815  1.42%   1,725,421    7,162  1.67%

 Short-Term
  Borrowings         51,738      230  1.76%      55,830      296  2.13%
 Subordinated
  Notes Payable      62,887      936  5.83%      62,887      931  5.86%
 Other Long-Term
  Borrowings         43,237      488  4.48%      34,612      396  4.60%
 ----------------------------------------------------------------------

 Total Interest
  Bearing
  Liabilities     1,783,231  $ 7,469  1.67%   1,878,750  $ 8,785  1.88%
                             --------------              --------------

 Noninterest
  Bearing
  Deposits          405,314                     415,125
 Other
  Liabilities        36,498                      40,006
 --------------------------                  ----------

 Total
  Liabilities     2,225,043                   2,333,881

 SHAREOWNERS'
  EQUITY:        $  303,595                  $  300,890
 --------------------------                  ----------

 Total
  Liabilities and
  Shareowners'
  Equity         $2,528,638                  $2,634,771
 --------------------------                  ----------

 Interest Rate
  Spread                     $27,802  4.69%              $28,081  4.55%
 ------------------------------------------              --------------

 Interest Income
  and Rate
  Earned(1)                  $35,271  6.36%              $36,866  6.43%
 Interest Expense
  and Rate
  Paid(2)                      7,469  1.35%                8,785  1.53%
 ------------------------------------------              --------------

 Net Interest
  Margin                     $27,802  5.01%              $28,081  4.90%
 ------------------------------------------              --------------

 (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
 ----------------------------------------------------------------------

                        June 2009 YTD              June 2008 YTD
                 --------------------------- --------------------------
 (Dollars in      Average            Average  Average           Average
  thousands)      Balance   Interest  Rate    Balance  Interest   Rate
 -------------------------- -------- ------- --------- -------- -------

 ASSETS:
 Loans, Net of
  Unearned
  Interest       $1,969,169   59,678  6.11%  $1,909,187   69,063  7.27%

 Investment
  Securities
  Taxable
   Investment
   Securities        90,248    1,518  3.37%      94,300    2,136  4.52%
  Tax-Exempt
   Investment
   Securities       104,005    2,200  4.23%      92,581    2,407  5.20%
 ----------------------------------------------------------------------

 Total Investment
  Securities        194,253    3,718  3.83%     186,881    4,543  4.86%

 Funds Sold           7,363        4  0.12%     206,649    2,602  2.49%
 ----------------------------------------------------------------------

 Total Earning
  Assets          2,170,785  $63,400  5.89%   2,302,717  $76,208  6.65%
                             --------------              --------------

 Cash and Due
  From Banks         79,109                      88,214
 Allowance for
  Loan Losses       (40,003)                    (19,392)
 Other Assets       286,801                     269,083
 --------------------------                  ----------

 Total Assets    $2,496,692                  $2,640,622
 --------------------------                  ----------

 LIABILITIES:
 Interest Bearing
  Deposits
 NOW Accounts    $  714,123      474  0.13%  $  781,064  $ 5,375  1.38%
 Money Market
  Accounts          309,719      382  0.25%     383,412    3,408  1.79%
 Savings Accounts   120,601       29  0.05%     115,172       63  0.11%
 Time Deposits      404,847    4,110  2.05%     455,143    8,797  3.89%
 ----------------------------------------------------------------------
 Total Interest
  Bearing
  Deposits        1,549,290    4,995  0.65%   1,734,791   17,643  2.05%

 Short-Term
  Borrowings         86,550      156  0.36%      61,963      817  2.64%
 Subordinated
  Notes Payable      62,887    1,858  5.88%      62,887    1,862  5.86%
 Other Long-Term
  Borrowings         52,997    1,134  4.31%      31,128      727  4.70%
 ----------------------------------------------------------------------

 Total Interest
  Bearing
  Liabilities     1,751,724  $ 8,143  0.94%   1,890,769  $21,049  2.24%
                             --------------              --------------

 Noninterest
  Bearing
  Deposits          415,020                     409,918
 Other
  Liabilities        50,586                      41,088
 --------------------------                  ----------

 Total
  Liabilities     2,217,330                   2,341,775

 SHAREOWNERS'
  EQUITY:        $  279,362                  $  298,847
 --------------------------                  ----------

 Total
  Liabilities and
  Shareowners'
  Equity         $2,496,692                  $2,640,622
 --------------------------                  ----------

 Interest Rate
  Spread                     $55,257  4.95%              $55,159  4.41%
 ------------------------------------------              --------------

 Interest Income
  and Rate
  Earned(1)                  $63,400  5.89%              $76,208  6.65%
 Interest Expense
  and Rate
  Paid(2)                     8,143   0.76%               21,049  1.84%
 ------------------------------------------              --------------

 Net Interest
  Margin                     $55,257  5.13%              $55,159  4.81%
 ------------------------------------------              --------------

 (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