FINANCIAL HIGHLIGHTS - 2006

·  
2006 earnings of $33.3 million, or $1.79 per diluted share, an increase of 9.9% and 7.8%, respectively, over 2005. Fourth quarter earnings totaled $8.8 million, or $.48 per diluted share compared to $7.5 million, or $.40 per diluted share for the same period in 2005.
 
·  
Strong growth in operating revenuse led by an 8.3% improvement in net interest income and a 13.0% increase in noninterest income.
 
·  
Improvement in net interest margin as reflected by a 26 basis point increase over 2005 - net interest margin of 5.35% significantly exceeds peer group.
 
·   Continued Strong credit quality as reflected by a nonperforming asset ratio of .44% and an annualized net charge-off ratio of .11%
 
·  
Well-capitalized with a risk based capital ratio of 14.95%.


   
Three Months Ended
  
Twelve Months Ended
  
       
Dec 31,
  
 Sept 30,
  
Dec 31,
  
 Dec 31,
  
Dec 31,
  
(Dollars in thousands, except per share data)
      
2006
  
 2006
  
2005
  
 2006
  
2005
  
EARNINGS
                            
Net Income
        
$
8,850
    
8,680
    
7,459
    
33,265
    
30,281
  
Diluted Earnings Per Common Share
          
0.48
    
0.47
    
0.40
    
1.79
    
1.66
  
PERFORMANCE
                                      
Return on Average Equity
          
10.84
%
  
10.83
    
9.67
    
10.48
    
10.56
  
Return on Average Assets
          
1.37
    
1.35
    
1.14
    
1.29
    
1.22
  
Net Interest Margin
          
5.35
    
5.45
    
5.16
    
5.35
    
5.09
  
Noninterest Income as % of Operating Revenue
          
32.71
    
31.88
    
30.68
    
31.81
    
30.91
  
Efficiency Ratio
          
63.99
    
64.35
    
65.22
    
65.42
    
64.79
  
CAPITAL ADEQUACY
                                      
Tier 1 Capital Ratio
          
14.00
%
  
13.76
    
12.61
    
14.00
    
12.61
  
Total Capital Ratio
          
14.95
    
14.72
    
13.56
    
14.95
    
13.56
  
Leverage Ratio
          
11.30
    
11.26
    
10.27
    
11.30
    
10.27
  
Equity to Assets
          
12.15
    
12.47
    
11.66
    
12.15
    
11.66
  





   
Three Months Ended
  
Twelve Months Ended
  
       
Dec 31,
  
 Sept 30,
  
Dec 31,
      
 Dec 31,
  
Dec 31,
  
(Dollars in thousands, except per share data)
      
2006
  
 2006
  
2005
      
 2006
  
2005
  
ASSET QUALITY
                                
Allowance as % of Non-Performing Loans
          
214.09
%
  
269.35
    
331.11
          
214.09
    
331.11
  
Allowance as a % of Loans
          
0.86
    
0.86
    
0.84
          
0.86
    
0.84
  
Net Charge-Offs as % of Average Loans
          
0.11
    
0.13
    
0.26
          
0.11
    
0.13
  
Nonperforming Assets as % of Loans and ORE
          
0.44
    
0.34
    
0.27
          
0.44
    
0.27
  
STOCK PERFORMANCE
                                            
High
        
$
35.98
    
33.25
    
39.33
          
37.97
    
39.33
  
Low
          
30.14
    
29.87
    
33.21
          
29.51
    
28.02
  
Close
        
$
35.30
    
31.10
    
34.29
          
35.30
    
34.29
  
Average Daily Trading Volume
          
19,826
    
19,185
    
15,266
          
20,449
    
19,493
  


Capital City Bank Group, Inc. (NASDAQ: CCBG) reported earnings for the year ended 2006 totaling $33.3 million, or $1.79 per diluted share. This compares to $30.3 million or $1.66 per diluted share in 2005. Results in 2006 reflect the acquisition of First National Bank of Alachua in May 2005. Earnings increased 9.9% and 7.8% on a dollar and per diluted share basis, respectively. For the fourth quarter of 2006, earnings totaled $8.8 million, or $.48 per diluted share. This compares to $7.5 million or $.40 per diluted share for the fourth quarter of 2005. For the year 2006, the Return on Average Assets was 1.29% and the Return on Average Equity was 10.48%, compared to 1.22% and 10.56%, respectively, for 2005.

The increase in earnings for the year was attributable to an increase in operating revenues (net interest income plus noninterest income) of $15.5 million and a reduction in the loan loss provision of $548,000, partially offset by an increase in noninterest expense of $11.8 million and income taxes of $1.3 million. The increase in operating revenues is reflective of an 8.3% increase in net interest income and a 13.0% increase in noninterest income.

Earnings for the fourth quarter 2006 increased due to an increase in operating revenue of $1.7 million and a decrease in the loan loss provision of $873,000, partially offset by an increase in noninterest expense of $642,000 and income taxes of $538,000. The increase in operating revenues is due to a 1.0% increase in net interest income and a 10.9% increase in noninterest income. A 19 basis point improvement in the net interest margin drove the improvement in net interest income while higher deposit fees, retail brokerage fees, and card processing fees were the primary reasons for the improvement in noninterest income. The lower loan loss provision is reflective of a lower level of required reserves. The higher expense level is primarily attributable to higher compensation, primarily higher associate salaries reflective of merit and market salary increases and new associates added during 2006.





William G. Smith, Jr., Chairman, President and CEO, stated, “Capital City enjoyed another record year, and we enter 2007 with a good deal of confidence. Our diverse markets offer many growth opportunities and we have four new offices scheduled to come on-line during 2007. Our strategy is well-defined and our associates continue to focus on achieving our goal of earning $50 million in 2010.”

Tax equivalent net interest income in 2006 increased $9.7 million, or 8.8% over 2005 due to improvement in the net interest margin. The full year net interest margin of 5.35% increased 26 basis points from the comparable period in 2005, attributable to a 96 basis point improvement in earning asset yields partially offset by the higher cost of funds of 70 basis points. The higher rate environment resulted in a favorable re-pricing spread on existing earning assets and higher yield on new loan production, which was partially offset by a decrease in earning asset volume.

Provision for loan losses of $2.0 million for the year was $548,000 lower than 2005 due to a lower level of required reserves, Net charge-offs totaled $2.1 million, or .11%, of average loans for 2006 compared to $2.5 million, or .13%, for 2005. At year-end, the allowance for loan losses was .86% of outstanding loans and provided coverage of 214% of nonperforming loans.

Noninterest income increased $6.4 million, or 13.0%, over 2005 primarily due to higher deposit fees, retail brokerage fees, and card processing fees. The increase in deposit fees is due to the growth in deposit accounts reflective of strong deposit growth that has resulted from the Company’s “Absolutely Free" checking products. The improvement in retail brokerage fees is due to an increase in the sales force, which has increased production. Card processing fees were driven higher by increased transaction volume for merchant services and increased bank card activity.

Noninterest expense grew by $11.8 million, or 10.7%, over 2005. Higher expense for compensation, occupancy, intangible amortization, and interchange fees were the primary reasons for the increase. The increase in compensation, occupancy, and intangible amortization are primarily reflective of the mid-2005 acquisition of First National Bank of Alachua. The increase in interchange fees was driven by higher transaction volume for merchant services and increase bank card activity.

Average earning assets for the fourth quarter decreased $40.9 million, or 1.80%, over the comparable quarter in 2005. The decrease in earning assets is primarily reflective of a decrease in average loans reflective of higher principal pay-downs and loan pay-offs, and lower new loan production.

Nonperforming assets of $8.7 million increased from the comparable period of 2005 by $3.2 million. The increase in the level of nonperforming assets is due to an increase in non-accrual loans. Despite the increase in non-accrual loans, there was a net reduction in the level of required reserves for these assets due to the resolution of several loans and strong collateral valuations for new loans added during the year. Nonperforming assets represented .44% of loans and other real estate at the end of the fourth quarter compared to .27% for the same period in 2005.

Average total deposits increased $4.4 million, or .22%, from the fourth quarter of 2005 driven by an $80.7 million increase in transaction accounts, partially offset by a $21.4 million decrease in savings deposits and $54.9 million decrease in certificates of deposit. The increase in transaction accounts is reflective of growth in balances related to “Absolutely Free” deposit products, and the Company’s Cash Power money market account products.




The Company had approximately $26.1 million in average net overnight funds sold for the fourth quarter of 2006 as compared to $5.7 million in average net overnight funds purchased in the fourth quarter of 2005. The improvement is due primarily to the aforementioned deposit growth and an overall reduction in the loan portfolio.


About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest financial services companies headquartered in Florida and has approximately $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 69 banking offices, four mortgage lending offices, and 80 ATMs in Florida, Georgia and Alabama. In 2006, Mergent, Inc., a leading provider of information on publicly traded companies, named the Company as a Dividend Achiever. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. Of all publicly traded U.S. companies that pay dividends, less than three percent made this list. Capital City Bank Group, Inc. was also named to this list in 2005. 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 our future results to differ materially. The following factors, among others, could cause our actual results to differ: our ability to integrate acquisitions; the strength of the U.S. economy and the local economies where we conduct 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; changes in consumer spending and savings habits; our growth and profitability; changes in accounting; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2005, and our 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 we assume no obligation to update forward-looking statements or the reasons why actual results could differ.
 
 
 

CAPITAL CITY BANK GROUP, INC.
                                       
CONSOLIDATED STATEMENT OF INCOME
                                       
Unaudited
                                       
                                        
   
2006
                      2005   
Twelve Months Ended
       
   
Fourth
      Third    Second    First    Fourth    
December 31,
       
(Dollars in thousands, except per share data)
  
Quarter
       Quarter    Quarter    Quarter    Quarter   
2006
   2005   
                                        
INTEREST INCOME
                                       
Interest and Fees on Loans
        
$
40,096
  
$
40,260
   
38,967
   
37,343
   
36,990
   
156,666
   
133,268
 
Investment Securities
          
1,928
   
1,914
   
1,816
   
1,530
   
1,437
   
7,188
   
5,794
 
Funds Sold
          
576
   
338
   
586
   
539
   
353
   
2,039
   
991
 
Total Interest Income
          
42,600
   
42,512
   
41,369
   
39,412
   
38,780
   
165,893
   
140,053
 
                                                   
INTEREST EXPENSE
                                                  
Deposits
          
10,830
   
9,985
   
8,716
   
7,722
   
6,727
   
37,253
   
21,134
 
Short-Term Borrowings
          
722
   
753
   
776
   
824
   
979
   
3,075
   
2,854
 
Subordinated Notes Payable
          
936
   
936
   
926
   
926
   
942
   
3,725
   
2,981
 
Other Long-Term Borrowings
          
515
   
615
   
764
   
810
   
822
   
2,704
   
3,094
 
Total Interest Expense
          
13,003
   
12,289
   
11,182
   
10,282
   
9,470
   
46,757
   
30,063
 
Net Interest Income
          
29,597
   
30,223
   
30,187
   
29,130
   
29,310
   
119,136
   
109,990
 
Provision for Loan Losses
          
460
   
711
   
121
   
667
   
1,333
   
1,959
   
2,507
 
Net Interest Income after Provision for Loan Losses
          
29,137
   
29,512
   
30,066
   
28,463
   
27,977
   
117,177
   
107,483
 
                                                   
NONINTEREST INCOME
                                                  
Service Charges on Deposit Accounts
          
6,394
   
6,450
   
6,096
   
5,680
   
5,722
   
24,620
   
20,740
 
Data Processing
          
709
   
674
   
703
   
637
   
693
   
2,723
   
2,610
 
Asset Management Fees
          
1,180
   
1,215
   
1,155
   
1,050
   
1,244
   
4,600
   
4,419
 
Retail Brokerage Fees
          
586
   
520
   
502
   
483
   
404
   
2,091
   
1,321
 
Gain on Sale of Investment Securities
          
-
   
-
   
(4
)
  
-
   
-
   
(4
)
  
9
 
Mortgage Banking Revenues
          
787
   
824
   
903
   
721
   
956
   
3,235
   
4,072
 
Merchant Fees
          
1,694
   
1,766
   
1,793
   
1,725
   
1,522
   
6,978
   
6,174
 
Interchange Fees
          
845
   
797
   
788
   
675
   
631
   
3,105
   
2,239
 
ATM/Debit Card Fees
          
658
   
635
   
627
   
599
   
582
   
2,519
   
2,206
 
Other
          
1,532
   
1,263
   
1,440
   
1,475
   
1,220
   
5,710
   
5,408
 
Total Noninterest Income
          
14,385
   
14,144
   
14,003
   
13,045
   
12,974
   
55,577
   
49,198
 
                                                   
NONINTEREST EXPENSE
                                                  
Salaries and Associate Benefits
          
14,943
   
15,278
   
15,204
   
15,430
   
13,894
   
60,855
   
53,687
 
Occupancy, Net
          
2,460
   
2,354
   
2,358
   
2,223
   
2,202
   
9,395
   
8,293
 
Furniture and Equipment
          
2,259
   
2,491
   
2,661
   
2,500
   
2,381
   
9,911
   
8,970
 
Intangible Amortization
          
1,484
   
1,536
   
1,536
   
1,530
   
1,518
   
6,085
   
5,440
 
Other
          
8,838
   
8,763
   
9,311
   
8,409
   
9,347
   
35,322
   
33,424
 
Total Noninterest Expense
          
29,984
   
30,422
   
31,070
   
30,092
   
29,342
   
121,568
   
109,814
 
                                                   
OPERATING PROFIT
          
13,538
   
13,234
   
12,999
   
11,416
   
11,609
   
51,186
   
46,867
 
Provision for Income Taxes
          
4,688
   
4,554
   
4,684
   
3,995
   
4,150
   
17,921
   
16,586
 
NET INCOME
        
$
8,850
  
$
8,680
   
8,315
   
7,421
   
7,459
   
33,265
   
30,281
 
                                                   
PER SHARE DATA
                                                  
Basic Earnings
        
$
0.48
  
$
0.47
   
0.44
   
0.40
   
0.40
   
1.79
   
1.66
 
Diluted Earnings
          
0.48
   
0.47
   
0.44
   
0.40
   
0.40
   
1.79
   
1.66
 
Cash Dividends
          
0.175
   
0.163
   
0.163
   
0.163
   
0.163
   
0.663
   
0.619
 
AVERAGE SHARES
                                                  
Basic
          
18,525
   
18,530
   
18,633
   
18,652
   
18,624
   
18,585
   
18,264
 
Diluted
          
18,569
   
18,565
   
18,653
   
18,665
   
18,654
   
18,610
   
18,281
 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                             
Unaudited
                              
                               
   
2006
                      2005   
       
Fourth
 
 Third
   Second    First    Fourth    
(Dollars in thousands, except per share data)
      
Quarter
  
 Quarter
   Quarter    Quarter    Quarter   
                               
ASSETS
                              
Cash and Due From Banks
        
$
98,769
    
100,781
   
103,078
   
104,486
   
105,195
 
Funds Sold and Interest Bearing Deposits
          
78,795
   
35,631
   
126,210
   
110,604
   
61,164
 
Total Cash and Cash Equivalents
          
177,564
   
136,412
   
229,288
   
215,090
   
166,359
 
                                       
Investment Securities, Available-for-Sale
          
191,894
   
190,617
   
191,232
   
180,760
   
171,019
 
Loans, Net of Unearned Interest
                                      
Commercial, Financial, & Agricultural
          
229,327
   
218,442
   
220,345
   
223,310
   
232,294
 
Real Estate - Construction
          
179,072
   
183,238
   
180,049
   
172,317
   
160,914
 
Real Estate - Commercial
          
643,885
   
647,302
   
672,881
   
679,948
   
704,881
 
Real Estate - Residential
          
524,301
   
529,087
   
536,346
   
543,373
   
531,653
 
Real Estate - Home Equity
          
173,597
   
174,577
   
171,835
   
163,189
   
165,336
 
Consumer
          
234,596
   
237,069
   
238,381
   
240,921
   
242,481
 
Credit Card
          
-
   
-
   
-
   
-
   
-
 
Other Loans
          
11,837
   
14,521
   
29,784
   
26,951
   
26,346
 
Overdrafts
          
3,106
   
5,223
   
3,239
   
4,647
   
3,589
 
Total Loans, Net of Unearned Interest
          
1,999,721
   
2,009,459
   
2,052,860
   
2,054,656
   
2,067,494
 
Allowance for Loan Losses
          
(17,217
)
  
(17,311
)
  
(17,264
)
  
(17,279
)
  
(17,410
)
Loans, Net
          
1,982,504
   
1,992,148
   
2,035,596
   
2,037,377
   
2,050,084
 
                                       
Premises and Equipment, Net
          
86,538
   
84,915
   
81,407
   
76,693
   
73,818
 
Intangible Assets
          
104,402
   
105,886
   
107,422
   
108,958
   
110,451
 
Other Assets
          
55,008
   
48,895
   
52,541
   
55,841
   
53,731
 
Total Other Assets
          
245,948
   
239,696
   
241,370
   
241,492
   
238,000
 
                                       
Total Assets
        
$
2,597,910
    
2,558,873
   
2,697,486
   
2,674,719
   
2,625,462
 
                                       
LIABILITIES
                                      
Deposits:
                                      
Noninterest Bearing Deposits
        
$
490,014
    
506,331
   
572,549
   
562,140
   
559,492
 
NOW Accounts
          
599,433
   
533,549
   
555,350
   
518,024
   
520,878
 
Money Market Accounts
          
384,568
   
387,906
   
377,958
   
369,416
   
331,094
 
Regular Savings Accounts
          
125,500
   
129,884
   
135,330
   
137,780
   
144,296
 
Certificates of Deposit
          
482,139
   
491,569
   
512,672
   
521,796
   
523,586
 
Total Deposits
          
2,081,654
   
2,049,239
   
2,153,859
   
2,109,156
   
2,079,346
 
                                       
Short-Term Borrowings
          
65,023
   
54,171
   
77,571
   
89,105
   
82,973
 
Subordinated Notes Payable
          
62,887
   
62,887
   
62,887
   
62,887
   
62,887
 
Other Long-Term Borrowings
          
43,083
   
43,701
   
63,022
   
68,764
   
69,630
 
Other Liabilities
          
29,493
   
29,833
   
28,403
   
33,744
   
24,850
 
 
                                      
Total Liabilities
          
2,282,140
   
2,239,831
   
2,385,742
   
2,363,656
   
2,319,686
 
                                       
SHAREOWNERS' EQUITY
                                      
Common Stock
          
185
   
185
   
185
   
187
   
186
 
Additional Paid-In Capital
          
80,654
   
80,938
   
80,272
   
84,291
   
83,304
 
Retained Earnings
          
243,242
   
238,870
   
233,201
   
227,920
   
223,532
 
Accumulated Other Comprehensive Loss, Net of Tax
          
(8,311
)
  
(951
)
  
(1,914
)
  
(1,335
)
  
(1,246
)
                                       
Total Shareowners' Equity
          
315,770
   
319,042
   
311,744
   
311,063
   
305,776
 
                                       
Total Liabilities and Shareowners' Equity
        
$
2,597,910
    
2,558,873
   
2,697,486
   
2,674,719
   
2,625,462
 
                                       
OTHER BALANCE SHEET DATA
                                      
Earning Assets
        
$
2,270,410
    
2,235,707
   
2,370,302
   
2,346,020
   
2,299,677
 
Intangible Assets
                                      
Goodwill
          
84,811
   
84,811
   
84,811
   
84,811
   
84,828
 
Deposit Base
          
18,221
   
19,632
   
21,042
   
22,453
   
23,864
 
Other
          
1,370
   
1,443
   
1,569
   
1,694
   
1,759
 
Interest Bearing Liabilities
          
1,762,633
   
1,703,667
   
1,784,790
   
1,767,772
   
1,735,344
 
                                       
Book Value Per Diluted Share
        
$
17.01
    
17.18
   
16.81
   
16.65
   
16.39
 
Tangible Book Value Per Diluted Share
          
11.39
   
11.48
   
11.01
   
10.82
   
10.47
 
                       
18,530
              
Actual Basic Shares Outstanding
          
18,518
   
18,532
   
18,530
   
18,667
   
18,632
 
Actual Diluted Shares Outstanding
          
18,562
   
18,567
   
18,550
   
18,680
   
18,662
 
 

CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
                               
   
2006
                      2005   
       
Fourth
  
 Third
   Second    First    Fourth    
(Dollars in thousands)
      
Quarter
  
 Quarter
   Quarter    Quarter    Quarter   
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
        
$
17,311
    
17,264
    
17,279
    
17,410
    
17,424
  
Provision for Loan Losses
          
460
    
711
    
121
    
667
    
1,333
  
Net Charge-Offs
          
554
    
664
    
136
    
798
    
1,347
  
                                       
Balance at End of Period
        
$
17,217
    
17,311
    
17,264
    
17,279
    
17,410
  
As a % of Loans
          
0.86
%
  
0.86
%
  
0.84
    
0.84
    
0.84
  
As a % of Nonperforming Loans
          
214.09
    
269.35
    
325.80
    
330.70
    
331.11
  
As a % of Nonperforming Assets
          
197.19
    
253.79
    
299.72
    
298.27
    
313.69
  
                                       
CHARGE-OFFS
                                      
Commercial, Financial and Agricultural
        
$
81
    
294
    
144
    
322
    
745
  
Real Estate - Construction
          
-
   
-
   
-
   
-
   
-
 
Real Estate - Commercial
          
54
   
-
   
-
   
291
    
245
  
Real Estate - Residential
          
154
    
81
    
23
    
22
    
145
  
Consumer
          
787
    
690
    
448
    
591
    
575
  
                                       
Total Charge-Offs
        
$
1,076
    
1,065
    
615
    
1,226
    
1,710
  
                                       
RECOVERIES
                                      
Commercial, Financial and Agricultural
        
$
77
    
43
    
63
    
62
    
30
  
Real Estate - Construction
          
-
   
-
   
-
   
-
   
-
 
Real Estate - Commercial
          
9
    
4
    
2
    
3
    
1
  
Real Estate - Residential
          
1
    
2
    
2
    
7
    
1
  
Consumer
          
435
    
352
    
412
    
356
    
331
  
                                       
Total Recoveries
        
$
522
    
401
    
479
    
428
    
363
  
                                       
NET CHARGE-OFFS
        
$
554
    
664
    
136
    
798
    
1,347
  
                                       
Net Charge-Offs as a % of Average Loans (1)
          
0.11
%
  
0.13
%
  
0.03
    
0.16
    
0.26
  
                                       
RISK ELEMENT ASSETS
                                      
Nonaccruing Loans
        
$
8,042
    
6,427
    
5,299
    
5,225
    
5,258
  
Restructured
          
-
   
-
   
-
   
-
   
-
 
Total Nonperforming Loans
          
8,042
    
6,427
    
5,299
    
5,225
    
5,258
  
Other Real Estate
          
689
    
394
    
461
    
568
    
292
  
Total Nonperforming Assets
        
$
8,731
    
6,821
    
5,760
    
5,793
    
5,550
  
                                       
Past Due Loans 90 Days or More
        
$
135
    
300
    
205
    
367
    
309
  
                                       
Nonperforming Loans as a % of Loans
          
0.40
%
  
0.32
%
  
0.26
    
0.25
    
0.25
  
Nonperforming Assets as a % of
                                      
Loans and Other Real Estate
          
0.44
    
0.34
    
0.28
    
0.28
    
0.27
  
Nonperforming Assets as a % of Capital (2)
          
2.62
    
2.03
    
1.75
    
1.76
    
1.72
  
                                       
                                       
(1) Annualized
                                      
                                       
(2) Capital includes allowance for loan losses.
                                      
 
 

 
                                                                                                   
AVERAGE BALANCE AND INTEREST RATES (1)
                                                                                                   
Unaudited
                                                                                                   
                                                                                                    
   
Fourth Quarter 2006
           
 Third Quarter 2006
           
 Second Quarter 2006
           
 First Quarter 2006
           
 Fourth Quarter 2005
           
 Twelve Months Ended December 31, 2006
           
 Twelve Months Ended December 31, 2005
           
   
Average
       
Average
 
 Average
       
Average
  Average        
Average
  Average        
Average
  Average        
Average
  Average        
Average
  Average        
Average
 
(Dollars in thousands)
  
Balance
  
 Interest
  
Rate
  
 Balance
   Interest   
Rate
   Balance    Interest   
Rate
   Balance    Interest   
Rate
   Balance    Interest   
Rate
   Balance    Interest   
Rate
   Balance    Interest   
Rate
  
                                                                                                    
ASSETS:
                                                                                                   
Loans, Net of Unearned Interest
  
$
2,003,719
  
$
40,296
    
7.98
%
  
2,025,112
    
40,433
    
7.92
    
2,040,656
    
39,059
    
7.68
  
$
2,048,642
  
$
37,439
    
7.41
%
  
2,062,775
    
37,112
    
7.14
  
$
2,029,397
  
$
157,227
    
7.75
%
  
1,968,289
    
133,665
    
6.79
  
                                                                                                                                 
Investment Securities
                                                                                                                                
Taxable Investment Securities
    
108,041
    
1,263
    
4.66
    
109,097
    
1,264
    
4.60
    
114,521
    
1,233
    
4.30
    
118,055
    
1,091
    
3.70
    
128,478
    
1,025
    
3.18
    
112,392
    
4,851
    
4.31
    
142,406
    
4,250
    
2.98
  
Tax-Exempt Investment Securities
    
82,568
    
1,020
    
4.94
    
81,409
    
999
    
4.90
    
74,862
    
895
    
4.78
    
59,368
    
674
    
4.54
    
55,481
    
632
    
4.55
    
74,634
    
3,588
    
4.81
    
49,252
    
2,369
    
4.81
  
                                                                                                                                 
Total Investment Securities
    
190,609
    
2,283
    
4.78
    
190,506
    
2,263
    
4.73
    
189,383
    
2,128
    
4.49
    
177,423
    
1,765
    
3.98
    
183,959
    
1,657
    
3.60
    
187,026
    
8,439
    
4.51
    
191,658
    
6,619
    
3.45
  
                                                                                                                                 
Funds Sold
    
43,738
    
576
    
5.15
    
25,540
    
338
    
5.19
    
48,778
    
586
    
4.75
    
49,602
    
539
    
4.36
    
32,276
    
353
    
4.28
    
41,854
    
2,039
    
4.81
    
27,725
    
991
    
3.53
  
                                                                                                                                 
Total Earning Assets
    
2,238,066
  
$
43,155
    
7.65
%
  
2,241,158
    
43,034
    
7.62
    
2,278,817
    
41,773
    
7.35
    
2,275,667
  
$
39,743
    
7.08
%
  
2,279,010
    
39,122
    
6.81
    
2,258,277
  
$
167,705
    
7.42
%
  
2,187,672
    
141,275
    
6.46
  
                                                                                                                                 
Cash and Due From Banks
    
94,449
                
96,969
                
99,830
                
109,907
                
114,650
                
100,237
                
105,787
              
Allowance For Loan Losses
    
(17,503
)
              
(17,420
)
              
(17,443
)
              
(17,582
)
              
(17,568
)
              
(17,486
)
              
(17,081
)
            
Other Assets
    
242,345
                
239,448
                
241,886
                
236,466
                
231,505
                
240,050
                
210,355
              
                                                                                                                                 
Total Assets
  
$
2,557,357
                
2,560,155
                
2,603,090
              
$
2,604,458
                
2,607,597
              
$
2,581,078
                
2,486,733
              
                                                                                                                                 
LIABILITIES:
                                                                                                                                
Interest Bearing Deposits
                                                                                                                                
NOW Accounts
  
$
542,751
  
$
2,522
    
1.84
%
  
511,299
    
2,026
    
1.57
    
510,088
    
1,664
    
1.31
  
$
510,270
    
1,446
    
1.15
%
  
483,780
    
1,088
    
0.89
  
$
518,671
  
$
7,658
    
1.48
%
  
430,601
    
2,868
    
0.67
  
Money Market Accounts
    
391,346
    
3,488
    
3.54
    
381,628
    
3,259
    
3.39
    
363,754
    
2,642
    
2.91
    
343,652
    
2,298
    
2.71
    
307,971
    
1,820
    
2.34
    
370,257
    
11,687
    
3.16
    
275,830
    
4,337
    
1.57
  
Savings Accounts
    
128,027
    
76
    
0.24
    
132,421
    
73
    
0.22
    
136,168
    
67
    
0.20
    
139,664
    
62
    
0.18
    
149,431
    
67
    
0.18
    
134,033
    
278
    
0.21
    
152,890
    
292
    
0.19
  
Time Deposits
    
484,807
    
4,744
    
3.88
    
504,121
    
4,627
    
3.64
    
518,679
    
4,343
    
3.36
    
521,966
    
3,916
    
3.04
    
539,695
    
3,752
    
2.76
    
507,283
    
17,630
    
3.48
    
550,821
    
13,637
    
2.48
  
Total Interest Bearing Deposits
    
1,546,931
    
10,830
    
2.78
    
1,529,469
    
9,985
    
2.59
    
1,528,689
    
8,716
    
2.29
    
1,515,552
    
7,722
    
2.07
    
1,480,877
    
6,727
    
1.80
    
1,530,244
    
37,253
    
2.43
    
1,410,142
    
21,134
    
1.50
  
                                                                                                                                 
Short-Term Borrowings
    
65,385
    
722
    
4.36
    
73,078
    
753
    
4.07
    
82,846
    
776
    
3.75
    
93,867
    
824
    
3.55
    
113,600
    
979
    
3.42
    
78,700
    
3,075
    
3.89
    
97,863
    
2,854
    
2.92
  
Subordinated Notes Payable
    
62,887
    
936
    
5.91
    
62,887
    
936
    
5.91
    
62,887
    
926
    
5.91
    
62,887
    
926
    
5.97
    
62,887
    
942
    
5.94
    
62,887
    
3,724
    
5.92
    
50,717
    
2,981
    
5.88
  
Other Long-Term Borrowings
    
43,453
    
515
    
4.71
    
52,367
    
615
    
4.66
    
63,597
    
764
    
4.82
    
69,966
    
810
    
4.70
    
71,224
    
822
    
4.58
    
57,260
    
2,704
    
4.72
    
70,216
    
3,094
    
4.41
  
                                                                                                                                 
Total Interest Bearing Liabilities
    
1,718,656
  
$
13,003
    
3.00
%
  
1,717,801
    
12,289
    
2.84
    
1,738,019
    
11,182
    
2.58
    
1,742,272
  
$
10,282
    
2.39
%
  
1,728,588
    
9,470
    
2.17
    
1,729,091
  
$
46,756
    
2.70
%
  
1,628,938
    
30,063
    
1.85
  
                                                                                                                                 
Noninterest Bearing Deposits
    
481,522
                
494,054
                
519,066
                
524,696
                
543,140
                
504,687
                
544,746
              
Other Liabilities
    
33,276
                
30,259
                
30,211
                
26,029
                
29,661
                
29,964
                
26,337
              
                                                                                                                                 
Total Liabilities
    
2,233,454
                
2,242,114
                
2,287,296
                
2,292,997
                
2,301,389
                
2,263,742
                
2,200,021
              
                                                                                                                                 
SHAREOWNERS' EQUITY:
  
$
323,903
                
318,041
                
315,794
              
$
311,461
                
306,208
              
$
317,336
                
286,712
              
                                                                                                                                 
Total Liabilities and Shareowners' Equity
  
$
2,557,357
                
2,560,155
                
2,603,090
              
$
2,604,458
                
2,607,597
              
$
2,581,078
                
2,486,733
              
                                                                                                                                 
Interest Rate Spread
        
$
30,152
    
4.65
%
        
30,745
    
4.78
          
30,591
    
4.77
        
$
29,461
    
4.69
%
        
29,652
    
4.64
        
$
120,949
    
4.72
%
        
111,212
    
4.61
  
                                                                                                                                 
Interest Income and Rate Earned (2)
        
$
43,155
    
7.65
          
43,034
    
7.62
          
41,773
    
7.35
        
$
39,743
    
7.08
          
39,122
    
6.81
        
$
167,705
    
7.42
          
141,275
    
6.46
  
Interest Expense and Rate Paid (2)
          
13,003
    
2.30
          
12,289
    
2.17
          
11,182
    
1.97
          
10,282
    
1.83
          
9,470
    
1.65
          
46,756
    
2.07
          
30,063
    
1.37
  
                                                                                                                                 
Net Interest Margin
        
$
30,152
    
5.35
%
        
30,745
    
5.45
          
30,591
    
5.38
        
$
29,461
    
5.25
%
        
29,652
    
5.16
        
$
120,949
    
5.35
%
        
111,212
    
5.09