Exhibit 99.1
 

Capital City Bank Group, Inc.
Reports Third Quarter Earnings of $7.2 Million,
Or $0.41 per Diluted Share

Tallahassee, FL. -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income for the third quarter of 2007 totaling $7.2 million ($0.41 per diluted share) compared to $8.7 million ($0.47 per diluted share) in the third quarter of 2006, a decline of 17.4% (12.8% on a per-share basis).  Earnings per share reflect the company’s repurchasing of 250,553 common shares during the third quarter of 2007 and the repurchase of a total of 980,816 common shares since September 30, 2006.

The decrease in net income compared to third quarter 2006 was attributable to a reduction in net interest income of $2.3 million and a $0.8 million increase in the loan loss provision, partially offset by an increase in noninterest income of $0.3 million, a decrease in noninterest expense of $0.5 million, and a reduction in income taxes of $0.8 million.  The decrease in net interest income reflects a 31 basis point increase in funding costs.  The higher loan loss provision is reflective of a higher level of required reserves for impaired loans.  The 2.0% increase in noninterest income is due to increases in retail brokerage fees and interchange fees.  The 1.7% decline in noninterest expense primarily reflects lower compensation and advertising expense.

The Return on Average Assets was 1.15% and the Return on Average Equity was 9.44%, compared to 1.35% and 10.83%, respectively, for the comparable period in 2006.

“Our net interest margin contracted during the third quarter as our funding costs rose.  We added about twice as much to our provision for loan losses during the third quarter than in the third quarter of 2006.  Consistent with trends across the community banking industry, these two factors were the primary drivers of our recent financial performance,” said William G. Smith, Jr. Chairman, President, & CEO of Capital City Bank Group.  “While these third-quarter results are clearly not where we want them to be, our net interest margin continues to compare very favorably with peer statistics, as do our level of reserve coverage of nonperforming loans (145%) and our ratio of charge-offs to total loans (.21%).  We continued to be a consistent repurchaser of our own stock, as we believe this is a prudent deployment of capital and a rational strategy for creating additional shareowner value given the nature of the current operating environment.”

“As we move through the balance of the year, we see the local economic forces remaining essentially unchanged.  While the geographic markets in which we are located are clearly not experiencing real estate related slowdowns of the depth and intensity found across southern Florida, we do anticipate our real estate loan portfolios to be impacted by the overall slowdown in the real estate markets.  We believe our overall approach to credit quality is sound and, given the current economic environment, our losses will remain at manageable levels.”

Tax equivalent net interest income in the third quarter decreased $2.2 million, or 7.2%, compared to the third quarter of 2006, due to an increase in funding costs driven by a higher average rate paid on certificates of deposit and an unfavorable shift in our deposit mix.  The net interest margin decreased 18 basis points from the third quarter of 2006 to a level of 5.27%.  The earning asset yield improved by 13 basis points, but was more than offset by a 31 basis point increase in the cost of funds.




The provision for loan losses of $1.6 million for the quarter was $841,000 higher than the third quarter of 2006 primarily attributable to a higher level of required reserves for impaired loans.  Net charge-offs totaled $1.0 million, or .21%, of average loans for the quarter compared to $664,000, or .13%, for the third quarter of 2006.  At quarter-end, the allowance for loan losses was .95% of outstanding loans (net of overdrafts) and provided coverage of 145% of nonperforming loans.

Noninterest income increased $287,000, or 2.0%, from the third quarter of 2006 primarily due to higher retail brokerage fees and interchange fees.  The increase in retail brokerage fees was due to higher activity by clients and improvement in the internal referral system for this service.  Interchange fees was driven higher primarily due to an increase in debit card activity.

Noninterest expense decreased by $503,000, or 1.7% compared to the third quarter of 2006.  Lower expense for compensation ($182,000) and advertising ($236,000) were the primary reasons for the decrease.  The decline in compensation reflects a lower level of incentive plan expense.  The decline in advertising is reflective of steps taken by management to improve expense management controls.

Average earning assets for the third quarter decreased $96.4 million, or 4.3%, from the third quarter of 2006 due primarily to a decline in funding sources and share repurchase activity which approximated $8.0 million for the third quarter of 2007.  Average loans decreased $117.9 million, or 5.8% during the same period reflective of a high level of principal pay-downs and loan pay-offs, including the pay-off of several larger commercial loans, and a general slowing of lending activity.

Nonperforming assets of $14.1 million increased from year-end by $5.3 million.  The increase in the level of nonperforming assets is due to a $4.3 million increase in non-accrual loans and a $1.0 million increase in other real estate owned.  Nonperforming assets represented .74% of loans and other real estate at the end of the third quarter compared to .44% at year-end 2006.

Average total deposits decreased $69.4 million, or 3.4%, from the third quarter of 2006 driven primarily by declines in demand deposit ($59.0 million), savings ($15.0 million), and time deposits ($32.3 million).  Increases in NOW ($14.5 million) and money market accounts ($22.3 million), respectively, partially offset the aforementioned declines in demand deposit, savings, and time deposits.   The change in deposit mix between the demand deposit/savings and NOW/money market categories primarily reflects the migration of clients toward higher rate nonmaturity deposit products.  The decline in time deposit balances reflects management’s unwillingness to retain higher cost funding in the face of a declining loan portfolio.

The Company had approximately $31.9 million in average net overnight funds sold for the third quarter of 2007 as compared to $9.8 million in average net overnight funds sold in the third quarter of 2006.  The increase is due to the aforementioned reduction in the loan portfolio.



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 $2.4 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 71 banking offices, three mortgage lending offices, and 79 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, 2006, 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.
 
 
 
EARNINGS HIGHLIGHTS
   
Three Months Ended
    
Nine Months Ended
   
Sept 30,
    
June 30,
    
Sept 30,
    
Sept 30,
    
Sept 30,
(Dollars in thousands, except per share data)
  
2007
    
2007
    
2006
    
2007
    
2006
EARNINGS
                          
 
Net Income
   $
7,171
      
7,891
      
8,680
      
22,019
      
24,416
Diluted Earnings Per Common Share
    
0.41
      
0.43
      
0.47
      
1.22
      
1.31
PERFORMANCE
                                      
Return on Average Equity
     9.44 %    
10.23
      
10.83
      
9.53
      
10.36
Return on Average Assets
    
1.15
      
1.26
      
1.35
      
1.18
      
1.26
Net Interest Margin
    
5.27
      
5.33
      
5.45
      
5.30
      
5.36
Noninterest Income as % of Operating Revenue
    
34.08
      
34.64
      
31.88
      
33.92
      
31.51
Efficiency Ratio
    
66.27
      
64.44
      
64.35
      
66.18
      
65.90
CAPITAL ADEQUACY
                                      
Tier 1 Capital Ratio
     13.74 %    
13.67
      
13.76
      
13.74
      
13.76
Total Capital Ratio
    
14.76
      
14.66
      
14.72
      
14.76
      
14.72
Leverage Ratio
    
11.49
      
11.14
      
11.26
      
11.49
      
11.26
Equity to Assets
    
12.26
      
11.91
      
12.47
      
12.26
      
12.47
ASSET QUALITY
                                      
Allowance as % of Non-Performing Loans
     145.49 %    
193.69
      
269.35
      
145.49
      
269.35
Allowance as a % of Loans
    
0.95
      
0.91
      
0.86
      
0.95
      
0.86
Net Charge-Offs as % of Average Loans
    
0.21
      
0.27
      
0.13
      
0.25
      
0.10
Nonperforming Assets as % of Loans and ORE
    
0.74
      
0.52
      
0.34
      
0.74
      
0.34
STOCK PERFORMANCE
                                      
High
   $
36.40
      
33.69
      
33.25
      
36.40
      
37.97
Low
    
27.69
      
29.12
      
29.87
      
27.69
      
29.51
Close
    
31.20
      
31.34
      
31.10
      
31.20
      
31.10
Average Daily Trading Volume
    
40,247
      
40,051
      
19,185
      
35,017
      
20,653

 
 
 


CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
Unaudited
  
   
2007
    
2006
    
Nine Months Ended
  
   
Third
    
Second
    
First
    
Fourth
    
Third
    
September 30
  
(Dollars in thousands, except per share data)
  
Quarter
    
Quarter
    
Quarter
    
Quarter
    
Quarter
    
2007
    
2006
  
                                           
INTEREST INCOME
                                          
Interest and Fees on Loans
   $
38,692
      
39,092
      
39,053
      
40,096
      
40,260
      
116,837
      
116,570
  
Investment Securities
    
1,968
      
1,943
      
1,940
      
1,928
      
1,914
      
5,851
      
5,260
  
Funds Sold
    
639
      
689
      
521
      
576
      
338
      
1,849
      
1,463
  
     Total Interest Income
    
41,299
      
41,724
      
41,514
      
42,600
      
42,512
      
124,537
      
123,293
  
                                                         
INTEREST EXPENSE
                                                        
Deposits
    
11,266
      
11,098
      
11,000
      
10,830
      
9,985
      
33,364
      
26,423
  
Short-Term Borrowings
    
734
      
737
      
761
      
722
      
753
      
2,232
      
2,353
  
Subordinated Notes Payable
    
936
      
932
      
926
      
936
      
936
      
2,794
      
2,789
  
Other Long-Term Borrowings
    
453
      
496
      
502
      
515
      
615
      
1,451
      
2,189
  
     Total Interest Expense
    
13,389
      
13,263
      
13,189
      
13,003
      
12,289
      
39,841
      
33,754
  
Net Interest Income
    
27,910
      
28,461
      
28,325
      
29,597
      
30,223
      
84,696
      
89,539
  
Provision for Loan Losses
    
1,552
      
1,675
      
1,237
      
460
      
711
      
4,464
      
1,499
  
Net Interest Income after Provision for Loan Losses
    
26,358
      
26,786
      
27,088
      
29,137
      
29,512
      
80,232
      
88,040
  
                                                         
NONINTEREST INCOME
                                                        
Service Charges on Deposit Accounts
    
6,387
      
6,442
      
6,045
      
6,394
      
6,450
      
18,874
      
18,226
  
Data Processing
    
775
      
790
      
715
      
709
      
674
      
2,280
      
2,014
  
Asset Management Fees
    
1,200
      
1,175
      
1,225
      
1,180
      
1,215
      
3,600
      
3,420
  
Retail Brokerage Fees
    
625
      
804
      
462
      
586
      
520
      
1,891
      
1,505
  
Gain on Sale of Investment Securities
    
-
      
-
      
7
      
-
      
-
      
7
       (4 )
Mortgage Banking Revenues
    
642
      
850
      
679
      
787
      
824
      
2,171
      
2,448
  
Merchant Fees
    
1,686
      
1,892
      
1,936
      
1,694
      
1,766
      
5,514
      
5,284
  
Interchange Fees
    
934
      
951
      
910
      
845
      
797
      
2,795
      
2,260
  
ATM/Debit Card Fees
    
685
      
661
      
641
      
658
      
635
      
1,987
      
1,861
  
Other
    
1,497
      
1,519
      
1,342
      
1,532
      
1,263
      
4,358
      
4,178
  
     Total Noninterest Income
    
14,431
      
15,084
      
13,962
      
14,385
      
14,144
      
43,477
      
41,192
  
                                                         
NONINTEREST EXPENSE
                                                        
Salaries and Associate Benefits
    
15,096
      
14,992
      
15,719
      
14,943
      
15,278
      
45,807
      
45,912
  
Occupancy, Net
    
2,409
      
2,324
      
2,236
      
2,460
      
2,354
      
6,969
      
6,935
  
Furniture and Equipment
    
2,513
      
2,494
      
2,349
      
2,259
      
2,491
      
7,356
      
7,652
  
Intangible Amortization
    
1,459
      
1,458
      
1,459
      
1,484
      
1,536
      
4,376
      
4,601
  
Other
    
8,442
      
8,629
      
8,799
      
8,838
      
8,763
      
25,870
      
26,484
  
     Total Noninterest Expense
    
29,919
      
29,897
      
30,562
      
29,984
      
30,422
      
90,378
      
91,584
  
                                                         
OPERATING PROFIT
    
10,870
      
11,973
      
10,488
      
13,538
      
13,234
      
33,331
      
37,648
  
Provision for Income Taxes
    
3,699
      
4,082
      
3,531
      
4,688
      
4,554
      
11,312
      
13,232
  
NET INCOME
   $
7,171
      
7,891
      
6,957
      
8,850
      
8,680
      
22,019
      
24,416
  
                                                         
PER SHARE DATA
                                                        
Basic Earnings
   $
0.41
      
0.43
      
0.38
      
0.48
      
0.47
      
1.22
      
1.31
  
Diluted Earnings
    
0.41
      
0.43
      
0.38
      
0.48
      
0.47
      
1.22
      
1.31
  
Cash Dividends
    
0.175
      
0.175
      
0.175
      
0.175
      
0.163
      
0.525
      
0.489
  
AVERAGE SHARES
                                                        
Basic
    
17,709
      
18,089
      
18,409
      
18,525
      
18,530
      
18,066
      
18,604
  
Diluted
    
17,719
      
18,089
      
18,420
      
18,569
      
18,565
      
18,077
      
18,627
  
 
 
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
  
   
2007
    
2006
  
   
Third
    
Second
    
First
    
Fourth
    
Third
  
(Dollars in thousands, except per share data)
  
Quarter
    
Quarter
    
Quarter
    
Quarter
    
Quarter
  
                               
ASSETS
                              
Cash and Due From Banks
   $
91,378
      
95,573
      
92,233
      
98,769
      
100,781
  
Funds Sold and Interest Bearing Deposits
    
19,599
      
77,297
      
93,832
      
78,795
      
35,631
  
     Total Cash and Cash Equivalents
    
110,977
      
172,870
      
186,065
      
177,564
      
136,412
  
                                         
Investment Securities, Available-for-Sale
    
184,609
      
189,680
      
191,446
      
191,894
      
190,617
  
                                         
Loans, Net of Unearned Interest
                                        
  Commercial, Financial, & Agricultural
    
205,628
      
203,555
      
205,048
      
229,327
      
218,442
  
  Real Estate - Construction
    
145,343
      
159,751
      
180,549
      
179,072
      
183,238
  
  Real Estate - Commercial
    
631,418
      
640,172
      
643,272
      
643,885
      
647,302
  
  Real Estate - Residential
    
480,488
      
493,783
      
509,040
      
524,301
      
529,087
  
  Real Estate - Home Equity
    
183,620
      
175,781
      
172,283
      
173,597
      
174,577
  
  Consumer
    
246,137
      
240,110
      
235,175
      
234,596
      
237,069
  
  Credit Card
    
-
      
-
      
-
      
-
      
-
  
  Other Loans
    
8,739
      
14,715
      
14,899
      
11,837
      
14,521
  
  Overdrafts
    
2,515
      
2,844
      
5,575
      
3,106
      
5,223
  
     Total Loans, Net of Unearned Interest
    
1,903,888
      
1,930,711
      
1,965,841
      
1,999,721
      
2,009,459
  
  Allowance for Loan Losses
     (18,001 )     (17,469 )     (17,108 )     (17,217 )     (17,311 )
     Loans, Net
    
1,885,887
      
1,913,242
      
1,948,733
      
1,982,504
      
1,992,148
  
                                         
Premises and Equipment, Net
    
95,816
      
92,656
      
88,812
      
86,538
      
84,915
  
Intangible Assets
    
100,026
      
101,485
      
102,944
      
104,402
      
105,886
  
Other Assets
    
62,611
      
60,815
      
60,117
      
55,008
      
48,895
  
     Total Other Assets
    
258,453
      
254,956
      
251,873
      
245,948
      
239,696
  
                                         
Total Assets
   $
2,439,926
      
2,530,748
      
2,578,117
      
2,597,910
      
2,558,873
  
                                         
LIABILITIES
                                        
Deposits:
                                        
  Noninterest Bearing Deposits
   $
419,242
      
456,986
      
467,875
      
490,014
      
506,331
  
  NOW Accounts
    
530,619
      
559,050
      
575,740
      
599,433
      
533,549
  
  Money Market Accounts
    
399,578
      
401,415
      
396,150
      
384,568
      
387,906
  
  Regular Savings Accounts
    
115,955
      
119,585
      
124,970
      
125,500
      
129,884
  
  Certificates of Deposit
    
472,019
      
472,554
      
477,327
      
482,139
      
491,569
  
     Total Deposits
    
1,937,413
      
2,009,590
      
2,042,062
      
2,081,654
      
2,049,239
  
                                         
Short-Term Borrowings
    
63,817
      
74,307
      
77,936
      
65,023
      
54,171
  
Subordinated Notes Payable
    
62,887
      
62,887
      
62,887
      
62,887
      
62,887
  
Other Long-Term Borrowings
    
29,725
      
41,276
      
42,879
      
43,083
      
43,701
  
Other Liabilities
    
47,031
      
41,251
      
41,841
      
29,493
      
29,833
  
                                         
Total Liabilities
    
2,140,873
      
2,229,311
      
2,267,605
      
2,282,140
      
2,239,831
  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
    
176
      
179
      
183
      
185
      
185
  
Additional Paid-In Capital
    
50,789
      
58,001
      
71,366
      
80,654
      
80,938
  
Retained Earnings
    
255,876
      
251,838
      
246,959
      
243,242
      
238,870
  
Accumulated Other Comprehensive Loss, Net of Tax
     (7,788 )     (8,581 )     (7,996 )     (8,311 )     (951 )
                                         
Total Shareowners' Equity
    
299,053
      
301,437
      
310,512
      
315,770
      
319,042
  
                                         
Total Liabilities and Shareowners' Equity
   $
2,439,926
      
2,530,748
      
2,578,117
      
2,597,910
      
2,558,873
  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $
2,108,096
      
2,197,688
      
2,251,119
      
2,270,410
      
2,235,707
  
Intangible Assets
                                        
  Goodwill
    
84,811
      
84,811
      
84,811
      
84,811
      
84,811
  
  Deposit Base
    
13,988
      
15,399
      
16,810
      
18,221
      
19,632
  
  Other
    
1,227
      
1,275
      
1,323
      
1,370
      
1,443
  
Interest Bearing Liabilities
    
1,674,600
      
1,731,074
      
1,757,889
      
1,762,633
      
1,703,667
  
                                         
Book Value Per Diluted Share
   $
16.95
      
16.87
      
16.97
      
17.01
      
17.18
  
Tangible Book Value Per Diluted Share
    
11.28
      
11.19
      
11.34
      
11.39
      
11.48
  
                                         
Actual Basic Shares Outstanding
    
17,628
      
17,869
      
18,287
      
18,518
      
18,532
  
Actual Diluted Shares Outstanding
    
17,639
      
17,869
      
18,297
      
18,562
      
18,567
  


CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
  
   
2007
    
2006
  
   
Third
    
Second
    
First
    
Fourth
    
Third
  
(Dollars in thousands)
  
Quarter
    
Quarter
    
Quarter
    
Quarter
    
Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $
17,469
      
17,108
      
17,217
      
17,311
      
17,264
  
Provision for Loan Losses
    
1,552
      
1,675
      
1,237
      
460
      
711
  
Net Charge-Offs
    
1,020
      
1,314
      
1,346
      
554
      
664
  
                                         
Balance at End of Period
   $
18,001
      
17,469
      
17,108
      
17,217
      
17,311
  
As a % of Loans
     0.95 %    
0.91
      
0.87
      
0.86
      
0.86
  
As a % of Nonperforming Loans
    
145.49
      
193.69
      
207.67
      
214.09
      
269.35
  
As a % of Nonperforming Assets
    
128.05
      
172.60
      
181.23
      
197.19
      
253.79
  
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $
279
      
253
      
560
      
81
      
294
  
Real Estate - Construction
    
-
      
-
      
108
      
-
      
-
  
Real Estate - Commercial
    
245
      
5
      
326
      
54
      
-
  
Real Estate - Residential
    
161
      
992
      
67
      
154
      
81
  
Consumer
    
854
      
534
      
761
      
787
      
690
  
                                         
Total Charge-Offs
   $
1,539
      
1,784
      
1,822
      
1,076
      
1,065
  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $
44
      
47
      
36
      
77
      
43
  
Real Estate - Construction
    
-
      
-
      
-
      
-
      
-
  
Real Estate - Commercial
    
2
      
5
      
5
      
9
      
4
  
Real Estate - Residential
    
2
      
26
      
3
      
1
      
2
  
Consumer
    
471
      
392
      
432
      
435
      
352
  
                                         
Total Recoveries
   $
519
      
470
      
476
      
522
      
401
  
                                         
NET CHARGE-OFFS
   $
1,020
      
1,314
      
1,346
      
554
      
664
  
                                         
Net Charge-Offs as a % of Average Loans (1)
     0.21 %    
0.27
      
0.28
      
0.11
      
0.13
  
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $
12,373
      
9,019
      
8,238
      
8,042
      
6,427
  
Restructured
    
-
      
-
      
-
      
-
      
-
  
  Total Nonperforming Loans
    
12,373
      
9,019
      
8,238
      
8,042
      
6,427
  
Other Real Estate
    
1,685
      
1,102
      
1,202
      
689
      
394
  
  Total Nonperforming Assets
   $
14,058
      
10,121
      
9,440
      
8,731
      
6,821
  
                                         
Past Due Loans 90 Days or More
   $
874
      
332
      
860
      
135
      
300
  
                                         
Nonperforming Loans as a % of Loans
     0.65 %    
0.47
      
0.42
      
0.40
      
0.32
  
Nonperforming Assets as a % of
                                        
   Loans and Other Real Estate
    
0.74
      
0.52
      
0.48
      
0.44
      
0.34
  
Nonperforming Assets as a % of Capital (2)
    
4.43
      
3.17
      
2.88
      
2.62
      
2.03
  
                                         
(1)  Annualized
                                        
                                         
(2)  Capital includes allowance for loan losses.
                                        


AVERAGE BALANCE AND INTEREST RATES (1)
                                                                                                          
Unaudited
                                                                                                                    
                                                                                                                     
   
Third Quarter 2007
        
Second Quarter 2007
      
First Quarter 2007
    
Fourth Quarter 2006
      
Third Quarter 2006
  
Nine Months Ended September 2007
Nine Months Ended September 2006
   
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
$
1,907,235
  
$
38,901
  
8.09
%
    
1,944,969
    
39,300
  
8.10
      
1,980,224
    
39,264
  
8.04
$
2,003,719
  
$
40,296
  
7.98
%
  
2,025,112
    
40,433
  
7.92
$
1,943,874
  
$
117,465
  
8.08
%
  
2,038,050
    
116,931
  
7.67
                                                                                                                     
Investment Securities
                                                                                                                    
  Taxable Investment Securities
102,618
    
1,224
  
4.75
        
105,425
    
1,236
  
4.68
      
108,377
    
1,263
  
4.67
  
108,041
    
1,263
  
4.66
      
109,097
    
1,264
  
4.60
  
105,453
    
3,723
  
4.70
      
113,859
    
3,588
  
4.19
  Tax-Exempt Investment Securities
85,446
    
1,142
  
5.35
        
83,907
    
1,088
  
5.19
      
82,627
    
1,039
  
5.03
  
82,568
    
1,020
  
4.94
      
81,409
    
999
  
4.90
  
84,003
    
3,269
  
5.19
      
71,960
    
2,568
  
4.76
                                                                                                                     
Total Investment Securities
  
188,064
    
2,366
  
5.02
        
189,332
    
2,324
  
4.91
      
191,004
    
2,302
  
4.82
  
190,609
    
2,283
  
4.78
      
190,506
    
2,263
  
4.73
  
189,456
    
6,992
  
4.92
      
185,819
    
6,156
  
4.41
                                                                                                                     
Funds Sold
  
49,438
    
639
  
5.06
        
52,935
    
689
  
5.15
      
40,332
    
521
  
5.17
  
43,738
    
576
  
5.15
      
25,540
    
338
  
5.19
  
47,602
    
1,849
  
5.12
      
41,219
    
1,463
  
4.69
                                                                                                                     
Total Earning Assets
  
2,144,737
  
$
41,906
  
7.75
%
    
2,187,236
    
42,313
  
7.76
      
2,211,560
    
42,087
  
7.71
  
2,238,066
  
$
43,155
  
7.65
%
  
2,241,158
    
43,034
  
7.62
  
2,180,932
  
$
126,306
  
7.74
%
  
2,265,088
    
124,550
  
7.35
                                                                                                                     
Cash and Due From Banks
  
84,477
                  
88,075
                
88,679
            
94,449
                
96,969
            
87,062
                
102,188
          
Allowance For Loan Losses
  
(17,664)
                  
(17,263)
                
(17,073)
            
(17,503)
                
(17,420)
            
(17,336)
                
(17,481)
          
Other Assets
  
256,153
                  
253,204
                
247,624
            
242,345
                
239,448
            
252,359
                
239,277
          
                                                                                                                     
Total Assets
$
2,467,703
                  
2,511,252
                
2,530,790
          
$
2,557,357
                
2,560,155
          
$
2,503,017
                
2,589,072
          
                                                                                                                     
LIABILITIES:
                                                                                                                    
Interest Bearing Deposits
                                                                                                                    
  NOW Accounts
$
525,795
  
$
2,531
  
1.91
%
    
541,525
    
2,611
  
1.93
      
552,303
    
2,626
  
1.93
$
542,751
  
$
2,522
  
1.84
%
  
511,299
    
2,026
  
1.57
  
539,777
  
$
7,768
  
1.92
%
  
510,556
    
5,136
  
1.34
  Money Market Accounts
  
403,957
    
3,565
  
3.50
        
393,403
    
3,458
  
3.53
      
386,736
    
3,427
  
3.59
  
391,346
    
3,488
  
3.54
      
381,628
    
3,259
  
3.39
  
394,762
    
10,450
  
3.54
      
363,150
    
8,199
  
3.02
  Savings Accounts
  
117,451
    
70
  
0.24
        
122,560
    
74
  
0.24
      
125,419
    
78
  
0.25
  
128,027
    
76
  
0.24
      
132,421
    
73
  
0.22
  
121,781
    
222
  
0.24
      
136,058
    
202
  
0.20
  Time Deposits
  
471,868
    
5,100
  
4.29
        
474,761
    
4,955
  
4.19
      
480,964
    
4,869
  
4.11
  
484,807
    
4,744
  
3.88
      
504,121
    
4,627
  
3.64
  
475,831
    
14,924
  
4.19
      
514,857
    
12,886
  
3.35
Total Interest Bearing Deposits
1,519,071
    
11,266
  
2.94
        
1,532,249
    
11,098
  
2.91
      
1,545,422
    
11,000
  
2.89
  
1,546,931
    
10,830
  
2.78
      
1,529,469
    
9,985
  
2.59
  
1,532,151
    
33,364
  
2.91
      
1,524,621
    
26,423
  
2.32
                                                                                                                     
Short-Term Borrowings
  
65,130
    
734
  
4.45
        
66,764
    
737
  
4.41
      
68,911
    
761
  
4.46
  
65,385
    
722
  
4.36
      
73,078
    
753
  
4.07
  
66,921
    
2,232
  
4.44
      
83,187
    
2,353
  
3.77
Subordinated Notes Payable
  
62,887
    
936
  
5.91
        
62,887
    
932
  
5.94
      
62,887
    
926
  
5.97
  
62,887
    
936
  
5.91
      
62,887
    
936
  
5.91
  
62,887
    
2,794
  
5.94
      
62,887
    
2,789
  
5.93
Other Long-Term Borrowings
  
38,269
    
453
  
4.70
        
42,284
    
496
  
4.71
      
43,137
    
502
  
4.72
  
43,453
    
515
  
4.71
      
52,367
    
615
  
4.66
  
41,212
    
1,451
  
4.71
      
61,912
    
2,189
  
4.73
                                                                                                                     
Total Interest Bearing Liabilities
1,685,357
  
$
13,389
  
3.15
%
    
1,704,184
    
13,263
  
3.12
      
1,720,357
    
13,189
  
3.11
  
1,718,656
  
$
13,003
  
3.00
%
  
1,717,801
    
12,289
  
2.84
  
1,703,171
  
$
39,841
  
3.13
%
  
1,732,607
    
33,754
  
2.60
                                                                                                                     
Noninterest Bearing Deposits
  
435,089
                  
455,169
                
458,304
            
481,522
                
494,054
            
449,436
                
512,493
          
Other Liabilities
  
45,721
                  
42,547
                
35,645
            
33,276
                
30,259
            
41,341
                
28,849
          
                                                                                                                     
Total Liabilities
  
2,166,167
                  
2,201,900
                
2,214,306
            
2,233,454
                
2,242,114
            
2,193,948
                
2,273,949
          
                                                                                                                     
SHAREOWNERS' EQUITY:
$
301,536
                  
309,352
                
316,484
          
$
323,903
                
318,041
          
$
309,069
                
315,123
          
                                                                                                                     
Total Liabilities and Shareowners' Equity
$
2,467,703
                  
2,511,252
                
2,530,790
          
$
2,557,357
                
2,560,155
          
$
2,503,017
                
2,589,072
          
                                                                                                                     
Interest Rate Spread
      
$
28,517
  
4.60
%
          
29,050
  
4.64
            
28,898
  
4.60
      
$
30,152
  
4.65
%
        
30,745
  
4.78
      
$
86,465
  
4.61
%
        
90,796
  
4.75
                                                                                                                     
Interest Income and Rate Earned (2)
  
$
41,906
  
7.75
              
42,313
  
7.76
            
42,087
  
7.71
      
$
43,155
  
7.65
            
43,034
  
7.62
      
$
126,306
  
7.74
            
124,550
  
7.35
Interest Expense and Rate Paid (2)
    
13,389
  
2.48
              
13,263
  
2.43
            
13,189
  
2.42
        
13,003
  
2.30
            
12,289
  
2.17
        
39,841
  
2.44
            
33,754
  
1.99
                                                                                                                     
Net Interest Margin
      
$
28,517
  
5.27
%
          
29,050
  
5.33
            
28,898
  
5.29
      
$
30,152
  
5.35
%
        
30,745
  
5.45
      
$
86,465
  
5.30
%
        
90,796
  
5.36
                                                                                                                     

 
 
(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.