ex99_1.htm

Capital City Bank Group, Inc.

Reports Third Quarter 2009 Results

TALLAHASSEE, Fla. (October 20, 2009) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $1.5 million ($0.08 per diluted share) for the third quarter of 2009 compared to net income of $0.8 million ($0.04 per diluted share) for the second quarter of 2009 and $4.8 million ($0.29 per diluted share) for the third quarter of 2008. We reported a net loss of $0.1 million ($0.00 per diluted share) for the first nine months of 2009, compared to net income of $16.9 million ($0.99 per diluted share) for the same period of 2008.

The loss reported for the third quarter of 2009 reflects a loan loss provision of $12.3 million ($0.45 per diluted share) versus $8.4 million ($0.30 per diluted share) in the second quarter of 2009 and $10.4 million ($0.37 per diluted share) in the third quarter of 2008. Earnings for the third quarter of 2008 also included a $6.25 million gain ($0.22 per diluted share) from the sale of a portion of the bank’s merchant services portfolio.

Year-to-date 2009 performance reflects a loan loss provision of $29.2 million ($1.05 per diluted share) and a special FDIC assessment of approximately $1.2 million ($0.04 per diluted share) recorded in the second quarter. Year-to-date earnings for 2008 reflect a loan loss provision of $20.0 million ($0.72 per diluted share), a $6.25 million gain ($0.22 per diluted share) from the sale of the bank’s merchant services portfolio, and Visa related transactions totaling $3.5 million pre-tax ($0.13 per diluted share).

“In a continuing tough economic environment we have been effectively managing problem assets and moving many of them through the resolution phases. Of equal priority is maintaining our focus on growing the business, as evidenced by strong growth in the commercial mortgage and home equity portfolios and continuing increases in core deposits, all coming as a result of our consistent execution of relationship-based community banking,” said William G. Smith, Jr., Chairman, President and Chief Executive Officer.

“We again set aside a substantial loan loss provision during the third quarter, which was clearly the main factor impacting our financial performance. The movement of a significant number of problem assets from the loan portfolio into the other real estate owned category indicates encouraging progress as we continue to move toward resolution and ultimate disposal of nonaccrual loans. Nonaccrual loans totaled $91.9 million at the end of the third quarter, a net decrease of $19.2 million from the prior linked quarter, reflective of a further slowdown in gross additions to non-accruing status and an increase in the migration of nonaccrual loans to the other real estate category, or to satisfactory restructuring.”

“On the growth side of the business, we continue to capitalize and build on the key underlying value of our franchise with successful deposit-gathering. While public funds declined seasonally, as expected, we have enjoyed good core deposit growth in 2009 and our absolutely free checking products continue to be successful as both balances and the number of accounts consistently are growing quarter over quarter. Certificates of deposit balances are up as rate pressures from higher paying institutions have eased in most of our markets. The growth in money market accounts compared to the linked quarter reflects a successful test of a deposit promotion in our Macon, GA market, which we plan to expand during the fourth quarter to other markets,” said Smith.

The Return on Average Assets was -0.24% and the Return on Average Equity was - -2.15% for the third quarter of 2009. These metrics were 0.12% and 1.12% for the second quarter of 2009 and 0.76% and 6.43% for the third quarter of 2008, respectively.

For the first nine months of 2009, the Return on Average Assets was 0.00% and the Return on Average Equity was -0.03% compared to 0.87% and 7.53%, respectively, for the same period of 2008.

Discussion of Financial Condition

Average earning assets were $2.157 billion for the third quarter of 2009, a decrease of $17.9 million, or 0.8% from the second quarter of 2009, and an increase of $6.5 million, or 0.3% from the fourth quarter of 2008. The decrease from the second quarter is primarily attributable to a $7.4 million and $9.2 million decrease in the investment and loan portfolios, respectively. 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 investment securities and short-term investments. The current quarter decrease in the loan portfolio was offset by an increase in other real estate owned as we continue to move forward with the resolution of nonaccrual loans. The loan portfolio would have experienced a slight increase when compared to the prior quarter when adjusting for the nonaccrual loans transferred to other real estate owned, representing the fifth consecutive quarter of growth in the core loan portfolio. Loan growth remains strong in the commercial mortgage and home equity portfolios. Growth in these portfolios continued due to the efforts of our bankers to reach clients who are interested in moving or expanding their banking relationships.

At the end of the third quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $144.4 million, a net increase of $.7 million, or 1% from the second quarter and $36.5 million, or 34% from the fourth quarter of 2008. Nonaccrual loans totaled $91.9 million at the end of the third quarter, a net decrease of $19.2 million from the prior linked quarter and $5.0 million from year-end 2008, reflective of a further slowdown in gross additions to non-accruing status and an increase in the migration of nonaccrual loans to the other real estate owned category. Quarter over quarter, other real estate owned properties increased $13.7 million and restructured loans increased by $6.2 million. Nonperforming assets represented 7.25% of loans and other real estate at the end of the third quarter compared to 7.19% at the prior quarter-end and 5.48% at year-end 2008.

Average total deposits were $1.950 billion for the third quarter, a decrease of $21.0 million, or 1.1%, from the second quarter and an increase of $4.3 million, or 0.2%, from the fourth quarter of 2008. On a linked quarter basis, the decrease in deposits reflects a decline in public funds attributable to seasonal run-off and the decision not to match competitors’ rates. Core deposits continued to grow during the quarter and partially offset the public funds decline. The core deposit growth occurred primarily in the money market accounts and certificates of deposit. Additionally, 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. The growth in money market accounts compared to the linked quarter reflects a successful test of a deposit promotion in our Macon market, which we plan to expand during the fourth quarter to other 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 declined during the first half of 2009, but experienced a partial offset in the third quarter as balances have increased slightly as discussed above. 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 $53.5 million during the third quarter of 2009 compared to an average net overnight funds purchased position of $49.8 million in the second quarter and an average overnight funds purchased position of $3.2 million at year-end 2008. The unfavorable variance in funds purchased position compared to the linked quarter is attributable to a decrease in deposits partially offset by a slight reduction in the loan and investment portfolios. The unfavorable variance from the fourth quarter of 2008 reflects growth in the loan portfolio, partially offset by growth in deposits and a decline in investment securities.

Equity capital was $268.4 million as of September 30, 2009, compared to $272.7 million as of June 30, 2009 and $278.8 million as of December 31, 2008. Our leverage ratio was 10.96%, 11.07%, and 11.51%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.12% at September 30, 2009 exceeds the 8.0% minimum requirement and the 10% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines. At September 30, 2009, our tangible common equity ratio was 7.43%, compared to 7.47% at June 30, 2009 and 7.76% at December 31, 2008. 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 and third quarters.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2009 was $27.1 million compared to $27.7 million for the second quarter of 2009 and $27.8 million for the third quarter of 2008. For the first nine months of 2009, tax equivalent net interest income totaled $82.4 million compared to $83.0 million in 2008.

The decrease in the net interest income on a linked quarter basis was partially due to the downward repricing of earning assets and a slight (3 basis points) increase in the costs of funds. One additional calendar day in the third quarter and a lower level of foregone interest on nonaccrual loans helped to offset the decline. The loan portfolio balance declined during the quarter and also continued to reprice lower without the offsetting benefit in funding costs. Compared to the linked quarter, the costs of funds increased primarily in interest bearing non-maturity deposits, reflecting a money market promotion launched during the third quarter.

The decline from the third 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 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 4.99% declined 12 basis points over the linked quarter, attributable to lower earning asset yields and a higher cost of funds. As compared to the third quarter of 2008, the margin experienced a decline of two basis points reflecting compression in earning asset yields, partially offset by aggressive deposit repricing.

The slight decrease in net interest income for the first nine months of 2009 as compared to the same period in 2008 resulted from lower earning assets yields, higher foregone interest and lower loan fees, partially offset by the lower cost of funds.

The provision for loan losses for the third quarter was $12.3 million compared to $8.4 million for the second quarter of 2009 and $10.4 million for the third quarter of 2008. The higher loan loss provision compared to the prior quarter was driven by an increase in impaired loan reserves for newly identified impaired loans, and to a lesser extent devaluation in real estate collateral securing impaired loans, primarily related to land development. Year-to-date, our loan loss provision was $29.2 million compared to $20.0 million for the same period of 2008 with the increase generally reflecting weakened economic conditions and real estate market stress, including declining property values, primarily vacant land. Net charge-offs in the third quarter totaled $8.7 million (1.76% of average loans) compared to $6.8 million (1.39% of average loans) in the second quarter of 2009 and $2.4 million (.50% of average loans) in the third quarter of 2008. For the nine-month period of 2009, our net charge-offs totaled $20.8 million (1.41% of average loans), compared to $7.5 million (.53% of average loans) for the same period in 2008. At quarter-end, the allowance for loan losses was 2.32% of outstanding loans (net of overdrafts) and provided coverage of 41% of nonperforming loans.

Noninterest income for the third quarter of 2009 totaled $14.3 million compared to $14.6 million in the second quarter of 2009 and $20.2 million for the third quarter of 2008. Compared to the linked quarter, the $0.3 million, or 2.3%, decline was due to lower mortgage banking fees ($239,000) and merchant fees ($270,000). The decline in mortgage banking fees is attributable to a decline in our residential real estate loan pipeline which spiked mid-year due to a pick-up in refinancing activity. The lower level of merchant fees reflects a seasonal decline in processing volume for the sole remaining merchant in our merchant services portfolio. Partially offsetting the aforementioned unfavorable variances was higher retail brokerage fees ($141,000) driven by an increase in account activity. Compared to the prior year quarter, the $5.9 million, or 29.2%, decline primarily reflects a one-time $6.25 million pre-tax gain from a sale of a portion of the bank’s merchant services portfolio in 2008. For the first nine months of 2009, as compared to same period of 2008, noninterest income decreased $10.7 million, or 20.0%, due to the one-time $6.25 million pre-tax gain from the bank’s merchant services portfolio sale, a $2.4 million pre-tax gain from the redemption of Visa shares realized in the first quarter of 2008, and an unfavorable variance in merchant fees of $2.9 million related to the aforementioned merchant services portfolio sale.

Noninterest expense totaled $31.6 million for the third quarter of 2009 compared to $32.9 million in the second quarter of 2009 and $29.9 million for the third quarter of 2008. Compared to the linked quarter, the $1.3 million, or 4.0%, favorable variance was due to lower compensation expense ($389,000) and FDIC insurance premium expense ($1.2 million). The lower compensation expense was due to lower pension expense and the lower FDIC insurance expense reflects the impact of the $1.2 million special assessment recorded in the second quarter. These favorable variances were partially offset by a higher level of other real estate owned expense ($300,000) and legal fees ($221,000), both attributable to increased collection and foreclosure activity. Compared to prior year quarter, the $1.7 million, or 5.7%, increase primarily reflects an increase in other real estate owned expense ($1.0 million) and legal expense ($517,000) also attributable to the increase in collection and foreclosure activity. For the first nine months of 2009, as compared to the same period of 2008, noninterest expense increased $6.3 million, or 7.0%, due to higher other real estate owned expense ($2.9 million), legal expense ($1.2 million), pension expense ($2.2 million), and FDIC insurance premium expense ($3.4 million), partially offset by lower expense for merchant fees ($2.5 million), intangible amortization ($1.3 million), and furniture/fixtures depreciation and maintenance ($632,000). The unfavorable variance was also impacted by the reversal of a portion ($1.1 million) of our Visa litigation accrual in the first quarter of 2008, which had the effect of reducing noninterest expense.

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 69 banking offices and 79 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the frequency and magnitude of foreclosure of the Company’s loans; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the Company’s ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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									Nine Months Ended
(Dollars in thousands, except per share data)	Sep 30, 2009			Jun 30, 2009			Sep 30, 2008			Sep 30, 2009			Sep 30, 2008
EARNINGS
Net Income	$	-1,488		$	774		$	4,838		$	-64		$	16,928
Diluted Earnings Per Common Share	$	-0.08		$	0.04		$	0.29		$	0.00		$	0.99
PERFORMANCE
Return on Average Equity		-2.15	%		1.12	%		6.34	%		-0.03	%		7.53	%
Return on Average Assets		-0.24	%		0.12	%		0.76	%		0.00	%		0.87	%
Net Interest Margin		4.99	%		5.11	%		5.01	%		5.09	%		4.87	%
Noninterest Income as % of Operating Revenue		35.01	%		35.07	%		42.64	%		34.75	%		39.84	%
Efficiency Ratio		73.86	%		75.44	%		59.27	%		74.82	%		62.98	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio		12.76	%		12.85	%		13.54	%		12.76	%		13.54	%
Total Capital Ratio		14.12	%		14.20	%		15.15	%		14.12	%		15.15	%
Tangible Capital Ratio		7.43	%		7.47	%		8.67	%		7.43	%		8.67	%
Leverage Ratio		10.96	%		11.07	%		11.21	%		10.96	%		11.21	%
Equity to Assets		10.77	%		10.80	%		12.17	%		10.77	%		12.17	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		40.90	%		33.71	%		48.55	%		40.90	%		48.55	%
Allowance as a % of Loans		2.32	%		2.12	%		1.59	%		2.32	%		1.59	%
Net Charge-Offs as % of Average Loans		1.76	%		1.39	%		0.50	%		1.41	%		0.53	%
Nonperforming Assets as % of Loans and ORE		7.25	%		7.19	%		3.51	%		7.25	%		3.51	%
STOCK PERFORMANCE
High	$	17.10		$	17.35		$	34.50		$	27.31		$	34.50
Low	$	13.92		$	11.01		$	19.20		$	9.50		$	19.20
Close	$	14.20		$	16.85		$	31.35		$	14.20		$	31.35
Average Daily Trading Volume		33,823			40,130			45,717			44,127			37,902

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

															Nine Months Ended
															September 30
(Dollars in thousands, except per share data)	2009 Third Quarter			2009 Second Quarter			2009 First Quarter			2008 Fourth Quarter			2008 Third Quarter		2009			2008

INTEREST INCOME
Interest and Fees on Loans	$	29,463		$	29,742		$	29,537		$	31,570		$	32,435	$	88,742		$	101,112
Investment Securities		1,323			1,437			1,513			1,627			1,744		4,273			5,447
Funds Sold		1			1			3			32			475		5			3,078
Total Interest Income		30,787			31,180			31,053			33,229			34,654		93,020			109,637

INTEREST EXPENSE
Deposits		2,626			2,500			2,495			3,848			5,815		7,621			23,458
Short-Term Borrowings		113			88			68			110			230		269			1,047
Subordinated Notes Payable		936			931			927			937			936		2,794			2,798
Other Long-Term Borrowings		560			566			568			587			488		1,694			1,215
Total Interest Expense		4,235			4,085			4,058			5,482			7,469		12,378			28,518
Net Interest Income		26,552			27,095			26,995			27,747			27,185		80,642			81,119
Provision for Loan Losses		12,347			8,426			8,410			12,497			10,425		29,183			19,999
Net Interest Income after Provision for Loan Losses		14,205			18,669			18,585			15,250			16,760		51,459			61,120

NONINTEREST INCOME
Service Charges on Deposit Accounts		7,099			7,162			6,698			6,807			7,110		20,959			20,935
Data Processing Fees		914			896			870			937			873		2,680			2,498
Asset Management Fees		960			930			970			935			1,025		2,860			3,300
Retail Brokerage Fees		765			625			493			630			565		1,883			1,769
Gain on Sale of Investment Securities		4			6			-			3			27		10			122
Mortgage Banking Revenues		663			902			584			292			331		2,149			1,331
Merchant Fees		393			663			958			650			616		2,014			4,898
Interchange Fees		1,129			1,118			1,056			1,007			1,073		3,303			3,158
Gain on Sale of Portion of Merchant Services Portfolio		-			-			-			-			6,250		-			6,250
ATM/Debit Card Fees		876			884			863			744			742		2,623			2,244
Other		1,501			1,448			1,550			1,306			1,600		4,499			7,224
Total Noninterest Income		14,304			14,634			14,042			13,311			20,212		42,980			53,729

NONINTEREST EXPENSE
Salaries and Associate Benefits		15,660			16,049			17,237			15,492			15,417		48,946			46,339
Occupancy, Net		2,455			2,540			2,345			2,503			2,373		7,340			7,226
Furniture and Equipment		2,193			2,304			2,338			2,368			2,369		6,835			7,534
Intangible Amortization		1,011			1,010			1,011			1,308			1,459		3,032			4,377
Other		10,296			11,027			9,326			9,331			8,298		30,649			24,994
Total Noninterest Expense		31,615			32,930			32,257			31,002			29,916		96,802			90,470

OPERATING PROFIT		(3,106	)		373			370			(2,441	)		7,056		(2,363	)		24,379
Provision for Income Taxes		(1,618	)		(401	)		(280	)		(738	)		2,218		(2,299	)		7,451
NET INCOME	$	(1,488	)	$	774		$	650		$	(1,703	)	$	4,838	$	(64	)	$	16,928

PER SHARE DATA
Basic Earnings	$	(0.08	)	$	0.04		$	0.04		$	(0.10	)	$	0.29	$	(0.00	)	$	0.99
Diluted Earnings	$	(0.08	)	$	0.04		$	0.04		$	(0.10	)	$	0.29	$	(0.00	)	$	0.99
Cash Dividends		0.190			0.190			0.190			0.190			0.185		0.570			0.555
AVERAGE SHARES
Basic		17,024			17,010			17,109			17,126			17,124		17,047			17,147
Diluted		17,025			17,010			17,131			17,135			17,128		17,048			17,149

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

(Dollars in thousands, except per share data)	2009 Third Quarter			2009 Second Quarter			2009 First Quarter			2008 Fourth Quarter			2008 Third Quarter

ASSETS
Cash and Due From Banks	$	79,275		$	92,394		$	81,317		$	88,143		$	71,062
Funds Sold and Interest Bearing Deposits		828			2,016			4,241			6,806			27,419
Total Cash and Cash Equivalents		80,103			94,410			85,558			94,949			98,481

Investment Securities, Available-for-Sale		183,944			194,002			195,767			191,569			193,978

Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural		203,813			201,589			202,038			206,230			189,676
Real Estate - Construction		128,476			153,507			154,102			141,973			148,160
Real Estate - Commercial		704,595			686,420			673,066			656,959			639,443
Real Estate - Residential		424,715			447,652			464,358			468,399			473,962
Real Estate - Home Equity		243,808			235,473			223,505			218,500			212,118
Consumer		241,672			241,467			243,280			246,973			252,743
Other Loans		7,790			7,933			8,068			15,838			7,378
Overdrafts		3,163			3,022			3,195			2,925			3,749
Total Loans, Net of Unearned Interest		1,958,032			1,977,063			1,971,612			1,957,797			1,927,229
Allowance for Loan Losses		(45,401	)		(41,782	)		(40,172	)		(37,004	)		(30,544	)
Loans, Net		1,912,631			1,935,281			1,931,440			1,920,793			1,896,685

Premises and Equipment, Net		111,797			109,050			107,259			106,433			104,806
Intangible Assets		89,851			90,862			91,872			92,883			94,192
Other Assets		113,611			102,234			87,483			82,072			66,308
Total Other Assets		315,259			302,146			286,614			281,388			265,306

Total Assets	$	2,491,937		$	2,525,839		$	2,499,379		$	2,488,699		$	2,454,450

LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	397,943		$	424,125		$	413,608		$	419,696		$	382,878
NOW Accounts		687,679			733,526			726,069			758,976			698,509
Money Market Accounts		301,662			300,683			312,541			324,646			368,453
Regular Savings Accounts		122,040			123,257			121,245			115,261			116,858
Certificates of Deposit		440,666			424,339			416,326			373,595			396,086
Total Deposits		1,949,990			2,005,930			1,989,789			1,992,174			1,962,784

Short-Term Borrowings		103,711			73,989			68,193			62,044			47,069
Subordinated Notes Payable		62,887			62,887			62,887			62,887			62,887
Other Long-Term Borrowings		50,665			52,354			53,448			51,470			53,074
Other Liabilities		56,269			57,973			49,518			41,294			29,841

Total Liabilities		2,223,522			2,253,133			2,223,835			2,209,869			2,155,655

SHAREOWNERS' EQUITY
Common Stock		170			170			170			171			171
Additional Paid-In Capital		36,065			35,698			35,841			36,783			36,681
Retained Earnings		253,104			257,828			260,287			262,890			267,853
Accumulated Other Comprehensive Loss, Net of Tax		(20,924	)		(20,990	)		(20,754	)		(21,014	)		(5,910	)

Total Shareowners' Equity		268,415			272,706			275,544			278,830			298,795

Total Liabilities and Shareowners' Equity	$	2,491,937		$	2,525,839		$	2,499,379		$	2,488,699		$	2,454,450

OTHER BALANCE SHEET DATA
Earning Assets	$	2,142,804		$	2,173,081		$	2,171,620		$	2,156,172		$	2,148,626
Intangible Assets
Goodwill		84,811			84,811			84,811			84,811			84,811
Deposit Base		4,196			5,159			6,121			7,084			8,345
Other		844			892			940			988			1,036
Interest Bearing Liabilities		1,769,310			1,771,035			1,760,709			1,748,879			1,742,936

Book Value Per Diluted Share	$	15.76		$	16.03		$	16.18		$	16.27		$	17.45
Tangible Book Value Per Diluted Share		10.48			10.70			10.80			10.85			11.94

Actual Basic Shares Outstanding		17,032			17,010			17,010			17,127			17,125
Actual Diluted Shares Outstanding		17,033			17,010			17,031			17,136			17,129

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

ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period	$	41,782		$	40,172		$	37,004		$	30,544		$	22,518
Provision for Loan Losses		12,347			8,426			8,410			12,497			10,425
Net Charge-Offs		8,728			6,816			5,242			6,037			2,399

Balance at End of Period	$	45,401		$	41,782		$	40,172		$	37,004		$	30,544
As a % of Loans		2.32	%		2.12	%		2.04	%		1.89	%		1.59	%
As a % of Nonperforming Loans		40.90	%		33.71	%		34.82	%		37.52	%		48.55	%
As a % of Nonperforming Assets		31.45	%		29.09	%		31.69	%		34.31	%		45.10	%

CHARGE-OFFS
Commercial, Financial and Agricultural	$	633		$	388		$	857		$	331		$	275
Real Estate - Construction		2,315			3,356			320			1,774			77
Real Estate - Commercial		1,707			123			1,002			293			(35	)
Real Estate - Residential		3,394			2,379			1,975			2,264			797
Consumer		1,324			1,145			2,117			1,993			1,797

Total Charge-Offs	$	9,373		$	7,391		$	6,271		$	6,655		$	2,911

RECOVERIES
Commercial, Financial and Agricultural	$	64		$	84		$	74		$	68		$	68
Real Estate - Construction		150			-			385			-			4
Real Estate - Commercial		8			1			-			-			1
Real Estate - Residential		92			51			58			128			6
Consumer		331			439			512			422			433

Total Recoveries	$	645		$	575		$	1,029		$	618		$	512

NET CHARGE-OFFS	$	8,728		$	6,816		$	5,242		$	6,037		$	2,399

Net Charge-Offs as a % of Average Loans(1)		1.76	%		1.39	%		1.08	%		1.24	%		0.50	%

RISK ELEMENT ASSETS
Nonaccruing Loans	$	91,880		$	111,039		$	110,200		$	96,876		$	61,509
Restructured Loans		19,121			12,916			5,157			1,744			1,403
Total Nonperforming Loans		111,001			123,955			115,357			98,620			62,912
Other Real Estate		33,371			19,671			11,425			9,222			4,813
Total Nonperforming Assets	$	144,372		$	143,626		$	126,783		$	107,842		$	67,725

Past Due Loans 90 Days or More	$	486		$	-		$	-		$	88		$	50

Nonperforming Loans as a % of Loans		5.67	%		6.27	%		5.85	%		5.04	%		3.26	%
Nonperforming Assets as a % of
Loans and Other Real Estate		7.25	%		7.19	%		6.39	%		5.48	%		3.51	%
Nonperforming Assets as a % of Capital(2)		46.01	%		45.67	%		40.16	%		34.15	%		20.56	%


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

AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited


	Third Quarter 2009								Second Quarter 2009								First Quarter 2009								Fourth Quarter 2008								Third Quarter 2008								September 2009 YTD								September 2008 YTD
(Dollars in thousands)	Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate			Average Balance			Interest		Average Rate

ASSETS:
Loans, Net of Unearned Interest	$	1,964,984			29,695		6.00	%	$	1,974,197			29,954		6.09	%	$	1,964,086			29,724		6.14	%	$	1,940,083			31,772		6.52	%	$	1,915,008			32,622		6.78	%	$	1,967,759			89,373		6.07	%	$	1,911,142			101,684		7.11	%

Investment Securities
Taxable Investment Securities		81,777			682		3.32	%		89,574			742		3.31	%		90,927			776		3.43	%		90,296			813		3.59	%		93,723			940		3.99	%		87,393			2,200		3.35	%		94,106			3,076		4.35	%
Tax-Exempt Investment Securities		107,307			985		3.67	%		106,869			1,067		4.00	%		101,108			1,133		4.48	%		103,817			1,252		4.82	%		98,966			1,234		4.99	%		105,117			3,185		4.04	%		94,725			3,641		5.13	%

Total Investment Securities		189,084			1,667		3.52	%		196,443			1,809		3.68	%		192,035			1,909		3.98	%		194,113			2,065		4.25	%		192,689			2,174		4.50	%		192,510			5,385		3.73	%		188,831			6,717		4.74	%

Funds Sold		3,294			1		0.11	%		4,641			1		0.10	%		10,116			3		0.13	%		16,645			32		0.74	%		99,973			475		1.86	%		5,992			5		0.12	%		170,831			3,077		2.37	%

Total Earning Assets		2,157,362		$	31,363		5.77	%		2,175,281		$	31,764		5.86	%		2,166,237		$	31,636		5.92	%		2,150,841		$	33,869		6.27	%		2,207,670		$	35,271		6.36	%		2,166,261		$	94,763		5.85	%		2,270,804		$	111,478		6.55	%

Cash and Due From Banks		76,622								81,368								76,826								76,027								77,309								78,271								84,552
Allowance for Loan Losses		(42,774	)							(41,978	)							(38,007	)							(30,347	)							(22,851	)							(40,937	)							(20,554	)
Other Assets		306,759								291,681								281,869								266,797								266,510								293,528								268,220

Total Assets	$	2,497,969							$	2,506,352							$	2,486,925							$	2,463,318							$	2,528,638							$	2,497,123							$	2,603,022

LIABILITIES:
Interest Bearing Deposits
NOW Accounts	$	678,292		$	257		0.15	%	$	709,039		$	249		0.14	%	$	719,265		$	225		0.13	%	$	684,246		$	636		0.37	%	$	727,754		$	1,443		0.79	%	$	702,048		$	731		0.14	%	$	763,164		$	6,818		1.19	%
Money Market Accounts		301,230			281		0.37	%		298,007			192		0.26	%		321,562			190		0.24	%		360,940			716		0.79	%		369,544			1,118		1.20	%		306,858			663		0.29	%		378,756			4,526		1.60	%
Savings Accounts		122,934			15		0.05	%		123,034			15		0.05	%		118,142			14		0.05	%		117,311			28		0.09	%		117,970			30		0.10	%		121,389			44		0.05	%		116,112			93		0.11	%
Time Deposits		430,944			2,073		1.91	%		417,545			2,044		1.96	%		392,006			2,066		2.14	%		379,266			2,468		2.59	%		410,101			3,224		3.13	%		413,641			6,183		2.00	%		440,019			12,021		3.65	%
Total Interest Bearing Deposits		1,533,400			2,626		0.68	%		1,547,625			2,500		0.65	%		1,550,975			2,495		0.65	%		1,541,763			3,848		0.99	%		1,625,369			5,815		1.42	%		1,543,936			7,621		0.66	%		1,698,051			23,458		1.85	%

Short-Term Borrowings		97,305			113		0.45	%		87,768			88		0.40	%		85,318			68		0.32	%		69,079			110		0.62	%		51,738			230		1.76	%		90,174			269		0.39	%		58,530			1,047		2.38	%
Subordinated Notes Payable		62,887			936		5.83	%		62,887			931		5.86	%		62,887			927		5.89	%		62,887			937		5.83	%		62,887			936		5.83	%		62,887			2,794		5.86	%		62,887			2,798		5.85	%
Other Long-Term Borrowings		51,906			560		4.28	%		52,775			566		4.30	%		53,221			568		4.33	%		53,261			587		4.39	%		43,237			488		4.48	%		52,629			1,694		4.30	%		35,194			1,215		4.61	%

Total Interest Bearing Liabilities		1,745,498		$	4,235		0.96	%		1,751,055		$	4,085		0.94	%		1,752,401		$	4,058		0.94	%		1,726,990		$	5,482		1.26	%		1,783,231		$	7,469		1.67	%		1,749,626		$	12,378		0.95	%		1,854,662		$	28,518		2.05	%

Noninterest Bearing Deposits		416,770								423,566								406,380								404,103								405,314								415,610								408,372
Other Liabilities		60,674								54,617								46,510								29,998								36,498								53,986								39,547

Total Liabilities		2,222,942								2,229,238								2,205,291								2,161,091								2,225,043								2,219,222								2,302,581

SHAREOWNERS' EQUITY:	$	275,027							$	277,114							$	281,634							$	302,227							$	303,595							$	277,901							$	300,441

Total Liabilities and Shareowners' Equity	$	2,497,969							$	2,506,352							$	2,486,925							$	2,463,318							$	2,528,638							$	2,497,123							$	2,603,022

Interest Rate Spread				$	27,128		4.81	%				$	27,679		4.92	%				$	27,578		4.98	%				$	28,387		5.01	%				$	27,802		4.69	%				$	82,385		4.90	%				$	82,960		4.50	%

Interest Income and Rate Earned(1)				$	31,363		5.77	%				$	31,764		5.86	%				$	31,636		5.92	%				$	33,869		6.27	%				$	35,271		6.36	%				$	94,763		5.85	%				$	111,478		6.55	%
Interest Expense and Rate Paid(2)					4,235		0.78	%					4,085		0.75	%					4,058		0.76	%					5,482		1.01	%					7,469		1.35	%					12,378		0.76	%					28,518		1.68	%

Net Interest Margin				$	27,128		4.99	%				$	27,679		5.11	%				$	27,578		5.16	%				$	28,387		5.26	%				$	27,802		5.01	%				$	82,385		5.09	%				$	82,960		4.87	%




(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.