Capital City Bank Group, Inc.
Reports Fourth Quarter and Full Year 2009 Results

TALLAHASSEE, Fla. (January 26, 2010) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $3.4 million ($0.20 per diluted share) for the fourth quarter of 2009 compared to a net loss of $1.5 million ($0.08 per diluted share) for the third quarter of 2009 and a net loss of $1.7 million ($0.10 per diluted share) in the fourth quarter of 2008.  For the full year 2009, a net loss of $3.5 million ($0.20 per diluted share) was realized compared to net income of $15.2 million ($0.89 per diluted share) for 2008.

The loss reported for the fourth quarter of 2009 reflects a loan loss provision of $10.8 million ($0.39 per diluted share) versus $12.3 million ($0.45 per diluted share) in the third quarter of 2009 and $12.5 million ($0.45 per diluted share) in the fourth quarter of 2008.  Higher costs related to the management and resolution of problem assets also negatively impacted earnings for the quarter.

Earnings for the full year 2009 include a loan loss provision of $40.0 million ($1.44 per diluted share) compared to $32.5 million ($1.16 per diluted share) for 2008.  Higher pension costs, FDIC insurance fees, and an increase in costs related to the management and resolution of problem assets also negatively impacted earnings for 2009.  2008 earnings included a $6.25 million gain ($0.22 per diluted share) from the sale of a portion of the bank’s merchant services portfolio, a $2.4 million gain from the redemption of Visa shares and the reversal of $1.1 million in Visa related litigation reserves.

“As we close out one of the toughest years in Capital City’s history and enter 2010, we are cautiously optimistic,” said William G. Smith, Jr., Chairman, President and CEO.  “The early signs would indicate a slight uptick in the economy, although we believe the road to recovery will be jagged as we move off the bottom.  It’s still too early to be certain we have turned the corner, but our confidence is growing as we sense our markets in north Florida and south Georgia are becoming more stable.”

“At Capital City, nonperforming assets were flat for the second consecutive quarter.  Additionally, the gross additions to our total problem loan pool declined substantially quarter over quarter and we continue to see increased activity in the resolution of our ORE properties.”

“Over the last two years our allowance for loan loss has increased by $25.9 million to $44.0 million, and at year-end represents 2.30% of outstanding loans.  During this period our cumulative provision has outpaced our cumulative net charge-offs by a factor of 1.6x.  To date, our two-year cumulative net charge-offs total 2.4% of our outstanding loan balances.”

“On the deposit side, we continue to focus on core deposits and are using this time of market disruption to effectively capitalize on organic growth opportunities. Our efforts are centered on generating core deposit growth, retaining these relationships for the longer term, and creating realistic opportunities to cross-sell new deposit clients into other profitable products and services. In addition to the seasonal inflow of public funds, we added over 800 new accounts and $70 million in new deposit balances through our money market promotion.  These clients carry substantial balances and offer an excellent opportunity to expand relationships over time.”

“As we move into 2010, our priorities will continue to be the resolution of our problem assets and a return to more normalized levels of profitability.  Persistent unemployment levels across our markets will be challenging, but our prospects are encouraging;  we are the leading locally-owned and operated banking company across northern Florida, we believe we can continue to execute our strategy without raising additional capital, and we fully understand that our core deposit base is the single largest driver of our overall profitability,” said Smith.

The Return on Average Assets was -0.52% and the Return on Average Equity was -5.03% for the fourth quarter of 2009.  These metrics were -0.24% and -2.15% for the third quarter of 2009 and -0.28% and -2.24% for the fourth quarter of 2008, respectively.

For the full year of 2009, the Return on Average Assets was -0.14% and the Return on Average Equity was -1.26% compared to 0.59% and 5.06%, respectively, for the full year of 2008.

    Discussion of Financial Condition

Average earning assets were $2.238 billion for the fourth quarter of 2009, an increase of $80.2 million, or 3.6% from the third quarter of 2009, and an increase of $86.7 million, or 4.0% from the fourth quarter of 2008.  The improvement from the third quarter is primarily attributable to an increase in the overnight funds position of $109.0 million, partially offset by a $9.2 million and $20.1 million decrease in the investment and loan portfolios, respectively.  The improvement in the net funds position reflects our focus on core deposit growth, a successful money market account (“MMA”) campaign in selected markets and the increase in balances of several large deposit relationships.  Loans declined primarily in the residential and construction portfolios with moderate growth experienced in the commercial mortgage portfolio.  Loans transferred to Other Real Estate Owned and gross charge-offs were significant factors contributing to the net reduction in the loan portfolio for the quarter.  Compared to the fourth quarter of 2008, the increase in earning assets primarily reflects growth in the overnight funds position, partially offset by a reduction in investment securities.

At the end of the fourth quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $144.1 million, a net decrease of $0.3 million from the third quarter and an increase of $36.2 million from the fourth quarter of 2008.  Nonaccrual loans totaled $86.3 million at the end of the fourth quarter, a net decrease of $5.6 million from the prior linked quarter reflective of both an improvement in successful problem loan resolutions and the migration of loans to the other real estate owned category.  Quarter over quarter, the other real estate owned balance increased $2.8 million and restructured loans increased by $2.5 million.  Compared to the prior year-end, the overall increase in nonperforming assets reflects weak economic and real estate market conditions, which have increased loan default rates primarily within our residential real estate loan portfolio.  Vacant residential land loans of $28.1 million represented approximately 33% of our nonaccrual loan balance at quarter-end, which is a decline from $39.4 million, or 43%, at the end of the linked quarter.  Total nonperforming assets represented 7.38% of loans and other real estate at the end of the fourth quarter compared to 7.25% at the prior quarter-end and 5.48% at year-end 2008.  The increase over the linked quarter is attributable to a net decline in the loan portfolio as nonperforming assets have been essentially flat for the last two quarters.

Average total deposits were $2.090 billion for the fourth quarter, an increase of $139.8 million, or 7.2%, from the third quarter and an increase of $144.1 million, or 7.4%, from the fourth quarter of 2008.  On a linked quarter basis, the increase reflects core deposit growth of approximately $150.0 million resulting from the MMA campaign in select markets and the opening of several large deposit relationships.  The recent MMA campaign, which was launched during the third quarter, generated in excess of $70.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank’s overall liquidity position.  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.  Partially offsetting the core deposit growth was a decline in average public funds of approximately $10.0 million attributable to seasonal run-off and the decision not to match competitors’ rates.  Starting late in the fourth quarter, we had an influx of public funds deposits (an increase of $159 million over prior quarter-end), which is seasonal in nature and we anticipate those deposits will decline during the first and second quarter of 2010.

We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $101.1 million during the fourth of 2009 compared to an average net overnight funds purchased position of $53.5 million in the third quarter and an average overnight funds purchased position of $18.0 million during the fourth quarter of 2008.  The favorable variance of $154.5 million in the funds position compared to the linked quarter is primarily attributable to the growth in core deposits mentioned above and net reductions in both the loan and investment portfolios.  The favorable variance from the fourth quarter of 2008 reflects core deposit growth and a net reduction in investment securities.
 
Equity capital was $267.9 million as of December 31, 2009, compared to $268.4 million as of September 30, 2009 and $278.8 million as of December 31, 2008.  Our leverage ratio was 10.39%, 10.96%, and 11.51%, respectively, for the comparable periods.  Further, our risk-adjusted capital ratio of 14.11% at December 31, 2009 exceeds the 8.0% minimum requirement and the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines.  At December 31, 2009, our tangible common equity ratio was 6.84%, compared to 7.43% at September 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 last three quarters of 2009.

Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2009 was $25.8 million compared to $27.1 million for the third quarter of 2009 and $28.4 million for the fourth quarter of 2008.  For 2009, tax equivalent net interest income totaled $108.2 million compared to $111.3 million in 2008.

The decrease of $1.3 million in net interest income on a linked quarter basis was partially due to a shift in earning asset mix, unfavorable asset repricing and a slight increase in the costs of funds.  Quarter over quarter, interest income was adversely impacted by declines in the investment and loan portfolios as well as unfavorable repricing, while interest expense increased reflecting the incremental costs of our money market promotion.  A decrease in both short-term and long-term borrowings, and a lower level of foregone interest on nonaccrual loans partially offset the unfavorable variances referenced above.

The decline from the fourth 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.  Beginning in September 2007, we responded aggressively to reductions in the Federal Reserve’s target rate and, as a result, we were able to significantly lower cost of funds year over year.

Pressure on asset repricing and an unfavorable shift in our earning asset mix, coupled with a higher cost of funds resulted in the net interest margin of 4.59% for the fourth quarter of 2009, which represents a decline of 40 basis points over the linked quarter and a 67 basis point decline over the fourth quarter of 2008.  During the course of 2009, historically low interest rates (essentially setting a floor on deposit repricing), foregone interest, lower loan fees, unfavorable asset repricing without the flexibility to significantly adjust deposit rates and core deposit growth (which has strengthened our liquidity position, but resulted in an unfavorable shift in our earning asset mix), have all placed pressure on our net interest margin.  Although the market offers a steep yield curve, our current strategy as well as historically, is to not accept greater interest rate risk by reaching further out the curve for yield, particularly given the fact that short term rates are at historical lows.  We continue to maintain short duration portfolios on both sides of the balance sheet and believe we are well positioned to respond to changing market conditions.  Over time, this strategy has produced fairly consistent outcomes and a net interest margin that is significantly above peer comparisons.  Given our recent deposit growth and unfavorable asset repricing, we anticipate continued pressure on the margin during the first quarter of 2010.

The provision for loan losses for the fourth quarter was $10.8 million compared to $12.3 million for the third quarter of 2009 and $12.5 million for the fourth quarter of 2008.  The reduction in the loan loss provision compared to the prior quarter was primarily due to a lower level of reserves required for impaired loans as this portfolio declined $9.1 million from the third quarter.  For the full year 2009, our loan loss provision was $40.0 million compared to $32.5 million for 2008 with the increase attributable to a higher level of required reserves.  Growth in the level of nonperforming loans coupled with weaker economic conditions and declining property values (primarily vacant residential land) were the primary factors contributing to the higher required reserves.  Net charge-offs in the fourth quarter totaled $11.8 million (2.42% of average loans) compared to $8.7 million (1.76% of average loans) in the third quarter of 2009 and $6.0 million (1.24% of average loans) in the fourth quarter of 2008.  For 2009, our net charge-offs totaled $32.6 million (1.66% of average loans), compared to $13.6 million (.71% of average loans) for 2008.  Over the last eight quarters, we have recorded a cumulative loan loss provision totaling $72.5 million, or 3.8% of beginning loans and recognized cumulative net charge-offs of $46.2 million, or 2.4%.  At year-end 2009, the allowance for loan losses of $44.0 million was 2.30% of outstanding loans (net of overdrafts) and provided coverage of 41% of nonperforming loans compared to 2.32% and 41%, respectively at the end of the third quarter and 1.89% and 38%, respectively at year-end 2008.

Noninterest income for the fourth quarter of 2009 totaled $14.4 million compared to $14.3 million in the third quarter of 2009 and $13.3 million for the fourth quarter of 2008.  Compared to the linked quarter, the $0.1 million, or 0.7% increase was due to higher deposit and asset management fees of $84,000 and $105,000, respectively, partially offset by lower mortgage banking revenues ($113,000).  The increase in deposit fees reflects a reduction in overdraft losses, while the increase in asset management fees is attributable to higher account valuations for managed accounts.  The decline in mortgage banking revenues is attributable to a reduction in our residential real estate loan pipeline.  Compared to the prior year quarter, the $1.1 million, or 8.3% increase primarily reflects higher deposit fees ($376,000), asset management fees ($130,000), retail brokerage fees ($142,000), and mortgage banking revenues ($258,000).  The same aforementioned factors drove the prior year variances in deposit fees and asset management fees.  The higher level of mortgage banking revenues was due to a mid-year spike in refinancing activity due to the lower interest rate environment.  Retail brokerage fees were higher due to an increase in both account trading activity and new account growth.  For the full year 2009, noninterest income decreased $9.6 million, or 14.4%, due to one-time transactions in 2008, including a $6.25 million pre-tax gain from the bank’s merchant services portfolio sale and a $2.4 million pre-tax gain from the redemption of Visa shares.  Additionally, lower merchant fees of $3.2 million related to the aforementioned merchant services portfolio sale also contributed to the unfavorable variance.  Improvement in deposit fees ($400,000) and mortgage banking fees ($1.1 million) as well as a higher level of card fees ($794,000) partially offset the aforementioned unfavorable variances.

 
Noninterest expense totaled $35.3 million for the fourth quarter of 2009 compared to $31.6 million in the third quarter of 2009 and $31.0 million for the fourth quarter of 2008.  Compared to the linked quarter, increases in professional fees ($595,000), legal fees ($214,000), other real estate owned expense (“OREO”) ($1.6 million), pension expense ($587,000), and advertising expense ($223,000) drove the unfavorable variance.  Legal fees and OREO expenses were higher due to the cost of managing and resolving problem assets.  The increase in professional fees primarily reflects payment to a consulting firm for services related to a review of our vendor maintenance contracts that will result in future cost reductions.  The variance in pension expense reflects a third quarter adjustment based on final pension expense estimates provided to us by our actuarial firm.  A deposit promotion initiated during the fourth quarter as well an increase in public relations expenses drove the unfavorable variance in advertising expense.  Compared to the prior year quarter, the $4.3 million, or 13.9% increase in noninterest expense was primarily due to higher legal fees ($529,000), OREO expenses ($2.9 million), FDIC insurance premium cost ($508,000), and pension expense ($613,000).  The same aforementioned factors drove the variance in legal fees and OREO expense.  Insurance premiums have risen in 2009 reflecting higher assessments as mandated by the FDIC.  The unfavorable variance in pension expense reflects a decline in pension asset value in 2008.  For the full year 2009, noninterest expense increased $10.6 million, or 8.8%, due to higher legal fees ($1.7 million), OREO expenses ($5.7 million), and pension expense ($2.8 million).  The same aforementioned factors drove the variance in legal fees, OREO expense, and pension expense.  The unfavorable variance was also impacted by the reversal of a portion ($1.1 million) of our Visa litigation accrual in 2008, which had the effect of reducing noninterest expense.

We realized a tax benefit of $3.0 million for the fourth quarter of 2009 and a tax benefit of $5.3 million for the full year 2009, both of which primarily reflect the impact of a higher level of permanent book/tax differences (primarily tax exempt income) in relation to our book operating profit.
About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.7 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services.  The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 69 banking offices and 79 ATMs in Florida, Georgia and Alabama.  For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
 
FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially.  The following factors, among others, could cause the Company’s actual results to differ: the frequency and magnitude of foreclosure of the Company’s loans; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the Company’s ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing.  Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 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
    
Twelve Months Ended
  
(Dollars in thousands, except per share data)
  
Dec 31, 2009
    
Sep 30, 2009
    
Dec 31, 2008
    
Dec 31, 2009
    
Dec 31, 2008
  
EARNINGS
                              
Net Income
   $ (3,407 )     (1,488 )   $ (1,703 )   $ (3,471 )   $ 15,225  
Diluted Earnings Per Common Share
   $ (0.20 )     (0.08 )   $ (0.10 )   $ (0.20 )   $ 0.89  
PERFORMANCE
                                        
Return on Average Equity
     -5.03 %     -2.15 %     -2.24 %     -1.26 %     5.06 %
Return on Average Assets
     -0.52 %     -0.24 %     -0.28 %     -0.14 %     0.59 %
Net Interest Margin
     4.59 %     4.99 %     5.26 %     4.96 %     4.96 %
Noninterest Income as % of Operating Revenue
     36.30 %     35.01 %     32.42 %     35.14 %     38.11 %
Efficiency Ratio
     85.21 %     73.86 %     71.21 %     77.33 %     64.91 %
CAPITAL ADEQUACY
                                        
Tier 1 Capital Ratio
     12.76 %     12.76 %     13.34 %     12.76 %     13.34 %
Total Capital Ratio
     14.11 %     14.12 %     14.69 %     14.11 %     14.69 %
Tangible Capital Ratio
     6.84 %     7.43 %     7.76 %     6.84 %     7.76 %
Leverage Ratio
     10.39 %     10.96 %     11.51 %     10.39 %     11.51 %
Equity to Assets
     9.89 %     10.77 %     11.20 %     9.89 %     11.20 %
ASSET QUALITY
                                        
Allowance as % of Non-Performing Loans
     40.77 %     40.90 %     37.52 %     40.77 %     37.52 %
Allowance as a % of Loans
     2.30 %     2.32 %     1.89 %     2.30 %     1.89 %
Net Charge-Offs as % of Average Loans
     2.42 %     1.76 %     1.24 %     1.66 %     0.71 %
Nonperforming Assets as % of Loans and ORE
     7.38 %     7.25 %     5.48 %     7.38 %     5.48 %
STOCK PERFORMANCE
                                        
High
   $ 14.34     $ 17.10     $ 33.32     $ 27.31     $ 34.50  
Low
   $ 11.00     $ 13.92     $ 21.06     $ 9.50     $ 19.20  
Close
   $ 13.84     $ 14.20     $ 27.24     $ 13.84     $ 27.24  
Average Daily Trading Volume
     39,672       33,823       43,379       46,881       39,293  
                                         

 
 
 

CAPITAL CITY BANK GROUP, INC.
                                      
CONSOLIDATED STATEMENT OF INCOME
                                      
Unaudited
                                          
                                           
                                 
Twelve Months Ended
  
                                 
December 31
  
(Dollars in thousands, except per share data)
    
2009
Fourth Quarter
  
 
2009
Third Quarter
    
2009
Second Quarter
    
2009
First Quarter
    
2008
Fourth Quarter
    
2009
    
2008
  
                                           
INTEREST INCOME
                                          
Interest and Fees on Loans
   $ 28,582     $ 29,463     $ 29,742     $ 29,537     $ 31,570     $ 117,324     $ 132,682  
Investment Securities
     1,097       1,323       1,437       1,513       1,627       5,370       7,075  
Funds Sold
     77       1       1       3       32       82       3,109  
Total Interest Income
     29,756       30,787       31,180       31,053       33,229       122,776       142,866  
                                                         
INTEREST EXPENSE
                                                        
Deposits
     2,964       2,626       2,500       2,495       3,848       10,585       27,306  
Short-Term Borrowings
     22       113       88       68       110       291       1,157  
Subordinated Notes Payable
     936       936       931       927       937       3,730       3,735  
Other Long-Term Borrowings
     542       560       566       568       587       2,236       1,802  
Total Interest Expense
     4,464       4,235       4,085       4,058       5,482       16,842       34,000  
Net Interest Income
     25,292       26,552       27,095       26,995       27,747       105,934       108,866  
Provision for Loan Losses
     10,834       12,347       8,426       8,410       12,497       40,017       32,496  
Net Interest Income after Provision for Loan Losses
     14,458       14,205       18,669       18,585       15,250       65,917       76,370  
                                                         
NONINTEREST INCOME
                                                        
Service Charges on Deposit Accounts
     7,183       7,099       7,162       6,698       6,807       28,142       27,742  
Data Processing Fees
     948       914       896       870       937       3,628       3,435  
Asset Management Fees
     1,065       960       930       970       935       3,925       4,235  
Retail Brokerage Fees
     772       765       625       493       630       2,655       2,399  
Gain on Sale of Investment Securities
     -       4       6       -       3       10       125  
Mortgage Banking Revenues
     550       663       902       584       292       2,699       1,623  
Merchant Fees
     345       393       663       958       650       2,359       5,548  
Interchange Fees
     1,129       1,129       1,118       1,056       1,007       4,432       4,165  
Gain on Sale of Portion of Merchant Services Portfolio
     -       -       -       -       -       -       6,250  
ATM/Debit Card Fees
     892       876       884       863       744       3,515       2,988  
Other
     1,527       1,501       1,448       1,550       1,306       6,026       8,530  
Total Noninterest Income
     14,411       14,304       14,634       14,042       13,311       57,391       67,040  
                                                         
NONINTEREST EXPENSE
                                                        
Salaries and Associate Benefits
     16,121       15,660       16,049       17,237       15,492       65,067       61,831  
Occupancy, Net
     2,458       2,455       2,540       2,345       2,503       9,798       9,729  
Furniture and Equipment
     2,261       2,193       2,304       2,338       2,368       9,096       9,902  
Intangible Amortization
     1,010       1,011       1,010       1,011       1,308       4,042       5,685  
Other
     13,463       10,296       11,027       9,326       9,331       44,112       34,325  
Total Noninterest Expense
     35,313       31,615       32,930       32,257       31,002       132,115       121,472  
                                                         
OPERATING PROFIT
     (6,444 )     (3,106 )     373       370       (2,441 )     (8,807 )     21,938  
Provision for Income Taxes
     (3,037 )     (1,618 )     (401 )     (280 )     (738 )     (5,336 )     6,713  
NET INCOME
   $ (3,407 )   $ (1,488 )   $ 774     $ 650     $ (1,703 )   $ (3,471 )   $ 15,225  
                                                         
PER SHARE DATA
                                                        
Basic Earnings
   $ (0.20 )   $ (0.08 )   $ 0.04     $ 0.04     $ (0.10 )   $ (0.20 )   $ 0.89  
Diluted Earnings
   $ (0.20 )   $ (0.08 )   $ 0.04     $ 0.04     $ (0.10 )   $ (0.20 )   $ 0.89  
Cash Dividends
     0.190       0.190       0.190       0.190       0.190       0.760       0.745  
AVERAGE SHARES
                                                        
Basic
     17,034       17,024       17,010       17,109       17,126       17,044       17,141  
Diluted
     17,035       17,025       17,010       17,131       17,135       17,045       17,147  
                                                         

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                          
Unaudited
                              
                               
(Dollars in thousands, except per share data)
  
2009
Fourth Quarter
    
2009
Third Quarter
    
2009
Second Quarter
    
2009
First Quarter
    
2008
Fourth Quarter
  
                               
ASSETS
                              
Cash and Due From Banks
   $ 57,877     $ 79,275     $ 92,394     $ 81,317     $ 88,143  
Funds Sold and Interest Bearing Deposits
     276,416       828       2,016       4,241       6,806  
Total Cash and Cash Equivalents
     334,293       80,103       94,410       85,558       94,949  
                                         
Investment Securities, Available-for-Sale
     176,673       183,944       194,002       195,767       191,569  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     189,061       203,813       201,589       202,038       206,230  
Real Estate - Construction
     111,249       128,476       153,507       154,102       141,973  
Real Estate - Commercial
     716,791       704,595       686,420       673,066       656,959  
Real Estate - Residential
     406,262       424,715       447,652       464,358       468,399  
Real Estate - Home Equity
     246,722       243,808       235,473       223,505       218,500  
Consumer
     233,524       241,672       241,467       243,280       246,973  
Other Loans
     10,207       7,790       7,933       8,068       15,838  
Overdrafts
     2,124       3,163       3,022       3,195       2,925  
Total Loans, Net of Unearned Interest
     1,915,940       1,958,032       1,977,063       1,971,612       1,957,797  
Allowance for Loan Losses
     (43,999 )     (45,401 )     (41,782 )     (40,172 )     (37,004 )
Loans, Net
     1,871,941       1,912,631       1,935,281       1,931,440       1,920,793  
                                         
Premises and Equipment, Net
     115,439       111,797       109,050       107,259       106,433  
Intangible Assets
     88,841       89,851       90,862       91,872       92,883  
Other Assets
     121,137       113,611       102,234       87,483       82,072  
Total Other Assets
     325,417       315,259       302,146       286,614       281,388  
                                         
Total Assets
   $ 2,708,324     $ 2,491,937     $ 2,525,839     $ 2,499,379     $ 2,488,699  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 427,791     $ 397,943     $ 424,125     $ 413,608     $ 419,696  
NOW Accounts
     899,649       687,679       733,526       726,069       758,976  
Money Market Accounts
     373,105       301,662       300,683       312,541       324,646  
Regular Savings Accounts
     122,370       122,040       123,257       121,245       115,261  
Certificates of Deposit
     435,319       440,666       424,339       416,326       373,595  
Total Deposits
     2,258,234       1,949,990       2,005,930       1,989,789       1,992,174  
                                         
Short-Term Borrowings
     35,841       103,711       73,989       68,193       62,044  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     49,380       50,665       52,354       53,448       51,470  
Other Liabilities
     34,083       56,269       57,973       49,518       41,294  
                                         
Total Liabilities
     2,440,425       2,223,522       2,253,133       2,223,835       2,209,869  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     170       170       170       170       171  
Additional Paid-In Capital
     36,099       36,065       35,698       35,841       36,783  
Retained Earnings
     246,460       253,104       257,828       260,287       262,890  
Accumulated Other Comprehensive Loss, Net of Tax
     (14,830 )     (20,924 )     (20,990 )     (20,754 )     (21,014 )
                                         
Total Shareowners' Equity
     267,899       268,415       272,706       275,544       278,830  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,708,324     $ 2,491,937     $ 2,525,839     $ 2,499,379     $ 2,488,699  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,369,029     $ 2,142,804     $ 2,173,081     $ 2,171,620     $ 2,156,172  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Deposit Base
     3,233       4,196       5,159       6,121       7,084  
Other
     797       844       892       940       988  
Interest Bearing Liabilities
     1,978,551       1,769,310       1,771,035       1,760,709       1,748,879  
                                         
Book Value Per Diluted Share
   $ 15.72     $ 15.76     $ 16.03     $ 16.18     $ 16.27  
Tangible Book Value Per Diluted Share
     10.51       10.48       10.70       10.80       10.85  
                                         
Actual Basic Shares Outstanding
     17,036       17,032       17,010       17,010       17,127  
Actual Diluted Shares Outstanding
     17,037       17,033       17,010       17,031       17,136  
                                         

 
 
 


CAPITAL CITY BANK GROUP, INC.
                                      
ALLOWANCE FOR LOAN LOSSES
                                        
  AND NONPERFORMING ASSETS
                                        
Unaudited
                                        
                                         
     
2009
      
2009
      
2009
      
2009
      
2008
  
(Dollars in thousands)
    
Fourth Quarter
    
Third Quarter
      
Second Quarter
      
First Quarter
      
Fourth Quarter
  
                                         
ALLOWANCE FOR LOAN LOSSES
                                        
Balance at Beginning of Period
   $
45,401
     $
                       41,782
     $ 
                 40,172
     $ 
                     37,004
     $ 
                  30,544
  
Provision for Loan Losses
    
                    10,834
      
                         12,347
      
                      8,426
      
                         8,410
      
                    12,497
  
Transfer of Unfunded Reserve to Other Liability
                          392
      
                                    -
      
                               -
      
                                  -
      
                                -
  
Net Charge-Offs
    
                    11,844
      
                           8,728
      
                      6,816
      
                         5,242
      
                       6,037
  
                                         
Balance at End of Period
   $
43,999
     $ 
                       45,401
     $ 
                 41,782
     $ 
                     40,172
     $ 
                  37,004
  
As a % of Loans
    
2.30
 %     
2.32
 %     
2.12
 %     
2.04
 %     
1.89
 % 
As a % of Nonperforming Loans
    
40.77
 %     
40.90
 %     
33.71
 %     
34.82
 %     
37.52
 % 
As a % of Nonperforming Assets
    
30.54
 %     
31.45
 %     
29.09
 %     
31.69
 %     
34.31
 % 
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
 $
712
     $
                            633
     $ 
                       388
     $ 
                          857
     $ 
                        331
  
Real Estate - Construction
    
                      2,040
      
                           2,315
      
                      3,356
      
                             320
      
                       1,774
  
Real Estate - Commercial
    
                      1,584
      
                           1,707
      
                         123
      
                         1,002
      
                          293
  
Real Estate - Residential
    
                      7,377
      
                           3,394
      
                      2,379
      
                         1,975
      
                       2,264
  
Consumer
    
                      1,324
      
                           1,324
      
                      1,145
      
                         2,117
      
                       1,993
  
                                         
Total Charge-Offs
   $
13,037
     $ 
                         9,373
     $ 
                   7,391
     $ 
                       6,271
     $ 
                    6,655
  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
 $
343
     $ 
                               64
     $ 
                         84
     $ 
                             74
     $ 
                          68
  
Real Estate - Construction
    
                              5
      
                               150
      
                               -
      
                             385
      
                                -
  
Real Estate - Commercial
    
                            43
      
                                   8
      
                              1
      
                                  -
      
                                -
  
Real Estate - Residential
    
                          331
      
                                 92
      
                           51
      
                               58
      
                          128
  
Consumer
    
                          471
      
                               331
      
                         439
      
                             512
      
                          422
  
                                         
Total Recoveries
   $
1,193
     $ 
                            645
     $ 
                      575
     $ 
                       1,029
     $ 
                       618
  
                                         
NET CHARGE-OFFS
   $
11,844
     $ 
                         8,728
     $ 
                   6,816
     $ 
                       5,242
     $ 
                    6,037
  
                                         
Net Charge-Offs as a % of Average Loans(1)  
 
2.42
 %    
1.76
 %     
1.39
 %     
1.08
 %     
1.24
 % 
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $
86,274
     $ 
                       91,880
     $ 
               111,039
     $ 
                  110,200
     $ 
                  96,876
  
Restructured Loans
    
                    21,644
      
                         19,121
      
                   12,916
      
                         5,157
      
                       1,744
  
Total Nonperforming Loans
    
                  107,918
      
                       111,001
      
                 123,955
      
                     115,357
      
                    98,620
  
Other Real Estate
    
                    36,134
      
                         33,371
      
                   19,671
      
                       11,425
      
                       9,222
  
Total Nonperforming Assets
   $
144,052
     $ 
                    144,372
     $ 
               143,626
     $ 
                  126,783
     $ 
                107,842
  
                                         
Past Due Loans 90 Days or More
   $
-
     $ 
                            486
     $ 
                            -
     $ 
                                -
     $ 
                          88
  
                                         
Nonperforming Loans as a % of Loans
  
5.63
 %    
5.67
 %     
6.27
 %     
5.85
 %     
5.04
 % 
Nonperforming Assets as a % of
                                        
Loans and Other Real Estate
    
7.38
 %    
7.25
 %     
7.19
 %     
6.39
 %     
5.48
 % 
Nonperforming Assets as a % of Capital(2)  
46.19
 %    
46.01
 %     
45.67
 %     
40.16
 %     
34.15
 % 
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses.
                                  
                                         

 
 
 


AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                                                          
Unaudited
                                                                                                                              
                                                                                                                               
                                                                                                                               
   
Fourth Quarter 2009
    
Third Quarter 2009
    
Second Quarter 2009
    
First Quarter 2009
    
Fourth Quarter 2008
    
December 2009 YTD
    
December 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
   $ 1,944,873       28,813       5.88 %   $ 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 %   $ 1,961,990       118,186       6.02 %   $ 1,918,417       133,457       6.96 %
                                                                                                                                                                         
Investment Securities
                                                                                                                                                                        
Taxable Investment Securities
     72,537       498       2.74 %     81,777       682       3.32 %     89,574       742       3.31 %     90,927       776       3.43 %     90,296       813       3.59 %     83,648       2,698       3.22 %     93,149       3,889       5.04 %
Tax-Exempt Investment Securities
     107,361       921       3.43 %     107,307       985       3.67 %     106,869       1,067       4.00 %     101,108       1,133       4.48 %     103,817       1,252       4.82 %     105,683       4,106       3.88 %     97,010       4,893       4.16 %
                                                                                                                                                                         
Total Investment Securities
     179,898       1,419       3.15 %     189,084       1,667       3.52 %     196,443       1,809       3.68 %     192,035       1,909       3.98 %     194,113       2,065       4.25 %     189,331       6,804       3.59 %     190,159       8,782       4.61 %
                                                                                                                                                                         
Funds Sold
     112,790       77       0.27 %     3,294       1       0.11 %     4,641       1       0.10 %     10,116       3       0.13 %     16,645       32       0.74 %     32,911       82       0.25 %     132,073       3,109       2.32 %
                                                                                                                                                                         
Total Earning Assets
     2,237,561     $ 30,309       5.38 %     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 %     2,184,232     $ 125,072       5.73 %     2,240,649     $ 145,348       6.48 %
                                                                                                                                                                         
Cash and Due From Banks
     69,687                       76,622                       81,368                       76,826                       76,027                       76,107                       82,410                  
Allowance for Loan Losses
     (46,468 )                     (42,774 )                     (41,978 )                     (38,007 )                     (30,347 )                     (42,331 )                     (23,015 )                
Other Assets
     314,470                       306,759                       291,681                       281,869                       266,797                       298,807                       267,861                  
                                                                                                                                                                         
Total Assets
   $ 2,575,250                     $ 2,497,969                     $ 2,506,352                     $ 2,486,925                     $ 2,463,318                     $ 2,516,815                     $ 2,567,905                  
                                                                                                                                                                         
LIABILITIES:
                                                                                                                                                                        
Interest Bearing Deposits
                                                                                                                                                                        
NOW Accounts
   $ 740,550     $ 308       0.17 %   $ 678,292     $ 257       0.15 %   $ 709,039     $ 249       0.14 %   $ 719,265     $ 225       0.13 %   $ 684,246     $ 636       0.37 %   $ 711,753     $ 1,039       0.15 %   $ 743,327     $ 7,454       1.00 %
Money Market Accounts
     361,104       625       0.69 %     301,230       281       0.37 %     298,007       192       0.26 %     321,562       190       0.24 %     360,940       716       0.79 %     320,531       1,288       0.40 %     374,278       5,242       1.40 %
Savings Accounts
     122,158       16       0.05 %     122,934       15       0.05 %     123,034       15       0.05 %     118,142       14       0.05 %     117,311       28       0.09 %     121,582       60       0.05 %     116,413       121       0.10 %
Time Deposits
     439,654       2,015       1.82 %     430,944       2,073       1.91 %     417,545       2,044       1.96 %     392,006       2,066       2.14 %     379,266       2,468       2.59 %     420,198       8,198       1.95 %     424,748       14,489       3.41 %
Total Interest Bearing Deposits
     1,663,466       2,964       0.71 %     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 %     1,574,064       10,585       0.67 %     1,658,766       27,306       1.65 %
                                                                                                                                                                         
Short-Term Borrowings
     47,114       22       0.18 %     97,305       113       0.45 %     87,768       88       0.40 %     85,318       68       0.32 %     69,079       110       0.62 %     79,321       291       0.36 %     61,181       1,157       1.88 %
Subordinated Notes Payable
     62,887       936       5.83 %     62,887       936       5.83 %     62,887       931       5.86 %     62,887       927       5.89 %     62,887       937       5.83 %     62,887       3,730       5.85 %     62,887       3,735       5.84 %
Other Long-Term Borrowings
     50,026       542       4.30 %     51,906       560       4.28 %     52,775       566       4.30 %     53,221       568       4.33 %     53,261       587       4.39 %     51,973       2,236       4.30 %     39,735       1,802       4.54 %
                                                                                                                                                                         
Total Interest Bearing Liabilities
     1,823,493     $ 4,464       0.97 %     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 %     1,768,245     $ 16,842       0.95 %     1,822,569     $ 34,000       1.87 %
                                                                                                                                                                         
Noninterest Bearing Deposits
     426,542                       416,770                       423,566                       406,380                       404,103                       418,365                       407,299                  
Other Liabilities
     56,659                       60,674                       54,617                       46,510                       29,998                       54,660                       37,147                  
                                                                                                                                                                         
Total Liabilities
     2,306,694                       2,222,942                       2,229,238                       2,205,291                       2,161,091                       2,241,270                       2,267,015                  
                                                                                                                                                                         
SHAREOWNERS' EQUITY:
   $ 268,556                     $ 275,027                     $ 277,114                     $ 281,634                     $ 302,227                     $ 275,545                     $ 300,890                  
                                                                                                                                                                         
Total Liabilities and Shareowners' Equity
   $ 2,575,250                     $ 2,497,969                     $ 2,506,352                     $ 2,486,925                     $ 2,463,318                     $ 2,516,815                     $ 2,567,905                  
                                                                                                                                                                         
Interest Rate Spread
           $ 25,845       4.41 %           $ 27,128       4.81 %           $ 27,679       4.92 %           $ 27,578       4.98 %           $ 28,387       5.01 %           $ 108,230       4.78 %           $ 111,348       4.61 %
                                                                                                                                                                         
Interest Income and Rate Earned(1)
     $ 30,309       5.38 %           $ 31,363       5.77 %           $ 31,764       5.86 %           $ 31,636       5.92 %           $ 33,869       6.27 %           $ 125,072       5.73 %           $ 145,348       6.48 %
Interest Expense and Rate Paid(2)
             4,464       0.79 %             4,235       0.78 %             4,085       0.75 %             4,058       0.76 %             5,482       1.01 %             16,842       0.77 %             34,000       1.52 %
                                                                                                                                                                         
Net Interest Margin
           $ 25,845       4.59 %           $ 27,128       4.99 %           $ 27,679       5.11 %           $ 27,578       5.16 %           $ 28,387       5.26 %           $ 108,230       4.96 %           $ 111,348       4.96 %
                                                                                                                                                                         
                                                                                                                                                                         
(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.