Capital City Bank Group, Inc.
Reports First Quarter 2010 Results

TALLAHASSEE, Fla. (April 19, 2010) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $3.5 million, or $0.20 per diluted share for the first quarter of 2010 compared to a net loss of $3.4 million, or $0.20 per diluted share in the fourth quarter of 2009 and net income of $0.7 million, or $0.04 per diluted share for the first quarter of 2009.

The net loss reported for the first quarter of 2010 reflects a loan loss provision of $10.7 million, or $0.39 per diluted share versus $10.8 million, or $0.39 per diluted share for the linked fourth quarter of 2009 and $8.4 million, or $0.30 per diluted share in the first quarter of 2009.  Compared to the linked fourth quarter of 2009, lower operating expenses of $1.9 million contributed to earnings, but were offset by a $1.7 million reduction in operating revenues (net interest income plus noninterest income) and a lower tax benefit of $0.3 million.

“We believe many of the economic indicators across our footprint appear to be in the early stages of stabilization, but uncertainty and a weak economy continue to affect our banking markets.  Consumers and businesses alike appear to be waiting for more economic certainty and confidence before resuming traditional spending patterns or business expansion plans.  Although our margin remains strong at 4.21%, these market realities have adversely impacted loan volume and thereby our margin in recent quarters,” said William G. Smith, Jr., Chairman, President and Chief Executive Officer.  “Concerning credit quality, we are encouraged by positive developments in some of our underlying credit metrics, specifically, a slowdown in the level of gross additions to our problem loans.  Nonaccrual loans have declined for three consecutive quarters.  The slight increase in total nonperforming assets this quarter was driven by migration into restructured loans, which are accruing interest and other real estate, which is an end stage to resolution.  Migration of the problem loans from nonaccruing to the restructured and other real estate categories simply puts us in a stronger position to ultimately resolve these situations.”

“Without question, this is the most difficult operating environment our team has faced during our 20-30 year careers.  We believe the collective experience of our management team,  knowledge of our local markets, strength of our brand, healthy capital and the company’s underlying performance metrics will enable us to successfully manage through this current economic cycle and capitalize on opportunities as our markets recover,” said Smith.

The Return on Average Assets was -0.52% and the Return on Average Equity was -5.23% for the first quarter of 2010.  These metrics were -0.52% and -5.03%, respectively for the fourth quarter of 2009, and 0.11% and 0.94%, respectively for the comparable quarter in 2009.

Discussion of Financial Condition

Average earning assets were $2.358 billion for the first quarter of 2010, an increase of $120.7 million, or 5.4% from the fourth quarter of 2009, and an increase of $192.1 million, or 8.9% from the first quarter of 2009.  The improvement from the fourth quarter is primarily attributable to an increase in the overnight funds position of $190.5 million, partially offset by an $11.3 million and $58.5 million decrease in the investment and loan portfolios, respectively.  The improvement in the funds position primarily reflects core deposit growth and to a lesser extent an influx of public funds.  Average loans declined throughout the portfolio driven by reduction in the residential real estate and construction loan categories primarily reflecting the transfer of loans to the other real estate category as well as loan charge-offs.  Additionally, the portfolio has been impacted by diminished loan demand, primarily attributable to the weak economy, as we have experienced lower production levels in recent quarters.  Compared to the first quarter of 2009, the increase in average earning assets primarily reflects growth in the overnight funds position partially offset by a reduction in the loan portfolio and investment securities.  Our loan production levels began to decline during the second half of 2009 with the trend continuing through the recent quarter.
 
Nonperforming assets of $153.7 million increased from the linked fourth quarter by $9.6 million and from the first quarter of 2009 by $26.9 million.  Nonaccrual loans decreased $9.9 million and $33.8 million, respectively, from the same prior-year periods.  For the first quarter, the migration of loans into our problem loan pool slowed as the gross additions declined for the second straight quarter and the level of our past due loans improved significantly.  More specifically, gross additions to our portfolio of nonaccruing loans have declined in four of the last five quarters, including the first quarter of 2010.  Furthermore, our collection and loan work-out efforts continue to produce positive momentum reflective of the increased level of loans migrating into both the restructured loan and other real estate categories.  Restructured loans totaled $30.8 million at the end of the first quarter reflecting an increase of $9.2 million over year-end 2009 and $25.7 million over the first quarter of 2009.  Four large loans were added to the restructured category during the first quarter and reflect our efforts to alleviate these borrowers near term cash flow strains.  Our current restructured loan portfolio consists of 150 loans that are all on fully accruing status and maintain a weighted average interest rate of 5.86%.  Other real estate owned totaled $46.4 million at the end of the quarter compared to $36.1 million at year-end 2009 and $11.4 million at the end of the first quarter of 2009, reflecting the continued migration of our problem loan pool through the foreclosure process which has picked up momentum over the last two quarters.  Nonperforming assets represented 8.10% of loans and other real estate at the end of the first quarter compared to 7.38% at year-end 2009 and 6.39% at the end of the first quarter of 2009.  The increase in this percentage is partially attributable to a decline in loans outstanding.

Average total deposits were $2.249 billion for the first quarter, an increase of $158.8 million, or 7.6%, from the fourth quarter and an increase of $291.4 million, or 14.9%, from the first quarter of 2009.  On a linked quarter basis, the increase reflects core deposit growth of approximately $66.3 million resulting from a successful money market promotion, higher deposit balances maintained by several larger, non-public depositors, as well as continued growth in our Absolutely Free Checking (“AFC”) accounts.  Additionally, average public funds increased approximately $92.0 million from the linked quarter attributable to seasonal inflow and the addition of new relationships.  The money market account promotion, which was launched during the third quarter and concluded in the fourth quarter, has generated in excess of $100.0 million in new deposit balances and served to support our core deposit growth initiatives and to further strengthen the bank’s overall liquidity position.  Our AFC products continue to be successful as both balances and the number of accounts continue to post growth quarter over quarter.  The improvement from the first quarter of 2009 primarily reflects the increase in core deposits mentioned above.

We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) sold position of $303.3 million during the first quarter of 2010 compared to an average net overnight funds sold position of $112.8 million in the fourth quarter of 2009 and an average overnight funds purchased position of $33.9 million in the first quarter of 2009.  The favorable variance as compared to both the fourth and first quarters of 2009, is primarily attributable to the growth in core deposits mentioned above and net reductions in both the loan and investment portfolios.  The investment portfolio was expanded at the end of the first quarter with the purchase of $50.0 million of US Treasuries in relatively short maturities.  If appropriate, we will continue to look to deploy a portion of the funds sold position in the investment portfolio during the second quarter.

Equity capital was $262.0 million as of March 31, 2010, compared to $267.9 million as of December 31, 2009 and $275.5 million as of March 31, 2009.  Our leverage ratio was 9.64%, 10.39%, and 11.25%, respectively, for the comparable periods.  Further, our risk-adjusted capital ratio of 14.16% at March 31, 2010 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines.  At March 31, 2010, our tangible common equity ratio was 6.62%, compared to 6.84% at December 31, 2009 and 7.63% at March 31, 2009.

 
Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2010 was $24.5 million compared to $25.8 million for the fourth quarter of 2009 and $27.6 million for the first quarter of 2009.  The decrease of $1.3 million in net interest income on a linked quarter basis was due to two less calendar days, a shift in earning asset mix and unfavorable asset repricing, partially offset by a decrease in foregone interest on nonaccrual loans and lower interest expense.  Interest income was primarily impacted by declining balances in our investment and loan portfolios as well as continued unfavorable repricing in each of these portfolios. These unfavorable volume and rate variances were partially offset by a favorable variance in foregone interest on nonaccrual loans and a reduction in interest expense, primarily attributable to lower rates on certificates of deposit and subordinated notes payable.  With the exception of calendar days, the $3.1 million unfavorable variance over the first quarter of 2009 is primarily attributable to the trends as noted above in comparing the first quarter 2010 to fourth quarter 2009.

The net interest margin in the first quarter of 2010 was 4.21%, a decline of 38 basis points over the linked quarter and 95 basis points over the first quarter of 2009.  The lower margin is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a favorable variance in our average cost of funds.  Strong deposit growth in recent quarters has improved our liquidity position, but has adversely impacted our margin in the short term as a significant portion of this growth is currently invested in overnight funds.  When we determine what portion of this growth is permanent we will begin deploying the overnight funds into higher yielding earning assets.  As noted earlier, late in the first quarter we invested an additional $50 million in the investment portfolio.

The provision for loan losses for the current quarter was $10.7 million compared to $10.8 million in the linked fourth quarter of 2009 and $8.4 million for the first quarter of 2009.  The provision for the current quarter primarily reflects required reserves for loans added to impaired status during the quarter and to a lesser extent collateral devaluation on existing impaired loans.  An increase in loan loss factors also impacted the level of loan loss provision for the quarter.  Net charge-offs in the first quarter totaled $13.5 million, or 2.91%, of average loans compared to $11.8 million, or 2.42% in the linked fourth quarter of 2009 and $5.2 million, or 1.08% in the first quarter of 2009.  The increase in net charge-offs compared to the linked fourth quarter reflects losses recorded on three large previously impaired loans that are working through the foreclosure process – these loans were substantially reserved for in the prior quarter.  At quarter-end, the allowance for loan losses was 2.23% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 2.30% and 41%, respectively, at the end of the prior quarter.

Noninterest income for the first quarter decreased $444,000, or 3.1%, from the fourth quarter of 2009 and declined $75,000, or 0.53%, from the first quarter of 2009.  Compared to the linked fourth quarter, the decrease is attributable to lower deposit fees ($554,000) and retail brokerage fees ($207,000), partially offset by higher merchant fees ($320,000).  The reduction in deposit fees compared to the prior linked quarter reflects a two-day calendar variance, and a lower level of NSF/overdraft activity reflective of current economic conditions and a higher level of consumer awareness that have both impacted consumer and business spending habits.  The decline in retail brokerage fees was driven by lower trading volume by clients.  The increase in merchant fees reflects higher processing volume for our sole remaining merchant that is scheduled to convert to another processor early in the third quarter.  Compared to the first quarter of 2009, the slight decline is attributable to a lower level of merchant fees ($293,000) reflective of a higher number of remaining merchants in early 2009.  Partially offsetting the reduction in merchant fees was an increase in bank card fees ($256,000) primarily driven by growth in transaction accounts as well as a debit card rewards program that was implemented in late 2009.

 



Noninterest expense decreased $1.9 million, or 5.5%, from the fourth quarter of 2009 and increased $1.1 million, or 3.5%, over the first quarter of 2009.  The decrease compared to the fourth quarter was driven by lower expense for other real estate properties ($700,000), which includes holding costs as well as valuation adjustments due to property devaluation.  Lower expense for loan collection legal support ($215,000), professional fees ($554,000), advertising ($272,000), and intangible amortization ($301,000) also contributed to the decline for the quarter.  The reduction in legal expense was due to a lower level of legal assistance needed for complex loan work-out arrangements as well as various cost control strategies implemented to reduce this cost.  Professional fees was elevated in the fourth quarter due to a one-time payment to a consulting firm for services related to a review of our vendor maintenance contracts that will result in future cost reductions.  The decline in advertising expense primarily reflects lower direct mail costs for our ongoing AFC product promotion and, to a lesser extent, costs incurred in support of our money market account promotion, which was recognized in the fourth quarter of 2009.  Intangible amortization declined due to the fact that the scheduled amortization of one of our core deposit intangible assets concluded during the fourth quarter of 2009.  Compared to the first quarter of 2009, the increase in noninterest expense was attributable to higher expense for other real estate properties ($1.8 million), partially offset by lower pension plan expense ($618,000).

We realized a tax benefit of $2.7 million for the first quarter of 2010 and a tax benefit of $3.0 million for the fourth quarter of 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.  The reduction in benefit for the current quarter primarily reflects a lower level of tax exempt income.

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, 2009, 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
  
(Dollars in thousands, except per share data)
  
Mar 31, 2010
    
Dec 31, 2009
    
Mar 31, 2009
  
EARNINGS
                  
Net Income
   $ (3,463 )     (3,407 )   $ 650  
Diluted Earnings Per Common Share
   $ (0.20 )     (0.20 )   $ 0.04  
PERFORMANCE
                        
Return on Average Equity
     -5.23 %     -5.03 %     0.94 %
Return on Average Assets
     -0.52 %     -0.52 %     0.11 %
Net Interest Margin
     4.21 %     4.59 %     5.16 %
Noninterest Income as % of Operating Revenue
     36.77 %     36.30 %     34.22 %
Efficiency Ratio
     85.00 %     85.21 %     75.07 %
CAPITAL ADEQUACY
                        
Tier 1 Capital Ratio
     12.81 %     12.76 %     13.09 %
Total Capital Ratio
     14.16 %     14.11 %     14.40 %
Tangible Capital Ratio
     6.62 %     6.84 %     7.63 %
Leverage Ratio
     9.64 %     10.39 %     11.25 %
Equity to Assets
     9.65 %     9.89 %     11.02 %
ASSET QUALITY
                        
Allowance as % of Non-Performing Loans
     38.42 %     40.77 %     34.82 %
Allowance as a % of Loans
     2.23 %     2.30 %     2.04 %
Net Charge-Offs as % of Average Loans
     2.91 %     2.42 %     1.08 %
Nonperforming Assets as % of Loans and ORE
     8.10 %     7.38 %     6.39 %
STOCK PERFORMANCE
                        
High
   $ 14.61     $ 14.34     $ 27.31  
Low
   $ 11.57     $ 11.00     $ 9.50  
Close
   $ 14.25     $ 13.84     $ 11.46  
Average Daily Trading Volume
     26,854       39,672       75,117  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                          
CONSOLIDATED STATEMENT OF INCOME
                          
Unaudited
                              
                               
                               
                               
(Dollars in thousands, except per share data)
  
2010
First Quarter
    
2009
Fourth Quarter
    
2009
Third Quarter
    
2009
Second Quarter
    
2009
First Quarter
  
                               
INTEREST INCOME
                              
Interest and Fees on Loans
   $ 26,992     $ 28,582     $ 29,463     $ 29,742     $ 29,537  
Investment Securities
     990       1,097       1,323       1,437       1,513  
Funds Sold
     172       77       1       1       3  
Total Interest Income
     28,154       29,756       30,787       31,180       31,053  
                                         
INTEREST EXPENSE
                                        
Deposits
     2,938       2,964       2,626       2,500       2,495  
Short-Term Borrowings
     17       22       113       88       68  
Subordinated Notes Payable
     651       936       936       931       927  
Other Long-Term Borrowings
     526       542       560       566       568  
Total Interest Expense
     4,132       4,464       4,235       4,085       4,058  
Net Interest Income
     24,022       25,292       26,552       27,095       26,995  
Provision for Loan Losses
     10,740       10,834       12,347       8,426       8,410  
Net Interest Income after Provision for Loan Losses
     13,282       14,458       14,205       18,669       18,585  
                                         
NONINTEREST INCOME
                                        
Service Charges on Deposit Accounts
     6,628       7,183       7,099       7,162       6,698  
Data Processing Fees
     900       948       914       896       870  
Asset Management Fees
     1,020       1,065       960       930       970  
Retail Brokerage Fees
     565       772       765       625       493  
Gain on Sale of Investment Securities
     5       -       4       6       -  
Mortgage Banking Revenues
     508       550       663       902       584  
Merchant Fees
     665       345       393       663       958  
Interchange Fees
     1,212       1,129       1,129       1,118       1,056  
Gain on Sale of Portion of Merchant Services Portfolio
     -       -       -       -       -  
ATM/Debit Card Fees
     963       892       876       884       863  
Other
     1,501       1,527       1,501       1,448       1,550  
Total Noninterest Income
     13,967       14,411       14,304       14,634       14,042  
                                         
NONINTEREST EXPENSE
                                        
Salaries and Associate Benefits
     16,779       16,121       15,660       16,049       17,237  
Occupancy, Net
     2,408       2,458       2,455       2,540       2,345  
Furniture and Equipment
     2,181       2,261       2,193       2,304       2,338  
Intangible Amortization
     710       1,010       1,011       1,010       1,011  
Other
     11,306       13,463       10,296       11,027       9,326  
Total Noninterest Expense
     33,384       35,313       31,615       32,930       32,257  
                                         
OPERATING PROFIT
     (6,135 )     (6,444 )     (3,106 )     373       370  
Provision for Income Taxes
     (2,672 )     (3,037 )     (1,618 )     (401 )     (280 )
NET INCOME
   $ (3,463 )   $ (3,407 )   $ (1,488 )   $ 774     $ 650  
                                         
PER SHARE DATA
                                        
Basic Earnings
   $ (0.20 )   $ (0.20 )   $ (0.08 )   $ 0.04     $ 0.04  
Diluted Earnings
   $ (0.20 )   $ (0.20 )   $ (0.08 )   $ 0.04     $ 0.04  
Cash Dividends
     0.190       0.190       0.190       0.190       0.190  
AVERAGE SHARES
                                        
Basic
     17,057       17,034       17,024       17,010       17,109  
Diluted
     17,070       17,035       17,025       17,010       17,131  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                          
Unaudited
                              
                               
(Dollars in thousands, except per share data)
  
2010
First Quarter
    
2009
Fourth Quarter
    
2009
Third Quarter
    
2009
Second Quarter
    
2009
First Quarter
  
                               
ASSETS
                              
Cash and Due From Banks
   $ 52,615     $ 57,877     $ 79,275     $ 92,394     $ 81,317  
Funds Sold and Interest Bearing Deposits
     293,413       276,416       828       2,016       4,241  
Total Cash and Cash Equivalents
     346,028       334,293       80,103       94,410       85,558  
                                         
Investment Securities, Available-for-Sale
     217,606       176,673       183,944       194,002       195,767  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     169,766       189,061       203,813       201,589       202,038  
Real Estate - Construction
     79,145       111,249       128,476       153,507       154,102  
Real Estate - Commercial
     729,011       716,791       704,595       686,420       673,066  
Real Estate - Residential
     394,132       406,262       424,715       447,652       464,358  
Real Estate - Home Equity
     245,185       246,722       243,808       235,473       223,505  
Consumer
     224,793       233,524       241,672       241,467       243,280  
Other Loans
     6,888       10,207       7,790       7,933       8,068  
Overdrafts
     2,701       2,124       3,163       3,022       3,195  
Total Loans, Net of Unearned Interest
     1,851,621       1,915,940       1,958,032       1,977,063       1,971,612  
Allowance for Loan Losses
     (41,198 )     (43,999 )     (45,401 )     (41,782 )     (40,172 )
Loans, Net
     1,810,423       1,871,941       1,912,631       1,935,281       1,931,440  
                                         
Premises and Equipment, Net
     117,055       115,439       111,797       109,050       107,259  
Intangible Assets
     88,131       88,841       89,851       90,862       91,872  
Other Assets
     135,860       121,137       113,611       102,234       87,483  
Total Other Assets
     341,046       325,417       315,259       302,146       286,614  
                                         
Total Assets
   $ 2,715,103     $ 2,708,324     $ 2,491,937     $ 2,525,839     $ 2,499,379  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 446,855     $ 427,791     $ 397,943     $ 424,125     $ 413,608  
NOW Accounts
     890,570       899,649       687,679       733,526       726,069  
Money Market Accounts
     376,091       373,105       301,662       300,683       312,541  
Regular Savings Accounts
     130,936       122,370       122,040       123,257       121,245  
Certificates of Deposit
     438,488       435,319       440,666       424,339       416,326  
Total Deposits
     2,282,940       2,258,234       1,949,990       2,005,930       1,989,789  
                                         
Short-Term Borrowings
     18,900       35,841       103,711       73,989       68,193  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     50,679       49,380       50,665       52,354       53,448  
Other Liabilities
     37,738       34,083       56,269       57,973       49,518  
                                         
Total Liabilities
     2,453,144       2,440,425       2,223,522       2,253,133       2,223,835  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     171       170       170       170       170  
Additional Paid-In Capital
     36,816       36,099       36,065       35,698       35,841  
Retained Earnings
     239,755       246,460       253,104       257,828       260,287  
Accumulated Other Comprehensive Loss, Net of Tax
     (14,783 )     (14,830 )     (20,924 )     (20,990 )     (20,754 )
                                         
Total Shareowners' Equity
     261,959       267,899       268,415       272,706       275,544  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,715,103     $ 2,708,324     $ 2,491,937     $ 2,525,839     $ 2,499,379  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,362,640     $ 2,369,029     $ 2,142,804     $ 2,173,081     $ 2,171,620  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Deposit Base
     2,572       3,233       4,196       5,159       6,121  
Other
     748       797       844       892       940  
Interest Bearing Liabilities
     1,968,551       1,978,551       1,769,310       1,771,035       1,760,709  
                                         
Book Value Per Diluted Share
   $ 15.34     $ 15.72     $ 15.76     $ 16.03     $ 16.18  
Tangible Book Value Per Diluted Share
     10.18       10.51       10.48       10.70       10.80  
                                         
Actual Basic Shares Outstanding
     17,063       17,036       17,032       17,010       17,010  
Actual Diluted Shares Outstanding
     17,076       17,037       17,033       17,010       17,031  

 
 
 


CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
   
2010
    
2009
    
2009
    
2009
    
2009
  
(Dollars in thousands)
  
First Quarter
    
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $ 43,999     $ 45,401     $ 41,782     $ 40,172     $ 37,004  
Provision for Loan Losses
     10,740       10,834       12,347       8,426       8,410  
Transfer of Unfunded Reserve to Other Liability
     5       392       -       -       -  
Net Charge-Offs
     13,536       11,844       8,728       6,816       5,242  
                                         
Balance at End of Period
   $ 41,198     $ 43,999     $ 45,401     $ 41,781     $ 40,172  
As a % of Loans
     2.23 %     2.30 %     2.32 %     2.12 %     2.04 %
As a % of Nonperforming Loans
     38.42 %     40.77 %     40.90 %     33.71 %     34.82 %
As a % of Nonperforming Assets
     26.81 %     30.54 %     31.45 %     29.09 %     31.69 %
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $ 842     $ 712     $ 633     $ 388     $ 857  
Real Estate - Construction
     3,722       2,040       2,315       3,356       320  
Real Estate - Commercial
     4,631       1,584       1,707       123       1,002  
Real Estate - Residential
     3,727       7,377       3,394       2,379       1,975  
Consumer
     1,507       1,324       1,324       1,145       2,117  
                                         
Total Charge-Offs
   $ 14,429     $ 13,037     $ 9,373     $ 7,391     $ 6,271  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $ 77     $ 343     $ 64     $ 84     $ 74  
Real Estate - Construction
     -       5       150       -       385  
Real Estate - Commercial
     157       43       8       1       -  
Real Estate - Residential
     114       331       92       51       58  
Consumer
     545       471       331       439       512  
                                         
Total Recoveries
   $ 893     $ 1,193     $ 645     $ 575     $ 1,029  
                                         
NET CHARGE-OFFS
   $ 13,536     $ 11,844     $ 8,728     $ 6,816     $ 5,242  
                                         
Net Charge-Offs as a % of Average Loans(1)
     2.91 %     2.42 %     1.76 %     1.39 %     1.08 %
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $ 76,382     $ 86,274     $ 91,880     $ 111,039     $ 110,200  
Restructured Loans
     30,843       21,644       19,121       12,916       5,157  
Total Nonperforming Loans
     107,225       107,918       111,001       123,955       115,357  
Other Real Estate
     46,444       36,134       33,371       19,671       11,425  
Total Nonperforming Assets
   $ 153,669     $ 144,052     $ 144,372     $ 143,626     $ 126,783  
                                         
Past Due Loans 90 Days or More
   $ -     $ -     $ 486     $ -     $ -  
                                         
Nonperforming Loans as a % of Loans
     5.79 %     5.63 %     5.67 %     6.27 %     5.85 %
Nonperforming Assets as a % of
                                        
Loans and Other Real Estate
     8.10 %     7.38 %     7.25 %     7.19 %     6.39 %
Nonperforming Assets as a % of Capital(2)
     50.69 %     46.19 %     46.01 %     45.67 %     40.16 %
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses.
                                  


 
 
 

AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                      
Unaudited
                                                                                          
                                                                                           
                                                                                           
   
First Quarter 2010
    
Fourth Quarter 2009
    
Third Quarter 2009
    
Second Quarter 2009
    
First Quarter 2009
  
(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
  
                                                                                           
ASSETS:
                                                                                          
Loans, Net of Unearned Interest
   $ 1,886,367       27,180       5.84 %   $ 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 %
                                                                                                                         
Investment Securities
                                                                                                                        
Taxable Investment Securities
     71,325       500       2.81 %     72,537       498       2.74 %     81,777       682       3.32 %     89,574       742       3.31 %     90,927       776       3.43 %
Tax-Exempt Investment Securities
     97,316       753       3.10 %     107,361       921       3.43 %     107,307       985       3.67 %     106,869       1,067       4.00 %     101,108       1,133       4.48 %
                                                                                                                         
Total Investment Securities
     168,641       1,253       2.98 %     179,898       1,419       3.15 %     189,084       1,667       3.52 %     196,443       1,809       3.68 %     192,035       1,909       3.98 %
                                                                                                                         
Funds Sold
     303,280       172       0.23 %     112,790       77       0.27 %     3,294       1       0.11 %     4,641       1       0.10 %     10,116       3       0.13 %
                                                                                                                         
Total Earning Assets
     2,358,288     $ 28,605       4.92 %     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 %
                                                                                                                         
Cash and Due From Banks
     54,873                       69,687                       76,622                       81,368                       76,826                  
Allowance for Loan Losses
     (44,584 )                     (46,468 )                     (42,774 )                     (41,978 )                     (38,007 )                
Other Assets
     329,842                       314,470                       306,759                       291,681                       281,869                  
                                                                                                                         
Total Assets
   $ 2,698,419                     $ 2,575,250                     $ 2,497,969                     $ 2,506,352                     $ 2,486,925                  
                                                                                                                         
LIABILITIES:
                                                                                                                        
Interest Bearing Deposits
                                                                                                                        
NOW Accounts
   $ 867,004     $ 384       0.18 %   $ 740,550     $ 308       0.17 %   $ 678,292     $ 257       0.15 %   $ 709,039     $ 249       0.14 %   $ 719,265     $ 225       0.13 %
Money Market Accounts
     374,161       689       0.75 %     361,104       625       0.69 %     301,230       281       0.37 %     298,007       192       0.26 %     321,562       190       0.24 %
Savings Accounts
     126,352       15       0.05 %     122,158       16       0.05 %     122,934       15       0.05 %     123,034       15       0.05 %     118,142       14       0.05 %
Time Deposits
     438,112       1,850       1.71 %     439,654       2,015       1.82 %     430,944       2,073       1.91 %     417,545       2,044       1.96 %     392,006       2,066       2.14 %
Total Interest Bearing Deposits
     1,805,629       2,938       0.66 %     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 %
                                                                                                                         
Short-Term Borrowings
     30,673       17       0.22 %     47,114       22       0.18 %     97,305       113       0.45 %     87,768       88       0.40 %     85,318       68       0.32 %
Subordinated Notes Payable
     62,887       651       4.14 %     62,887       936       5.83 %     62,887       936       5.83 %     62,887       931       5.86 %     62,887       927       5.89 %
Other Long-Term Borrowings
     49,981       526       4.27 %     50,026       542       4.30 %     51,906       560       4.28 %     52,775       566       4.30 %     53,221       568       4.33 %
                                                                                                                         
Total Interest Bearing Liabilities
     1,949,170     $ 4,132       0.86 %     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 %
                                                                                                                         
Noninterest Bearing Deposits
     443,131                       426,542                       416,770                       423,566                       406,380                  
Other Liabilities
     37,563                       56,659                       60,674                       54,617                       46,510                  
                                                                                                                         
Total Liabilities
     2,429,864                       2,306,694                       2,222,942                       2,229,238                       2,205,291                  
                                                                                                                         
SHAREOWNERS' EQUITY:
   $ 268,555                     $ 268,556                     $ 275,027                     $ 277,114                     $ 281,634                  
                                                                                                                         
Total Liabilities and Shareowners' Equity
   $ 2,698,419                     $ 2,575,250                     $ 2,497,969                     $ 2,506,352                     $ 2,486,925                  
                                                                                                                         
Interest Rate Spread
           $ 24,473       4.06 %           $ 25,845       4.41 %           $ 27,128       4.81 %           $ 27,679       4.92 %           $ 27,578       4.98 %
                                                                                                                         
Interest Income and Rate Earned(1)
     $ 28,605       4.92 %           $ 30,309       5.38 %           $ 31,363       5.77 %           $ 31,764       5.86 %           $ 31,636       5.92 %
Interest Expense and Rate Paid(2)
             4,132       0.71 %             4,464       0.79 %             4,235       0.78 %             4,085       0.75 %             4,058       0.76 %
                                                                                                                         
Net Interest Margin
           $ 24,473       4.21 %           $ 25,845       4.59 %           $ 27,128       4.99 %           $ 27,679       5.11 %           $ 27,578       5.16 %