ex99_1.htm

Capital City Bank Group, Inc.

Reports Third Quarter 2010 Results

TALLAHASSEE, Fla. (October 26, 2010) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income for the third quarter of 2010 totaling $0.4 million, or $0.02 per diluted share, compared to net income of $0.7 million, or $0.04 per diluted share, for the second quarter of 2010 and a net loss of $1.5 million, or $0.08 per diluted share, for the third quarter of 2009. For the first nine months of 2010, the Company reported a net loss of $2.3 million, or $0.14 per diluted share compared to a net loss of $0.1 million, or $0.00 per diluted share for the same period in 2009.

Net income for the third quarter reflects a loan loss provision of $5.7 million compared to $3.6 million for the second quarter of 2010. The increase in the loan loss provision and lower noninterest income of $1.2 million, partially offset by higher net interest income of $0.4 million and lower noninterest expense of $2.3 million, were the primary factors driving the reduction in earnings from the linked second quarter. Compared to the third quarter of 2009, a $6.7 million reduction in the loan loss provision, partially offset by a decline in net interest income of $1.8 million, lower noninterest income of $0.9 million and higher noninterest expense of $0.7 million, drove the improvement in earnings.

For the first nine months of 2010, lower net interest income of $7.5 million, a decline in noninterest income of $0.9 million, and higher noninterest expense of $3.6 million were the primary reasons for the decline in earnings over 2009. A lower loss provision of $9.1 million helped offset the aforementioned unfavorable variances.

“Given the current state of our economy, we were pleased to report a profit for the second consecutive quarter. Credit related costs continue to be elevated, but our diligence and focus on resolving problem assets is paying benefits as our nonperforming assets fell $4.2 million to $145.6 million as of quarter-end. Our capital levels remain strong and we believe we are well positioned to capitalize on opportunities evolving in our markets. While resolving problem assets is a high priority, it is not to the detriment of serving our existing clients and growing our business,” said William G. Smith, Jr., Chairman, President and Chief Executive Officer.

The Return on Average Assets was 0.06% and the Return on Average Equity was 0.60% for the third quarter of 2010. These metrics were 0.11% and 1.11% for the second quarter of 2010, and -0.24% and -2.15% for the third quarter of 2009, respectively.

For the first nine months of 2010, the Return on Average Assets was -0.12% and the Return on Average Equity was -1.17% compared to 0.00% and -0.03%, respectively, for the same period in 2009.

Discussion of Financial Condition

Average earning assets were $2.273 billion for the third quarter of 2010, a decrease of $56.2 million, or 2.4%, from the second quarter of 2010, and an increase of $35.6 million, or 1.6%, from the fourth quarter of 2009. The decrease from the second quarter is primarily attributable to a lower level of overnight funds of $15.1 million (reflecting the reduction in deposits), and problem loan resolutions, which have the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned category. Growth over the fourth quarter is attributable to increases in overnight funds and investment securities of $139.6 million and $33.4 million, respectively, which were primarily funded by higher deposit balances. These increases were partially offset by problem loan resolutions. Average loans have declined throughout the portfolio, driven by reductions in the commercial real estate and construction loan categories. The portfolio continues to be impacted by weak loan demand attributable to the sluggish economy, but not at the levels we have experienced in recent quarters. In addition to lower production and normal amortization and payoffs, the reduction in the portfolio is also attributable to gross charge-offs and the transfer of loans to the other real estate owned category, which collectively accounted for $60.9 million, or 53%, of the net reduction of $114.7 million1 in the portfolio during the first nine months of 2010.

1 The $114.7 million reduction in the loan portfolio and the $60.9 million in loan resolutions are based on “as of“ balances not averages.

At the end of the third quarter, nonperforming assets (including nonaccrual loans, restructured loans and other real estate owned) totaled $145.6 million, a decrease of $4.2 million from the second quarter of 2010, driven primarily by a decrease in restructured loans of $6.9 million - two large loans were restored to performing status due to paying as agreed under restructured terms. Nonaccrual loans realized a net decrease of $0.4 million in the current quarter as the volume of loans migrating to nonaccrual status was essentially offset by resolutions and transfers to the other real estate owned category. The $3.1 million increase in the other real estate owned balance reflects the aforementioned migration of nonaccrual loans through the foreclosure process as well as a slight slowdown in property dispositions. Nonperforming assets represented 7.86% of loans and other real estate at the end of the third quarter compared to 8.01% at the prior quarter-end and 7.38% at year-end 2009.

Average total deposits were $2.172 billion for the third quarter, a decrease of $62.0 million, or 2.8%, from the second quarter of 2010 and an increase of $82.2 million, or 3.9%, from the fourth quarter of 2009. Deposit levels are strong, but down slightly from the second quarter level, primarily attributable to lower money market account and certificates of deposit balances, and a decline in public funds. The money market account promotion launched during the third quarter of 2009 and concluded in the fourth quarter, experienced runoff as rates were eased during the current quarter to standard levels. Despite the lowering of rates, the bank has retained in excess of $24.4 million in new deposit balances. This initiative served to support our core deposit growth strategy while succeeding in further strengthening the Bank’s overall liquidity position. Certificates of deposit declined primarily due to the maturity of one large public fund CD and a reduction in the number of single relationship, higher yielding certificates of deposit with the Bank. Public funds balances have declined as anticipated from the linked quarter reflecting seasonality within this deposit category. Our Absolutely Free Checking (“AFC”) products continue to be successful as both balances and the number of accounts increased quarter over quarter.

We continue to pursue prudent pricing discipline to manage the mix of our deposits. Therefore, we are not attempting to compete with higher rate paying competitors for deposits. The increase from the fourth quarter of 2009 reflects higher public funds of $37.3 million and core deposits of $44.9 million, fueled primarily by the success of the AFC products.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $246.9 million during the third quarter of 2010 compared to an average net overnight funds sold position of $262.2 million in the prior quarter and an average overnight funds sold position of $112.8 million in the fourth quarter of 2009. The lower balance when compared to the linked quarter primarily reflects the decline in deposits mentioned above, partially offset by the lower investment and loan portfolios. The favorable variance as compared to year-end is primarily attributable to the growth in deposits and net reductions in the loan portfolio, partially offset by a higher balance in the investment portfolio. Late in the third quarter, a portion of the funds sold position was deployed into the investment portfolio. We will continue to evaluate deploying the excess funds sold position into the investment portfolio during the fourth quarter of 2010.

Equity capital was $260.7 million as of September 30, 2010, compared to $261.7 million as of June 30, 2010 and $267.9 million as of December 31, 2009. Our leverage ratio was 9.75%, 9.58%, and 10.39%, respectively, for the comparable periods. Further, our risk-adjusted capital ratio of 14.29% at September 30, 2010 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines. At September 30, 2010, our tangible common equity ratio was 6.98%, compared to 6.80% at June 30, 2010 and 6.84% at December 31, 2009.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2010 was $25.1 million compared to $24.7 million for the second quarter of 2010 and $27.1 million for the third quarter of 2009. For the first nine months of 2010, tax equivalent net interest income totaled $74.3 million compared to $82.4 million in 2009.

The increase of $0.4 million in tax equivalent net interest income on a linked quarter basis was due to lower interest expense, one additional calendar day, and a continued decrease in foregone interest on nonaccrual loans, partially offset by a reduction in loan income attributable to declining loan balances, and continued unfavorable asset repricing. Lower interest expense reflects a reduction in deposit rates primarily in the categories of NOWs, money market accounts and certificates of deposit.

The decrease of $8.1 million in tax equivalent net interest income for the first nine months of 2010, as compared to the same period in 2009, resulted from a reduction in loans outstanding, lower earning assets yields reflecting unfavorable asset repricing, higher foregone interest and lower loan fees, partially offset by a reduction in interest expense.

The net interest margin in the third quarter of 2010 was 4.38%, an increase of 12 basis points over the linked quarter and a decline of 61 basis points from the third quarter of 2009. The increase in the margin when compared to the linked quarter was a result of a 12 basis point reduction in the cost of funds, as the yield on earning assets remained constant. The lower cost of funds resulted from a reduction in the rates on NOW accounts primarily to comply with the Transaction Account Guarantee Program changes. Rates were lowered on the money market promotional accounts while certificates of deposit rates were significantly reduced in all markets. The decline in the margin for the first nine months of 2010 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 experienced in the fourth quarter of 2009 and the first half of 2010 improved our liquidity position, but has also adversely impacted our margin in the short term as a significant portion of this growth is currently invested in overnight funds.

The provision for loan losses for the third quarter of 2010 was $5.7 million compared to $3.6 million in the second quarter of 2010 and $12.3 million for the third quarter of 2009. For the first nine months of 2010, the loan loss provision totaled $20.0 million compared to $29.2 million for the same period in 2009. The higher provision over the second quarter primarily reflects an increase in the volume of loans migrating to impaired status and collateral devaluation on existing impaired loans. The lower provision for the first nine months of the year primarily reflects a reduction in the level of loans migrating into our problem loan pool as well as other stabilizing trends within the loan portfolio. Net charge-offs in the third quarter totaled $6.4 million, or 1.40% of average loans, compared to $6.4 million, or 1.39%, in the second quarter of 2010. At quarter-end, the allowance for loan losses was 2.10% of outstanding loans (net of overdrafts) and provided coverage of 40% of nonperforming loans compared to 2.11% and 38%, respectively, at the end of the prior quarter.

Noninterest income for the third quarter decreased $1.2 million, or 8.3%, from the linked quarter attributable to lower deposit fees ($0.6 million), retail brokerage fees ($0.2 million), and other income ($0.5 million). The decline in deposit fees was attributable to a lower level of overdraft fees due to reduced activity and to a lesser extent a higher level of overdraft charge-offs. The reduction in overdraft activity reflects current economic conditions and a higher level of consumer awareness that have both impacted consumer and business spending habits, as well as the recent implementation of new rules under Regulation E, which regulate our ability to post one-time debit card/ATM transactions for clients who have not opted in to our overdraft protection service. The lower level of retail brokerage fees is primarily reflective of lower trading activity. The decline in other income is due to a reduced level of merchant fees - a substantial portion of our merchant portfolio was sold in July 2008 and over the course of 2009 our merchants migrated to a new processor. For 2010, we continued to service our largest remaining merchant who migrated to a new processor during the third quarter of 2010. The reduction in this revenue source has been substantially offset by a reduction in processing costs which is reflected in noninterest expense (interchange fees). For the first nine months of 2010, noninterest income declined $0.9 million, or 2.1%, from the same period in 2009 attributable to lower deposit fees ($0.9 million) and other income ($1.2 million), partially offset by an increase in debit card and interchange fees ($0.9 million). The declines in deposit and merchant fees are attributable the same aforementioned factors for the current quarter. The higher level of debit card fees reflect a new rewards program implemented in early 2010 as well as a higher level of card activation and utilization.

Total noninterest expense decreased $2.3 million, or 6.5%, from the linked quarter driven by a reduction in expense for other real estate properties ($0.8 million), FDIC insurance ($0.4 million), advertising costs ($0.5 million), pension plan expense ($0.4 million), and interchange fees ($0.3 million). The decline in other real estate expense reflects a lower level of property valuation write-downs. The favorable variance in FDIC insurance reflects a higher required expense in the prior quarter due to an adjustment in our premium rate. The lower level of pension expense reflects a year-to-date adjustment after receipt of accounting reports from our actuary which included better than estimated asset return performance. The decline in interchange fees reflects the migration of our last merchant services client to a new processor – this decline is substantially offset by a corresponding decline in merchant fee revenue. For the first nine months of 2010, as compared to the same period in 2009, noninterest expense increased $3.6 million, or 3.7%, due primarily to higher expense for other real estate properties ($6.2 million), partially offset by lower pension expense ($1.4 million), advertising expense ($0.4 million), and intangible

asset amortization ($0.9 million). A higher level of other real estate owned properties drove the increase in other real estate expenses. The decline in pension expense reflects improved return on pension plan assets. Closer management of costs related to our free checking products as well as lower public relations expense contributed to the decline in advertising expense. The lower level of intangible asset amortization reflects the full amortization of a core deposit intangible.

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 $2.6 billion in assets. The Company provides a full range of banking services, including traditional deposit and credit services, asset management, trust, mortgage banking, merchant services, bankcards, data processing and securities brokerage services. The Company's bank subsidiary, Capital City Bank, was founded in 1895 and now has 70 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 and the valuation allowance on deferred tax assets; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; continued depression of the market value of the Company that could result in an impairment of goodwill; 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 and manmade disasters; 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									Nine Months Ended
(Dollars in thousands, except per share data)	Sep 30, 2010			Jun 30, 2010			Sep 30, 2009			Sep 30, 2010			Sep 30, 2009
EARNINGS
Net Income(Loss)	$	401		$	731		$	(1,488	)	$	(2,331	)	$	(64	)
Net Income(Loss) Per Common Share	$	0.02		$	0.04		$	(0.08	)	$	(0.14	)	$	0.00
PERFORMANCE
Return on Average Equity		0.60	%		1.11	%		-2.15	%		-1.17	%		-0.03	%
Return on Average Assets		0.06	%		0.11	%		-0.24	%		-0.12	%		0.00	%
Net Interest Margin		4.38	%		4.26	%		4.99	%		4.29	%		5.09	%
Noninterest Income as % of Operating Revenue		35.17	%		37.58	%		35.01	%		36.52	%		34.75	%
Efficiency Ratio		82.08	%		86.06	%		73.86	%		84.39	%		74.82	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio		12.93	%		12.78	%		12.76	%		12.93	%		12.76	%
Total Capital Ratio		14.29	%		14.14	%		14.12	%		14.29	%		14.12	%
Tangible Capital Ratio		6.98	%		6.80	%		7.43	%		6.98	%		7.43	%
Leverage Ratio		9.75	%		9.58	%		10.96	%		9.75	%		10.96	%
Equity to Assets		10.10	%		9.87	%		10.77	%		10.10	%		10.77	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		39.94	%		37.80	%		40.90	%		39.94	%		40.90	%
Allowance as a % of Loans		2.10	%		2.11	%		2.32	%		2.10	%		2.32	%
Net Charge-Offs as % of Average Loans		1.40	%		1.39	%		1.76	%		1.91	%		1.41	%
Nonperforming Assets as % of Loans and ORE		7.86	%		8.01	%		7.25	%		7.86	%		7.25	%
STOCK PERFORMANCE
High	$	14.24		$	18.25		$	17.10		$	18.25		$	27.31
Low	$	10.76		$	12.36		$	13.92		$	10.76		$	9.50
Close	$	12.14		$	12.38		$	14.20		$	12.14		$	14.20
Average Daily Trading Volume		29,747			46,507			33,823			34,489			44,127

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

															Nine Months Ended
															September 30
(Dollars in thousands, except per share data)	2010 Third Quarter			2010 Second Quarter		2010 First Quarter			2009 Fourth Quarter			2009 Third Quarter			2010			2009

INTEREST INCOME
Interest and Fees on Loans	$	26,418		$	26,644	$	26,992		$	28,582		$	29,463		$	80,054		$	88,742
Investment Securities		1,014			1,114		990			1,097			1,323			3,118			4,273
Funds Sold		144			176		172			77			1			492			5
Total Interest Income		27,576			27,934		28,154			29,756			30,787			83,664			93,020

INTEREST EXPENSE
Deposits		1,820			2,363		2,938			2,964			2,626			7,121			7,621
Short-Term Borrowings		31			12		17			22			113			60			269
Subordinated Notes Payable		376			639		651			936			936			1,666			2,794
Other Long-Term Borrowings		565			551		526			542			560			1,642			1,694
Total Interest Expense		2,792			3,565		4,132			4,464			4,235			10,489			12,378
Net Interest Income		24,784			24,369		24,022			25,292			26,552			73,175			80,642
Provision for Loan Losses		5,668			3,633		10,740			10,834			12,347			20,041			29,183
Net Interest Income after Provision for Loan Losses		19,116			20,736		13,282			14,458			14,205			53,134			51,459

NONINTEREST INCOME
Service Charges on Deposit Accounts		6,399			7,039		6,628			7,183			7,099			20,066			20,959
Data Processing Fees		911			919		900			948			914			2,730			2,680
Asset Management Fees		1,040			1,080		1,020			1,065			960			3,140			2,860
Retail Brokerage Fees		671			846		565			772			765			2,082			1,883
Gain on Sale of Investment Securities		3			-		5			-			4			8			10
Mortgage Banking Revenues		772			641		508			550			663			1,921			2,149
Interchange Fees		1,291			1,289		1,212			1,129			1,129			3,792			3,303
ATM/Debit Card Fees		1,036			1,073		963			892			876			3,072			2,623
Other		1,326			1,787		2,166			1,872			1,894			5,279			6,513
Total Noninterest Income		13,449			14,674		13,967			14,411			14,304			42,090			42,980

NONINTEREST EXPENSE
Salaries and Associate Benefits		15,003			15,584		16,779			16,121			15,660			47,366			48,946
Occupancy, Net		2,611			2,585		2,408			2,458			2,455			7,604			7,340
Furniture and Equipment		2,288			2,192		2,181			2,261			2,193			6,661			6,835
Intangible Amortization		709			710		710			1,010			1,011			2,129			3,032
Other		11,752			13,558		11,306			13,463			10,296			36,616			30,649
Total Noninterest Expense		32,363			34,629		33,384			35,313			31,615			100,376			96,802

OPERATING PROFIT(LOSS)		202			781		(6,135	)		(6,444	)		(3,106	)		(5,152	)		(2,363	)
Provision for Income Taxes		(199	)		50		(2,672	)		(3,037	)		(1,618	)		(2,821	)		(2,299	)
NET INCOME(LOSS)	$	401		$	731	$	(3,463	)	$	(3,407	)	$	(1,488	)	$	(2,331	)	$	(64	)

PER SHARE DATA
Basic Earnings	$	0.02		$	0.04	$	(0.20	)	$	(0.20	)	$	(0.08	)	$	(0.14	)	$	0.00
Diluted Earnings	$	0.02		$	0.04	$	(0.20	)	$	(0.20	)	$	(0.08	)	$	(0.14	)	$	0.00
Cash Dividends		0.100			0.100		0.190			0.190			0.190			0.390			0.570
AVERAGE SHARES
Basic		17,087			17,063		17,057			17,034			17,024			17,069			17,047
Diluted		17,088			17,074		17,070			17,035			17,025			17,070			17,048

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

(Dollars in thousands, except per share data)	2010 Third Quarter			2010 Second Quarter			2010 First Quarter			2009 Fourth Quarter			2009 Third Quarter

ASSETS
Cash and Due From Banks	$	48,701		$	52,380		$	52,615		$	57,877		$	79,275
Funds Sold and Interest Bearing Deposits		193,415			250,508			293,413			276,416			828
Total Cash and Cash Equivalents		242,116			302,888			346,028			334,293			80,103

Investment Securities, Available-for-Sale		231,303			218,785			217,606			176,673			183,944

Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural		156,049			161,268			169,766			189,061			203,813
Real Estate - Construction		45,346			56,910			79,145			111,249			128,476
Real Estate - Commercial		680,639			676,516			729,011			716,791			704,595
Real Estate - Residential		448,704			450,997			394,132			406,262			424,715
Real Estate - Home Equity		250,795			247,726			245,185			246,722			243,808
Consumer		207,207			215,723			224,793			233,524			241,672
Other Loans		9,828			9,498			6,888			10,207			7,790
Overdrafts		2,669			3,144			2,701			2,124			3,163
Total Loans, Net of Unearned Interest		1,801,237			1,821,782			1,851,621			1,915,940			1,958,032
Allowance for Loan Losses		(37,720	)		(38,442	)		(41,198	)		(43,999	)		(45,401	)
Loans, Net		1,763,517			1,783,340			1,810,423			1,871,941			1,912,631

Premises and Equipment, Net		115,689			116,802			117,055			115,439			111,797
Intangible Assets		86,712			87,421			88,131			88,841			89,851
Other Real Estate Owned		51,208			48,110			46,444			36,134			33,371
Other Assets		89,451			93,398			89,416			85,003			80,240
Total Other Assets		343,060			345,731			341,046			325,417			315,259

Total Assets	$	2,579,996		$	2,650,744		$	2,715,103		$	2,708,324		$	2,491,937

LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	479,887		$	460,168		$	446,855		$	427,791		$	397,943
NOW Accounts		830,297			891,636			890,570			899,649			687,679
Money Market Accounts		282,848			303,369			376,091			373,105			301,662
Regular Savings Accounts		135,143			132,174			130,936			122,370			122,040
Certificates of Deposit		393,268			412,964			438,488			435,319			440,666
Total Deposits		2,121,443			2,200,311			2,282,940			2,258,234			1,949,990

Short-Term Borrowings		38,138			21,376			18,900			35,841			103,711
Subordinated Notes Payable		62,887			62,887			62,887			62,887			62,887
Other Long-Term Borrowings		46,456			55,605			50,679			49,380			50,665
Other Liabilities		50,383			48,885			37,738			34,083			56,269

Total Liabilities		2,319,307			2,389,064			2,453,144			2,440,425			2,223,522

SHAREOWNERS' EQUITY
Common Stock		171			171			171			170			170
Additional Paid-In Capital		36,864			36,633			36,816			36,099			36,065
Retained Earnings		237,471			238,779			239,755			246,460			253,104
Accumulated Other Comprehensive Loss, Net of Tax		(13,817	)		(13,903	)		(14,783	)		(14,830	)		(20,924	)

Total Shareowners' Equity		260,689			261,680			261,959			267,899			268,415

Total Liabilities and Shareowners' Equity	$	2,579,996		$	2,650,744		$	2,715,103		$	2,708,324		$	2,491,937

OTHER BALANCE SHEET DATA
Earning Assets	$	2,225,955		$	2,291,075		$	2,362,640		$	2,369,029		$	2,142,804
Intangible Assets
Goodwill		84,811			84,811			84,811			84,811			84,811
Core Deposits		1,248			1,910			2,572			3,233			4,196
Other		653			700			748			797			844
Interest Bearing Liabilities		1,789,037			1,880,011			1,968,551			1,978,551			1,769,310

Book Value Per Diluted Share	$	15.25		$	15.32		$	15.34		$	15.72		$	15.76
Tangible Book Value Per Diluted Share		10.18			10.21			10.18			10.51			10.48

Actual Basic Shares Outstanding		17,095			17,067			17,063			17,036			17,032
Actual Diluted Shares Outstanding		17,096			17,078			17,076			17,037			17,033


CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited
	2010			2010			2010			2009			2009
(Dollars in thousands)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter

ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period	$	38,442		$	41,199		$	43,999		$	45,401		$	41,782
Provision for Loan Losses		5,668			3,633			10,740			10,834			12,347
Transfer of Unfunded Reserve to Other Liability		-			-			-			392			-
Net Charge-Offs		6,390			6,390			13,540			11,844			8,728

Balance at End of Period	$	37,720		$	38,442		$	41,199		$	43,999		$	45,401
As a % of Loans		2.10	%		2.11	%		2.23	%		2.30	%		2.32	%
As a % of Nonperforming Loans		39.94	%		37.80	%		38.42	%		40.77	%		40.90	%
As a % of Nonperforming Assets		25.90	%		25.66	%		26.81	%		30.54	%		31.45	%

CHARGE-OFFS
Commercial, Financial and Agricultural	$	242		$	405		$	842		$	712		$	633
Real Estate - Construction		701			1,220			3,722			2,040			2,315
Real Estate - Commercial		1,741			920			4,631			1,584			1,707
Real Estate - Residential		3,175			4,725			3,727			7,377			3,394
Consumer		1,057			360			1,507			1,324			1,324

Total Charge-Offs	$	6,916		$	7,630		$	14,429		$	13,037		$	9,373

RECOVERIES
Commercial, Financial and Agricultural	$	65		$	181		$	77		$	343		$	64
Real Estate - Construction		-			8			-			5			150
Real Estate - Commercial		6			43			157			43			8
Real Estate - Residential		181			638			114			331			92
Consumer		274			370			541			471			331

Total Recoveries	$	526		$	1,240		$	889		$	1,193		$	645

NET CHARGE-OFFS	$	6,390		$	6,390		$	13,540		$	11,844		$	8,728

Net Charge-Offs as a % of Average Loans(1)		1.40	%		1.39	%		2.91	%		2.42	%		1.76	%

RISK ELEMENT ASSETS
Nonaccruing Loans	$	74,168		$	74,504		$	76,382		$	86,274		$	91,880
Restructured Loans		20,267			27,200			30,843			21,644			19,121
Total Nonperforming Loans		94,435			101,704			107,225			107,918			111,001
Other Real Estate		51,208			48,110			46,444			36,134			33,371
Total Nonperforming Assets	$	145,643		$	149,814		$	153,669		$	144,052		$	144,372

Past Due Loans 30-89 Days	$	24,904		$	21,192		$	18,768		$	36,501		$	32,553
Past Due Loans 90 Days or More	$	-		$	-		$	-		$	-		$	486

Nonperforming Loans as a % of Loans		5.24	%		5.58	%		5.79	%		5.63	%		5.67	%
Nonperforming Assets as a % of
Loans and Other Real Estate		7.86	%		8.01	%		8.10	%		7.38	%		7.25	%
Nonperforming Assets as a % of Capital(2)		48.81	%		49.92	%		50.69	%		46.19	%		46.01	%


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


AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited


	Third Quarter 2010								Second Quarter 2010								First Quarter 2010								Fourth Quarter 2009								Third Quarter 2009								September 2010 YTD								September 2009 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	$	1,807,483			26,568		5.83	%	$	1,841,379			26,795		5.84	%	$	1,886,367			27,180		5.84	%	$	1,944,873			28,813		5.88	%	$	1,964,984			29,695		6.00	%	$	1,844,788			80,543		5.84	%	$	1,967,759			89,373		6.07	%

Investment Securities
Taxable Investment Securities		124,625			674		2.15	%		128,268			708		2.21	%		71,325			500		2.81	%		72,537			498		2.74	%		81,777			682		3.32	%		108,268			1,882		2.32	%		87,393			2,200		3.35	%
Tax-Exempt Investment Securities		88,656			521		2.35	%		92,140			624		2.71	%		97,316			753		3.10	%		107,361			921		3.43	%		107,307			985		3.67	%		92,672			1,898		2.73	%		105,117			3,185		4.04	%

Total Investment Securities		213,281			1,195		2.23	%		220,408			1,332		2.42	%		168,641			1,253		2.98	%		179,898			1,419		3.15	%		189,084			1,667		3.52	%		200,940			3,780		2.51	%		192,510			5,385		3.73	%

Funds Sold		252,434			144		0.22	%		267,578			176		0.26	%		303,280			172		0.23	%		112,790			77		0.27	%		3,294			1		0.11	%		274,245			492		0.24	%		5,992			5		0.12	%

Total Earning Assets		2,273,198		$	27,907		4.87	%		2,329,365		$	28,303		4.87	%		2,358,288		$	28,605		4.92	%		2,237,561		$	30,309		5.38	%		2,157,362		$	31,363		5.77	%		2,319,973		$	84,815		4.89	%		2,166,261		$	94,763		5.85	%

Cash and Due From Banks		50,942								50,739								54,873								69,687								76,622								52,170								78,271
Allowance for Loan Losses		(39,584	)							(41,074	)							(44,584	)							(46,468	)							(42,774	)							(41,729	)							(40,937	)
Other Assets		342,202								339,458								329,842								314,470								306,759								337,212								293,528

Total Assets	$	2,626,758							$	2,678,488							$	2,698,419							$	2,575,250							$	2,497,969							$	2,667,626							$	2,497,123

LIABILITIES:
Interest Bearing Deposits
NOW Accounts	$	871,158		$	326		0.15	%	$	879,329		$	400		0.18	%	$	867,004		$	384		0.18	%	$	740,550		$	308		0.17	%	$	678,292		$	257		0.15	%	$	872,512		$	1,110		0.17	%	$	702,048		$	731		0.14	%
Money Market Accounts		293,424			145		0.20	%		333,976			331		0.40	%		374,161			689		0.75	%		361,104			625		0.69	%		301,230			281		0.37	%		333,558			1,165		0.47	%		306,858			663		0.29	%
Savings Accounts		133,690			17		0.05	%		131,333			17		0.05	%		126,352			15		0.05	%		122,158			16		0.05	%		122,934			15		0.05	%		130,485			49		0.05	%		121,389			44		0.05	%
Time Deposits		402,880			1,332		1.31	%		430,571			1,615		1.50	%		438,112			1,850		1.71	%		439,654			2,015		1.82	%		430,944			2,073		1.91	%		423,726			4,797		1.51	%		413,641			6,183		2.00	%
Total Interest Bearing Deposits		1,701,152			1,820		0.42	%		1,775,209			2,363		0.53	%		1,805,629			2,938		0.66	%		1,663,466			2,964		0.71	%		1,533,400			2,626		0.68	%		1,760,281			7,121		0.54	%		1,543,936			7,621		0.66	%

Short-Term Borrowings		23,388			31		0.54	%		22,694			12		0.20	%		30,673			17		0.22	%		47,114			22		0.18	%		97,305			113		0.45	%		25,558			60		0.31	%		90,174			269		0.39	%
Subordinated Notes Payable		62,887			376		2.34	%		62,887			639		4.02	%		62,887			651		4.14	%		62,887			936		5.83	%		62,887			936		5.83	%		62,887			1,666		3.49	%		62,887			2,794		5.86	%
Other Long-Term Borrowings		54,258			565		4.13	%		52,704			551		4.20	%		49,981			526		4.27	%		50,026			542		4.30	%		51,906			560		4.28	%		52,330			1,642		4.20	%		52,629			1,694		4.30	%

Total Interest Bearing Liabilities		1,841,685		$	2,792		0.60	%		1,913,494		$	3,565		0.75	%		1,949,170		$	4,132		0.86	%		1,823,493		$	4,464		0.97	%		1,745,498		$	4,235		0.96	%		1,901,056		$	10,489		0.74	%		1,749,626		$	12,378		0.95	%

Noninterest Bearing Deposits		471,013								458,969								443,131								426,542								416,770								457,807								415,610
Other Liabilities		50,318								42,152								37,563								56,659								60,674								43,391								53,986

Total Liabilities		2,363,016								2,414,615								2,429,864								2,306,694								2,222,942								2,402,254								2,219,222

SHAREOWNERS' EQUITY:	$	263,742							$	263,873							$	268,555							$	268,556							$	275,027							$	265,372							$	277,901

Total Liabilities and Shareowners' Equity	$	2,626,758							$	2,678,488							$	2,698,419							$	2,575,250							$	2,497,969							$	2,667,626							$	2,497,123

Interest Rate Spread				$	25,115		4.27	%				$	24,738		4.12	%				$	24,473		4.06	%				$	25,845		4.41	%				$	27,128		4.81	%				$	74,326		4.15	%				$	82,385		4.90	%

Interest Income and Rate Earned(1)				$	27,907		4.87	%				$	28,303		4.87	%				$	28,605		4.92	%				$	30,309		5.38	%				$	31,363		5.77	%				$	84,815		4.89	%				$	94,763		5.85	%
Interest Expense and Rate Paid(2)					2,792		0.49	%					3,565		0.61	%					4,132		0.71	%					4,464		0.79	%					4,235		0.78	%					10,489		0.60	%					12,378		0.76	%

Net Interest Margin				$	25,115		4.38	%				$	24,738		4.26	%				$	24,473		4.21	%				$	25,845		4.59	%				$	27,128		4.99	%				$	74,326		4.29	%				$	82,385		5.09	%




(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.