Capital City Bank Group, Inc.
Reports First Quarter 2011 Results

TALLAHASSEE, Fla. (April 25, 2011) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $1.3 million, or $0.08 per diluted share for the first quarter of 2011 compared to net income of $1.9 million, or $0.12 per diluted share in the fourth quarter of 2010 (“linked quarter”) and a net loss of $3.5 million, or $0.20 per diluted share for the first quarter of 2010.

Compared to the fourth quarter of 2010, net income reflects lower net interest income of $1.4 million, an increase in the loan loss provision of $0.3 million, and higher income tax expense of $0.7 million, partially offset by higher noninterest income of $1.6 million, and lower noninterest expense of $0.2 million.  During the first quarter of 2011, we sold all of our Visa Class B shares of stock, which resulted in a $3.2 million pre-tax gain reflected in noninterest income and a swap liability of $0.6 million reflected in noninterest expense.

The increase in net income over the first quarter of 2010 was driven by a lower loan loss provision of $6.6 million and higher noninterest income of $2.4 million, partially offset by a reduction in net interest income of $1.0 million and higher income tax expense of $3.2 million.

“Given the current state of our economy, I am pleased to report Capital City earned a profit during the first quarter, but weak loan demand, historically low interest rates and general economic conditions within our markets continue to put pressure on earnings," said William G. Smith, Jr., Chairman, President and Chief Executive Officer.  Although our nonperforming assets remain elevated, many credit metrics are showing improved trends.  As expected, total credit costs remain elevated as we work loans through the collection cycle and dispose of OREO properties, both of which gained momentum during the quarter.  We operate from a position of strength with strong liquidity and capital base; and we continue to focus on core deposits as we believe this is the foundation of our long-term franchise value.  While we believe the worst is behind us, early on we suggested the road to recovery would be choppy and this is now playing out as we continue to experience volatility in our quarter to quarter performance."

The Return on Average Assets was 0.20% and the Return on Average Equity was 2.03% for the first quarter of 2011, compared to 0.30% and 2.90%, respectively for the fourth quarter of 2010, and -0.52% and -5.23%, respectively for the comparable quarter in 2010.

Discussion of Financial Condition

Average earning assets were $2.279 billion for the first quarter of 2011, an increase of $60.6 million, or 2.7% from the fourth quarter of 2010, and a decline of $79.7 million, or 3.4%, from the first quarter of 2010.  The higher level of earning assets over the linked quarter was funded by growth in both deposits and short-term borrowings.  Quarter over quarter, average overnight funds grew by $70.2 million, the investment portfolio grew $43.0 million and loans declined $52.6 million, partially attributable to the resolution of problem loans during the quarter.

As compared to the first quarter of 2010, earning assets declined $79.7 million.  A $123.4 million reduction in deposits, partially offset by a $56.6 million increase in short-term borrowings drove the overall reduction in earning assets.  The increase in short-term borrowings is attributable to the expiration of our Guarantee NOW Account (“GNA”) program and clients shifting deposits from the GNA to retail repurchase agreements, which is explained in greater detail below.  Average loans and overnight funds declined $156.0 million and $60.4 million, respectively, while investment securities increased $136.7 million.  Average loans have declined throughout the portfolio, driven primarily by reduction in the commercial real estate and construction loan categories.

The loan portfolio continues to be impacted by weak loan demand attributable to the lack of consumer confidence and a sluggish economy.  In addition to lower production, normal amortization and payoffs, the resolution of problem loans has the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned category.  During the first quarter, problem loan resolutions accounted for $15.3 million, or 35% of a net reduction in total loans of $43.9 million, and on a year over year basis, problem loan resolutions accounted for $70.4 million, or 51% of the net reduction of $136.8 million1.
 
Nonperforming assets (including nonaccrual loans, restructured loans (“TDRs”), and other real estate owned (“OREO”)) totaled $153.3 million at the end of the first quarter of 2011, an increase of $8.1 million over the fourth quarter of 2010 and a reduction of $0.3 million from the first quarter of 2010.  Compared to the linked quarter, nonaccrual loans   increased $8.3 million due to a higher level of defaults within our problem loan pool, a significant portion of which was related to one borrowing relationship totaling $6.0 million.  TDRs totaled $24.0 million at the end of the first quarter, a $2.4 million increase over the linked quarter.  The balance of OREO decreased $2.6 million from the linked quarter reflective of an increased pace of property dispositions.  Compared to the first quarter of 2010, the slight decline in nonperforming assets reflects a $2.4 million reduction in the nonaccrual loan balance and a $6.8 million decline in TDRs, partially offset by an $8.9 million increase in the OREO balance.  Nonperforming assets represented 5.76% of total assets at March 31, 2011 compared to 5.54% at December 31, 2010 and 5.66% at March 31, 2010.

Average total deposits were $2.125 billion for the first quarter, an increase of $9.5 million, or 0.5%, from the fourth quarter of 2010 and a decrease of $123.4 million, or 5.5%, from the first quarter of 2010.  Deposit levels improved slightly from the linked quarter primarily as a result of growth in public funds, partially offset by declines in certificates of deposit and existing clients moving from our GNA product to repurchase agreements.  Public funds balances have increased as anticipated from the linked quarter reflecting seasonality within this deposit category.  Pursuant to changes in the FDIC’s Temporary Liquidity Guarantee Program, our government guaranteed NOW product was discontinued during the fourth quarter.  As of December 31, 2010, approximately $95 million in balances from this product remained in the NOW category, $95 million migrated to the noninterest bearing DDA category, and $60 million moved into Repurchase Agreements.
 
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 decrease from the first quarter of 2010 reflects a reduction in money market accounts (primarily promotional deposits), deposits transferring from GNA to repurchase agreements and lower certificates of deposit balances, partially offset by higher public funds.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $238.1 million during the first quarter of 2011 compared to an average net overnight funds sold position of $164.9 million in the prior quarter and an average overnight funds sold position of $297.0 million in the first quarter of 2010.  The higher balance when compared to the linked quarter primarily reflects the increase in deposits mentioned above, growth in short-term borrowings and declines in the loan portfolio, partially offset by a higher level of investment securities.  The unfavorable variance as compared to first quarter of 2010 is primarily attributable to declines in deposits and the deployment of funds to the investment portfolio, partially offset by a net reduction in loans.

Equity capital was $259.3 million as of March 31, 2011, compared to $259.0 million as of December 31, 2010 and $262.0 million as of March 31, 2010.  Our leverage ratio was 9.74%, 10.10%, and 9.64%, respectively, for the comparable periods.  Further, our risk-adjusted capital ratio of 14.82% at March 31, 2011 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines and reflects an improvement of 23 basis points over the linked quarter.  At March 31, 2011, our tangible common equity ratio was 6.73%, compared to 6.82% at December 31, 2010 and 6.62% at March 31, 2010.
 
 
 
 
1 The problem loan resolutions and reductions in portfolio balances stated in this paragraph are based on “as of" balances, not averages.
 
Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2011 was $23.3 million compared to $24.6 million for the fourth quarter of 2010 and $24.5 million for the first quarter of 2010.

The decrease of $1.3 million in tax equivalent net interest income as compared to the linked quarter was due to two less calendar days; a reduction in loan income attributable to declining loan balances and continued unfavorable asset repricing.  This was partially offset by lower interest expense and a slight decrease in foregone interest on nonaccrual loans.  Lower interest expense reflects a reduction in deposit rates primarily in certificates of deposit.   With the exception of calendar days, the explanation for the $1.2 million decline from the prior year quarter essentially mirrors the explanation for the linked quarter.

The net interest margin in the first quarter of 2011 was 4.14%, a decrease of 27 basis points over the linked quarter and a decline of 7 basis points from the first quarter of 2010.  The decrease in the margin when compared to both periods was a reduction in the earning asset yield attributable to a shift in the mix of earning assets and continued unfavorable asset repricing.  Partially offsetting the unfavorable variances was a reduction in the cost of funds, primarily the average rate paid on certificates of deposit.

The provision for loan losses for the first quarter of 2011 was $4.1 million compared to $3.8 million in the fourth quarter of 2010 and $10.7 million for the first quarter of 2010.  The increase in the loan loss provision compared to the linked quarter primarily reflects reserves for newly identified impaired loans.  A reduction in general reserves had a favorable impact on the loan loss provision and reflects a decline in our classified loan balance, partially due to loan upgrades during the quarter, a lower historical loss ratio and a reduction in past dues.  Compared to the first quarter of 2010, a reduction in impaired loans was the primary factor driving the decline in the loan loss provision.  Net charge-offs for the first quarter of 2011 totaled $5.7 million, or 1.33%, of average loans compared to $6.1 million, or 1.35% for the fourth quarter of 2010 and $13.5 million, or 2.91% in the first quarter of 2010.  At quarter-end, the allowance for loan losses of $33.9 million was 1.98% of outstanding loans (net of overdrafts) and provided coverage of 35% of nonperforming loans compared to 2.01% and 41%, respectively, at December 31, 2010, and 2.23% and 38%, respectively, at March 31, 2010.

Noninterest income for the first quarter of 2011 totaled $16.3 million, an increase of $1.6 million, or 10.9% over the fourth quarter of 2010 and $2.4 million, or 16.9% over the first quarter of 2010.  The increase for both periods was due to a $3.2 million gain (reflected in other income) from the sale of all the Class B shares of Visa stock that were obtained from the initial public offering of Visa, Inc.  Compared to the linked quarter, a lower level of deposit fees of $0.5 million and mortgage banking fees of $0.4 million partially offset the gain realized from the sale of Visa stock.  The decline in deposit fees reflects a two-day calendar variance and a seasonal variance in the use of our overdraft product.  Mortgage banking fees declined primarily due to lower new loan production reflective of a slowdown in new home purchase activity in our Tallahassee market.  Additionally, gains from the sale of OREO properties and miscellaneous recoveries, both of which are reflected as other income, also declined from the linked quarter by $0.3 million and $0.4 million, respectively.  Compared to the first quarter of 2010, noninterest income increased $2.4 million reflecting the $3.2 million gain on the sale of Visa shares, a $0.3 million increase in bank card fees, and higher retail brokerage fees of $0.2 million, partially offset by a $0.6 million decline in deposit fees and a $0.7 million decline in merchant fees which is included in other income.  The decline in deposit fees compared to the first quarter of 2010 reflects a lower level of overdraft fees due to reduced activity reflective of current economic conditions, a higher level of consumer awareness that has both impacted consumer and business spending habits, as well as the 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 reduction in merchant fees reflects the migration of our last remaining merchant to another processor – the decline in these revenues are substantially offset by a reduction in processing costs, which are reflected as interchange fees in noninterest expense.

Noninterest expense for the first quarter of 2011 totaled $33.3 million, a decrease of $0.2 million, or 0.62%, from the fourth quarter of 2010 and $0.1 million, or 0.16%, from the first quarter of 2010.  The decline compared to the linked quarter was primarily due to a reduction in other expense of $1.1 million and intangible amortization expense of $0.2 million, partially offset by higher salary/benefit expense of $1.2 million.  Other expense declined due to lower OREO expense of $1.0 million, advertising expense of $0.4 million, professional fees of $0.3 million, and a decline in other losses of $0.6 million.  Unfavorable variances related to the recognition of a $0.6 million swap liability related to the sale of our Visa stock and the prior quarter reversal of our $0.8 million Visa litigation reserve partially offset the aforementioned reductions.  Lower carrying costs of $0.5 million and valuation adjustments/losses of $0.5 million were the primary reason for the decline in OREO expense.  A lower level of advertising and public relations activity drove the decline in advertising expense.  Professional fees were lower primarily due to nonrecurring expenses in the fourth quarter of 2010 for consulting engagements.  Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions.  The increase in salary/benefit expense was due to higher incentive expense (cash and stock), the resetting of payroll/unemployment taxes and pension expense.  Incentive expense increased due to the resetting to par of several performance incentive programs.  The increase in pension expense reflects utilization of a lower discount rate in 2011 reflective of lower long-term bond interest rates.  Compared to the first quarter of 2010, the slight decrease in noninterest expense was attributable to lower salary/benefit expense of $0.2 million and intangible amortization of $0.4 million, partially offset by an unfavorable variance of $0.5 million in other expense.  The unfavorable variance for other expense was due to higher OREO expense of $0.8 million and recognition of a $0.6 million swap liability, partially offset by a decline in interchange fees of $0.6 million and professional fees of $0.2 million.

Income tax expense for the first quarter of 2011 totaled $0.5 million, an increase of $0.7 million over the fourth quarter of 2010, and $3.2 million over the first quarter of 2010.  A higher level of book operating profit at our bank subsidiary due to the gain on sale of Visa stock drove the higher level of tax expense compared to both periods.  Reversal of a tax contingency during the fourth quarter of 2010 also contributed to the variance.
 
About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (“The Company”) (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 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: legislative or regulatory changes, including the Dodd-Frank Act; the strength of the U.S. economy and the local economies where the Company conducts operations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the frequency and magnitude of foreclosure of the Company’s loans; continued depression of the market value of the Company that could result in an impairment of goodwill; restrictions on our operations, including the inability to pay dividends without our regulators’ consent; the effects of the health and soundness of other financial institutions, including the FDIC’s need to increase Deposit Insurance Fund assessments; our ability to declare and pay dividends; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; 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; the Company’s ability to integrate acquisitions; 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, 2010, 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, 2011
    
Dec 31, 2010
    
Mar 31, 2010
  
EARNINGS
                  
Net Income(Loss)
   $ 1,310     $ 1,918     $ (3,463 )
Net Income(Loss) Per Common Share
   $ 0.08     $ 0.12     $ (0.20 )
PERFORMANCE
                        
Return on Average Equity
     2.03 %     2.90 %     -5.23 %
Return on Average Assets
     0.20 %     0.30 %     -0.52 %
Net Interest Margin
     4.14 %     4.41 %     4.21 %
Noninterest Income as % of Operating Revenue
     41.54 %     37.69 %     36.77 %
Efficiency Ratio
     83.30 %     83.75 %     85.00 %
CAPITAL ADEQUACY
                        
Tier 1 Capital Ratio
     13.46 %     13.24 %     12.81 %
Total Capital Ratio
     14.82 %     14.59 %     14.16 %
Tangible Capital Ratio
     6.73 %     6.82 %     6.62 %
Leverage Ratio
     9.74 %     10.10 %     9.64 %
Equity to Assets
     9.74 %     9.88 %     9.65 %
ASSET QUALITY
                        
Allowance as % of Non-Performing Loans
     34.57 %     40.57 %     38.42 %
Allowance as a % of Loans
     1.98 %     2.01 %     2.23 %
Net Charge-Offs as % of Average Loans
     1.33 %     1.35 %     2.91 %
Nonperforming Assets as % of Loans and ORE
     8.66 %     8.00 %     8.10 %
Nonperforming Assets as % of Total Assets
     5.76 %     5.54 %     5.66 %
STOCK PERFORMANCE
                        
High
   $ 13.80     $ 14.19     $ 14.61  
Low
   $ 11.87     $ 11.56     $ 11.57  
Close
   $ 12.68     $ 12.60     $ 14.25  
Average Daily Trading Volume
     21,740       21,385       26,854  
                         


 
 
 

CAPITAL CITY BANK GROUP, INC.
                          
CONSOLIDATED STATEMENT OF OPERATIONS
                    
Unaudited
                              
                               
                               
                               
(Dollars in thousands, except per share data)
  
2011
First Quarter
    
2010
Fourth Quarter
    
2010
Third Quarter
    
2010
Second Quarter
    
2010
First Quarter
  
                               
INTEREST INCOME
                              
Interest and Fees on Loans
   $ 23,947     $ 25,656     $ 26,418     $ 26,644     $ 26,992  
Investment Securities
     1,071       1,080       1,014       1,114       990  
Funds Sold
     171       95       144       176       172  
Total Interest Income
     25,189       26,831       27,576       27,934       28,154  
                                         
INTEREST EXPENSE
                                        
Deposits
     1,258       1,524       1,820       2,363       2,938  
Short-Term Borrowings
     111       99       31       12       17  
Subordinated Notes Payable
     340       342       376       639       651  
Other Long-Term Borrowings
     494       508       565       551       526  
Total Interest Expense
     2,203       2,473       2,792       3,565       4,132  
Net Interest Income
     22,986       24,358       24,784       24,369       24,022  
Provision for Loan Losses
     4,133       3,783       5,668       3,633       10,740  
Net Interest Income after Provision for Loan Losses
     18,853       20,575       19,116       20,736       13,282  
                                         
NONINTEREST INCOME
                                        
Service Charges on Deposit Accounts
     5,983       6,434       6,399       7,039       6,628  
Data Processing Fees
     974       880       911       919       900  
Asset Management Fees
     1,080       1,095       1,040       1,080       1,020  
Retail Brokerage Fees
     729       738       671       846       565  
Gain on Sale of Investment Securities
     -       -       3       -       5  
Mortgage Banking Fees
     617       1,027       772       641       508  
Interchange Fees (1)
     1,360       1,285       1,291       1,289       1,212  
ATM/Debit Card Fees (1)
     1,136       1,051       1,036       1,073       963  
Other
     4,455       2,225       1,326       1,787       2,166  
Total Noninterest Income
     16,334       14,735       13,449       14,674       13,967  
                                         
NONINTEREST EXPENSE
                                        
Salaries and Associate Benefits
     16,577       15,389       15,003       15,584       16,779  
Occupancy, Net
     2,396       2,406       2,611       2,585       2,408  
Furniture and Equipment
     2,226       2,268       2,288       2,192       2,181  
Intangible Amortization
     353       553       709       710       710  
Other
     11,779       12,924       11,752       13,558       11,306  
Total Noninterest Expense
     33,331       33,540       32,363       34,629       33,384  
                                         
OPERATING PROFIT(LOSS)
     1,856       1,770       202       781       (6,135 )
Provision for Income Taxes
     546       (148 )     (199 )     50       (2,672 )
NET INCOME(LOSS)
   $ 1,310     $ 1,918     $ 401     $ 731     $ (3,463 )
                                         
PER SHARE DATA
                                        
Basic Earnings
   $ 0.08     $ 0.12     $ 0.02     $ 0.04     $ (0.20 )
Diluted Earnings
   $ 0.08     $ 0.12     $ 0.02     $ 0.04     $ (0.20 )
Cash Dividends
     0.100       0.100       0.100       0.100       0.190  
AVERAGE SHARES
                                        
Basic
     17,122       17,095       17,087       17,063       17,057  
Diluted
     17,130       17,096       17,088       17,074       17,070  
                                         
                                         
(1) Together referred to as "Bank Card Fees"
                                  

 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                    
Unaudited
                              
                               
(Dollars in thousands, except per share data)
  
2011
First Quarter
    
2010
Fourth Quarter
    
2010
Third Quarter
    
2010
Second Quarter
    
2010
First Quarter
  
                               
ASSETS
                              
Cash and Due From Banks
   $ 52,000     $ 35,410     $ 48,701     $ 52,380     $ 52,615  
Funds Sold and Interest Bearing Deposits
     271,375       200,783       193,415       250,508       293,413  
Total Cash and Cash Equivalents
     323,375       236,193       242,116       302,888       346,028  
                                         
Investment Securities, Available-for-Sale
     311,356       309,731       231,303       218,785       217,606  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     153,960       157,394       156,049       161,268       169,766  
Real Estate - Construction
     35,614       43,239       45,346       56,910       79,145  
Real Estate - Commercial
     668,583       671,702       680,639       676,516       729,011  
Real Estate - Residential
     404,204       420,604       448,704       450,997       394,132  
Real Estate - Home Equity
     248,745       251,565       250,795       247,726       245,185  
Consumer
     196,205       200,727       207,207       215,723       224,793  
Other Loans
     5,098       9,937       9,828       9,498       6,888  
Overdrafts
     2,385       3,503       2,669       3,144       2,701  
Total Loans, Net of Unearned Interest
     1,714,794       1,758,671       1,801,237       1,821,782       1,851,621  
Allowance for Loan Losses
     (33,873 )     (35,436 )     (37,720 )     (38,442 )     (41,198 )
Loans, Net
     1,680,921       1,723,235       1,763,517       1,783,340       1,810,423  
                                         
Premises and Equipment, Net
     113,918       115,356       115,689       116,802       117,055  
Intangible Assets
     85,806       86,159       86,712       87,421       88,131  
Other Real Estate Owned
     55,364       57,937       51,208       48,110       46,444  
Other Assets
     91,754       93,442       89,451       93,398       89,416  
Total Other Assets
     346,842       352,894       343,060       345,731       341,046  
                                         
Total Assets
   $ 2,662,494     $ 2,622,053     $ 2,579,996     $ 2,650,744     $ 2,715,103  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 540,184     $ 546,257     $ 479,887     $ 460,168     $ 446,855  
NOW Accounts
     818,512       770,149       830,297       891,636       890,570  
Money Market Accounts
     288,224       275,416       282,848       303,369       376,091  
Regular Savings Accounts
     150,051       139,888       135,143       132,174       130,936  
Certificates of Deposit
     350,076       372,266       393,268       412,964       438,488  
Total Deposits
     2,147,047       2,103,976       2,121,443       2,200,311       2,282,940  
                                         
Short-Term Borrowings
     86,650       92,928       38,138       21,376       18,900  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     50,050       50,101       46,456       55,605       50,679  
Other Liabilities
     56,582       53,142       50,383       48,885       37,738  
                                         
Total Liabilities
     2,403,216       2,363,034       2,319,307       2,389,064       2,453,144  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     171       171       171       171       171  
Additional Paid-In Capital
     37,548       36,920       36,864       36,633       36,816  
Retained Earnings
     237,276       237,679       237,471       238,779       239,755  
Accumulated Other Comprehensive Loss, Net of Tax
     (15,717 )     (15,751 )     (13,817 )     (13,903 )     (14,783 )
                                         
Total Shareowners' Equity
     259,278       259,019       260,689       261,680       261,959  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,662,494     $ 2,622,053     $ 2,579,996     $ 2,650,744     $ 2,715,103  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,297,525     $ 2,269,185     $ 2,225,955     $ 2,291,075     $ 2,362,640  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Core Deposits
     437       742       1,248       1,910       2,572  
Other
     558       606       653       700       748  
Interest Bearing Liabilities
     1,806,450       1,763,635       1,789,037       1,880,011       1,968,551  
                                         
Book Value Per Diluted Share
   $ 15.13     $ 15.15     $ 15.25     $ 15.32     $ 15.34  
Tangible Book Value Per Diluted Share
     10.13       10.11       10.18       10.21       10.18  
                                         
Actual Basic Shares Outstanding
     17,127       17,100       17,095       17,067       17,063  
Actual Diluted Shares Outstanding
     17,136       17,101       17,096       17,078       17,076  


 
 
 

CAPITAL CITY BANK GROUP, INC.
                              
ALLOWANCE FOR LOAN LOSSES
                              
AND NONPERFORMING ASSETS
                              
Unaudited
                              
   
2011
    
2010
    
2010
    
2010
    
2010
  
(Dollars in thousands)
  
First Quarter
    
Fourth Quarter
    
Third Quarter
    
Second Quarter
    
First Quarter
  
                               
ALLOWANCE FOR LOAN LOSSES
                              
Balance at Beginning of Period
   $ 35,436     $ 37,720     $ 38,442     $ 41,199     $ 43,999  
Provision for Loan Losses
     4,133       3,783       5,668       3,633       10,740  
Net Charge-Offs
     5,696       6,067       6,390       6,390       13,540  
                                         
Balance at End of Period
   $ 33,873     $ 35,436     $ 37,720     $ 38,442     $ 41,199  
As a % of Loans
     1.98 %     2.01 %     2.10 %     2.11 %     2.23 %
As a % of Nonperforming Loans
     34.57 %     40.57 %     39.94 %     37.80 %     38.42 %
As a % of Nonperforming Assets
     22.09 %     24.39 %     25.90 %     25.66 %     26.81 %
                                         
CHARGE-OFFS
                                        
Commercial, Financial and Agricultural
   $ 721     $ 629     $ 242     $ 405     $ 842  
Real Estate - Construction
     -       234       701       1,220       3,722  
Real Estate - Commercial
     430       1,469       1,741       920       4,631  
Real Estate - Residential
     4,445       3,629       3,175       4,725       3,727  
Consumer
     620       582       1,057       360       1,507  
                                         
Total Charge-Offs
   $ 6,216     $ 6,543     $ 6,916     $ 7,630     $ 14,429  
                                         
RECOVERIES
                                        
Commercial, Financial and Agricultural
   $ 63     $ 48     $ 65     $ 181     $ 77  
Real Estate - Construction
     9       -       -       8       -  
Real Estate - Commercial
     12       55       6       43       157  
Real Estate - Residential
     96       7       181       638       114  
Consumer
     340       366       274       370       541  
                                         
Total Recoveries
   $ 520     $ 476     $ 526     $ 1,240     $ 889  
                                         
NET CHARGE-OFFS
   $ 5,696     $ 6,067     $ 6,390     $ 6,390     $ 13,540  
                                         
Net Charge-Offs as a % of Average Loans(1)
     1.33 %     1.35 %     1.40 %     1.39 %     2.91 %
                                         
RISK ELEMENT ASSETS
                                        
Nonaccruing Loans
   $ 73,954     $ 65,700     $ 74,168     $ 74,504     $ 76,382  
Restructured Loans
     24,028       21,649       20,267       27,200       30,843  
Total Nonperforming Loans
     97,982       87,349       94,435       101,704       107,225  
Other Real Estate
     55,364       57,937       51,208       48,110       46,444  
Total Nonperforming Assets
   $ 153,346     $ 145,286     $ 145,643     $ 149,814     $ 153,669  
                                         
Past Due Loans 30-89 Days
   $ 19,391     $ 24,193     $ 24,904     $ 21,192     $ 18,768  
Past Due Loans 90 Days or More
   $ -     $ 159     $ -     $ -     $ -  
                                         
Nonperforming Loans as a % of Loans
     5.71 %     4.97 %     5.24 %     5.58 %     5.79 %
Nonperforming Assets as a % of
                                        
Loans and Other Real Estate
     8.66 %     8.00 %     7.86 %     8.01 %     8.10 %
Nonperforming Assets as a % of Capital(2)
     52.31 %     49.34 %     48.81 %     49.92 %     50.69 %
Nonperforming Assets as a % of Total Assets
     5.76 %     5.54 %     5.65 %     5.65 %     5.66 %
                                         
                                         
(1) Annualized
                                        
(2) Capital includes allowance for loan losses.
                                  


 
 
 

AVERAGE BALANCE AND INTEREST RATES(1)
                                                                          
Unaudited
                                                                                          
                                                                                           
                                                                                           
   
First Quarter 2011
    
Fourth Quarter 2010
    
Third Quarter 2010
    
Second Quarter 2010
    
First Quarter 2010
  
(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
   $ 1,730,330       24,101       5.65 %   $ 1,782,916       25,799       5.74 %   $ 1,807,483       26,568       5.83 %   $ 1,841,379       26,795       5.84 %   $ 1,886,367       27,180       5.84 %
                                                                                                                         
Investment Securities
                                                                                                                        
Taxable Investment Securities
     231,153       851       1.48 %     178,926       799       1.78 %     124,625       674       2.15 %     128,268       708       2.21 %     71,325       500       2.81 %
Tax-Exempt Investment Securities
     74,226       337       1.81 %     83,469       434       2.08 %     88,656       521       2.35 %     92,140       624       2.71 %     97,316       753       3.10 %
                                                                                                                         
Total Investment Securities
     305,379       1,188       1.56 %     262,395       1,233       1.87 %     213,281       1,195       2.23 %     220,408       1,332       2.42 %     168,641       1,253       2.98 %
                                                                                                                         
Funds Sold
     242,893       171       0.28 %     172,738       95       0.24 %     252,434       144       0.22 %     267,578       176       0.26 %     303,280       172       0.23 %
                                                                                                                         
Total Earning Assets
     2,278,602     $ 25,460       4.53 %     2,218,049     $ 27,127       4.85 %     2,273,198     $ 27,907       4.87 %     2,329,365     $ 28,303       4.87 %     2,358,288     $ 28,605       4.92 %
                                                                                                                         
Cash and Due From Banks
     50,942                       51,030                       50,942                       50,739                       54,873                  
Allowance for Loan Losses
     (34,822 )                     (37,713 )                     (39,584 )                     (41,074 )                     (44,584 )                
Other Assets
     348,295                       345,427                       342,202                       339,458                       329,842                  
                                                                                                                         
Total Assets
   $ 2,643,017                     $ 2,576,793                     $ 2,626,758                     $ 2,678,488                     $ 2,698,419                  
                                                                                                                         
LIABILITIES:
                                                                                                                        
Interest Bearing Deposits
                                                                                                                        
NOW Accounts
   $ 786,939     $ 261       0.13 %   $ 837,625     $ 296       0.14 %   $ 871,158     $ 326       0.15 %   $ 879,329     $ 400       0.18 %   $ 867,004     $ 384       0.18 %
Money Market Accounts
     278,562       131       0.19 %     282,887       134       0.19 %     293,424       145       0.20 %     333,976       331       0.40 %     374,161       689       0.75 %
Savings Accounts
     144,623       18       0.05 %     136,276       16       0.05 %     133,690       17       0.05 %     131,333       17       0.05 %     126,352       15       0.05 %
Time Deposits
     360,575       848       0.95 %     382,870       1,078       1.12 %     402,880       1,332       1.31 %     430,571       1,615       1.50 %     438,112       1,850       1.71 %
Total Interest Bearing Deposits
     1,570,699       1,258       0.32 %     1,639,658       1,524       0.37 %     1,701,152       1,820       0.42 %     1,775,209       2,363       0.53 %     1,805,629       2,938       0.66 %
                                                                                                                         
Short-Term Borrowings
     87,267       111       0.52 %     34,706       99       1.14 %     23,388       31       0.54 %     22,694       12       0.20 %     30,673       17       0.22 %
Subordinated Notes Payable
     62,887       340       2.16 %     62,887       342       2.13 %     62,887       376       2.34 %     62,887       639       4.02 %     62,887       651       4.14 %
Other Long-Term Borrowings
     50,345       494       3.98 %     50,097       508       4.02 %     54,258       565       4.13 %     52,704       551       4.20 %     49,981       526       4.27 %
                                                                                                                         
Total Interest Bearing Liabilities
     1,771,198     $ 2,203       0.50 %     1,787,348     $ 2,473       0.55 %     1,841,685     $ 2,792       0.60 %     1,913,494     $ 3,565       0.75 %     1,949,170     $ 4,132       0.86 %
                                                                                                                         
Noninterest Bearing Deposits
     554,680                       476,209                       471,013                       458,969                       443,131                  
Other Liabilities
     55,536                       50,614                       50,318                       42,152                       37,563                  
                                                                                                                         
Total Liabilities
     2,381,414                       2,314,171                       2,363,016                       2,414,615                       2,429,864                  
                                                                                                                         
SHAREOWNERS' EQUITY:
   $ 261,603                     $ 262,622                     $ 263,742                     $ 263,873                     $ 268,555                  
                                                                                                                         
Total Liabilities and Shareowners' Equity
   $ 2,643,017                     $ 2,576,793                     $ 2,626,758                     $ 2,678,488                     $ 2,698,419                  
                                                                                                                         
Interest Rate Spread
           $ 23,257       4.03 %           $ 24,654       4.30 %           $ 25,115       4.27 %           $ 24,738       4.12 %           $ 24,473       4.06 %
                                                                                                                         
Interest Income and Rate Earned(1)
     $ 25,460       4.53 %           $ 27,127       4.85 %           $ 27,907       4.87 %           $ 28,303       4.87 %           $ 28,605       4.92 %
Interest Expense and Rate Paid(2)
       2,203       0.39 %             2,473       0.44 %             2,792       0.49 %             3,565       0.61 %             4,132       0.71 %
                                                                                                                         
Net Interest Margin
           $ 23,257       4.14 %           $ 24,654       4.41 %           $ 25,115       4.38 %           $ 24,738       4.26 %           $ 24,473       4.21 %
                                                                                                                         
                                                                                                                         
(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.