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

TALLAHASSEE, Fla. (July 26, 2011) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income for the second quarter of 2011 totaling $2.1 million, or $0.12 per diluted share, compared to $1.3 million, or $0.08 per diluted share for the first quarter of 2011 (“linked quarter”), and $0.7 million, or $0.04 per diluted share, for the second quarter of 2010.  For the first six months of 2011, the Company reported net income of $3.5 million, or $0.20 per diluted share, compared to a net loss of $2.7 million, or $0.16 per diluted share for the same period in 2010.

The increase in earnings over the linked quarter reflects higher net interest income of $0.4 million, lower loan loss provision of $0.6 million, and a reduction in noninterest expense of $2.2 million, partially offset by a decline in noninterest income of $1.9 million and higher income tax expense of $0.5 million.  Compared to the second quarter of 2010, a $3.6 million decline in noninterest expense partially offset by a $1.2 million reduction in operating revenues and higher income tax expense of $1.0 million drove the improvement in earnings.
 
The increase in earnings for the first half of 2011 is attributable to a lower loan loss provision of $6.7 million, reduction in noninterest expense of $3.5 million, and higher noninterest income of $2.1 million, partially offset by lower net interest income of $2.0 million and higher income tax expense of $4.1 million.

2011 performance reflects the sale of our Visa Class B shares of stock during the first quarter which resulted in a $2.6 million net gain ($3.2 million pre-tax included in noninterest income and a swap liability of $0.6 million included in noninterest expense).

“Although we are still facing a challenging operating environment, I am pleased with our progress,” said William G. Smith, Jr., Chairman, President and Chief Executive Officer.  “Profit in the second quarter of $2.1 million, or $0.12 per share, represents our fifth consecutive quarter of profitability.  Highlights from the quarter include lower nonperforming assets, declining credit costs, a strong net interest margin and lower operating expenses.  While the economy remains sluggish and loan growth continues to be a challenge, I am pleased with our second quarter performance and believe we have momentum as we enter the latter half of 2011.”

The Return on Average Assets was 0.33% and the Return on Average Equity was 3.28% for the second quarter of 2011.  These metrics were 0.20% and 2.03% for the first quarter of 2011, and 0.11% and 1.11% for the second quarter of 2010, respectively.

For the first half of 2011, the Return on Average Assets was 0.26% and the Return on Average Equity was 2.66% compared to -0.20% and -2.07%, respectively, for the first half of 2010.

Discussion of Financial Condition

Average earning assets were $2.259 billion for the second quarter of 2011, a decrease of $19.7 million, or 0.9% from the linked quarter and an increase of $40.9 million, or 1.8%, from the fourth quarter of 2010.  The lower level of earning assets over the linked quarter was a result of a decline in the loan portfolio of $26.0 million, partially offset by higher short-term investments of $6.2 million.  Compared to the fourth quarter of 2010, average overnight funds were higher by $76.4 million, the investment portfolio increased $43.1 million and loans declined $78.6 million, partially attributable to the resolution of problem loans during the first six months.

Average loans have declined throughout the portfolio, driven primarily by a reduction in the commercial real estate, residential 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 (which has the effect of lowering the loan portfolio as loans are either charged off or transferred to the other real estate owned (“OREO”) category), contributed to the overall decline.  During the second quarter, problem loan resolutions accounted for $20.8 million or 76% of the net reduction in total loans of $27.2 million from the linked quarter.  Problem loan resolutions accounted for $36.2 million or 51% of the net reduction in loans of $71.1 million from the fourth quarter of 20101.
Nonperforming assets (including nonaccrual loans, restructured loans (“TDRs”), and OREO) totaled $145.7 million at the end of the second quarter of 2011, a decrease of $7.7 million from the first quarter of 2011 and an increase of $0.4 million over the fourth quarter of 2010.  Nonaccrual loans decreased $12.9 million to $61.1 million from the linked quarter primarily due to the migration of loans to the OREO category.  A slowdown in new additions to the nonaccrual category also contributed to the improvement.  Compared to the fourth quarter of 2010, nonaccrual loans declined by $4.6 million reflecting the movement of loans to the OREO category and, to a lesser extent, migration to the TDR category.  TDRs totaled $23.6 million at the end of the second quarter, a $0.4 million decrease from the linked quarter and a $1.9 million increase over the fourth quarter of 2010.  The balance of OREO totaled $61.0 million at the end of the second quarter, a $5.7 million increase over the linked quarter and $3.1 million over the fourth quarter of 2010, which reflects our efforts in working problem loans through the foreclosure process.  Overall, a slower pace of loan defaults, momentum in working loans through the collection cycle, and progress in our property disposition efforts has contributed to the overall improvement in our nonperforming asset portfolio.  Through the first six months of 2011, we sold OREO properties totaling $17.7 million, which compares to $18.0 million for the full year 2010.  Nonperforming assets represented 5.60% of total assets at June 30, 2011 compared to 5.76% at March 31, 2011 and 5.54% at December 31, 2010.

Average total deposits were $2.107 billion for the second quarter, a decrease of $18.1 million, or 0.9%, from the linked quarter and $8.6 million, or 0.4%, from the fourth quarter of 2010.  Deposits decreased in both periods driven primarily by a reduction in certificates of deposit.  Additionally, a decrease resulting from existing clients moving from our Guaranteed Now Account product to repurchase agreements occurred late in the fourth quarter of 2010 as further discussed below.  Public funds balances increased as anticipated from the fourth quarter of 2010, but have declined from the first quarter level, which reflects the seasonality within this deposit category.  Savings and money market accounts experienced a slight increase in both periods, partially offsetting the above mentioned decline.

As a result of 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.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $249.1 million during the second quarter of 2011 compared to an average overnight funds sold position of $238.1 million in the linked quarter and $164.9 million in the fourth quarter of 2010.  The higher balance when compared to the linked quarter primarily reflects a decline in the loan portfolio, partially offset by the decrease in deposits mentioned above and lower levels of short-term borrowings.  The favorable variance as compared to the fourth quarter of 2010 is primarily attributable to an increase in repurchase agreements and a net reduction in loans, partially offset by a decline in deposits and the deployment of funds to the investment portfolio.
 
Equity capital was $260.5 million as of June 30, 2011, compared to $259.3 million as of March 31, 2011 and $259.0 million as of December 31, 2010.  Our leverage ratio was 9.95%, 9.74%, and 10.10%, respectively, for these periods.  Further, our risk-adjusted capital ratio of 15.19% at June 30, 2011 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines.  At June 30, 2011, our tangible common equity ratio was 6.96%, compared to 6.73% at March 31, 2011 and 6.82% at December 31, 2010.

 
 
 
Discussion of Operating Results

Tax equivalent net interest income for the second quarter of 2011 was $23.7 million compared to $23.3 million for the first quarter of 2010 and $24.7 million for the second quarter of 2010.  For the first six months of 2011, tax equivalent net interest income totaled $47.0 million compared to $49.2 million in 2010.
 
The increase of $0.4 million in tax equivalent net interest income on a linked quarter basis was due to lower cost of funds and one additional calendar day.  Lower interest expense reflects a reduction in deposit rates, primarily in certificates of deposit.  Interest income on earning assets was higher as a result of the one additional calendar day. Additionally, net interest income was impacted by favorable net interest adjustments on nonaccrual loans (i.e. quarter over quarter improvement in the level of interest income reversals), which offset lower interest income attributable to a reduction in loans outstanding and unfavorable asset repricing.

The decrease in tax equivalent net interest income of $1.0 million and $2.2 million, for the three and six month periods ended June 30, 2011, respectively, as compared to the same periods in 2010, resulted from a reduction in loans outstanding, lower earning assets yields reflecting unfavorable asset repricing and lower loan fees, partially offset by a reduction in interest expense and favorable net interest adjustments as noted above.

The net interest margin in the second quarter of 2011 was 4.21%, an increase of 7 basis points over the linked quarter and a decline of 6 basis points from the second quarter of 2010.  Year over year, for the six month period, the margin declined 7 basis points to 4.17%.  The increase in the margin when compared to the linked quarter reflects a 3 basis point reduction in the cost of funds, and an improvement in the yield on earning assets of 4 basis points.  The higher yield on earning assets was primarily attributable to an increase in the loan yield resulting from the favorable interest income adjustments mentioned above, while the lower cost of funds resulted from a reduction in the rates on certificates of deposit, which were significantly reduced in all markets. The 7 basis point decline in the margin for the six months of 2011 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.
 
The provision for loan losses for the second quarter of 2011 was $3.5 million compared to $4.1 million in the first quarter of 2011 and $3.6 million for the second quarter of 2010.  The reduction in the loan loss provision for both periods primarily reflects a reduction in the level of impaired loans and required reserves.  For the first six months of 2011, the loan loss provision totaled $7.7 million compared to $14.4 million for the same period in 2010, also reflective of lower impaired loan reserves as well as a decline in general reserves, primarily due to a reduction in the level of internally classified loans and lower loss rates.  Net charge-offs for the second quarter of 2011 totaled $6.3 million, or 1.49%, of average loans compared to $5.7 million, or 1.33% for the first quarter of 2011 and $6.4 million, or 1.39% in the second quarter of 2010.  For the first half of 2011, net charge-offs totaled $12.0 million, or 1.41%, of average loans compared to $19.9 million, or 2.16% for the same period of 2010.  At quarter-end, the allowance for loan losses of $31.1 million was 1.84% of outstanding loans (net of overdrafts) and provided coverage of 37% of nonperforming loans compared to 1.98% and 35%, respectively, at March 31, 2011, and 2.01% and 41%, respectively, at December 31, 2010.

Noninterest income for the second quarter of 2011 totaled $14.4 million, a decrease of $1.9 million, or 11.5% from the first quarter of 2011 and $0.2 million, or 1.5% from the second quarter of 2010.  The unfavorable variance compared to the linked quarter reflects the sale of our Class B shares of Visa stock during the first quarter of 2011, which resulted in a $3.2 million pre-tax gain (reflected in other income), as well as a $0.2 million reduction in data processing fees.  Favorable variances for deposit fees, retail brokerage fees, and gains from the sale of OREO partially offset the aforementioned unfavorable variances.  For the first six months of 2011, noninterest income totaled $30.8 million, an increase of $2.1 million over the same period of 2010 driven by the Visa gain, partially offset by lower deposit and merchant fees.  The decline in deposit fees reflects a lower level of overdraft fees due to reduced activity as well as the implementation of new rules under Regulation E.  The reduction in merchant fees reflects the transfer of our merchant processing business to another processor, which was completed in August 2010.  The decline in our merchant fees is substantially offset by a reduction in processing costs, which are reflected as interchange fees in noninterest expense.
 
Noninterest expense for the second quarter of 2011 totaled $31.2 million, a decrease of $2.2 million from the first quarter of 2011 and $3.5 million from the second quarter of 2010.  The decline over the linked quarter reflects lower expense for compensation of $0.6 million, FDIC insurance of $0.3 million, intangible amortization of $0.2 million, OREO expenses of $0.6 million, and miscellaneous expense of $0.3 million.  Compensation expense declined due to a reduction in performance compensation and lower unemployment taxes.  The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure.  Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions.  The lower level of OREO expense primarily reflects a reduction in the level of losses recognized on the sale of OREO.    Recognition of a $0.6 million swap liability associated with the sale of our Visa shares during the first quarter of 2011 drove the favorable variance in miscellaneous expense.  For the first six months of 2011, noninterest expense totaled $64.5 million, a $3.5 million decline from the same period of 2010 attributable to lower professional fees of $0.3 million, advertising expense of $0.3 million, FDIC insurance of $0.7 million, intangible amortization expense of $1.0 million, and interchange fees of $0.9 million.  Professional fees declined due to lower consulting fees and appraisal fees for OREO properties.  The reduction in advertising fees reflects a lower level of activity as well as improved efficiencies gained from restructuring of the direct mail campaigns for our free checking products.  The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure.  Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions.  Lower interchange fees are attributable to the sale of our merchant processing business as noted above in our discussion of noninterest income.

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 $2.6 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: 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.


 
1 The problem loan resolutions and reductions in portfolio balances stated in this paragraph are based on “as of" balances, not averages.

 
 
 



EARNINGS HIGHLIGHTS
                              
   
Three Months Ended
    
Six Months Ended
  
(Dollars in thousands, except per share data)
  
Jun 30, 2011
    
Mar 31, 2011
    
Jun 30, 2010
    
Jun 30, 2011
    
Jun 30, 2010
  
EARNINGS
                              
Net Income (Loss)
   $ 2,145     $ 1,310     $ 731     $ 3,455     $ (2,732 )
Net Income (Loss) Per Common Share
   $ 0.12     $ 0.08     $ 0.04     $ 0.20     $ (0.16 )
PERFORMANCE
                                        
Return on Average Equity
     3.28 %     2.03 %     1.11 %     2.66 %     -2.07 %
Return on Average Assets
     0.33 %     0.20 %     0.11 %     0.26 %     -0.20 %
Net Interest Margin
     4.21 %     4.14 %     4.26 %     4.17 %     4.24 %
Noninterest Income as % of Operating Revenue
     38.13 %     41.54 %     37.58 %     39.87 %     37.18 %
Efficiency Ratio
     81.41 %     83.30 %     86.06 %     82.37 %     85.54 %
CAPITAL ADEQUACY
                                        
Tier 1 Capital Ratio
     13.83 %     13.46 %     12.78 %     13.83 %     12.78 %
Total Capital Ratio
     15.19 %     14.82 %     14.14 %     15.19 %     14.14 %
Tangible Common Equity Ratio
     6.96 %     6.73 %     6.80 %     6.96 %     6.80 %
Leverage Ratio
     9.95 %     9.74 %     9.58 %     9.95 %     9.58 %
Equity to Assets
     10.02 %     9.74 %     9.87 %     10.02 %     9.87 %
ASSET QUALITY
                                        
Allowance as % of Non-Performing Loans
     36.71 %     34.57 %     37.80 %     36.71 %     37.80 %
Allowance as a % of Loans
     1.84 %     1.98 %     2.11 %     1.84 %     2.11 %
Net Charge-Offs as % of Average Loans
     1.49 %     1.33 %     1.39 %     1.41 %     2.16 %
Nonperforming Assets as % of Loans and ORE
     8.33 %     8.66 %     8.01 %     8.33 %     8.01 %
Nonperforming Assets as % of Total Assets
     5.60 %     5.76 %     5.65 %     5.60 %     5.65 %
STOCK PERFORMANCE
                                        
High
   $ 13.12     $ 13.80     $ 18.25     $ 13.80     $ 18.25  
Low
   $ 9.94     $ 11.87     $ 12.36     $ 9.94     $ 11.57  
Close
   $ 10.26     $ 12.68     $ 12.38     $ 10.26     $ 12.38  
Average Daily Trading Volume
     29,716       21,740       46,507       25,696       36,917  
                                         
                                         


 
 
 

CAPITAL CITY BANK GROUP, INC.
                                      
CONSOLIDATED STATEMENT OF OPERATIONS
                                
Unaudited
                                          
                                           
                                 
Six Months Ended
  
                                 
June 30
  
(Dollars in thousands, except per share data)
  
2011
Second Quarter
    
2011
First Quarter
    
2010
Fourth Quarter
    
2010
Third Quarter
    
2010
Second Quarter
    
2011
    
2010
  
                                           
INTEREST INCOME
                                          
Interest and Fees on Loans
   $ 24,305     $ 23,947     $ 25,656     $ 26,418     $ 26,644     $ 48,252     $ 53,636  
Investment Securities
     1,017       1,071       1,080       1,014       1,114       2,088       2,104  
Funds Sold
     145       171       95       144       176       316       348  
Total Interest Income
     25,467       25,189       26,831       27,576       27,934       50,656       56,088  
                                                         
INTEREST EXPENSE
                                                        
Deposits
     1,083       1,258       1,524       1,820       2,363       2,341       5,301  
Short-Term Borrowings
     110       111       99       31       12       221       29  
Subordinated Notes Payable
     343       340       342       376       639       683       1,290  
Other Long-Term Borrowings
     492       494       508       565       551       986       1,077  
Total Interest Expense
     2,028       2,203       2,473       2,792       3,565       4,231       7,697  
Net Interest Income
     23,439       22,986       24,358       24,784       24,369       46,425       48,391  
Provision for Loan Losses
     3,545       4,133       3,783       5,668       3,633       7,678       14,373  
Net Interest Income after Provision for Loan Losses
     19,894       18,853       20,575       19,116       20,736       38,747       34,018  
                                                         
NONINTEREST INCOME
                                                        
Service Charges on Deposit Accounts
     6,309       5,983       6,434       6,399       7,039       12,292       13,667  
Data Processing Fees
     764       974       880       911       919       1,738       1,819  
Asset Management Fees
     1,080       1,080       1,095       1,040       1,080       2,160       2,100  
Retail Brokerage Fees
     939       729       738       671       846       1,668       1,411  
Gain on Sale of Investment Securities
     -       -       -       3       -       -       5  
Mortgage Banking Fees
     568       617       1,027       772       641       1,185       1,149  
Interchange Fees (1)
     1,443       1,360       1,285       1,291       1,289       2,803       2,501  
ATM/Debit Card Fees (1)
     1,115       1,136       1,051       1,036       1,073       2,251       2,036  
Other
     2,230       4,455       2,225       1,326       1,787       6,685       3,953  
Total Noninterest Income
     14,448       16,334       14,735       13,449       14,674       30,782       28,641  
                                                         
NONINTEREST EXPENSE
                                                        
Salaries and Associate Benefits
     16,000       16,577       15,389       15,003       15,584       32,577       32,363  
Occupancy, Net
     2,447       2,396       2,406       2,611       2,585       4,843       4,993  
Furniture and Equipment
     2,117       2,226       2,268       2,288       2,192       4,343       4,373  
Intangible Amortization
     107       353       553       709       710       460       1,420  
Other Real Estate
     3,033       3,677       4,709       3,306       4,082       6,710       6,907  
Other
     7,463       8,102       8,215       8,446       9,476       15,565       17,957  
Total Noninterest Expense
     31,167       33,331       33,540       32,363       34,629       64,498       68,013  
                                                         
OPERATING PROFIT(LOSS)
     3,175       1,856       1,770       202       781       5,031       (5,354 )
Provision for Income Taxes
     1,030       546       (148 )     (199 )     50       1,576       (2,622 )
NET INCOME(LOSS)
   $ 2,145     $ 1,310     $ 1,918     $ 401     $ 731     $ 3,455     $ (2,732 )
                                                         
PER SHARE DATA
                                                        
Basic Earnings
   $ 0.12     $ 0.08     $ 0.12     $ 0.02     $ 0.04     $ 0.20     $ (0.16 )
Diluted Earnings
   $ 0.12     $ 0.08     $ 0.12     $ 0.02     $ 0.04     $ 0.20     $ (0.16 )
Cash Dividends
     0.100       0.100       0.100       0.100       0.100       0.200       0.290  
AVERAGE SHARES
                                                        
Basic
     17,127       17,122       17,095       17,087       17,063       17,124       17,060  
Diluted
     17,139       17,130       17,096       17,088       17,074       17,135       17,071  
                                                         
                                                         
(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
Second Quarter
    
2011
First Quarter
    
2010
Fourth Quarter
    
2010
Third Quarter
    
2010
Second Quarter
  
                               
ASSETS
                              
Cash and Due From Banks
   $ 71,554     $ 52,000     $ 35,410     $ 48,701     $ 52,380  
Funds Sold and Interest Bearing Deposits
     223,183       271,375       200,783       193,415       250,508  
Total Cash and Cash Equivalents
     294,737       323,375       236,193       242,116       302,888  
                                         
Investment Securities, Available-for-Sale
     304,313       311,356       309,731       231,303       218,785  
                                         
Loans, Net of Unearned Interest
                                        
Commercial, Financial, & Agricultural
     149,830       153,960       157,394       156,049       161,268  
Real Estate - Construction
     30,867       35,614       43,239       45,346       56,910  
Real Estate - Commercial
     660,058       668,583       671,702       680,639       676,516  
Real Estate - Residential
     395,126       404,204       420,604       448,704       450,997  
Real Estate - Home Equity
     248,228       248,745       251,565       250,795       247,726  
Consumer
     194,624       196,205       200,727       207,207       215,723  
Other Loans
     5,987       5,098       9,937       9,828       9,498  
Overdrafts
     2,882       2,385       3,503       2,669       3,144  
Total Loans, Net of Unearned Interest
     1,687,602       1,714,794       1,758,671       1,801,237       1,821,782  
Allowance for Loan Losses
     (31,080 )     (33,873 )     (35,436 )     (37,720 )     (38,442 )
Loans, Net
     1,656,522       1,680,921       1,723,235       1,763,517       1,783,340  
                                         
Premises and Equipment, Net
     112,576       113,918       115,356       115,689       116,802  
Intangible Assets
     85,699       85,806       86,159       86,712       87,421  
Other Real Estate Owned
     61,016       55,364       57,937       51,208       48,110  
Other Assets
     84,395       91,754       93,442       89,451       93,398  
Total Other Assets
     343,686       346,842       352,894       343,060       345,731  
                                         
Total Assets
   $ 2,599,258     $ 2,662,494     $ 2,622,053     $ 2,579,996     $ 2,650,744  
                                         
LIABILITIES
                                        
Deposits:
                                        
Noninterest Bearing Deposits
   $ 568,813     $ 540,184     $ 546,257     $ 479,887     $ 460,168  
NOW Accounts
     764,480       818,512       770,149       830,297       891,636  
Money Market Accounts
     283,230       288,224       275,416       282,848       303,369  
Regular Savings Accounts
     153,403       150,051       139,888       135,143       132,174  
Certificates of Deposit
     331,085       350,076       372,266       393,268       412,964  
Total Deposits
     2,101,011       2,147,047       2,103,976       2,121,443       2,200,311  
                                         
Short-Term Borrowings
     65,237       86,650       92,928       38,138       21,376  
Subordinated Notes Payable
     62,887       62,887       62,887       62,887       62,887  
Other Long-Term Borrowings
     49,196       50,050       50,101       46,456       55,605  
Other Liabilities
     60,383       56,582       53,142       50,383       48,885  
                                         
Total Liabilities
     2,338,714       2,403,216       2,363,034       2,319,307       2,389,064  
                                         
SHAREOWNERS' EQUITY
                                        
Common Stock
     171       171       171       171       171  
Additional Paid-In Capital
     37,724       37,548       36,920       36,864       36,633  
Retained Earnings
     237,709       237,276       237,679       237,471       238,779  
Accumulated Other Comprehensive Loss, Net of Tax
     (15,060 )     (15,717 )     (15,751 )     (13,817 )     (13,903 )
                                         
Total Shareowners' Equity
     260,544       259,278       259,019       260,689       261,680  
                                         
Total Liabilities and Shareowners' Equity
   $ 2,599,258     $ 2,662,494     $ 2,622,053     $ 2,579,996     $ 2,650,744  
                                         
OTHER BALANCE SHEET DATA
                                        
Earning Assets
   $ 2,215,098     $ 2,297,525     $ 2,269,185     $ 2,225,955     $ 2,291,075  
Intangible Assets
                                        
Goodwill
     84,811       84,811       84,811       84,811       84,811  
Core Deposits
     378       437       742       1,248       1,910  
Other
     510       558       606       653       700  
Interest Bearing Liabilities
     1,709,518       1,806,450       1,763,635       1,789,037       1,880,011  
                                         
Book Value Per Diluted Share
   $ 15.20     $ 15.13     $ 15.15     $ 15.25     $ 15.32  
Tangible Book Value Per Diluted Share
     10.21       10.13       10.11       10.18       10.21  
                                         
Actual Basic Shares Outstanding
     17,127       17,127       17,100       17,095       17,067  
Actual Diluted Shares Outstanding
     17,139       17,136       17,101       17,096       17,078  
                                         

 
 
 

 
CAPITAL CITY BANK GROUP, INC.
                            
ALLOWANCE FOR LOAN LOSSES
                            
AND NONPERFORMING ASSETS
                            
Unaudited
                            
   
2011
    
2011
    
2010
    
2010
    
2010
(Dollars in thousands)
  
Second Quarter
  
First Quarter
    
Fourth Quarter
    
Third Quarter
    
Second Quarter
                             
ALLOWANCE FOR LOAN LOSSES
                            
Balance at Beginning of Period
 $
33,873
    $
                       35,436
    $
              37,720
   $ 
                    38,442
   $ 
                 41,199
Provision for Loan Losses
  
                      3,545
    
                           4,133
    
                      3,783
    
                         5,668
    
                       3,633
Transfer of Unfunded Reserve to Other Liability
                               -
    
                                    -
    
                               -
    
                                  -
    
                                -
Net Charge-Offs
  
                      6,338
    
                           5,696
    
                      6,067
    
                         6,390
    
                       6,390
                             
Balance at End of Period
 $
31,080
    $
 $                      33,873
   $ 
                35,436
   $ 
                     37,720
   $ 
                 38,442
As a % of Loans
  
1.84%
    
1.98%
    
2.01%
    
2.10%
    
2.11%
As a % of Nonperforming Loans
  
36.71%
    
34.57%
    
40.57%
    
39.94%
    
37.80%
As a % of Nonperforming Assets
  
21.34%
    
22.09%
    
24.39%
    
25.90%
    
25.66%
                             
CHARGE-OFFS
                            
Commercial, Financial and Agricultural
 $
301
    $
                           721
   $ 
                       629
   $ 
                          242
   $ 
                       405
Real Estate - Construction
  
                            14
    
                                    -
    
                         234
    
                             701
    
                       1,220
Real Estate - Commercial
  
                      2,808
    
                               430
    
                      1,469
    
                         1,741
    
                          920
Real Estate - Residential
  
                      3,315
    
                           4,445
    
                      3,629
    
                         3,175
    
                       4,725
Consumer
  
                          606
    
                               620
    
                         582
    
                         1,057
    
                          360
                             
Total Charge-Offs
 $
7,044
    $
                         6,216
   $ 
                   6,543
   $ 
                      6,916
   $ 
                   7,630
                             
RECOVERIES
                            
Commercial, Financial and Agricultural
 $
43
    $
                              63
   $ 
                         48
   $ 
                           65
   $ 
                      181
Real Estate - Construction
  
                              5
    
                                   9
    
                               -
    
                                  -
    
                               8
Real Estate - Commercial
  
                          115
    
                                 12
    
                           55
    
                                 6
    
                            43
Real Estate - Residential
  
                          170
    
                                 96
    
                              7
    
                             181
    
                          638
Consumer
  
                          373
    
                               340
    
                         366
    
                             274
    
                          370
                             
Total Recoveries
 $
706
    $
                            520
   $ 
                       476
   $ 
                         526
   $ 
                   1,240
                             
NET CHARGE-OFFS
 $
6,338
    $
                         5,696
   $ 
                  6,067
   $ 
                      6,390
   $ 
                   6,390
                             
Net Charge-Offs as a % of Average Loans(1)
1.49%
    
1.33%
    
1.35%
    
1.40%
    
1.39%
                             
RISK ELEMENT ASSETS
                            
Nonaccruing Loans
 $
61,076
    $
                       73,954
   $ 
                65,700
   $ 
                    74,168
   $ 
                  74,504
Restructured Loans
  
                    23,582
    
                         24,028
    
                   21,649
    
                       20,267
    
                    27,200
Total Nonperforming Loans
  
                    84,658
    
                         97,982
    
                   87,349
    
                       94,435
    
                  101,704
Other Real Estate
  
                    61,016
    
                         55,364
    
                   57,937
    
                       51,208
    
                    48,110
Total Nonperforming Assets
 $
145,674
    $
                   153,346
   $ 
              145,286
   $ 
                 145,643
   $ 
               149,814
                             
Past Due Loans 30-89 Days
 $
18,103
    $
                       19,391
   $ 
                 24,193
   $ 
                     24,904
   $ 
                21,192
Past Due Loans 90 Days or More
 $
271
    $
                                  -
   $ 
                       159
   $ 
                              -
   $ 
                             -
                             
Nonperforming Loans as a % of Loans
  
5.02%
    
5.71%
    
4.97%
    
5.24%
    
5.58%
Nonperforming Assets as a % of
                            
Loans and Other Real Estate
  
8.33%
    
8.66%
    
8.00%
    
7.86%
    
8.01%
Nonperforming Assets as a % of Capital(2)
49.95%
    
52.31%
    
49.34%
    
48.81%
    
49.92%
Nonperforming Assets as a % of Total Assets
5.60%
    
5.76%
    
5.54%
    
5.65%
    
5.65%
                             
                             
(1) Annualized
                            
(2) Capital includes allowance for loan losses.
                        


 
 
 

AVERAGE BALANCE AND INTEREST RATES(1)
                                                                                                                          
Unaudited
                                                                                                                              
                                                                                                                               
                                                                                                                               
   
Second Quarter 2011
    
First Quarter 2011
    
Fourth Quarter 2010
    
Third Quarter 2010
    
Second Quarter 2010
    
June 2011 YTD
    
June 2010 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
   $ 1,704,348       24,465       5.76 %   $ 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 %   $ 1,717,267       48,566       5.76 %   $ 1,863,749       53,975       5.84 %
                                                                                                                                                                         
Investment Securities
                                                                                                                                                                        
Taxable Investment Securities
     244,487       825       1.35 %     231,153       851       1.48 %     178,926       799       1.78 %     124,625       674       2.15 %     128,268       708       2.21 %     237,857       1,676       1.41 %     99,954       1,208       2.42 %
Tax-Exempt Investment Securities
     60,963       297       1.95 %     74,226       337       1.81 %     83,469       434       2.08 %     88,656       521       2.35 %     92,140       624       2.71 %     67,558       634       1.88 %     94,713       1,377       2.91 %
                                                                                                                                                                         
Total Investment Securities
     305,450       1,122       1.47 %     305,379       1,188       1.56 %     262,395       1,233       1.87 %     213,281       1,195       2.23 %     220,408       1,332       2.42 %     305,415       2,310       1.52 %     194,667       2,585       2.66 %
                                                                                                                                                                         
Funds Sold
     249,133       145       0.23 %     242,893       171       0.28 %     172,738       95       0.24 %     252,434       144       0.22 %     267,578       176       0.26 %     246,030       316       0.23 %     285,331       348       0.24 %
                                                                                                                                                                         
Total Earning Assets
     2,258,931     $ 25,732       4.57 %     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 %     2,268,712     $ 51,192       4.55 %     2,343,747     $ 56,908       4.90 %
                                                                                                                                                                         
Cash and Due From Banks
     47,465                       50,942                       51,030                       50,942                       50,739                       49,194                       52,795                  
Allowance for Loan Losses
     (32,993 )                     (34,822 )                     (37,713 )                     (39,584 )                     (41,074 )                     (33,903 )                     (42,820 )                
Other Assets
     344,884                       348,295                       345,427                       342,202                       339,458                       346,581                       334,677                  
                                                                                                                                                                         
Total Assets
   $ 2,618,287                     $ 2,643,017                     $ 2,576,793                     $ 2,626,758                     $ 2,678,488                     $ 2,630,584                     $ 2,688,399                  
                                                                                                                                                                         
LIABILITIES:
                                                                                                                                                                        
Interest Bearing Deposits
                                                                                                                                                                        
NOW Accounts
   $ 782,698     $ 259       0.13 %   $ 786,939     $ 261       0.13 %   $ 837,625     $ 296       0.14 %   $ 871,158     $ 326       0.15 %   $ 879,329     $ 400       0.18 %   $ 784,806     $ 520       0.13 %   $ 873,200     $ 784       0.18 %
Money Market Accounts
     284,411       136       0.19 %     278,562       131       0.19 %     282,887       134       0.19 %     293,424       145       0.20 %     333,976       331       0.40 %     281,503       267       0.19 %     353,958       1,020       0.58 %
Savings Accounts
     152,599       16       0.04 %     144,623       18       0.05 %     136,276       16       0.05 %     133,690       17       0.05 %     131,333       17       0.05 %     148,633       34       0.05 %     128,856       32       0.05 %
Time Deposits
     338,723       672       0.80 %     360,575       848       0.95 %     382,870       1,078       1.12 %     402,880       1,332       1.31 %     430,571       1,615       1.50 %     349,589       1,520       0.88 %     434,321       3,465       1.61 %
Total Interest Bearing Deposits
     1,558,431       1,083       0.28 %     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 %     1,564,531       2,341       0.30 %     1,790,335       5,301       0.60 %
                                                                                                                                                                         
Short-Term Borrowings
     76,754       110       0.58 %     87,267       111       0.52 %     34,706       99       1.14 %     23,388       31       0.54 %     22,694       12       0.20 %     81,982       221       0.54 %     26,662       29       0.21 %
Subordinated Notes Payable
     62,887       343       2.16 %     62,887       340       2.16 %     62,887       342       2.13 %     62,887       376       2.34 %     62,887       639       4.02 %     62,887       683       2.16 %     62,887       1,290       4.08 %
Other Long-Term Borrowings
     49,650       492       3.97 %     50,345       494       3.98 %     50,097       508       4.02 %     54,258       565       4.13 %     52,704       551       4.20 %     49,995       986       3.98 %     51,350       1,077       4.23 %
                                                                                                                                                                         
Total Interest Bearing Liabilities
     1,747,722     $ 2,028       0.47 %     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 %     1,759,395     $ 4,231       0.48 %     1,931,234     $ 7,697       0.80 %
                                                                                                                                                                         
Noninterest Bearing Deposits
     548,870                       554,680                       476,209                       471,013                       458,969                       551,759                       451,094                  
Other Liabilities
     59,324                       55,536                       50,614                       50,318                       42,152                       57,440                       39,870                  
                                                                                                                                                                         
Total Liabilities
     2,355,916                       2,381,414                       2,314,171                       2,363,016                       2,414,615                       2,368,594                       2,422,198                  
                                                                                                                                                                         
SHAREOWNERS' EQUITY:
   $ 262,371                     $ 261,603                     $ 262,622                     $ 263,742                     $ 263,873                     $ 261,990                     $ 266,201                  
                                                                                                                                                                         
Total Liabilities and Shareowners' Equity
   $ 2,618,287                     $ 2,643,017                     $ 2,576,793                     $ 2,626,758                     $ 2,678,488                     $ 2,630,584                     $ 2,688,399                  
                                                                                                                                                                         
Interest Rate Spread
           $ 23,704       4.10 %           $ 23,257       4.03 %           $ 24,654       4.30 %           $ 25,115       4.27 %           $ 24,738       4.12 %           $ 46,961       4.07 %           $ 49,211       4.10 %
                                                                                                                                                                         
Interest Income and Rate Earned(1)
     $ 25,732       4.57 %           $ 25,460       4.53 %           $ 27,127       4.85 %           $ 27,907       4.87 %           $ 28,303       4.87 %           $ 51,192       4.55 %           $ 56,908       4.90 %
Interest Expense and Rate Paid(2)
       2,028       0.36 %             2,203       0.39 %             2,473       0.44 %             2,792       0.49 %             3,565       0.61 %             4,231       0.38 %             7,697       0.66 %
                                                                                                                                                                         
Net Interest Margin
           $ 23,704       4.21 %           $ 23,257       4.14 %           $ 24,654       4.41 %           $ 25,115       4.38 %           $ 24,738       4.26 %           $ 46,961       4.17 %           $ 49,211       4.24 %
                                                                                                                                                                         
                                                                                                                                                                         
                                                                                                                                                                         
                                                                                                                                                                         
(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.