ex99_1.htm

Capital City Bank Group, Inc.

Reports Third Quarter 2011 Results

TALLAHASSEE, Fla. (October 25, 2011) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income for the third quarter of 2011 totaling $2.0 million, or $0.12 per diluted share, compared to $2.1 million, or $0.12 per diluted share for the second quarter of 2011, and $0.4 million, or $0.02 per diluted share, for the third quarter of 2010. Net income for the nine month period ended September 30, 2011 was $5.4 million, or $0.32 per diluted share, compared to a net loss of $2.3 million, or $0.14 per diluted share for the same period in 2010.

Compared to the second quarter of 2011, third quarter 2011 earnings reflect lower operating revenues of $0.6 million and a $0.2 million increase in the loan loss provision, partially offset by a $0.5 million decline in noninterest expense and lower income tax expense of $0.1 million. A $1.9 million decline in the loan loss provision and a $1.7 million reduction in noninterest expense partially offset by lower operating revenues of $0.9 million and higher income taxes of $1.1 million drove the improvement in earnings compared to the third quarter of 2010.

The increase in earnings for the nine month period ended September 30, 2011 is attributable to an $8.6 million reduction in the loan loss provision and lower noninterest expense of $5.2 million, partially offset by a $0.8 million decline in operating revenues and higher income taxes of $5.2 million. 2011 performance also 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. “Market disruption continues to present opportunities and strengthen the Capital City brand. Profit in the third quarter of $2.0 million, or $0.12 per share represents our sixth 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 revenue growth continues to be a challenge, I am pleased with our third quarter performance” said Smith.

The Return on Average Assets was 0.31% and the Return on Average Equity was 2.97% for the third quarter of 2011. These metrics were 0.33% and 3.28% for the second quarter of 2011, and 0.06% and 0.60% for the third quarter of 2010, respectively.

For the nine month period ended September 30, 2011, the Return on Average Assets was 0.28% and the Return on Average Equity was 2.77% compared to -0.12% and -1.17%, respectively, for the same period of 2010.

Discussion of Financial Condition

Average earning assets were $2.203 billion for the third quarter of 2011, a decrease of $56.0 million, or 2.5% from the second quarter of 2011 and an increase of $15.1 million, or 0.7%, from the fourth quarter of 2010. The lower level of earning assets over the second quarter of 2011 was a result of a decline in the loan portfolio of $36.6 million, short-term investments of $17.4 million and the investment portfolio of $2.0 million. Compared to the fourth quarter of 2010, average overnight funds were higher by $59.0 million, the investment portfolio increased $41.1 million and loans declined $115.2 million, partially attributable to the resolution of problem loans during 2011.

Average loans continued to decline throughout the portfolio, driven primarily by a reduction in the commercial real estate, residential and commercial loan categories. The loan portfolio is impacted by weak loan demand attributable to the lack of consumer confidence and a sluggish economy. In addition to lower production, normal amortization, payoffs and 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 third quarter, problem loan resolutions accounted for $13.5 million or 45% of the net reduction in total loans of $29.9 million from the second quarter 2011. Problem loan resolutions accounted for $44.5 million, or 44%, of the net reduction in loans of $101.0 million from the fourth quarter of 20101.

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

Nonperforming assets (including nonaccrual loans, restructured loans (“TDRs”), and OREO) totaled $143.0 million at the end of the third quarter of 2011, a decrease of $2.7 million from the second quarter of 2011 and a decrease of $2.3 million from the fourth quarter of 2010. Nonaccrual loans decreased $7.7 million from the second quarter of 2011 to $53.4 million, primarily reflecting migration of loans into the restructured loan category and the transfer of loans to OREO. Nonaccrual loan inflow for the third quarter of 2011 was comparable to the second quarter of 2011.

Compared to the fourth quarter of 2010, nonaccrual loans declined by $12.3 million reflecting the movement of loans to the OREO category and, to a lesser extent, migration to the restructured loan category. TDR's totaled $28.4 million at the end of the third quarter, a $4.8 million increase over the second quarter of 2011 and a $6.8 million increase over the fourth quarter of 2010. The balance of OREO totaled $61.2 million at the end of the third quarter, a slight increase of $0.2 million from the second quarter of 2011. For 2011, we have realized a slower pace of loan defaults, momentum in working loans through the collection cycle, and progress in our property disposition efforts, which has contributed to the overall improvement in our nonperforming asset portfolio. So far in 2011, we have sold OREO properties totaling $25.2 million, which compares to $18.0 million for the full year 2010. Nonperforming assets represented 5.67% of total assets at September 30, 2011 compared to 5.60% at June 30, 2011 and 5.54% at December 31, 2010.

Average total deposits were $2.061 billion for the third quarter, a decrease of $45.4 million, or 2.2%, from the second quarter of 2011 and $53.9 million, or 2.6%, 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 second quarter level, which reflects the seasonality within this deposit category. Noninterest bearing demand and savings 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 continue to experience a favorable shift in the mix of our deposits as higher cost certificates of deposit balances are replaced with lower rate nonmaturity deposits and noninterest bearing demand accounts.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $231.7 million during the third quarter of 2011 compared to an average overnight funds sold position of $249.1 million in the linked quarter and $164.9 million in the fourth quarter of 2010. The lower balance when compared to the linked quarter primarily reflects declining deposits mentioned above and lower levels of short-term borrowings, partially offset by a decrease in the loan portfolio. The variance as compared to the fourth quarter of 2010 is primarily attributable to a net reduction in loans and an increase in repurchase agreements, partially offset by a decline in deposits and the deployment of funds to the investment portfolio.

Equity capital was $260.9 million as of September 30, 2011, compared to $260.5 million as of June 30, 2011 and $259.0 million as of December 31, 2010. Our leverage ratio was 10.20%, 9.95%, and 10.10%, respectively, for these periods. Further, our risk-adjusted capital ratio of 15.41% at September 30, 2011 exceeds the 10.0% threshold to be designated as “well-capitalized” under the risk-based regulatory guidelines. At September 30, 2011, our tangible common equity ratio was 7.19%, compared to 6.96% at June 30, 2011 and 6.82% at December 31, 2010.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2011 was $23.3 million compared to $23.7 million for the second quarter of 2011 and $25.1 million for the third quarter of 2010. For the nine month period ended September 30, 2011, tax equivalent net interest income totaled $70.3 million compared to $74.3 million for the same period in 2010.

The decrease of $0.4 million in tax equivalent net interest income from the second quarter of 2011 was due to lower loan balances, declining loan fees and lower earning asset yields, partially offset by a reduction in the costs of funds, an additional calendar day and a lower level of foregone interest on nonaccrual loans.

The decrease in tax equivalent net interest income of $1.8 million and $4.0 million, for the three and nine month periods ended September 30, 2011, respectively, as compared to the same periods in 2010, resulted from an unfavorable change in earning asset mix and yield, partially offset by a reduction in interest expense and a lower level of foregone interest on nonaccrual loans.

The decline in loans, coupled with the low rate environment continues to put pressure on our net interest income. Lowering our costs of funds, to the extent we can and continuing to shift the mix of our deposits will help to partially mitigate the unfavorable impact of weak loan demand and re-pricing.

The net interest margin in the third quarter of 2011 was 4.20%, a decrease of one basis point over the linked quarter and a decline of 18 basis points from the third quarter of 2010. Year over year, for the nine month period, the margin declined 11 basis points to 4.18%. The decrease in the margin for all comparable periods is attributable to the shift in our earning asset mix and unfavorable asset re-pricing, partially offset by a favorable variance in our average cost of funds.

The provision for loan losses for the third quarter of 2011 was $3.7 million compared to $3.5 million in the second quarter of 2011 and $5.7 million for the third quarter of 2010. For the nine month period ended September 30, 2011, the loan loss provision totaled $11.4 million compared to $20.0 million for the same period in 2010. This change was driven by a reduction in impaired loans and related reserves as well as a lower general reserve, which is primarily reflective of a 14% reduction in the level of internally classified loans, and lower loss rates. Net charge-offs for the third quarter of 2011 totaled $5.1 million, or 1.22%, of average loans compared to $6.3 million, or 1.49% for the second quarter of 2011 and $6.4 million, or 1.40%, in the third quarter of 2010. For the nine month period ended September 30, 2011, net charge-offs totaled $17.2 million, or 1.35%, of average loans compared to $26.3 million, or 1.91%, for the same period of 2010. At quarter-end, the allowance for loan losses of $29.7 million was 1.79% of outstanding loans (net of overdrafts) and provided coverage of 36% of nonperforming loans compared to 1.84% and 37%, respectively, at June 30, 2011, and 2.01% and 41%, respectively, at December 31, 2010.

Noninterest income for the third quarter of 2011 totaled $14.2 million, a decrease of $0.3 million, or 1.8%, from the second quarter of 2011 and an increase of $0.7 million, or 5.5%, over the third quarter of 2010. A $0.5 million reduction in other income drove the decline from the second quarter of 2011 and reflects a lower level of gains from the sale of ORE properties. Partially offsetting the lower level of other income was a $0.3 million increase in deposit fees. The favorable variance compared to the third quarter of 2010 was primarily due to a higher deposit and bank card fees of $0.2 million and $0.3 million, respectively. For the nine month period ended September 30, 2011, noninterest income totaled $45.0 million, an increase of $2.9 million, or 6.8%, from the same period in 2010. The increase reflects a $3.3 million increase in other income reflective of a $3.2 million pre-tax gain from the sale of our Class B shares of Visa stock during the first quarter of 2011, and a $1.0 million increase in gains from the sale of OREO properties, partially offset by a $1.1 million decline in merchant fees. Increases in retail brokerage and bank card fees of $0.4 million and $0.8 million, respectively, also contributed to the increase for the year. Partially offsetting these favorable variances was a $1.1 million reduction in deposit fees reflective of a lower level of overdraft fees due to reduced activity as well as the implementation of new rules under Regulation E. The aforementioned reduction in merchant fees reflects the transfer of our merchant processing business to another processor, which was completed in August 2010. This decline is substantially offset by a reduction in processing costs, which is reflected as interchange fees in noninterest expense.

Noninterest expense for the third quarter of 2011 totaled $30.6 million, a decrease of $0.5 million from the second quarter of 2011 and $1.7 million from the third quarter of 2010. The decline from the second quarter of 2011 was primarily due to a $0.5 million reduction in OREO expense reflective of both a reduction in valuation adjustments and losses from the sale of properties. Compared to the third quarter of 2010, the favorable variance was due to lower OREO expense of $0.8 million, intangible amortization expense of $0.6 million, occupancy expense of $0.3 million, and other expense of $0.9 million, partially offset by higher salaries/associate benefit expense of $0.8 million. The lower level of OREO expense primarily reflects a reduction in the level of losses recognized on the sale of OREO. Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions. Occupancy expense declined due to lower lease expense for two banking offices that have been relocated to newly constructed offices as well as lower expense for furniture/equipment, reflecting the full depreciation of our imaging system components. The $0.9 million decline in other expense was primarily due to lower FDIC insurance expense of $0.5 million and professional fees of $0.2 million. FDIC insurance expense declined due to a lower rate reflecting recent changes to the FDIC premium structure. Professional fees declined due to reduction in consulting fees related to a review of our vendor contracts. The increase in salaries/associate benefit expense primarily reflects a higher level of performance incentive expense and associate salaries reflective of third quarter, 2011 merit raises.

For the nine month period ended September 30, 2011, noninterest expense totaled $95.1 million, a $5.2 million decline from the same period of 2010 attributable to lower occupancy expense of $0.3 million, furniture/equipment expense of $0.2 million, intangible amortization expense of $1.6 million, other real estate expense of $1.0 million, and a decline in other expense of $3.3 million. Partially offsetting the aforementioned favorable variances was a $1.0 million increase in salaries/associate benefit expense. Occupancy expense declined due to lower lease expense for two banking offices that have been relocated to newly constructed offices and the reduction in furniture/equipment expense reflects the full depreciation of several system components. Intangible amortization expense declined due to the full amortization of core deposit intangibles related to several past acquisitions. The lower level of OREO expense reflects both a reduction in valuation adjustments and a property carrying costs. The $3.3 million reduction in other expense primarily reflects a reduction in FDIC insurance expense of $1.3 million, interchange fees of $0.9 million, professional fees of $0.5 million, advertising expense of $0.2 million, and telephone expense of $0.2 million. The reduction in FDIC insurance expense reflects a lower rate due to recent changes to the FDIC premium structure. Lower interchange fees are attributable to the sale of our merchant processing business as noted above in our discussion of noninterest income. Professional fees declined due to lower consulting fees. The reduction in advertising fees reflects efficiencies gained in the promotion of our free checking products. Telephone expense declined primarily due to the renegotiation of contracts.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (“Company”) (NASDAQ: CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 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, including the impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; 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.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
	Three Months Ended									Nine Months Ended
(Dollars in thousands, except per share data)	Sep 30, 2011			June 30, 2011			Sep 30, 2010			Sep 30, 2011			Sep 30, 2010

EARNINGS
Net Income (Loss)	$	1,977		$	2,145		$	401		$	5,432		$	(2,331	)
Net Income (Loss) Per Common Share	$	0.12		$	0.12		$	0.02		$	0.32		$	(0.14	)
PERFORMANCE
Return on Average Equity		2.97	%		3.28	%		0.60	%		2.77	%		-1.17	%
Return on Average Assets		0.31	%		0.33	%		0.06	%		0.28	%		-0.12	%
Net Interest Margin		4.20	%		4.21	%		4.38	%		4.18	%		4.29	%
Noninterest Income as % of Operating Revenue		38.14	%		38.13	%		35.17	%		39.38	%		36.52	%
Efficiency Ratio		81.40	%		81.41	%		82.08	%		82.07	%		84.39	%
CAPITAL ADEQUACY
Tier 1 Capital Ratio		14.05	%		13.83	%		12.93	%		14.05	%		12.93	%
Total Capital Ratio		15.41	%		15.19	%		14.29	%		15.41	%		14.29	%
Tangible Common Equity Ratio		7.19	%		6.96	%		6.98	%		7.19	%		6.98	%
Leverage Ratio		10.20	%		9.95	%		9.75	%		10.20	%		9.75	%
Equity to Assets		10.34	%		10.02	%		10.10	%		10.34	%		10.10	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		36.26	%		36.71	%		39.94	%		36.26	%		39.94	%
Allowance as a % of Loans		1.79	%		1.84	%		2.10	%		1.79	%		2.10	%
Net Charge-Offs as % of Average Loans		1.22	%		1.49	%		1.40	%		1.35	%		1.91	%
Nonperforming Assets as % of Loans and ORE		8.32	%		8.33	%		7.86	%		8.32	%		7.86	%
Nonperforming Assets as % of Total Assets		5.67	%		5.60	%		5.65	%		5.67	%		5.65	%
STOCK PERFORMANCE
High	$	11.18		$	13.12		$	14.24		$	13.80		$	18.25
Low	$	9.81		$	9.94		$	10.76		$	9.81		$	10.76
Close	$	10.38		$	10.26		$	12.14		$	10.38		$	12.14
Average Daily Trading Volume		43,483			29,716			29,747			31,783			34,489

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

	2011			2011			2011			2010			2010
(Dollars in thousands)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter
ASSETS:
Cash and Due From Banks	$	53,027		$	71,554		$	52,000		$	35,410		$	48,701
Funds Sold and Interest Bearing Deposits		193,387			223,183			271,375			200,783			193,415
Total Cash and Cash Equivalents		246,414			294,737			323,375			236,193			242,116

Investment Securities, Available-for-Sale		306,038			304,313			311,356			309,731			231,303

Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural		142,511			149,830			153,960			157,394			156,049
Real Estate - Construction		31,991			30,867			35,614			43,239			45,346
Real Estate - Commercial		644,128			660,058			668,583			671,702			680,639
Real Estate - Residential		388,686			395,126			404,204			420,604			448,704
Real Estate - Home Equity		245,438			248,228			248,745			251,565			250,795
Consumer		188,933			194,624			196,205			200,727			207,207
Other Loans		13,720			5,987			5,098			9,937			9,828
Overdrafts		2,292			2,882			2,385			3,503			2,669
Total Loans, Net of Unearned Interest		1,657,699			1,687,602			1,714,794			1,758,671			1,801,237
Allowance for Loan Losses		(29,658	)		(31,080	)		(33,873	)		(35,436	)		(37,720	)
Loans, Net		1,628,041			1,656,522			1,680,921			1,723,235			1,763,517

Premises and Equipment, Net		111,471			112,576			113,918			115,356			115,689
Intangible Assets		85,591			85,699			85,806			86,159			86,712
Other Real Estate Owned		61,196			61,016			55,364			57,937			51,208
Other Assets		85,221			84,395			91,754			93,442			89,451
Total Other Assets		343,479			343,686			346,842			352,894			343,060

Total Assets	$	2,523,972		$	2,599,258		$	2,662,494		$	2,622,053		$	2,579,996

LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	584,628		$	568,813		$	540,184		$	546,257		$	479,887
NOW Accounts		708,066			764,480			818,512			770,149			830,297
Money Market Accounts		280,001			283,230			288,224			275,416			282,848
Regular Savings Accounts		154,136			153,403			150,051			139,888			135,143
Certificates of Deposit		316,968			331,085			350,076			372,266			393,268
Total Deposits		2,043,798			2,101,011			2,147,047			2,103,976			2,121,443

Short-Term Borrowings		47,508			65,237			86,650			92,928			38,138
Subordinated Notes Payable		62,887			62,887			62,887			62,887			62,887
Other Long-Term Borrowings		45,389			49,196			50,050			50,101			46,456
Other Liabilities		63,465			60,383			56,582			53,142			50,383

Total Liabilities		2,263,047			2,338,714			2,403,216			2,363,034			2,319,307

SHAREOWNERS' EQUITY
Common Stock		172			171			171			171			171
Additional Paid-In Capital		38,074			37,724			37,548			36,920			36,864
Retained Earnings		237,969			237,709			237,276			237,679			237,471
Accumulated Other Comprehensive Loss, Net of Tax		(15,290	)		(15,060	)		(15,717	)		(15,751	)		(13,817	)

Total Shareowners' Equity		260,925			260,544			259,278			259,019			260,689

Total Liabilities and Shareowners' Equity	$	2,523,972		$	2,599,258		$	2,662,494		$	2,622,053		$	2,579,996

OTHER BALANCE SHEET DATA
Earning Assets	$	2,157,124		$	2,215,098		$	2,297,525		$	2,269,185		$	2,225,955
Intangible Assets
Goodwill		84,811			84,811			84,811			84,811			84,811
Core Deposits		318			378			437			742			1,248
Other		462			510			558			606			653
Interest Bearing Liabilities		1,614,954			1,709,518			1,806,450			1,763,635			1,789,037

Book Value Per Diluted Share	$	15.20		$	15.20		$	15.13		$	15.15		$	15.25
Tangible Book Value Per Diluted Share		10.21			10.21			10.13			10.11			10.18

Actual Basic Shares Outstanding		17,157			17,127			17,127			17,100			17,095
Actual Diluted Shares Outstanding		17,172			17,139			17,136			17,101			17,096

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

													Nine Months Ended
	2011		2011		2011		2010			2010			2011		2010
(Dollars in thousands, except per share data)	Third Quarter		Second Quarter		First Quarter		Fourth Quarter			Third Quarter			Third Quarter		Third Quarter

INTEREST INCOME
Interest and Fees on Loans	$	23,777	$	24,305	$	23,947	$	25,656		$	26,418		$	72,029	$	80,054
Investment Securities		978		1,017		1,071		1,080			1,014			3,066		3,118
Funds Sold		136		145		171		95			144			452		492
Total Interest Income		24,891		25,467		25,189		26,831			27,576			75,547		83,664

INTEREST EXPENSE
Deposits		907		1,083		1,258		1,524			1,820			3,248		7,121
Short-Term Borrowings		78		110		111		99			31			299		60
Subordinated Notes Payable		339		343		340		342			376			1,022		1,666
Other Long-Term Borrowings		467		492		494		508			565			1,453		1,642
Total Interest Expense		1,791		2,028		2,203		2,473			2,792			6,022		10,489
Net Interest Income		23,100		23,439		22,986		24,358			24,784			69,525		73,175
Provision for Loan Losses		3,718		3,545		4,133		3,783			5,668			11,396		20,041
Net Interest Income after Provision for Loan Losses		19,382		19,894		18,853		20,575			19,116			58,129		53,134

NONINTEREST INCOME
Service Charges on Deposit Accounts		6,629		6,309		5,983		6,434			6,399			18,921		20,066
Data Processing Fees		749		764		974		880			911			2,487		2,730
Asset Management Fees		1,080		1,080		1,080		1,095			1,040			3,240		3,140
Retail Brokerage Fees		807		939		729		738			671			2,475		2,082
Gain on Sale of Investment Securities		-		-		-		-			3			-		8
Mortgage Banking Fees		645		568		617		1,027			772			1,830		1,921
Interchange Fees (1)		1,420		1,443		1,360		1,285			1,291			4,223		3,792
ATM/Debit Card Fees (1)		1,170		1,115		1,136		1,051			1,036			3,421		3,072
Other		1,693		2,230		4,455		2,225			1,326			8,378		5,279
Total Noninterest Income		14,193		14,448		16,334		14,735			13,449			44,975		42,090

NONINTEREST EXPENSE
Salaries and Associate Benefits		15,805		16,000		16,577		15,389			15,003			48,382		47,366
Occupancy, Net		2,495		2,447		2,396		2,406			2,611			7,338		7,604
Furniture and Equipment		2,118		2,117		2,226		2,268			2,288			6,461		6,661
Intangible Amortization		108		107		353		553			709			568		2,129
Other Real Estate		2,542		3,033		3,677		4,709			3,306			9,252		10,213
Other		7,579		7,463		8,102		8,215			8,446			23,144		26,403
Total Noninterest Expense		30,647		31,167		33,331		33,540			32,363			95,145		100,376

OPERATING PROFIT(LOSS)		2,928		3,175		1,856		1,770			202			7,959		(5,152	)
Provision for Income Taxes		951		1,030		546		(148	)		(199	)		2,527		(2,821	)
NET INCOME(LOSS)	$	1,977	$	2,145	$	1,310	$	1,918		$	401		$	5,432	$	(2,331	)

PER SHARE DATA
Basic Earnings	$	0.12	$	0.12	$	0.08	$	0.12		$	0.02		$	0.32	$	(0.14	)
Diluted Earnings	$	0.12	$	0.12	$	0.08	$	0.12		$	0.02		$	0.32	$	(0.14	)
Cash Dividends		0.100		0.100		0.100		0.100			0.100			0.300		0.390
AVERAGE SHARES
Basic		17,152		17,127		17,122		17,095			17,087			17,134		17,069
Diluted		17,167		17,139		17,130		17,096			17,088			17,143		17,070


(1) Together referred to as "Bank Card Fees"

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND NONPERFORMING ASSETS
Unaudited

	2011			2011			2011			2010			2010
(Dollars in thousands, except per share data)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter

ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period	$	31,080		$	33,873		$	35,436		$	37,720		$	38,442
Provision for Loan Losses		3,718			3,545			4,133			3,783			5,668
Net Charge-Offs	$	5,140		$	6,338		$	5,696		$	6,067		$	6,390

Balance at End of Period		29,658			31,080			33,873			35,436			37,720
As a % of Loans		1.79	%		1.84	%		1.98	%		2.01	%		2.10	%
As a % of Nonperforming Loans		36.26	%		36.71	%		34.57	%		40.57	%		39.94	%
As a % of Nonperforming Assets		20.74	%		21.34	%		22.09	%		24.39	%		25.90	%

CHARGE-OFFS
Commercial, Financial and Agricultural	$	186		$	301		$	721		$	629		$	242
Real Estate - Construction		75			14			-			234			701
Real Estate - Commercial		1,031			2,808			430			1,469			1,741
Real Estate - Residential		3,867			3,315			4,445			3,629			3,175
Consumer		832			606			620			582			1,057

Total Charge-Offs	$	5,991		$	7,044		$	6,216		$	6,543		$	6,916

RECOVERIES
Commercial, Financial and Agricultural	$	33		$	43		$	63		$	48		$	65
Real Estate - Construction		-			5			9			-			-
Real Estate - Commercial		37			115			12			55			6
Real Estate - Residential		379			170			96			7			181
Consumer		402			373			340			366			274

Total Recoveries	$	851		$	706		$	520		$	476		$	526

NET CHARGE-OFFS	$	5,140		$	6,338		$	5,696		$	6,067		$	6,390

Net Charge-Offs as a % of Average Loans(1)		1.22	%		1.49	%		1.33	%		1.35	%		1.40	%

RISK ELEMENT ASSETS
Nonaccruing Loans	$	53,396		$	61,076		$	73,954		$	65,700		$	74,168
Restructured Loans		28,404			23,582			24,028			21,649			20,267
Total Nonperforming Loans		81,800			84,658			97,982			87,349			94,435
Other Real Estate		61,196			61,016			55,364			57,937			51,208
Total Nonperforming Assets	$	142,996		$	145,674		$	153,346		$	145,286		$	145,643

Past Due Loans 30-89 Days	$	17,053		$	18,103		$	19,391		$	24,193		$	24,904
Past Due Loans 90 Days or More	$	26		$	271		$	-		$	159		$	-

Nonperforming Loans as a % of Loans		4.93	%		5.02	%		5.71	%		4.97	%		5.24	%
Nonperforming Assets as a % of
Loans and Other Real Estate		8.32	%		8.33	%		8.66	%		8.00	%		7.86	%
Nonperforming Assets as a % of Capital(2)		49.21	%		49.95	%		52.31	%		49.34	%		48.81	%
Nonperforming Assets as a % of Total Assets		5.67	%		5.60	%		5.76	%		5.54	%		5.65	%


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


AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
	Third Quarter 2011								Second Quarter 2011								First Quarter 2011								Fourth Quarter 2010								Third Quarter 2010								September 2011 YTD								September 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	$	1,667,720		$	23,922		5.69	%	$	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	%	$	1,700,570		$	72,488		5.70	%	$	1,844,788		$	80,543		5.84	%

Investment Securities
Taxable Investment Securities		248,138			828		1.32	%		244,487			825		1.35	%		231,153			851		1.48	%		178,926			799		1.78	%		124,625			674		2.15	%		241,321			2,504		1.40	%		108,268			1,882		2.32	%
Tax-Exempt Investment Securities		55,388			231		1.67	%		60,963			297		1.95	%		74,226			337		1.81	%		83,469			434		2.08	%		88,656			521		2.35	%		63,457			865		1.82	%		92,672			1,898		2.73	%

Total Investment Securities		303,526			1,059		1.39	%		305,450			1,122		1.47	%		305,379			1,188		1.56	%		262,395			1,233		1.87	%		213,281			1,195		2.23	%		304,778			3,369		1.47	%		200,940			3,780		2.51	%

Funds Sold		231,681			136		0.23	%		249,133			145		0.23	%		242,893			171		0.28	%		172,738			95		0.24	%		252,434			144		0.22	%		241,195			452		0.25	%		274,245			492		0.24	%

Total Earning Assets		2,202,927		$	25,117		4.52	%		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	%		2,246,543		$	76,309		4.54	%		2,319,973		$	84,815		4.89	%

Cash and Due From Banks		47,252								47,465								50,942								51,030								50,942								48,539								52,170
Allowance for Loan Losses		(30,969	)							(32,993	)							(34,822	)							(37,713	)							(39,584	)							(32,914	)							(41,729	)
Other Assets		344,041								344,884								348,295								345,427								342,202								345,725								337,212

Total Assets	$	2,563,251							$	2,618,287							$	2,643,017							$	2,576,793							$	2,626,758							$	2,607,893							$	2,667,626

LIABILITIES:
Interest Bearing Deposits
NOW Accounts	$	726,652		$	222		0.12	%	$	782,698		$	259		0.13	%	$	786,939		$	261		0.13	%	$	837,625		$	296		0.14	%	$	871,158		$	326		0.15	%	$	765,209		$	742		0.13	%	$	872,512		$	1,110		0.17	%
Money Market Accounts		282,378			95		0.13	%		284,411			136		0.19	%		278,562			131		0.19	%		282,887			134		0.19	%		293,424			145		0.20	%		281,798			362		0.17	%		333,558			1,165		0.47	%
Savings Accounts		153,748			19		0.05	%		152,599			16		0.04	%		144,623			18		0.05	%		136,276			16		0.05	%		133,690			17		0.05	%		150,357			53		0.05	%		130,485			49		0.05	%
Time Deposits		324,951			571		0.70	%		338,723			672		0.80	%		360,575			848		0.95	%		382,870			1,078		1.12	%		402,880			1,332		1.31	%		341,286			2,091		0.82	%		423,726			4,797		1.51	%
Total Interest Bearing Deposits		1,487,729			907		0.24	%		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	%		1,538,650			3,248		0.28	%		1,760,281			7,121		0.54	%

Short-Term Borrowings		64,160			78		0.48	%		76,754			110		0.58	%		87,267			111		0.52	%		34,706			99		1.14	%		23,388			31		0.54	%		75,976			299		0.53	%		25,558			60		0.31	%
Subordinated Notes Payable		62,887			339		2.11	%		62,887			343		2.16	%		62,887			340		2.16	%		62,887			342		2.13	%		62,887			376		2.34	%		62,887			1,022		2.14	%		62,887			1,666		3.49	%
Other Long-Term Borrowings		46,435			467		3.99	%		49,650			492		3.97	%		50,345			494		3.98	%		50,097			508		4.02	%		54,258			565		4.13	%		48,795			1,453		3.98	%		52,330			1,642		4.20	%

Total Interest Bearing Liabilities		1,661,211		$	1,791		0.43	%		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	%		1,726,308		$	6,022		0.47	%		1,901,056		$	10,489		0.74	%

Noninterest Bearing Deposits		574,184								548,870								554,680								476,209								471,013								559,316								457,807
Other Liabilities		63,954								59,324								55,536								50,614								50,318								59,635								43,391

Total Liabilities		2,299,349								2,355,916								2,381,414								2,314,171								2,363,016								2,345,259								2,402,254

SHAREOWNERS' EQUITY:	$	263,902							$	262,371							$	261,603							$	262,622							$	263,742							$	262,634							$	265,372

Total Liabilities and Shareowners' Equity	$	2,563,251							$	2,618,287							$	2,643,017							$	2,576,793							$	2,626,758							$	2,607,893							$	2,667,626

Interest Rate Spread				$	23,326		4.09	%				$	23,704		4.10	%				$	23,257		4.03	%				$	24,654		4.30	%				$	25,115		4.27	%				$	70,287		4.07	%				$	74,326		4.15	%

Interest Income and Rate Earned(1)					25,117		4.52	%					25,732		4.57	%					25,460		4.53	%					27,127		4.85	%					27,907		4.87	%					76,309		4.54	%					84,815		4.89	%
Interest Expense and Rate Paid(2)					1,791		0.32	%					2,028		0.36	%					2,203		0.39	%					2,473		0.44	%					2,792		0.49	%					6,022		0.36	%					10,489		0.60	%

Net Interest Margin				$	23,326		4.20	%				$	23,704		4.21	%				$	23,257		4.14	%				$	24,654		4.41	%				$	25,115		4.38	%				$	70,287		4.18	%				$	74,326		4.29	%


(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.