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Capital City Bank Group, Inc. Reports First Quarter 2014 Results

TALLAHASSEE, Fla., April 28, 2014 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $3.8 million, or $0.22 per diluted share, for the first quarter of 2014 compared to net income of $2.8 million, or $0.16 per diluted share, for the fourth quarter of 2013, and net income of $0.8 million, or $0.05 per diluted share, for the first quarter of 2013.

Compared to the fourth quarter of 2013, performance reflects lower operating expenses of $1.3 million and income taxes of $1.4 million, partially offset by lower net interest income of $0.7 million and noninterest income of $1.0 million.

Compared to the first quarter of 2013, the increase in earnings was due to lower operating expenses of $2.8 million, a lower loan loss provision of $0.7 million, and a reduction in income taxes of $1.8 million, partially offset by lower net interest income of $1.6 million and noninterest income of $0.7 million.

"Capital City posted a solid performance in the first quarter," said William G. Smith, Chairman, President, and CEO of Capital City Bank Group. The board reinstituted the quarterly dividend and authorized the repurchase of up to 1.5 million shares of common stock over the next five years – two important events taking place during the quarter. Nonperforming assets fell 7.6% and, while it is too early to suggest the loan portfolio has stabilized, it was encouraging to report quarter-over-quarter growth for the first time since 2009. Improving our credit quality and stabilizing our loan portfolio remain primary areas of focus in our 2014 strategy, as will continued efforts to right-size our expense base and identify new revenue opportunities. The economic outlook continues to brighten, though the pace of improvement is slow. There is still work to be done, but I am proud of our accomplishments and like our momentum coming out of the first quarter of 2014."

The Return on Average Assets was 0.59% and the Return on Average Equity was 5.44% for the first quarter of 2014, compared to 0.43% and 4.33%, respectively, for the fourth quarter of 2013, and 0.13% and 1.36%, respectively, for the first quarter in 2013.

Discussion of Financial Condition

Average earning assets were $2.268 billion for the first quarter of 2014, an increase of $62.0 million, or 2.8%, over the fourth quarter of 2013, and an increase of $27.4 million, or 1.2%, over the first quarter of 2013. The increase compared to the fourth quarter of 2013 and first quarter of 2013 primarily reflects a higher level of deposits resulting from the influx of public funds and noninterest bearing deposits.

We maintained an average net overnight funds (deposits with banks plus federal funds sold less federal funds purchased) sold position of $467.3 million during the first quarter of 2014 compared to an average net overnight funds sold position of $411.6 million in the fourth quarter of 2013 and an average overnight funds sold position of $448.4 million in the first quarter of 2013. The higher balance when compared to both prior periods primarily reflects the decline in the loan portfolio and higher deposits.

Slow economic growth in our markets and deleveraging by our clients continues to generate a historically high level of liquidity, which, given the current operating environment, is difficult to profitably deploy without taking inordinate risks. Where practical, we are working to lower the level of overnight funds by adding to our investment portfolio with short-duration, high quality securities and reducing deposit balances. We continue to use a fully-insured money market account which is offered by a third party and can serve as an alternative investment for some of our higher balance depositors while at the same time allowing us to maintain the account relationship. Until such time that attractive investment alternatives arise, we will continue to execute these strategies as well as seek other initiatives in an effort to lower our overnight fund balances.

When compared to the fourth and first quarters of 2013, average loans declined by $19.4 million and $100.9 million, respectively. Most loan categories have experienced declines with the reduction primarily in the commercial real estate and residential real estate categories. Without compromising our credit standards or taking on inordinate interest rate risk, we have modified several lending programs in our business and commercial real estate areas to try to mitigate the significant impact that consumer and business deleveraging is having on our portfolio. On a linked quarter basis, period-end loans increased $7.4 million, which was the first time since the second quarter of 2009 we have experienced quarter over quarter growth. Loan categories posting growth included commercial and industrial, construction and auto finance. The quarter over quarter growth reflects both an increase in production (which has increased in four of the last five quarters) as well as lower payoffs.

Nonperforming assets (nonaccrual loans and other real estate owned "OREO") totaled $78.6 million at the end of the first quarter of 2014, a decrease of $6.4 million (8%) from the fourth quarter of 2013 and $25.3 million (24%) from the first quarter of 2013. Nonaccrual loans totaled $34.6 million at the end of the first quarter of 2014, a decrease of $2.4 million and $10.9 million, respectively, from the same prior year periods. Nonaccrual loan additions in the first quarter of 2014 totaled $7.5 million compared to $14.5 million and $7.7 million for the fourth and first quarters of 2013, respectively. The balance of OREO totaled $44.0 million at the end of the first quarter of 2014, a decrease of $4.0 million and $14.4 million, respectively, from the fourth and first quarters of 2013. For the first quarter of 2014, we added properties totaling $1.3 million, sold properties totaling $4.6 million, and recorded valuation adjustments totaling $0.7 million. Nonperforming assets represented 2.98% of total assets at March 31, 2014 compared to 3.26% at December 31, 2013 and 3.99% at March 31, 2013.

Average total deposits were $2.125 billion for the first quarter of 2014, an increase of $74.1 million, or 3.6%, over the fourth quarter of 2013 and $22.0 million, or 1.1%, over the first quarter of 2013. The increase in deposits when compared to the fourth quarter of 2013 resulted primarily from the higher level of public funds, partially offset by a reduction in certificates of deposit. When compared to the first quarter of 2013, the increase was primarily a result of a higher level of noninterest bearing deposits and savings accounts, partially offset by lower certificates of deposit.

Deposit levels remain strong and our mix of deposits continues to improve as higher cost certificates of deposit are replaced with lower rate non-maturity deposits and noninterest bearing demand accounts. Prudent pricing discipline will continue to be the key to managing our mix of deposits. Therefore, we do not attempt to compete with higher rate paying competitors for deposits.

Average borrowings decreased by $14.4 million when compared to the fourth quarter of 2013 as a result of lower balances in repurchase agreements, and were lower by $14.8 million when compared to the first quarter of 2013 due to a reduction in Federal Home Loan Bank ("FHLB") advances.

Discussion of Operating Results

Tax equivalent net interest income for the first quarter of 2014 was $18.4 million compared to $19.1 million for the fourth quarter of 2013 and $20.1 million for the first quarter of 2013. The decrease in tax equivalent net interest income compared to both prior periods was due to a reduction in loan income primarily attributable to declining loan balances and unfavorable asset repricing, partially offset by a reduction in interest expense and a lower level of foregone interest on loans. The lower interest expense is attributable to favorable repricing on FHLB advances and certificates of deposit, which reflects both lower balances and favorable repricing.

Pressure on net interest income continues primarily as a result of the low rate environment and the declining loan portfolio. The low rate environment, although favorable to the repricing of deposits, continues to negatively impact the loan and investment portfolios. Increased lending competition in all markets has also unfavorably impacted the pricing for loans.

Lowering our cost 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 repricing, although the impact is expected to be minimal.

The net interest margin for the first quarter of 2014 was 3.29%, a decrease of 16 basis points from the fourth quarter of 2013, and a decline of 35 basis points from the first quarter of 2013. The decrease in the margin for both comparable periods is attributable to the shift in our earning asset mix and unfavorable asset repricing, partially offset by a lower average cost of funds. As compared to the fourth quarter of 2013, 10 of the 16 basis point decline in the margin was attributable to the higher level of earning assets during the first quarter of 2014.

The provision for loan losses for the first quarter of 2014 was $0.4 million compared to $0.4 million for the fourth quarter of 2013 and $1.1 million for the first quarter of 2013. The lower level of provision reflects favorable problem loan migration, lower loan losses and continued improvement in key credit metrics. Net charge-offs for the first quarter of 2014 totaled $1.3 million, or 0.39% (annualized), of average loans compared to $2.3 million, or 0.65% (annualized), for the fourth quarter of 2012 and $2.4 million, or 0.66% (annualized), for the first quarter of 2013. At quarter-end, the allowance for loan losses of $22.1 million was 1.57% of outstanding loans (net of overdrafts) and provided coverage of 64% of nonperforming loans compared to 1.65% and 62%, respectively, at December 31, 2013, and 1.90% and 61%, respectively, at March 31, 2013.

Noninterest income for the first quarter of 2014 totaled $12.8 million, a decrease of $1.0 million, or 7.5%, from the fourth quarter of 2013 reflective of lower deposit fees of $0.5 million, wealth management fees of $0.3 million, data processing fees of $0.1 million, and other income of $0.1 million. The decrease in deposit fees was due to an expected lower utilization of our overdraft protection service during the first quarter as clients receive tax refunds and to a lesser extent two less processing days in the current quarter. The decrease in wealth management fees was primarily attributable to a lower level of account activity by our retail brokerage clients as well as a decline in new retail investment product sales, which were very strong in the prior quarter. Data processing fees declined due to a lower level of fees from a government processing contract for which processing activity is gradually declining due to the client's migration to a new processor in the second quarter of 2014. Compared to the first quarter of 2013, noninterest income decreased $0.7 million, or 5.5%, attributable to a $0.4 million reduction in mortgage banking fees and a $0.3 million decline in deposit fees. The decline in mortgage banking fees reflects lower refinancing volume which is attributable to the higher rate environment. The decrease in deposit fees was due to a lower level of overdraft fees generally reflective of improved financial management by our clients.

Noninterest expense for the first quarter of 2014 totaled $28.4 million, a decrease of $1.3 million, or 4.3%, from the fourth quarter of 2013. The decrease reflects lower compensation expense of $0.8 million and a $0.6 million decrease in other expense partially offset by a $0.1 million increase in OREO expense. The decline in compensation expense reflects a $1.2 million reduction in pension plan expense partially offset by higher payroll taxes of $0.2 million and unemployment taxes of $0.2 million. The decrease in our pension plan expense is primarily attributable to the utilization of a higher discount rate in 2014 for determining plan liabilities reflective of an increase in long-term bond interest rates. The increase in payroll taxes reflects the reset of social security taxes and the increase in unemployment taxes is attributable to timing as a large portion of the annual premium is paid in the first quarter. Other expense decreased primarily due to lower FDIC insurance fees, with lower legal fees, processing fees, and advertising costs contributing to a lesser extent. Compared to the first quarter of 2013, noninterest expense decreased $2.8 million, or 8.9%, attributable to lower compensation expense of $1.0 million, OREO expense of $1.4 million, occupancy expense of $0.1 million, and other expense of $0.2 million. Lower pension expense of $1.3 million partially offset by a $0.3 million increase in performance compensation (cash incentives) drove the reduction in compensation expense. The decline in OREO expense was primarily attributable to lower losses from the sale of OREO and a decrease in property valuation adjustments. Lower facility maintenance costs and office lease expense drove the decline in occupancy expense. Other expense decreased due to lower FDIC insurance fees and legal fees.

We realized an income tax benefit of $1.4 million in the first quarter of 2014 compared to income tax expense of $5,000 and $0.4 million for the fourth and first quarters of 2013, respectively. The first quarter was favorably impacted by a $2.2 million state tax benefit attributable to an adjustment in our reserve for uncertain tax positions associated with prior year matters. A similar adjustment in the amount of $0.9 million was realized in the fourth quarter of 2013. During 2014, we do not anticipate any further adjustments of this nature and, therefore, expect our effective income tax rate for the full year to be higher than the effective tax rate for the first quarter of 2014.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq:CCBG) is one of the largest publicly traded bank holding 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 63 full-service offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company's future results to differ materially. The following factors, among others, could cause the Company's actual results to differ: the accuracy of the Company's financial statement estimates and assumptions, including the estimate used for the Company's loan loss provision and deferred tax valuation allowance; legislative or regulatory changes, including the Dodd-Frank Act and Basel III; the strength of the U.S. economy and the local economies where the Company conducts operations; the frequency and magnitude of foreclosure of the Company's loans; restrictions on our operations; 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 long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; the effects of security breaches and computer viruses that may affect the Company's computer systems; the Company's need and our ability to incur additional debt or equity financing; a decrease to the market value of the Company that could result in an impairment of goodwill; changes in consumer spending and savings habits; the Company's growth and profitability; changes in accounting; and the Company's ability to manage the risks involved in the foregoing. Additional factors can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, 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.
EARNINGS HIGHLIGHTS
Unaudited
Three Months Ended
(Dollars in thousands, except per share data) Mar 31, 2014 Dec 31, 2013 Mar 31, 2013
EARNINGS
Net Income $ 3,751 $ 2,772 $ 839
Net Income Per Common Share $ 0.22 $ 0.16 $ 0.05
PERFORMANCE
Return on Average Assets 0.59% 0.43% 0.13%
Return on Average Equity 5.44% 4.33% 1.36%
Net Interest Margin 3.29% 3.45% 3.64%
Noninterest Income as % of Operating Revenue 42.05% 43.85% 40.62%
Efficiency Ratio 91.02% 90.22% 92.67%
CAPITAL ADEQUACY
Tier 1 Capital Ratio 16.85% 16.56% 14.95%
Total Capital Ratio 18.22% 17.94% 16.32%
Tangible Common Equity Ratio 7.66% 7.58% 6.49%
Leverage Ratio 10.47% 10.46% 9.81%
Equity to Assets 10.63% 10.58% 9.54%
ASSET QUALITY
Allowance as % of Non-Performing Loans 63.98% 62.48% 61.17%
Allowance as a % of Loans 1.57% 1.65% 1.90%
Net Charge-Offs as % of Average Loans 0.39% 0.65% 0.66%
Nonperforming Assets as % of Loans and ORE 5.42% 5.87% 6.81%
Nonperforming Assets as % of Total Assets 2.98% 3.26% 3.99%
STOCK PERFORMANCE
High $14.59 $ 12.69 $ 12.54
Low 11.56 11.33 10.95
Close 13.28 11.77 12.35
Average Daily Trading Volume $ 35,921 $ 28,682 $ 23,519
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
2014 2013
(Dollars in thousands) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
ASSETS
Cash and Due From Banks $ 59,288 $ 55,209 $ 51,136 $ 67,811 $ 52,677
Funds Sold and Interest Bearing Deposits 468,805 474,719 358,869 391,457 461,714
Total Cash and Cash Equivalents 528,093 529,928 410,005 459,268 514,391
Investment Securities, Available for Sale 229,615 251,420 271,838 350,614 307,502
Investment Securities, Held to Maturity 191,645 148,211 97,309 -- --
Total Investment Securities 421,260 399,631 369,147 350,614 307,502
Loans Held for Sale 12,313 11,065 13,822 15,362 11,422
Loans, Net of Unearned Interest
Commercial, Financial, & Agricultural 138,664 126,607 123,253 126,931 125,905
Real Estate - Construction 36,454 31,012 31,454 35,823 37,948
Real Estate - Commercial 522,019 533,871 570,736 581,501 599,517
Real Estate - Residential 297,842 303,618 305,811 302,254 304,786
Real Estate - Home Equity 226,411 227,922 230,212 232,530 233,205
Consumer 163,768 156,718 148,321 142,620 146,043
Other Loans 7,270 6,074 5,220 5,904 5,187
Overdrafts 2,349 2,782 2,835 2,554 2,307
Total Loans, Net of Unearned Interest 1,394,777 1,388,604 1,417,842 1,430,117 1,454,898
Allowance for Loan Losses (22,110) (23,095) (25,010) (27,294) (27,803)
Loans, Net 1,372,667 1,365,509 1,392,832 1,402,823 1,427,096
Premises and Equipment, Net 102,655 103,385 103,702 104,743 105,883
Intangible Assets 84,811 84,843 84,891 84,937 84,985
Other Real Estate Owned 44,036 48,071 53,018 55,087 58,421
Other Assets 67,205 69,471 87,055 89,024 95,613
Total Other Assets 298,707 305,770 328,666 333,791 344,902
Total Assets $ 2,633,040 $ 2,611,903 $ 2,514,472 $ 2,561,858 $ 2,605,313
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 657,548 $ 641,463 $ 626,114 $ 644,739 $ 616,017
NOW Accounts 775,439 794,746 668,240 706,101 765,030
Money Market Accounts 292,923 268,449 283,338 287,340 299,118
Regular Savings Accounts 225,481 211,668 211,174 204,594 200,492
Certificates of Deposit 212,322 219,922 228,020 228,349 233,325
Total Deposits 2,163,713 2,136,248 2,016,886 2,071,123 2,113,982
Short-Term Borrowings 48,733 51,321 51,918 46,081 50,682
Subordinated Notes Payable 62,887 62,887 62,887 62,887 62,887
Other Long-Term Borrowings 33,971 38,043 40,244 41,251 41,224
Other Liabilities 43,856 47,004 91,369 91,227 87,930
Total Liabilities 2,353,160 2,335,503 2,263,304 2,312,569 2,356,705
SHAREOWNERS' EQUITY
Common Stock 174 174 173 173 173
Additional Paid-In Capital 41,220 41,152 40,481 40,210 39,580
Retained Earnings 247,017 243,614 240,842 239,251 238,408
Accumulated Other Comprehensive Loss, Net of Tax (8,531) (8,540) (30,328) (30,345) (29,553)
Total Shareowners' Equity 279,880 276,400 251,168 249,289 248,608
Total Liabilities and Shareowners' Equity $ 2,633,040 $ 2,611,903 $ 2,514,472 $ 2,561,858 $ 2,605,313
OTHER BALANCE SHEET DATA
Earning Assets $ 2,297,154 $ 2,274,019 $ 2,159,680 $ 2,187,549 $ 2,235,537
Intangible Assets
Goodwill 84,811 84,811 84,811 84,811 84,811
Core Deposits -- -- -- -- --
Other -- 32 80 126 174
Interest Bearing Liabilities 1,651,755 1,647,036 1,545,821 1,576,601 1,652,758
Book Value Per Diluted Share $ 16.02 $ 15.85 $ 14.44 $ 14.36 $ 14.35
Tangible Book Value Per Diluted Share 11.17 10.98 9.56 9.47 9.44
Actual Basic Shares Outstanding 17,427 17,361 17,336 17,336 17,319
Actual Diluted Shares Outstanding 17,466 17,443 17,396 17,372 17,326
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
2014 2013
(Dollars in thousands, except per share data) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
INTEREST INCOME
Interest and Fees on Loans $ 18,098 $ 19,057 $ 19,264 $ 19,709 $ 20,154
Investment Securities 847 760 717 710 704
Funds Sold 291 259 269 279 270
Total Interest Income 19,236 20,076 20,250 20,698 21,128
INTEREST EXPENSE
Deposits 308 314 335 367 415
Short-Term Borrowings 20 46 46 61 82
Subordinated Notes Payable 331 400 339 342 339
Other Long-Term Borrowings 291 320 330 333 347
Total Interest Expense 950 1,080 1,050 1,103 1,183
Net Interest Income 18,286 18,996 19,200 19,595 19,945
Provision for Loan Losses 359 397 555 1,450 1,070
Net Interest Income after Provision for Loan Losses 17,927 18,599 18,645 18,145 18,875
NONINTEREST INCOME
Deposit Fees 5,869 6,398 6,474 6,217 6,165
Bank Card Fees 2,707 2,656 2,715 2,754 2,661
Wealth Management Fees 1,918 2,233 2,130 1,901 1,915
Mortgage Banking Fees 625 654 869 968 1,043
Data Processing Fees 541 689 662 670 653
Securities Transactions -- 3 -- -- --
Other 1,125 1,192 1,176 1,221 1,091
Total Noninterest Income 12,785 13,825 14,026 13,731 13,528
NONINTEREST EXPENSE
Compensation 15,781 16,583 16,158 16,647 16,739
Occupancy, Net 4,298 4,349 4,403 4,161 4,418
Intangible Amortization 32 48 46 48 68
Other Real Estate 1,399 1,251 1,868 2,290 2,824
Other 6,856 7,416 7,678 7,318 7,091
Total Noninterest Expense 28,366 29,647 30,153 30,464 31,140
OPERATING PROFIT (LOSS) 2,346 2,777 2,518 1,412 1,263
Income Tax (Benefit) Expense (1,405) 5 927 569 424
NET INCOME $ 3,751 $ 2,772 $ 1,591 $ 843 $ 839
PER SHARE DATA
Basic Income $ 0.22 $ 0.16 $ 0.09 $ 0.05 $ 0.05
Diluted Income 0.22 0.16 0.09 0.05 0.05
Cash Dividends $ 0.02 $ -- $ -- $ -- $ --
AVERAGE SHARES
Basic 17,399 17,341 17,336 17,319 17,302
Diluted 17,439 17,423 17,396 17,355 17,309
CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR LOAN LOSSES
AND RISK ELEMENT ASSETS
Unaudited
2014 2013 2013 2013 2013
(Dollars in thousands, except per share data) First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter
ALLOWANCE FOR LOAN LOSSES
Balance at Beginning of Period $ 23,095 $ 25,010 $ 27,294 $ 27,803 $ 29,167
Provision for Loan Losses 359 397 555 1,450 1,070
Net Charge-Offs 1,344 2,312 2,839 1,959 2,434
Balance at End of Period $ 22,110 $ 23,095 $ 25,010 $ 27,294 $ 27,803
As a % of Loans 1.57% 1.65% 1.75% 1.89% 1.90%
As a % of Nonperforming Loans 63.98% 62.48% 60.00% 65.66% 61.17%
CHARGE-OFFS
Commercial, Financial and Agricultural $ 11 $ 337 $ 138 $ 119 $ 154
Real Estate - Construction -- 72 278 110 610
Real Estate - Commercial 594 676 882 1,050 1,043
Real Estate - Residential 731 921 1,178 1,053 683
Real Estate - Home Equity 403 362 362 322 113
Consumer 405 430 674 351 296
Total Charge-Offs $ 2,144 $ 2,798 $ 3,512 $ 3,005 $ 2,899
RECOVERIES
Commercial, Financial and Agricultural $ 75 $ 33 $ 87 $ 38 $ 51
Real Estate - Construction 4 -- 1 -- --
Real Estate - Commercial 27 14 167 144 38
Real Estate - Residential 395 179 167 396 96
Real Estate - Home Equity 11 39 13 224 18
Consumer 288 221 238 244 262
Total Recoveries $ 800 $ 486 $ 673 $ 1,046 $ 465
NET CHARGE-OFFS $ 1,344 $ 2,312 $ 2,839 $ 1,959 $ 2,434
Net Charge-Offs as a % of Average Loans(1) 0.39% 0.65% 0.78% 0.54% 0.66%
RISK ELEMENT ASSETS
Nonaccruing Loans $ 34,558 $ 36,964 $ 41,682 $ 41,566 $ 45,448
Other Real Estate Owned 44,036 48,071 53,018 55,087 58,421
Total Nonperforming Assets $ 78,594 $ 85,035 $ 94,700 $ 96,653 $ 103,869
Past Due Loans 30-89 Days $ 4,902 $ 7,746 $ 8,427 $ 9,017 $ 9,274
Past Due Loans 90 Days or More -- -- -- -- --
Classified Loans 107,420 115,630 128,190 153,080 156,185
Performing Troubled Debt Restructuring's $ 46,249 $ 44,764 $ 50,692 $ 52,729 $ 53,108
Nonperforming Loans as a % of Loans 2.46% 2.64% 2.91% 2.88% 3.10%
Nonperforming Assets as a % of
Loans and Other Real Estate 5.42% 5.87% 6.38% 6.44% 6.81%
Nonperforming Assets as a % of Total Assets 2.98% 3.26% 3.77% 3.77% 3.99%
(1) Annualized
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
First Quarter 2014 Fourth Quarter 2013 Third Quarter 2013
(Dollars in thousands) Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:
Loans, Net of Unearned Interest $ 1,395,506 18,161 5.28% $ 1,414,909 19,121 5.36% $ 1,436,039 19,345 5.34%
Investment Securities
Taxable Investment Securities 290,942 703 0.88 255,298 608 0.86 232,094 568 0.95
Tax-Exempt Investment Securities 114,542 219 0.74 124,501 233 0.74 121,119 223 0.73
Total Investment Securities 405,484 922 0.91 379,799 841 0.88 353,213 791 0.89
Funds Sold 467,330 291 0.25 411,578 259 0.25 412,138 269 0.26
Total Earning Assets 2,268,320 $ 19,374 3.46% 2,206,286 $ 20,221 3.64% 2,201,390 $ 20,405 3.68%
Cash and Due From Banks 48,084 48,519 51,640
Allowance for Loan Losses (23,210) (25,612) (27,636)
Other Assets 305,113 324,460 333,001
Total Assets $ 2,598,307 $ 2,553,653 $ 2,558,395
LIABILITIES:
Interest Bearing Deposits
NOW Accounts $ 770,302 $ 104 0.05% $ 697,468 $ 95 0.05% $ 676,855 $ 107 0.06%
Money Market Accounts 274,015 48 0.07 279,608 50 0.07 284,920 53 0.07
Savings Accounts 218,825 26 0.05 211,761 27 0.05 207,631 26 0.05
Time Deposits 215,291 130 0.24 224,500 142 0.25 231,490 149 0.26
Total Interest Bearing Deposits 1,478,433 308 0.08% 1,413,337 314 0.09% 1,400,896 335 0.09%
Short-Term Borrowings 46,343 20 0.18% 58,126 46 0.31% 49,919 46 0.37%
Subordinated Notes Payable 62,887 331 2.10 62,887 400 2.49 62,887 339 2.11
Other Long-Term Borrowings 37,055 291 3.18 39,676 320 3.19 40,832 330 3.21
Total Interest Bearing Liabilities 1,624,718 $ 950 0.24% 1,574,026 $ 1,080 0.27% 1,554,534 $ 1,050 0.27%
Noninterest Bearing Deposits 646,527 637,533 658,602
Other Liabilities 47,333 88,095 93,642
Total Liabilities 2,318,578 2,299,654 2,306,778
SHAREOWNERS' EQUITY: 279,729 253,999 251,617
Total Liabilities and Shareowners' Equity $ 2,598,307 $ 2,553,653 $ 2,558,395
Interest Rate Spread $ 18,424 3.23% $ 19,141 3.36% $ 19,355 3.41%
Interest Income and Rate Earned(1) 19,374 3.46 20,221 3.64 20,405 3.68
Interest Expense and Rate Paid(2) 950 0.17 1,080 0.19 1,050 0.19
Net Interest Margin $ 18,424 3.29% $ 19,141 3.45% $ 19,355 3.49%
(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.
CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES(1)
Unaudited
Second Quarter 2013 First Quarter 2013
(Dollars in thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Loans, Net of Unearned Interest 1,456,904 19,790 5.45% $ 1,496,432 20,228 5.48%
Investment Securities
Taxable Investment Securities 225,770 578 1.02 215,087 590 1.10
Tax-Exempt Investment Securities 104,981 200 0.76 80,946 174 0.86
Total Investment Securities 330,751 778 0.94 296,033 764 1.04
Funds Sold 419,039 279 0.27 448,424 270 0.24
Total Earning Assets 2,206,694 $ 20,847 3.79% 2,240,889 $ 21,262 3.85%
Cash and Due From Banks 49,081 50,679
Allowance for Loan Losses (29,012) (30,467)
Other Assets 337,765 337,579
Total Assets 2,564,528 $ 2,598,680
LIABILITIES:
Interest Bearing Deposits
NOW Accounts 716,459 $ 124 0.07% $ 788,660 156 0.08%
Money Market Accounts 289,637 54 0.07 282,847 54 0.08
Savings Accounts 202,784 25 0.05 193,033 23 0.05
Time Deposits 231,134 164 0.29 238,441 182 0.31
Total Interest Bearing Deposits 1,440,014 367 0.10% 1,502,981 415 0.11%
Short-Term Borrowings 52,399 61 0.47% 55,255 82 0.60%
Subordinated Notes Payable 62,887 342 2.15 62,887 339 2.15
Other Long-Term Borrowings 40,942 333 3.26 42,898 347 3.29
Total Interest Bearing Liabilities 1,596,242 $ 1,103 0.28% 1,664,021 $ 1,183 0.29%
Noninterest Bearing Deposits 627,633 599,986
Other Liabilities 90,168 85,116
Total Liabilities 2,314,043 2,349,123
SHAREOWNERS' EQUITY: 250,485 249,557
Total Liabilities and Shareowners' Equity 2,564,528 $ 2,598,680
Interest Rate Spread $ 19,744 3.51% $ 20,079 3.56%
Interest Income and Rate Earned(1) 20,847 3.79 21,262 3.85
Interest Expense and Rate Paid(2) 1,103 0.20 1,183 0.21
Net Interest Margin $ 19,744 3.59% $ 20,079 3.64%
(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.

CONTACT: J. Kimbrough Davis Executive Vice President and Chief Financial Officer 850.402.7820Source:Capital City Bank Group, Inc.