Capital City Bank Group, Inc.
Reports Fourth Quarter and Full Year 2008 Results
TALLAHASSEE, Fla. (January 26, 2009) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported a net loss of $1.7 million ($0.10 per diluted share) for the fourth quarter of 2008 compared to net income of $4.8 million ($0.29 per diluted share) for the third quarter of 2008 and net income of $7.7 million ($0.44 per diluted share) in the fourth quarter of 2007. Net income for the year ended 2008 totaled $15.2 million ($.89 per diluted share) compared to $29.7 million ($1.66 per diluted share) for 2007.
Earnings for the fourth quarter of 2008 include a loan loss provision of $12.5 million ($.45 per diluted share) versus $10.4 million ($.37 per diluted share) in the third quarter of 2008 and $1.7 million ($.06 per diluted share) in the fourth quarter of 2007. Earnings for the third quarter of 2008 also included a $6.25 million gain ($0.22 per diluted share) from the sale of a major portion of the bank’s merchant services portfolio.
Earnings for the full year 2008 include a loan loss provision of $32.5 million ($1.16 per diluted share) versus $6.2 million ($.21 per diluted share) for 2007. In addition to the third quarter gain from the sale of a portion of the bank’s merchant services portfolio, earnings for the full year included a $2.4 million gain from the redemption of Visa, Inc. shares related to its initial public offering and the reversal of $1.1 million in Visa related litigation reserves.
“While disappointed with the fourth quarter, we are pleased with Capital City’s overall performance for the year,” said William G. Smith, Jr., chairman, president and chief executive officer. “During the fourth quarter, management took aggressive action with problem credits, including charge-offs of $6.1 million and the addition of $6.5 million to the loan loss reserve. During the year, Capital City doubled its loan loss reserve to $37.0 million and ended the year with a loan loss reserve equal to 1.89% of loans. While problem credits and other real estate often involve protracted workout periods, we have reviewed the major relationships in these areas and are very encouraged by the workout plans the Capital City team has in place. While we are acutely focused on problem credits, Capital City will continue to pursue its underlying business growth strategy in 2009 and is prepared to capitalize on opportunities, both specific client relationships and acquisitions.
“Capital City expects to be working the collections process aggressively, often going for court-ordered judgments to produce cash from liquidations occurring ahead of the lengthy foreclosure process. We want history to eventually show that we had the most effective strategy and results among the Florida banks for managing our institution through this cycle.
“As we move into 2009, Capital City Bank Group continues to maintain a very strong and internally generated capital position, substantially above the regulatory guidelines to be considered well-capitalized. At year-end the Tier I Risk-Based Capital, Total Risk-Based Capital and Tangible Equity to Assets ratios were 13.4%, 14.7% and 7.7%, respectively,” said Smith. “We believe Capital City has sufficient capital to execute its business plan in 2009 and for the years ahead.”
The Return on Average Assets was -.28% and the Return on Average Equity was -2.24% for the fourth quarter of 2008. These metrics were .76% and 6.34% for the third quarter of 2008 and 1.21% and 10.16% for the fourth quarter of 2007, respectively.
For the full year of 2008, the Return on Average Assets was .59% and the Return on Average Equity was 5.06% compared to 1.18% and 9.68%, respectively, for the full year of 2007.
Discussion of Financial Condition
Average earning assets were $2.151 billion for the fourth quarter, a decrease of $56.8 million, or 2.57% from the third quarter of 2008, and a decrease of $40.4 million, or 1.84% from the fourth quarter of 2007. The decrease from the linked quarter is primarily attributable to an $83.3 million decrease in short-term investments driven by the decline in client deposits (see discussion below), partially offset by a $25.1 million increase in average loans. Compared to the fourth quarter of 2007, the decrease primarily reflects a decrease in average short-term investments ($80.1 million) partially offset by a $32.0 million increase in average loans and a $7.7 million increase in investment securities. Our loan pipelines have increased during the second half of the year due to the efforts of our bankers to reach quality clients who are interested in moving or expanding their banking relationships. Year over year, growth was primarily attributable to commercial real estate mortgages and home equity loans.
At the end of the fourth quarter, nonperforming assets (including nonaccrual loans, restructured loans, and other real estate owned) totaled $107.8 million, an increase of $40.1 million, or 59% from the third quarter and $79.7 million, or 283% from the fourth quarter of 2007. The level of nonaccrual loans increased $35.4 million to $96.9 million compared to the prior linked quarter due primarily to the addition of loans to builders, investors, and other borrowers whom operate within our residential real estate markets, which are experiencing continued stress due to general economic conditions, significant slow-down in purchase activity, and property de-valuation. Vacant residential land loans represented 49% of our nonaccrual balance at year-end. In aggregate, a reserve equal to approximately 31% has been allocated to these loans. Restructured loans totaled $1.7 million at the end of the fourth quarter. Other real estate owned totaled $9.2 million at the end of the fourth quarter. Nonperforming assets represented 5.48% of loans and other real estate at the end of the fourth quarter compared to 3.51% and 1.47% at the end of the prior quarter and year-end 2007, respectively.
Average total deposits were $1.946 billion for the fourth quarter, a decrease of $84.8 million, or 4.2%, from the third quarter and a decrease of $70.9 million, or 3.5%, from the fourth quarter of 2007. On a linked quarter basis, the decline in deposits primarily reflects a lower level of NOW account balances (primarily public funds and legal settlement accounts) and certificates of deposit balances. This decline in the public funds balances generally reflects the timing of tax receipts and certain public entity clients seeking higher yield. Compared to the fourth quarter of 2007, a majority of the decrease in deposits has been realized in the money market and certificates of deposit categories. The decrease in the money market account balance is due to lower account balances maintained by both businesses and individuals, which we believe is attributable to lower rates and distressed economic conditions. The decline in the certificate of deposit category reflects a combination of proceeds migrating to other deposit categories, as well as transferring to higher rate paying competitors. Despite the disruption in the market, we continue to pursue prudent pricing discipline and have chosen not to compete with higher rate paying competitors for these deposits.
We maintained an average net overnight funds (deposits with banks plus Fed funds sold less Fed funds purchased) purchased position of $18.0 million during the fourth quarter of 2008 as compared to an average net overnight funds sold position of $86.5 million in the third quarter of 2008 and $84.1 million in the fourth quarter of 2007. The decline in the funds position primarily reflects a decline in deposit balances as discussed above, coupled with growth in the loan portfolio.
Discussion of Operating Results
Tax equivalent net interest income for the fourth quarter of 2008 was $28.4 million compared to $27.8 million for the third quarter of 2008 and $28.2 million for the fourth quarter of 2007. For the twelve months of 2008, tax equivalent net interest income totaled $111.3 million compared to $114.7 million in 2007.
The increase in the net interest income on a linked quarter basis and from the fourth quarter of 2007 reflects lower cost of funds resulting from a favorable shift in the mix of deposits and lower market rates. Management responded aggressively to the federal funds rate reductions which began in September 2007, and believe we have successfully neutralized the overall impact. Higher foregone interest on nonaccrual loans and a decline in loan fees partially offset the improvement in net interest income. Additionally, the fourth quarter of 2008 was favorably impacted by $784,000 attributable to the resolution of a problem loan which was acquired in a prior acquisition. The net interest margin of 5.26% expanded by 25 basis points over the linked quarter and 16 basis points over the fourth quarter of 2007, primarily attributable to the favorable shift in the mix of deposits and aggressive deposit repricing.
The decrease in net interest income for the twelve months ended December 31, 2008 as compared to the same period of 2007 was attributable to a higher level of foregone interest associated with the increased level of nonperforming assets. Year over year, the increase in foregone interest coupled with the influx of municipal deposits, which produce relatively thin spreads, led to compression in our net interest margin of 29 basis points.
Average negotiated deposits, which include public funds, grew from $377 million in the fourth quarter of 2007 to $435 million in the current quarter, but were down from $538 million in the second quarter of 2008. We believe this reduction is partially attributable to state budgetary concerns and local governments seeking higher yields. Although the year over year growth in public funds has had a positive impact on net interest income, it has had an adverse impact on our margin percentage due to the relatively thin spreads.
The provision for loan losses for the current quarter was $12.5 million compared to $10.4 million in the third quarter of 2008 and $1.7 million for the fourth quarter of 2007. The provision for the full year of 2008 totaled $32.5 million compared to $6.2 million in 2007. The increase in the provision for both periods generally reflects current stressed economic conditions and the associated impact on consumers, housing, and real estate markets. Over the course of the year, a majority of the increase in our provision has been driven by higher reserves needed for our consumer loan portfolio and for loans where repayment is reliant on activity within residential real estate markets, primarily loans to builders and investors (both business and individual). The increase in the provision for the current quarter reflects a higher level of loan charge-offs which were $6.0 million, or 1.24% of average loans, and an increase in both general and impaired loan reserves required for loans where repayment is tied to residential real estate market activity, which has significantly slowed and has been hampered by property de-valuation. We continue to perform a detailed review and valuation assessment of our impaired loans on a quarterly basis and adjust specific reserves or charge off losses, as appropriate, based on collateral valuations. At quarter-end, the allowance for loan losses was 1.89% of outstanding loans (net of overdrafts) and provided coverage of 38% of nonperforming loans compared to 1.59% and 49%, respectively at the end of the third quarter and .95% and 72%, respectively at the end of the fourth quarter of 2007.
Noninterest income for the fourth quarter decreased $6.9 million, or 34.1%, from the third quarter of 2008 primarily attributable to a pre-tax gain of $6.25 million from the sale of a portion of the bank’s merchant services portfolio and a one-time gain from the sale of a banking office ($241,000), both of which were recognized in the third quarter. Lower deposit fees of $303,000 driven by a three day processing variance also contributed to the decline for the quarter. As compared to the fourth quarter of 2007, noninterest income declined $2.5 million, or 15.9% due to lower deposit fees ($449,000) primarily reflective of a higher level of overdraft charge-offs, and a lower level of trust fees ($165,000) and mortgage banking fees ($133,000), both of which reflect turbulent market conditions. Merchant fees also declined $1.1 million, or 62.7%, reflecting a sale of a major portion of this portfolio early in the third quarter of 2008. A one-time gain of $540,000 recognized during the fourth quarter of 2007 from the sale of a banking office also contributed to the unfavorable variance. For the full year of 2008, noninterest income grew $7.7 million, or 13.0%, from the comparable period in 2007 due primarily to the aforementioned gain from the merchant services portfolio sale, a gain from the redemption of Visa Inc. shares during the first quarter of 2008 ($2.4 million) and strong improvement in deposit fees ($1.6 million). These improvements were partially offset by reductions in mortgage banking fees ($1.0 million) and merchant services fees ($1.7 million).
Noninterest expense for the fourth quarter increased $1.1 million, or 3.6%, over the third quarter of 2008 primarily attributable to higher expenses for advertising ($459,000), legal ($201,000), and professional fees ($284,000). Other real estate owned write-downs also increased $186,000 during the quarter. The increase in advertising was driven by our branding campaign which kicked off in late November. Legal expense increased due to a higher level of legal support needed for problem loan collection/workout efforts. The increase in professional fees primarily reflects an increase to both our internal and external audit expense accruals. As compared to the same quarter in 2007, noninterest expense declined $612,000 or 1.9% due to a one-time pre-tax charge of $1.9 million in the fourth quarter of 2007 for Visa Inc litigation. The favorable variance created by the Visa charge was partially offset by higher pension expense.
For the full year of 2008, noninterest expense declined $520,000 or .43% reflecting the impact of the one-time $1.9 million Visa litigation charge in the fourth quarter of 2007 and the reversal of $1.1 million in Visa reserves during the first quarter of 2008. Lower interchange expense ($1.5 million) reflecting the aforementioned sale of a portion of the merchant services portfolio also contributed to the favorable variance for the year. Partially offsetting the aforementioned favorable variances was higher salary expense ($1.1 million), legal fees ($501,000), FDIC insurance premiums ($555,000), commission fees ($879,000), and other real estate owned expenses ($1.0 million). The increase in salary expense reflects routine merit raises during the course of the year. Legal expense increased due to a higher level of legal support needed for problem loan collection/workout efforts. Our FDIC insurance premium increased during the second half of the year primarily reflecting the full use of our premium credits. The variance in commission fees reflects the cost of supporting our working capital financing product; the revenues of which are reflected in noninterest income and more than offset the higher expense. Expense related to our other real estate owned properties was higher due to an increase in general holding costs driven by a higher level of properties, but more significantly the unfavorable variance was driven by subsequent valuation adjustments (write-downs) on properties.
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial services companies headquartered in Florida and has approximately $2.5 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 68 banking offices and 80 ATMs in Florida, Georgia and Alabama. Since 2005, the Company has been named as a Dividend Achiever by Mergent, Inc., a leading provider of information on publicly traded companies. To be named a Dividend Achiever, a public company must have increased its regular cash dividends for at least 10 consecutive years. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the frequency and magnitude of foreclosure of the Company’s loans; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; the accuracy of the Company’s financial statement estimates and assumptions, including the estimate for the Company’s loan loss provision; the Company’s ability to integrate acquisitions; the strength of the U.S. economy and the local economies where the Company conducts operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; the effects of security breaches and computer viruses that may affect the Company’s computer systems; changes in consumer spending and savings habits; the Company’s growth and profitability; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, 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.
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| EARNINGS HIGHLIGHTS | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| (Dollars in thousands, except per share data) | | Dec 31, 2008 | | | Sep 30, 2008 | | | Dec 31, 2007 | | | Dec 31, 2008 | | | Dec 31, 2007 | |
| EARNINGS | | | | | | | | | | | | | | | |
| Net Income | | $ | (1,703 | ) | | $ | 4,838 | | | $ | 7,664 | | | $ | 15,225 | | | $ | 29,683 | |
| Diluted Earnings Per Common Share | | $ | (0.10 | ) | | $ | 0.29 | | | $ | 0.44 | | | $ | 0.89 | | | $ | 1.66 | |
| PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| Return on Average Equity | | | -2.24 | % | | | 6.34 | % | | | 10.16 | % | | | 5.06 | % | | | 9.68 | % |
| Return on Average Assets | | | -0.28 | % | | | 0.76 | % | | | 1.21 | % | | | 0.59 | % | | | 1.18 | % |
| Net Interest Margin | | | 5.26 | % | | | 5.01 | % | | | 5.10 | % | | | 4.96 | % | | | 5.25 | % |
| Noninterest Income as % of Operating Revenue | | | 32.42 | % | | | 42.64 | % | | | 36.49 | % | | | 38.11 | % | | | 34.57 | % |
| Efficiency Ratio | | | 71.21 | % | | | 59.27 | % | | | 68.51 | % | | | 64.91 | % | | | 66.77 | % |
| CAPITAL ADEQUACY | | | | | | | | | | | | | | | | | | | | |
| Tier 1 Capital Ratio | | | 13.34 | % | | | 13.54 | % | | | 13.05 | % | | | 13.34 | % | | | 13.05 | % |
| Total Capital Ratio | | | 14.69 | % | | | 15.15 | % | | | 14.05 | % | | | 14.69 | % | | | 14.05 | % |
| Tangible Capital Ratio | | | 7.76 | % | | | 8.67 | % | | | 7.71 | % | | | 7.76 | % | | | 7.71 | % |
| Leverage Ratio | | | 11.51 | % | | | 11.21 | % | | | 10.83 | % | | | 11.51 | % | | | 10.83 | % |
| Equity to Assets | | | 11.20 | % | | | 12.17 | % | | | 11.19 | % | | | 11.20 | % | | | 11.19 | % |
| ASSET QUALITY | | | | | | | | | | | | | | | | | | | | |
| Allowance as % of Non-Performing Loans | | | 37.52 | % | | | 48.55 | % | | | 71.92 | % | | | 37.52 | % | | | 71.92 | % |
| Allowance as a % of Loans | | | 1.89 | % | | | 1.59 | % | | | 0.95 | % | | | 1.89 | % | | | 0.95 | % |
| Net Charge-Offs as % of Average Loans | | | 1.24 | % | | | 0.50 | % | | | 0.34 | % | | | 0.71 | % | | | 0.27 | % |
| Nonperforming Assets as % of Loans and ORE | | | 5.48 | % | | | 3.51 | % | | | 1.47 | % | | | 5.48 | % | | | 1.47 | % |
| STOCK PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 33.32 | | | $ | 34.50 | | | $ | 34.00 | | | $ | 34.50 | | | $ | 36.40 | |
| Low | | $ | 21.06 | | | $ | 19.20 | | | $ | 24.60 | | | $ | 19.20 | | | $ | 24.60 | |
| Close | | $ | 27.24 | | | $ | 31.35 | | | $ | 28.22 | | | $ | 27.24 | | | $ | 28.22 | |
| Average Daily Trading Volume | | | 43,379 | | | | 45,717 | | | | 52,489 | | | | 39,293 | | | | 39,385 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF INCOME | | | | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | Twelve Months Ended | |
| | | | | | | | | | | | | | | | | | December 31 | |
| (Dollars in thousands, except per share data) | | 2008 Fourth Quarter | | | 2008 Third Quarter | | | 2008 Second Quarter | | | 2008 First Quarter | | | 2007 Fourth Quarter | | | 2008 | | | 2007 | |
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| INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 31,570 | | | $ | 32,435 | | | $ | 33,422 | | | $ | 35,255 | | | $ | 37,730 | | | $ | 132,682 | | | $ | 154,567 | |
| Investment Securities | | | 1,627 | | | | 1,744 | | | | 1,810 | | | | 1,894 | | | | 1,992 | | | | 7,075 | | | | 7,843 | |
| Funds Sold | | | 32 | | | | 475 | | | | 1,028 | | | | 1,574 | | | | 1,064 | | | | 3,109 | | | | 2,913 | |
| Total Interest Income | | | 33,229 | | | | 34,654 | | | | 36,260 | | | | 38,723 | | | | 40,786 | | | | 142,866 | | | | 165,323 | |
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| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 3,848 | | | | 5,815 | | | | 7,162 | | | | 10,481 | | | | 11,323 | | | | 27,306 | | | | 44,687 | |
| Short-Term Borrowings | | | 110 | | | | 230 | | | | 296 | | | | 521 | | | | 639 | | | | 1,157 | | | | 2,871 | |
| Subordinated Notes Payable | | | 937 | | | | 936 | | | | 931 | | | | 931 | | | | 936 | | | | 3,735 | | | | 3,730 | |
| Other Long-Term Borrowings | | | 587 | | | | 488 | | | | 396 | | | | 331 | | | | 343 | | | | 1,802 | | | | 1,794 | |
| Total Interest Expense | | | 5,482 | | | | 7,469 | | | | 8,785 | | | | 12,264 | | | | 13,241 | | | | 34,000 | | | | 53,082 | |
| Net Interest Income | | | 27,747 | | | | 27,185 | | | | 27,475 | | | | 26,459 | | | | 27,545 | | | | 108,866 | | | | 112,241 | |
| Provision for Loan Losses | | | 12,497 | | | | 10,425 | | | | 5,432 | | | | 4,142 | | | | 1,699 | | | | 32,496 | | | | 6,163 | |
| Net Interest Income after Provision for Loan Losses | | | 15,250 | | | | 16,760 | | | | 22,043 | | | | 22,317 | | | | 25,846 | | | | 76,370 | | | | 106,078 | |
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| NONINTEREST INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Service Charges on Deposit Accounts | | | 6,807 | | | | 7,110 | | | | 7,060 | | | | 6,765 | | | | 7,256 | | | | 27,742 | | | | 26,130 | |
| Data Processing Fees | | | 937 | | | | 873 | | | | 812 | | | | 813 | | | | 853 | | | | 3,435 | | | | 3,133 | |
| Asset Management Fees | | | 935 | | | | 1,025 | | | | 1,125 | | | | 1,150 | | | | 1,100 | | | | 4,235 | | | | 4,700 | |
| Retail Brokerage Fees | | | 630 | | | | 565 | | | | 735 | | | | 469 | | | | 619 | | | | 2,399 | | | | 2,510 | |
| Gain on Sale of Investment Securities | | | 3 | | | | 27 | | | | 30 | | | | 65 | | | | 7 | | | | 125 | | | | 14 | |
| Mortgage Banking Revenues | | | 292 | | | | 331 | | | | 506 | | | | 494 | | | | 425 | | | | 1,623 | | | | 2,596 | |
| Merchant Fees | | �� | 650 | | | | 616 | | | | 2,074 | | | | 2,208 | | | | 1,743 | | | | 5,548 | | | | 7,257 | |
| Interchange Fees | | | 1,007 | | | | 1,073 | | | | 1,076 | | | | 1,009 | | | | 962 | | | | 4,165 | | | | 3,757 | |
| Gain on Sale of Portion of Merchant Services Portfolio | | | 0 | | | | 6,250 | | | | 0 | | | | 0 | | | | 0 | | | | 6,250 | | | | 0 | |
| ATM/Debit Card Fees | | | 744 | | | | 742 | | | | 758 | | | | 744 | | | | 705 | | | | 2,988 | | | | 2,692 | |
| Other | | | 1,306 | | | | 1,600 | | | | 1,542 | | | | 4,082 | | | | 2,153 | | | | 8,530 | | | | 6,511 | |
| Total Noninterest Income | | | 13,311 | | | | 20,212 | | | | 15,718 | | | | 17,799 | | | | 15,823 | | | | 67,040 | | | | 59,300 | |
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| NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and Associate Benefits | | | 15,492 | | | | 15,417 | | | | 15,318 | | | | 15,604 | | | | 14,472 | | | | 61,831 | | | | 60,279 | |
| Occupancy, Net | | | 2,503 | | | | 2,373 | | | | 2,491 | | | | 2,362 | | | | 2,378 | | | | 9,729 | | | | 9,347 | |
| Furniture and Equipment | | | 2,368 | | | | 2,369 | | | | 2,583 | | | | 2,582 | | | | 2,534 | | | | 9,902 | | | | 9,890 | |
| Intangible Amortization | | | 1,308 | | | | 1,459 | | | | 1,459 | | | | 1,459 | | | | 1,458 | | | | 5,685 | | | | 5,834 | |
| Other | | | 9,331 | | | | 8,298 | | | | 8,905 | | | | 7,791 | | | | 10,772 | | | | 34,325 | | | | 36,642 | |
| Total Noninterest Expense | | | 31,002 | | | | 29,916 | | | | 30,756 | | | | 29,798 | | | | 31,614 | | | | 121,472 | | | | 121,992 | |
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| OPERATING PROFIT | | | (2,441 | ) | | | 7,056 | | | | 7,005 | | | | 10,318 | | | | 10,055 | | | | 21,938 | | | | 43,386 | |
| Provision for Income Taxes | | | (738 | ) | | | 2,218 | | | | 2,195 | | | | 3,038 | | | | 2,391 | | | | 6,713 | | | | 13,703 | |
| NET INCOME | | $ | (1,703 | ) | | $ | 4,838 | | | $ | 4,810 | | | $ | 7,280 | | | $ | 7,664 | | | $ | 15,225 | | | $ | 29,683 | |
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| PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic Earnings | | $ | (0.10 | ) | | $ | 0.29 | | | $ | 0.28 | | | $ | 0.42 | | | $ | 0.44 | | | $ | 0.89 | | | $ | 1.66 | |
| Diluted Earnings | | $ | (0.10 | ) | | $ | 0.29 | | | $ | 0.28 | | | $ | 0.42 | | | $ | 0.44 | | | $ | 0.89 | | | $ | 1.66 | |
| Cash Dividends | | | 0.190 | | | | 0.185 | | | | 0.185 | | | | 0.185 | | | | 0.185 | | | | 0.745 | | | | 0.710 | |
| AVERAGE SHARES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 17,126 | | | | 17,124 | | | | 17,146 | | | | 17,170 | | | | 17,444 | | | | 17,141 | | | | 17,909 | |
| Diluted | | | 17,135 | | | | 17,128 | | | | 17,147 | | | | 17,178 | | | | 17,445 | | | | 17,147 | | | | 17,912 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
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| (Dollars in thousands, except per share data) | | 2008 Fourth Quarter | | | 2008 Third Quarter | | | 2008 Second Quarter | | | 2008 First Quarter | | | 2007 Fourth Quarter | |
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| ASSETS | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | $ | 88,143 | | | $ | 71,062 | | | $ | 108,672 | | | $ | 97,525 | | | $ | 93,437 | |
| Funds Sold and Interest Bearing Deposits | | | 6,806 | | | | 27,419 | | | | 192,786 | | | | 241,202 | | | | 166,260 | |
| Total Cash and Cash Equivalents | | | 94,949 | | | | 98,481 | | | | 301,458 | | | | 338,727 | | | | 259,697 | |
| | | | | | | | | | | | | | | | | | | | | |
| Investment Securities, Available-for-Sale | | | 191,569 | | | | 193,978 | | | | 185,971 | | | | 186,944 | | | | 190,719 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans, Net of Unearned Interest | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial, & Agricultural | | | 206,230 | | | | 189,676 | | | | 196,075 | | | | 202,238 | | | | 208,864 | |
| Real Estate - Construction | | | 141,973 | | | | 148,160 | | | | 150,907 | | | | 152,060 | | | | 142,248 | |
| Real Estate - Commercial | | | 656,959 | | | | 639,443 | | | | 622,282 | | | | 624,826 | | | | 634,920 | |
| Real Estate - Residential | | | 468,399 | | | | 473,962 | | | | 481,397 | | | | 482,058 | | | | 481,150 | |
| Real Estate - Home Equity | | | 218,500 | | | | 212,118 | | | | 205,536 | | | | 197,093 | | | | 192,428 | |
| Consumer | | | 246,973 | | | | 252,743 | | | | 244,071 | | | | 238,663 | | | | 243,415 | |
| Other Loans | | | 15,838 | | | | 7,378 | | | | 9,436 | | | | 10,506 | | | | 7,222 | |
| Overdrafts | | | 2,925 | | | | 3,749 | | | | 7,111 | | | | 7,014 | | | | 5,603 | |
| Total Loans, Net of Unearned Interest | | | 1,957,797 | | | | 1,927,229 | | | | 1,916,815 | | | | 1,914,458 | | | | 1,915,850 | |
| Allowance for Loan Losses | | | (37,004 | ) | | | (30,544 | ) | | | (22,518 | ) | | | (20,277 | ) | | | (18,066 | ) |
| Loans, Net | | | 1,920,793 | | | | 1,896,685 | | | | 1,894,297 | | | | 1,894,181 | | | | 1,897,784 | |
| | | | | | | | | | | | | | | | | | | | | |
| Premises and Equipment, Net | | | 106,433 | | | | 104,806 | | | | 102,559 | | | | 100,145 | | | | 98,612 | |
| Intangible Assets | | | 92,883 | | | | 94,192 | | | | 95,651 | | | | 97,109 | | | | 98,568 | |
| Other Assets | | | 82,072 | | | | 66,308 | | | | 69,479 | | | | 75,406 | | | | 70,947 | |
| Total Other Assets | | | 281,388 | | | | 265,306 | | | | 267,689 | | | | 272,660 | | | | 268,127 | |
| | | | | �� | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,488,699 | | | $ | 2,454,450 | | | $ | 2,649,415 | | | $ | 2,692,512 | | | $ | 2,616,327 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest Bearing Deposits | | $ | 419,696 | | | $ | 382,878 | | | $ | 416,992 | | | $ | 432,904 | | | $ | 432,659 | |
| NOW Accounts | | | 758,976 | | | | 698,509 | | | | 814,380 | | | | 800,128 | | | | 744,093 | |
| Money Market Accounts | | | 324,646 | | | | 368,453 | | | | 387,011 | | | | 381,474 | | | | 386,619 | |
| Regular Savings Accounts | | | 115,261 | | | | 116,858 | | | | 118,307 | | | | 116,018 | | | | 111,600 | |
| Certificates of Deposit | | | 373,595 | | | | 396,086 | | | | 426,236 | | | | 462,081 | | | | 467,373 | |
| Total Deposits | | | 1,992,174 | | | | 1,962,784 | | | | 2,162,926 | | | | 2,192,605 | | | | 2,142,344 | |
| | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | | 62,044 | | | | 47,069 | | | | 51,783 | | | | 61,781 | | | | 53,131 | |
| Subordinated Notes Payable | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | | | | 62,887 | |
| Other Long-Term Borrowings | | | 51,470 | | | | 53,074 | | | | 36,857 | | | | 29,843 | | | | 26,731 | |
| Other Liabilities | | | 41,294 | | | | 29,841 | | | | 38,382 | | | | 47,723 | | | | 38,559 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities | | | 2,209,869 | | | | 2,155,655 | | | | 2,352,835 | | | | 2,394,839 | | | | 2,323,652 | |
| | | | | | | | | | | | | | | | | | | | | |
| SHAREOWNERS' EQUITY | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | 171 | | | | 171 | | | | 171 | | | | 172 | | | | 172 | |
| Additional Paid-In Capital | | | 36,783 | | | | 36,681 | | | | 36,382 | | | | 38,042 | | | | 38,243 | |
| Retained Earnings | | | 262,890 | | | | 267,853 | | | | 266,171 | | | | 264,538 | | | | 260,325 | |
| Accumulated Other Comprehensive Loss, Net of Tax | | | (21,014 | ) | | | (5,910 | ) | | | (6,144 | ) | | | (5,079 | ) | | | (6,065 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total Shareowners' Equity | | | 278,830 | | | | 298,795 | | | | 296,580 | | | | 297,673 | | | | 292,675 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Liabilities and Shareowners' Equity | | $ | 2,488,699 | | | $ | 2,454,450 | | | $ | 2,649,415 | | | $ | 2,692,512 | | | $ | 2,616,327 | |
| | | | | | | | | | | | | | | | | | | | | |
| OTHER BALANCE SHEET DATA | | | | | | | | | | | | | | | | | | | | |
| Earning Assets | | $ | 2,156,172 | | | $ | 2,148,626 | | | $ | 2,295,572 | | | $ | 2,342,604 | | | $ | 2,272,829 | |
| Intangible Assets | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | | | | 84,811 | |
| Deposit Base | | | 7,084 | | | | 8,345 | | | | 9,756 | | | | 11,167 | | | | 12,578 | |
| Other | | | 988 | | | | 1,036 | | | | 1,084 | | | | 1,131 | | | | 1,179 | |
| Interest Bearing Liabilities | | | 1,748,879 | | | | 1,742,936 | | | | 1,897,461 | | | | 1,914,212 | | | | 1,852,434 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book Value Per Diluted Share | | $ | 16.27 | | | $ | 17.45 | | | $ | 17.33 | | | $ | 17.33 | | | $ | 17.03 | |
| Tangible Book Value Per Diluted Share | | | 10.85 | | | | 11.94 | | | | 11.74 | | | | 11.67 | | | | 11.30 | |
| | | | | | | | | | | | | | | | | | | | | |
| Actual Basic Shares Outstanding | | | 17,127 | | | | 17,125 | | | | 17,111 | | | | 17,175 | | | | 17,183 | |
| Actual Diluted Shares Outstanding | | | 17,136 | | | | 17,129 | | | | 17,112 | | | | 17,183 | | | | 17,184 | |
| CAPITAL CITY BANK GROUP, INC. | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| AND NONPERFORMING ASSETS | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | |
| | | 2008 | | | 2008 | | | 2008 | | | 2008 | | | 2007 | |
| (Dollars in thousands) | | Fourth Quarter | | | Third Quarter | | | Second Quarter | | | First Quarter | | | Fourth Quarter | |
| | | | | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | |
| Balance at Beginning of Period | | $ | 30,544 | | | $ | 22,518 | | | $ | 20,277 | | | $ | 18,066 | | | $ | 18,001 | |
| Provision for Loan Losses | | | 12,497 | | | | 10,425 | | | | 5,432 | | | | 4,142 | | | | 1,699 | |
| Net Charge-Offs | | | 6,037 | | | | 2,399 | | | | 3,191 | | | | 1,931 | | | | 1,634 | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance at End of Period | | $ | 37,004 | | | $ | 30,544 | | | $ | 22,518 | | | $ | 20,277 | | | $ | 18,066 | |
| As a % of Loans | | | 1.89 | % | | | 1.59 | % | | | 1.18 | % | | | 1.06 | % | | | 0.95 | % |
| As a % of Nonperforming Loans | | | 37.52 | % | | | 48.55 | % | | | 51.80 | % | | | 54.32 | % | | | 71.92 | % |
| As a % of Nonperforming Assets | | | 34.31 | % | | | 45.10 | % | | | 47.12 | % | | | 49.34 | % | | | 64.15 | % |
| | | | | | | | | | | | | | | | | | | | | |
| CHARGE-OFFS | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 331 | | | $ | 275 | | | $ | 407 | | | $ | 636 | | | $ | 370 | |
| Real Estate - Construction | | | 1,774 | | | | 77 | | | | 158 | | | $ | 572 | | | | 58 | |
| Real Estate - Commercial | | | 293 | | | | (35 | ) | | | 1,115 | | | | 126 | | | | 133 | |
| Real Estate - Residential | | | 2,264 | | | | 797 | | | | 817 | | | | 176 | | | | 209 | |
| Consumer | | | 1,993 | | | | 1,797 | | | | 1,232 | | | | 1,170 | | | | 1,302 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Charge-Offs | | $ | 6,655 | | | $ | 2,911 | | | $ | 3,729 | | | $ | 2,680 | | | $ | 2,072 | |
| | | | | | | | | | | | | | | | | | | | | |
| RECOVERIES | | | | | | | | | | | | | | | | | | | | |
| Commercial, Financial and Agricultural | | $ | 68 | | | $ | 68 | | | $ | 55 | | | $ | 139 | | | $ | 47 | |
| Real Estate - Construction | | | 0 | | | | 4 | | | | 0 | | | | 0 | | | | 0 | |
| Real Estate - Commercial | | | 0 | | | | 1 | | | | 13 | | | | 1 | | | | 2 | |
| Real Estate - Residential | | | 128 | | | | 6 | | | | 24 | | | | 3 | | | | 5 | |
| Consumer | | | 422 | | | | 433 | | | | 446 | | | | 606 | | | | 384 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Recoveries | | $ | 618 | | | $ | 512 | | | $ | 538 | | | $ | 749 | | | $ | 438 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET CHARGE-OFFS | | $ | 6,037 | | | $ | 2,399 | | | $ | 3,191 | | | $ | 1,931 | | | $ | 1,634 | |
| QTD Average Loans | | | 1,940,083 | | | | 1,915,008 | | | | 1,908,802 | | | | 1,909,573 | | | | 1,908,069 | |
Net Charge-Offs as a % of Average Loans(1) | | | 1.24 | % | | | 0.50 | % | | | 0.67 | % | | | 0.41 | % | | | 0.34 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RISK ELEMENT ASSETS | | | | | | | | | | | | | | | | | | | | |
| Nonaccruing Loans | | $ | 96,876 | | | $ | 61,509 | | | $ | 41,738 | | | $ | 35,352 | | | $ | 25,120 | |
| Restructured Loans | | | 1,744 | | | | 1,403 | | | | 1,733 | | | | 1,980 | | | | 0 | |
| Total Nonperforming Loans | | | 98,620 | | | | 62,912 | | | | 43,471 | | | | 37,332 | | | | 25,120 | |
| Other Real Estate | | | 9,222 | | | | 4,813 | | | | 4,322 | | | | 3,768 | | | | 3,043 | |
| Total Nonperforming Assets | | $ | 107,842 | | | $ | 67,725 | | | $ | 47,793 | | | $ | 41,100 | | | $ | 28,163 | |
| Capital | | | 315,834 | | | | 329,339 | | | | 319,098 | | | | 317,949 | | | | 310,741 | |
| Past Due Loans 90 Days or More | | $ | 88 | | | $ | 50 | | | $ | 896 | | | $ | 842 | | | $ | 416 | |
| EOM Loans | | | 1,957,797 | | | | 1,927,229 | | | | 1,916,815 | | | | 1,914,458 | | | | 1,915,850 | |
| Nonperforming Loans as a % of Loans | | | 5.04 | % | | | 3.26 | % | | | 2.27 | % | | | 1.95 | % | | | 1.31 | % |
| Nonperforming Assets as a % of | | | | | | | | | | | | | | | | | | | | |
| Loans and Other Real Estate | | | 5.48 | % | | | 3.51 | % | | | 2.49 | % | | | 2.14 | % | | | 1.47 | % |
Nonperforming Assets as a % of Capital(2) | | | 34.15 | % | | | 20.56 | % | | | 14.98 | % | | | 12.93 | % | | | 9.06 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| (1) Annualized | | | | | | | | | | | | | | | | | | | | |
| (2) Capital includes allowance for loan losses. | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCE AND INTEREST RATES(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unaudited | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fourth Quarter 2008 | | | Third Quarter 2008 | | | Second Quarter 2008 | | | First Quarter 2008 | | | Fourth Quarter 2007 | | | December 2008 YTD | | | December 2007 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 | | $ | 1,940,083 | | | | 31,772 | | | | 6.52 | % | | $ | 1,915,008 | | | | 32,622 | | | | 6.78 | % | | $ | 1,908,802 | | | | 33,610 | | | | 7.08 | % | | $ | 1,909,574 | | | | 35,453 | | | | 7.47 | % | | $ | 1,908,069 | | | | 37,969 | | | | 7.89 | % | | $ | 1,918,417 | | | | 133,457 | | | | 6.96 | % | | $ | 1,934,850 | | | | 155,434 | | | | 8.03 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable Investment Securities | | | 90,296 | | | | 813 | | | | 3.59 | % | | | 93,723 | | | | 940 | | | | 3.99 | % | | | 93,814 | | | | 1,028 | | | | 4.38 | % | | | 94,786 | | | | 1,108 | | | | 4.67 | % | | | 99,055 | | | | 1,226 | | | | 4.93 | % | | | 93,149 | | | | 3,889 | | | | 5.04 | % | | | 103,840 | | | | 4,949 | | | | 4.76 | % |
| Tax-Exempt Investment Securities | | | 103,817 | | | | 1,252 | | | | 4.82 | % | | | 98,966 | | | | 1,234 | | | | 4.99 | % | | | 94,371 | | | | 1,200 | | | | 5.09 | % | | | 90,790 | | | | 1,207 | | | | 5.32 | % | | | 87,358 | | | | 1,178 | | | | 5.39 | % | | | 97,010 | | | | 4,893 | | | | 4.16 | % | | | 84,849 | | | | 4,447 | | | | 5.24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Investment Securities | | | 194,113 | | | | 2,065 | | | | 4.25 | % | | | 192,689 | | | | 2,174 | | | | 4.50 | % | | | 188,185 | | | | 2,228 | | | | 4.73 | % | | | 185,576 | | | | 2,315 | | | | 4.99 | % | | | 186,413 | | | | 2,404 | | | | 5.15 | % | | | 190,159 | | | | 8,782 | | | | 4.61 | % | | | 188,689 | | | | 9,396 | | | | 4.97 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Funds Sold | | | 16,645 | | | | 32 | | | | 0.74 | % | | | 99,973 | | | | 475 | | | | 1.86 | % | | | 206,984 | | | | 1,028 | | | | 1.96 | % | | | 206,313 | | | | 1,574 | | | | 3.02 | % | | | 96,748 | | | | 1,064 | | | | 4.31 | % | | | 132,073 | | | | 3,109 | | | | 2.32 | % | | | 59,989 | | | | 2,913 | | | | 4.79 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Earning Assets | | | 2,150,841 | | | $ | 33,869 | | | | 6.27 | % | | | 2,207,670 | | | $ | 35,271 | | | | 6.36 | % | | | 2,303,971 | | | $ | 36,866 | | | | 6.43 | % | | | 2,301,463 | | | $ | 39,342 | | | | 6.87 | % | | | 2,191,230 | | | $ | 41,437 | | | | 7.50 | % | | | 2,240,649 | | | $ | 145,348 | | | | 6.48 | % | | | 2,183,528 | | | $ | 167,743 | | | | 7.68 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and Due From Banks | | | 76,027 | | | | | | | | | | | | 77,309 | | | | | | | | | | | | 82,182 | | | | | | | | | | | | 94,247 | | | | | | | | | | | | 85,598 | | | | | | | | | | | | 82,410 | | | | | | | | | | | | 86,692 | | | | | | | | | |
| Allowance for Loan Losses | | | (30,347 | ) | | | | | | | | | | | (22,851 | ) | | | | | | | | | | | (20,558 | ) | | | | | | | | | | | (18,227 | ) | | | | | | | | | | | (18,127 | ) | | | | | | | | | | | (23,015 | ) | | | | | | | | | | | (17,535 | ) | | | | | | | | |
| Other Assets | | | 266,797 | | | | | | | | | | | | 266,510 | | | | | | | | | | | | 269,176 | | | | | | | | | | | | 268,991 | | | | | | | | | | | | 260,981 | | | | | | | | | | | | 267,861 | | | | | | | | | | | | 254,532 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Assets | | $ | 2,463,318 | | | | | | | | | | | $ | 2,528,638 | | | | | | | | | | | $ | 2,634,771 | | | | | | | | | | | $ | 2,646,474 | | | | | | | | | | | $ | 2,519,682 | | | | | | | | | | | $ | 2,567,905 | | | | | | | | | | | $ | 2,507,217 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Bearing Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW Accounts | | $ | 684,246 | | | $ | 636 | | | | 0.37 | % | | $ | 727,754 | | | $ | 1,443 | | | | 0.79 | % | | $ | 788,237 | | | $ | 1,935 | | | | 0.99 | % | | $ | 773,891 | | | $ | 3,440 | | | | 1.79 | % | | $ | 608,347 | | | $ | 2,980 | | | | 1.94 | % | | $ | 743,327 | | | $ | 7,454 | | | | 1.00 | % | | $ | 557,060 | | | $ | 10,748 | | | | 1.93 | % |
| Money Market Accounts | | | 360,940 | | | | 716 | | | | 0.79 | % | | | 369,544 | | | | 1,118 | | | | 1.20 | % | | | 376,996 | | | | 1,210 | | | | 1.29 | % | | | 389,828 | | | | 2,198 | | | | 2.27 | % | | | 404,406 | | | | 3,217 | | | | 3.16 | % | | | 374,278 | | | | 5,242 | | | | 1.40 | % | | | 397,193 | | | | 13,667 | | | | 3.44 | % |
| Savings Accounts | | | 117,311 | | | | 28 | | | | 0.09 | % | | | 117,970 | | | | 30 | | | | 0.10 | % | | | 117,182 | | | | 29 | | | | 0.10 | % | | | 113,163 | | | | 34 | | | | 0.12 | % | | | 113,527 | | | | 57 | | | | 0.20 | % | | | 116,413 | | | | 121 | | | | 0.10 | % | | | 119,700 | | | | 279 | | | | 0.23 | % |
| Time Deposits | | | 379,266 | | | | 2,468 | | | | 2.59 | % | | | 410,101 | | | | 3,224 | | | | 3.13 | % | | | 443,006 | | | | 3,988 | | | | 3.62 | % | | | 467,280 | | | | 4,809 | | | | 4.14 | % | | | 471,454 | | | | 5,069 | | | | 4.27 | % | | | 424,748 | | | | 14,489 | | | | 3.41 | % | | | 474,728 | | | | 19,993 | | | | 4.21 | % |
| Total Interest Bearing Deposits | | | 1,541,763 | | | | 3,848 | | | | 0.99 | % | | | 1,625,369 | | | | 5,815 | | | | 1.42 | % | | | 1,725,421 | | | | 7,162 | | | | 1.67 | % | | | 1,744,162 | | | | 10,481 | | | | 2.42 | % | | | 1,597,734 | | | | 11,323 | | | | 2.81 | % | | | 1,658,766 | | | | 27,306 | | | | 1.65 | % | | | 1,548,681 | | | | 44,687 | | | | 2.89 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-Term Borrowings | | | 69,079 | | | | 110 | | | | 0.62 | % | | | 51,738 | | | | 230 | | | | 1.76 | % | | | 55,830 | | | | 296 | | | | 2.13 | % | | | 68,095 | | | | 521 | | | | 3.06 | % | | | 64,842 | | | | 639 | | | | 3.89 | % | | | 61,181 | | | | 1,157 | | | | 1.88 | % | | | 66,397 | | | | 2,871 | | | | 4.31 | % |
| Subordinated Notes Payable | | | 62,887 | | | | 937 | | | | 5.83 | % | | | 62,887 | | | | 936 | | | | 5.83 | % | | | 62,887 | | | | 931 | | | | 5.86 | % | | | 62,887 | | | | 931 | | | | 5.96 | % | | | 62,887 | | | | 936 | | | | 5.91 | % | | | 62,887 | | | | 3,735 | | | | 5.84 | % | | | 62,887 | | | | 3,730 | | | | 5.93 | % |
| Other Long-Term Borrowings | | | 53,261 | | | | 587 | | | | 4.39 | % | | | 43,237 | | | | 488 | | | | 4.48 | % | | | 34,612 | | | | 396 | | | | 4.60 | % | | | 27,644 | | | | 331 | | | | 4.82 | % | | | 28,215 | | | | 343 | | | | 4.83 | % | | | 39,735 | | | | 1,802 | | | | 4.54 | % | | | 37,936 | | | | 1,794 | | | | 4.73 | % |
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| Total Interest Bearing Liabilities | | | 1,726,990 | | | $ | 5,482 | | | | 1.26 | % | | | 1,783,231 | | | $ | 7,469 | | | | 1.67 | % | | | 1,878,750 | | | $ | 8,785 | | | | 1.88 | % | | | 1,902,788 | | | $ | 12,264 | | | | 2.59 | % | | | 1,753,678 | | | $ | 13,241 | | | | 3.00 | % | | | 1,822,569 | | | $ | 34,000 | | | | 1.87 | % | | | 1,715,901 | | | $ | 53,082 | | | | 3.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest Bearing Deposits | | | 404,103 | | | | | | | | | | | | 405,314 | | | | | | | | | | | | 415,125 | | | | | | | | | | | | 404,712 | | | | | | | | | | | | 419,002 | | | | | | | | | | | | 407,299 | | | | | | | | | | | | 441,765 | | | | | | | | | |
| Other Liabilities | | | 29,998 | | | | | | | | | | | | 36,498 | | | | | | | | | | | | 40,006 | | | | | | | | | | | | 42,170 | | | | | | | | | | | | 47,660 | | | | | | | | | | | | 37,147 | | | | | | | | | | | | 42,934 | | | | | | | | | |
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| Total Liabilities | | | 2,161,091 | | | | | | | | | | | | 2,225,043 | | | | | | | | | | | | 2,333,881 | | | | | | | | | | | | 2,349,670 | | | | | | | | | | | | 2,220,340 | | | | | | | | | | | | 2,267,015 | | | | | | | | | | | | 2,200,600 | | | | | | | | | |
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| SHAREOWNERS' EQUITY: | | $ | 302,227 | | | | | | | | | | | $ | 303,595 | | | | | | | | | | | $ | 300,890 | | | | | | | | | | | $ | 296,804 | | | | | | | | | | | $ | 299,342 | | | | | | | | | | | $ | 300,890 | | | | | | | | | | | $ | 306,617 | | | | | | | | | |
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| Total Liabilities and Shareowners' Equity | | $ | 2,463,318 | | | | | | | | | | | $ | 2,528,638 | | | | | | | | | | | $ | 2,634,771 | | | | | | | | | | | $ | 2,646,474 | | | | | | | | | | | $ | 2,519,682 | | | | | | | | | | | $ | 2,567,905 | | | | | | | | | | | $ | 2,507,217 | | | | | | | | | |
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| Interest Rate Spread | | | | | | $ | 28,387 | | | | 5.01 | % | | | | | | $ | 27,802 | | | | 4.69 | % | | | | | | $ | 28,081 | | | | 4.55 | % | | | | | | $ | 27,078 | | | | 4.28 | % | | | | | | $ | 28,196 | | | | 4.50 | % | | | | | | $ | 111,348 | | | | 4.61 | % | | | | | | $ | 114,661 | | | | 4.59 | % |
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Interest Income and Rate Earned(1) | | | $ | 33,869 | | | | 6.27 | % | | | | | | $ | 35,271 | | | | 6.36 | % | | | | | | $ | 36,866 | | | | 6.43 | % | | | | | | $ | 39,342 | | | | 6.87 | % | | | | | | $ | 41,437 | | | | 7.50 | % | | | | | | $ | 145,348 | | | | 6.48 | % | | | | | | $ | 167,743 | | | | 7.68 | % |
Interest Expense and Rate Paid(2) | | | | | | | 5,482 | | | | 1.01 | % | | | | | | | 7,469 | | | | 1.35 | % | | | | | | | 8,785 | | | | 1.53 | % | | | | | | | 12,264 | | | | 2.14 | % | | | | | | | 13,241 | | | | 2.40 | % | | | | | | | 34,000 | | | | 1.52 | % | | | | | | | 53,082 | | | | 2.43 | % |
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| Net Interest Margin | | | | | | $ | 28,387 | | | | 5.26 | % | | | | | | $ | 27,802 | | | | 5.01 | % | | | | | | $ | 28,081 | | | | 4.90 | % | | | | | | $ | 27,078 | | | | 4.73 | % | | | | | | $ | 28,196 | | | | 5.10 | % | | | | | | $ | 111,348 | | | | 4.96 | % | | | | | | $ | 114,661 | | | | 5.25 | % |
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| (1) Interest and average rates are calculated on a tax-equivalent basis using the 35% federal rate. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) Rate calculated based on average earning assets. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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