----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

| **x** | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|-------|------------------------------------------------------------------------------------------------------------------------------------------|

**For      the Quarterly Period Ended March 31, 2007**

**OR**

| **o** | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from ____________ to ____________**

**Commission      File Number: **
**0-13358**

| **CAPITAL                CITY BANK GROUP, INC.**                                     |
|--------------------------------------------------------------------------------------|
| (Exact                name of registrant as specified in its                charter) |

| **Florida**                                                                                  |   | **59-2273542**                                      |
|----------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation                or organization) |   | (I.R.S.                Employer Identification No.) |

| **217                North Monroe Street, Tallahassee, Florida** |   | **32301**                 |
|------------------------------------------------------------------|--------|---------------------------|
| (Address                of principal executive office)           |   | (Zip                Code) |

| **(850)                671-0300**                                                  |
|------------------------------------------------------------------------------------|
| (Registrant's                telephone number, including area                code) |

| Large                accelerated filer o | Accelerated                filer x | Non-accelerated                filer o |
|------------------------------------------|------------------------------------|----------------------------------------|

----

**CAPITAL      CITY BANK GROUP, INC.**

**QUARTERLY      REPORT ON FORM 10-Q**

**FOR      THE PERIOD ENDED MARCH 31, 2007**

**TABLE      OF CONTENTS**

| **PART                I - Financial Information** |                                                                                                                | **                        Page** |
|---------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|
|                                              |
| Item                1.                            | Consolidated                Financial Statements                (unaudited)                                         | 4                                                                        |
|                                              |                                                                                                                |                                                                     |
| Item                2.                            | Management's                Discussion and Analysis of Financial Condition                and Results of Operations | 15                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                3.                            | Quantitative                and Qualitative Disclosure About Market                Risk                             | 27                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                4.                            | Controls                and Procedures                                                                              | 29                                                                       |
|                                              |                                                                                                                |                                                                     |
| **PART                II - Other Information**    |                                                                                                                |                                                                     |
|                                              |
| Item                1.                            | Legal                Proceedings                                                                                    | 29                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                1.A.                          | Risk                Factors                                                                                         | 29                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                2.                            | Unregistered                Sales of Equity Securities and Use of                Proceeds                           | 29                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                3.                            | Defaults                Upon Senior Securities                                                                      | 30                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                4.                            | Submission                of Matters to a Vote of Security                Holders                                   | 30                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                5.                            | Other                Information                                                                                    | 30                                                                       |
|                                              |                                                                                                                |                                                                     |
| Item                6.                            | Exhibits                                                                                                            | 30                                                                       |
|                                              |                                                                                                                |                                                                     |
| **Signatures**                                    |                                                                                                                | 31                                                                       |

----

**INTRODUCTORY      NOTE**

**Caution      Concerning Forward-Looking Statements**

| §   | our                ability to integrate the business and operations of companies and                banks                that we have acquired, and those we may acquire in the                future; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | our                need and our ability to incur additional debt or equity                financing; |
|--------------------|------------------------------------------------------------------------------------------------------|

| §   | the                strength of the United States economy in general and the strength                of the                local economies in which we conduct operations; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the                accuracy of our financial statement estimates and assumptions; |
|--------------------|-----------------------------------------------------------------------------------|

| §   | the                effects of harsh weather conditions, including                hurricanes; |
|--------------------|----------------------------------------------------------------------------------------------|

| §   | inflation,                interest rate, market and monetary fluctuations; |
|--------------------|----------------------------------------------------------------------------|

| §   | the                effects of our lack of a diversified loan portfolio, including the                risks                of geographic and industry                concentrations; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | the                frequency and magnitude of foreclosure of our                loans; |
|--------------------|----------------------------------------------------------------------------------------|

| §   | effect                of changes in the stock market and other capital markets; |
|--------------------|---------------------------------------------------------------------------------|

| §   | legislative                or regulatory changes; |
|--------------------|---------------------------------------------------|

| §   | our                ability to comply with the extensive laws and regulations to which                we are                subject; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| §   | the                willingness of clients to accept third-party products and services                rather                than our products and services and vice                versa; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | changes                in the securities and real estate markets; |
|--------------------|-------------------------------------------------------------------|

| §   | increased                competition and its effect on                pricing; |
|--------------------|--------------------------------------------------------------------------------|

| §   | technological                changes; |
|--------------------|---------------------------------------|

| §   | changes                in monetary and fiscal policies of the U.S.                Government; |
|--------------------|-----------------------------------------------------------------------------------------------|

| §   | the                effects of security breaches and computer viruses that may affect                our                computer systems; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| §   | changes                in consumer spending and saving habits; |
|--------------------|----------------------------------------------------------------|

| §   | growth                and profitability of our noninterest income; |
|--------------------|--------------------------------------------------------------------|

| §   | changes                in accounting principles, policies, practices or                guidelines; |
|--------------------|----------------------------------------------------------------------------------------------------|

| §   | the                limited trading activity of our common                stock; |
|--------------------|---------------------------------------------------------------------------------|

| §   | the                concentration of ownership of our common                stock; |
|--------------------|-----------------------------------------------------------------------------------|

| §   | anti-takeover                provisions under federal and state law as well as our Articles of                Incorporation and our bylaws; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| §   | other                risks described from time to time in our filings with the Securities                and                Exchange Commission; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | our                ability to manage the risks involved in the foregoing. |
|--------------------|---------------------------------------------------------------------------|

----

| **PART                I.** | **FINANCIAL                INFORMATION** |
|----------------------------|------------------------------------------|

| **Item                1.** | **CONSOLIDATED                FINANCIAL STATEMENTS                (unaudited)** |
|----------------------------|---------------------------------------------------------------------------------|

**CAPITAL      CITY BANK GROUP, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**FOR      THE THREE MONTHS ENDED MARCH 31**

**(Unaudited)**

| *(Dollars                in Thousands, Except Per Share Data)*     | **2007** |       | **2006** |   |
|--------------------------------------------------------------------|----------|------------|----------|--------|
| **INTEREST                INCOME**                                 |     |       |     |   |
| Interest                and Fees on Loans                          | $        | 39,053     |     | $      | 37,343 |   |
| Investment                Securities:                              |     |       |     |   |   |   |
| U.S.                Treasury                                       |     | 141        |     |   | 79 |   |
| U.S.                Govt. Agencies and Corporations                |     | 939        |     |   | 814 |   |
| States                and Political Subdivisions                   |     | 676        |     |   | 439 |   |
| Other                Securities                                    |     | 184        |     |   | 198 |   |
| Funds                Sold                                          |     | 521        |     |   | 539 |   |
| Total                Interest Income                               |     | 41,514     |     |   | 39,412 |   |
|                                                               |     |       |     |   |   |   |
| **INTEREST                EXPENSE**                                |     |       |     |   |   |   |
| Deposits                                                           |     | 11,000     |     |   | 7,722 |   |
| Short-Term                Borrowings                               |     | 761        |     |   | 824 |   |
| Subordinated                Notes Payable                          |     | 926        |     |   | 926 |   |
| Other                Long-Term Borrowings                          |     | 502        |     |   | 810 |   |
| Total                Interest Expense                              |     | 13,189     |     |   | 10,282 |   |
|                                                               |     |       |     |   |   |   |
| **NET                INTEREST INCOME**                             |     | 28,325     |     |   | 29,130 |   |
| Provision                for Loan Losses                           |     | 1,237      |     |   | 667 |   |
| Net                Interest Income After Provision For Loan Losses |     | 27,088     |     |   | 28,463 |   |
|                                                               |     |       |     |   |   |   |
| **NONINTEREST                INCOME**                              |     |       |     |   |   |   |
| Service                Charges on Deposit Accounts                 |     | 6,045      |     |   | 5,680 |   |
| Data                Processing                                     |     | 715        |     |   | 637 |   |
| Asset                Management Fees                               |     | 1,225      |     |   | 1,050 |   |
| Securities                Transactions                             |     | 7          |     |   | - |   |
| Mortgage                Banking Revenues                           |     | 679        |     |   | 721 |   |
| Other                                                              |     | 5,291      |     |   | 4,957 |   |
| Total                Noninterest Income                            |     | 13,962     |     |   | 13,045 |   |
|                                                               |     |       |     |   |   |   |
| **NONINTEREST                EXPENSE**                             |     |       |     |   |   |   |
| Salaries                and Associate Benefits                     |     | 15,719     |     |   | 15,430 |   |
| Occupancy,                Net                                      |     | 2,236      |     |   | 2,223 |   |
| Furniture                and Equipment                             |     | 2,349      |     |   | 2,500 |   |
| Intangible                Amortization                             |     | 1,459      |     |   | 1,530 |   |
| Other                                                              |     | 8,799      |     |   | 8,409 |   |
| Total                Noninterest Expense                           |     | 30,562     |     |   | 30,092 |   |
|                                                               |     |       |     |   |   |   |
| **INCOME                BEFORE INCOME TAXES**                      |     | 10,488     |     |   | 11,416 |   |
| Income                Taxes                                        |     | 3,531      |     |   | 3,995 |   |
|                                                               |     |       |     |   |   |   |
| **NET                INCOME**                                      | $        | 6,957      |     | $      | 7,421 |   |
| Basic                Net Income Per Share                          | $        | 0.38       |     | $      | 0.40 |   |
| Diluted                Net Income Per Share                        | $        | 0.38       |     | $      | 0.40 |   |
|                                                               |     |       |     |   |   |   |
| Average                Basic Shares Outstanding                    |     | 18,408,726 |     |   | 18,651,746 |   |
| Average                Diluted Shares Outstanding                  |     | 18,419,616 |     |   | 18,665,136 |   |

*The      accompanying Notes to Consolidated Financial Statements are an integral part      of      these statements.*

----

**CAPITAL      CITY BANK GROUP, INC.**

**CONSOLIDATED      STATEMENTS OF FINANCIAL CONDITION**

**AS      OF MARCH 31, 2007 AND DECEMBER 31, 2006**

**(Unaudited)**

| *(Dollars                In Thousands, Except Share Data)*                                                                                                                                                             | **March                31, 2007** |      | **December                31, 2006** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|-----------|--------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                             |                              |      |                                 |   |
| Cash                and Due From Banks                                                                                                                                                                                 | $                                 | 92,233    |                                 | $      | 98,769 |   |
| Funds                Sold and Interest Bearing Deposits                                                                                                                                                                |                              | 93,832    |                                 |   | 78,795 |   |
| Total                Cash and Cash Equivalents                                                                                                                                                                         |                              | 186,065   |                                 |   | 177,564 |   |
| Investment                Securities, Available-for-Sale                                                                                                                                                               |                              | 191,446   |                                 |   | 191,894 |   |
|                                                                                                                                                                                                                   |                              |      |                                 |   |   |   |
| Loans,                Net of Unearned Interest                                                                                                                                                                         |                              | 1,965,841 |                                 |   | 1,999,721 |   |
| Allowance                for Loan Losses                                                                                                                                                                               |                              | (17,108   | )                                    |   | (17,217 | ) |
| Loans,                Net                                                                                                                                                                                              |                              | 1,948,733 |                                 |   | 1,982,504 |   |
|                                                                                                                                                                                                                   |                              |      |                                 |   |   |   |
| Premises                and Equipment, Net                                                                                                                                                                             |                              | 88,812    |                                 |   | 86,538 |   |
| Goodwill                                                                                                                                                                                                               |                              | 84,811    |                                 |   | 84,811 |   |
| Other                Intangible Assets                                                                                                                                                                                 |                              | 18,133    |                                 |   | 19,591 |   |
| Other                Assets                                                                                                                                                                                            |                              | 60,117    |                                 |   | 55,008 |   |
| Total                Assets                                                                                                                                                                                            | $                                 | 2,578,117 |                                 | $      | 2,597,910 |   |
|                                                                                                                                                                                                                   |                              |      |                                 |   |   |   |
| **LIABILITIES**                                                                                                                                                                                                        |                              |      |                                 |   |   |   |
| Deposits:                                                                                                                                                                                                              |                              |      |                                 |   |   |   |
| Noninterest                Bearing Deposits                                                                                                                                                                            | $                                 | 467,875   |                                 | $      | 490,014 |   |
| Interest                Bearing Deposits                                                                                                                                                                               |                              | 1,574,187 |                                 |   | 1,591,640 |   |
| Total                Deposits                                                                                                                                                                                          |                              | 2,042,062 |                                 |   | 2,081,654 |   |
|                                                                                                                                                                                                                   |                              |      |                                 |   |   |   |
| Short-Term                Borrowings                                                                                                                                                                                   |                              | 77,936    |                                 |   | 65,023 |   |
| Subordinated                Notes Payable                                                                                                                                                                              |                              | 62,887    |                                 |   | 62,887 |   |
| Other                Long-Term Borrowings                                                                                                                                                                              |                              | 42,879    |                                 |   | 43,083 |   |
| Other                Liabilities                                                                                                                                                                                       |                              | 41,841    |                                 |   | 29,493 |   |
| Total                Liabilities                                                                                                                                                                                       |                              | 2,267,605 |                                 |   | 2,282,140 |   |
|                                                                                                                                                                                                                   |                              |      |                                 |   |   |   |
| **SHAREOWNERS'                EQUITY**                                                                                                                                                                                 |                              |      |                                 |   |   |   |
| Preferred                Stock, $.01 par value, 3,000,000 shares authorized;no                shares outstanding                                                                                                       |                              | -         |                                 |   | - |   |
| Common                Stock, $.01 par value, 90,000,000 shares authorized; 18,286,561 and                18,518,398 shares issued and outstanding at March 31, 2007 and December                31, 2006, respectively |                              | 183       |                                 |   | 185 |   |
| Additional                Paid-In Capital                                                                                                                                                                              |                              | 71,366    |                                 |   | 80,654 |   |
| Retained                Earnings                                                                                                                                                                                       |                              | 246,959   |                                 |   | 243,242 |   |
| Accumulated                Other Comprehensive Loss, Net of Tax                                                                                                                                                        |                              | (7,996    | )                                    |   | (8,311 | ) |
| Total                Shareowners' Equity                                                                                                                                                                               |                              | 310,512   |                                 |   | 315,770 |   |
| Total                Liabilities and Shareowners' Equity                                                                                                                                                               | $                                 | 2,578,117 |                                 | $      | 2,597,910 |   |

*The      accompanying Notes to Consolidated Financial Statements are an integral part      of      these statements.*

----

**CAPITAL      CITY BANK GROUP, INC.**

**CONSOLIDATED      STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY**

**(Unaudited)**

| *(Dollars                in Thousands, Except Per Share Data)*                              | Common                Stock |   | Additional                Paid-In Capital |   | Retained                Earnings |   | Accumulated                Other Comprehensive Loss, Net of Taxes |    | Total  |   |
|---------------------------------------------------------------------------------------------|-----------------------------|--------|-------------------------------------------|--------|----------------------------------|--------|-------------------------------------------------------------------|---------|--------|--------|
|                                                                                        |                        |   |                                      |   |                             |   |                                                              |    |   |   |
| **Balance,                December 31, 2006**                                               | $                           | 185    |                                      | $      | 80,654                           |   | $                                                                 | 243,242 |   | $      | (8,311 | ) | $ | 315,770 |   |
| Comprehensive                Income:                                                        |                        |   |                                      |   |                             |   |                                                              |    |   |   |   |   |   |   |   |
| Net                Income                                                                   |                        | -      |                                      |   | -                                |   |                                                              | 6,957   |   |   | - |   |   |   |   |
| Net                Change in Unrealized GainOn                Available-for-Sale Securities |                        | -      |                                      |   | -                                |   |                                                              | -       |   |   | 315 |   |   |   |   |
| Total                Comprehensive Income                                                   |                        | -      |                                      |   | -                                |   |                                                              | -       |   |   | - |   |   | 7,272 |   |
| Cash                Dividends ($.1750 per share)                                            |                        | -      |                                      |   | -                                |   |                                                              | (3,240  | )      |   | - |   |   | (3,240 | ) |
| Stock                Performance Plan Compensation                                          |                        | -      |                                      |   | 63                               |   |                                                              | -       |   |   | - |   |   | 63 |   |
| Issuance                of Common Stock                                                     |                        | 1      |                                      |   | 432                              |   |                                                              | -       |   |   | - |   |   | 433 |   |
| Repurchase                of Common Stock                                                   |                        | (3     | )                                         |   | (9,783                           | )      |                                                              | -       |   |   | - |   |   | (9,786 | ) |
|                                                                                        |                        |   |                                      |   |                             |   |                                                              |    |   |   |   |   |   |   |   |
| **Balance,                March 31, 2007**                                                  | $                           | 183    |                                      | $      | 71,366                           |   | $                                                                 | 246,959 |   | $      | (7,996 | ) | $ | 310,512 |   |

*The      accompanying Notes to Consolidated Financial Statements are an integral part      of      these statements.*

----

**CAPITAL      CITY BANK GROUP, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE THREE MONTHS ENDED MARCH 31**

**(Unaudited)**

| *(Dollars                in Thousands)*                                                                    | **2007** |    | **2006** |   |
|------------------------------------------------------------------------------------------------------------|----------|---------|----------|--------|
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                                                    |     |    |     |   |
| Net                Income                                                                                  | $        | 6,957   |     | $      | 7,421 |   |
| Adjustments                to Reconcile Net Income toCash                Provided by Operating Activities: |     |    |     |   |   |   |
| Provision                for Loan Losses                                                                   |     | 1,237   |     |   | 667 |   |
| Depreciation                                                                                               |     | 1,534   |     |   | 1,657 |   |
| Net                Securities Amortization                                                                 |     | 92      |     |   | 220 |   |
| Amortization                of Intangible Assets                                                           |     | 1,459   |     |   | 1,530 |   |
| Gain                on Sale of Investment Securities                                                       |     | (7      | )        |   | - |   |
| Origination                of Loans Held-for-Sale                                                          |     | (43,084 | )        |   | (40,260 | ) |
| Proceeds                From Sales of Loans Held-for-Sale                                                  |     | 42,374  |     |   | 42,705 |   |
| Net                Gain From Sales of Loans Held-for-Sale                                                  |     | (679    | )        |   | (721 | ) |
| Non-Cash                Compensation                                                                       |     | 63      |     |   | 442 |   |
| Deferred                Income Taxes                                                                       |     | 1,152   |     |   | 2,722 |   |
| Net                Increase in Other Assets                                                                |     | (4,297  | )        |   | (2,019 | ) |
| Net                Increase in Other Liabilities                                                           |     | 11,084  |     |   | 6,627 |   |
| Net                Cash Provided By Operating Activities                                                   |     | 17,885  |     |   | 20,991 |   |
|                                                                                                       |     |    |     |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                    |     |    |     |   |   |   |
| Securities                Available-for-Sale:                                                              |     |    |     |   |   |   |
| Purchases                                                                                                  |     | (10,715 | )        |   | (41,170 | ) |
| Payments,                Maturities, and Calls                                                             |     | 11,552  |     |   | 31,024 |   |
| Net                Decrease in Loans                                                                       |     | 33,060  |     |   | 9,828 |   |
| Purchase                of Premises & Equipment                                                        |     | (4,102  | )        |   | (4,558 | ) |
| Proceeds                From Sales of Premises & Equipment                                             |     | 294     |     |   | 26 |   |
| Net                Cash                Provided By (Used In) Investing Activities                          |     | 30,089  |     |   | (4,850 | ) |
|                                                                                                       |     |    |     |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                    |     |    |     |   |   |   |
| Net                (Decrease)                Increase in Deposits                                          |     | (39,593 | )        |   | 29,810 |   |
| Net                Increase in Short-Term Borrowings                                                       |     | 12,921  |     |   | 2,711 |   |
| Increase                in Other Long-Term Borrowings                                                      |     | 1,700   |     |   | 3,250 |   |
| Repayment                of Other Long-Term Borrowings                                                     |     | (1,911  | )        |   | (694 | ) |
| Dividends                Paid                                                                              |     | (3,240  | )        |   | (3,033 | ) |
| Repurchase                of Common Stock                                                                  |     | (9,783  | )        |   | - |   |
| Issuance                of Common Stock                                                                    |     | 433     |     |   | 546 |   |
| Net                Cash (Used In) Provided By Financing Activities                                         |     | (39,473 | )        |   | 32,590 |   |
|                                                                                                       |     |    |     |   |   |   |
| **NET                CHANGE IN CASH AND CASH EQUIVALENTS**                                                 |     | 8,501   |     |   | 48,731 |   |
|                                                                                                       |     |    |     |   |   |   |
| Cash                and Cash Equivalents at Beginning of Period                                            |     | 177,564 |     |   | 166,359 |   |
| Cash                and Cash Equivalents at End of Period                                                  | $        | 186,065 |     | $      | 215,090 |   |
|                                                                                                       |     |    |     |   |   |   |
| Supplemental                Disclosure:                                                                    |     |    |     |   |   |   |
| Interest                Paid on Deposits                                                                   | $        | 11,112  |     | $      | 7,612 |   |
| Interest                Paid on Debt                                                                       | $        | 2,199   |     | $      | 2,558 |   |
| Taxes                Paid                                                                                  | $        | 3,229   |     | $      | 27 |   |
| Loans                Transferred to Other Real Estate                                                      | $        | 863     |     | $      | 488 |   |
| Issuance                of Common Stock as Non-Cash Compensation                                           | $        | 1,158   |     | $      | 644 |   |
| Transfer                of Current Portion of Long-Term Borrowingsto                Short-Term Borrowings  |     | -       |     | $      | 3,000 |   |

*The      accompanying Notes to Consolidated Financial Statements are an integral part      of      these statements.*

----

**CAPITAL      CITY BANK GROUP, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1      - MANAGEMENT'S OPINION AND      ACCOUNTING POLICIES**

**Basis      of Presentation**

**NOTE      2 - **
**INVESTMENT      SECURITIES**

|                                                     | **March                31, 2007** |    |
|----------------------------------------------------------|-----------------------------------|---------|
| *(Dollars                in Thousands)*                  | Amortized                Cost     |    | Unrealized                Gains |   | Unrealized                Losses |   | Market                Value |   |
| U.S.                Treasury                             | $                                 | 12,114  |   | $ | 20 |   | $ | 32 |   | $ | 12,102 |   |
| U.S.                Government Agencies and Corporations |                              | 59,189  |   |   | 76 |   |   | 421 |   |   | 58,844 |   |
| States                and Political Subdivisions         |                              | 83,553  |   |   | 16 |   |   | 329 |   |   | 83,240 |   |
| Mortgage-Backed                Securities                |                              | 24,548  |   |   | 59 |   |   | 301 |   |   | 24,306 |   |
| Other                Securities(1)                       |                              | 12,905  |   |   | 49 |   |   | - |   |   | 12,954 |   |
| Total                Investment Securities               | $                                 | 192,309 |   | $ | 220 |   | $ | 1,083 |   | $ | 191,446 |   |

|                                                     | **December                31, 2006** |    |
|----------------------------------------------------------|--------------------------------------|---------|
| *(Dollars                in Thousands)*                  | Amortized                Cost        |    | Unrealized                Gains |   | Unrealized                Losses |   | Market                Value |   |
| U.S.                Treasury                             | $                                    | 12,098  |   | $ | 16 |   | $ | 49 |   | $ | 12,065 |   |
| U.S.                Government Agencies and Corporations |                                 | 61,619  |   |   | 37 |   |   | 593 |   |   | 61,063 |   |
| States                and Political Subdivisions         |                                 | 83,621  |   |   | 16 |   |   | 415 |   |   | 83,222 |   |
| Mortgage-Backed                Securities                |                                 | 23,244  |   |   | 23 |   |   | 371 |   |   | 22,896 |   |
| Other                Securities(1)                       |                                 | 12,648  |   |   | - |   |   | - |   |   | 12,648 |   |
| Total                Investment Securities               | $                                    | 193,230 |   | $ | 92 |   | $ | 1,428 |   | $ | 191,894 |   |

| *(1)* | *FHLB                and FRB stock recorded at                cost.* |
|-------|----------------------------------------------------------------------|

----

**NOTE      3 - LOANS**

| *(Dollars                in Thousands)*               | **March                31, 2007** |      | **December                31, 2006** |   |
|-------------------------------------------------------|-----------------------------------|-----------|--------------------------------------|--------|
| Commercial,                Financial and Agricultural | $                                 | 205,048   |                                 | $      | 229,327 |   |
| Real                Estate-Construction               |                              | 180,549   |                                 |   | 179,072 |   |
| Real                Estate-Commercial                 |                              | 643,272   |                                 |   | 643,885 |   |
| Real                Estate-Residential                |                              | 517,637   |                                 |   | 531,968 |   |
| Real                Estate-Home Equity                |                              | 172,283   |                                 |   | 173,597 |   |
| Real                Estate-Loans Held-for-Sale        |                              | 6,302     |                                 |   | 4,170 |   |
| Consumer                                              |                              | 240,750   |                                 |   | 237,702 |   |
| Loans,                Net of Unearned Interest        | $                                 | 1,965,841 |                                 | $      | 1,999,721 |   |

**NOTE      4 - ALLOWANCE FOR LOAN LOSSES**

| *(Dollars                in Thousands)*                   | **2007** |   | **2006** |   |
|-----------------------------------------------------------|----------|--------|----------|--------|
| Balance,                Beginning of Period               | $        | 17,217 |     | $      | 17,410 |   |
| Provision                for Loan Losses                  |     | 1,237  |     |   | 667 |   |
| Recoveries                on Loans Previously Charged-Off |     | 476    |     |   | 428 |   |
| Loans                Charged-Off                          |     | (1,822 | )        |   | (1,226 | ) |
| Balance,                End of Period                     | $        | 17,108 |     | $      | 17,279 |   |

|                                                 | **March                  31, 2007** |   | **December                  31, 2006** |   |
|------------------------------------------------------|-------------------------------------|--------|----------------------------------------|--------|
|  *(Dollars                  in Thousands)*      | Balance                             |   | Valuation                  Allowance   |   | Balance |   | Valuation                  Allowance |   |
| Impaired                  Loans:                     |                                |   |                                   |   |   |   |   |   |
| With                  Related Valuation Allowance    | $                                   | 6,439  |                                   | $      | 2,644 |   | $ | 6,085 |   | $ | 2,255 |   |
| Without                  Related Valuation Allowance |                                | 3,940  |                                   |   | - |   |   | 4,574 |   |   | - |   |

**NOTE      5 - INTANGIBLE ASSETS**

|                                            | **March                31, 2007** |    | **December                31, 2006** |   |
|-------------------------------------------------|-----------------------------------|---------|--------------------------------------|--------|
|  *(Dollars                in Thousands)*   | GrossAmount                       |    | AccumulatedAmortization              |   | GrossAmount |   | AccumulatedAmortization |   |
| Core                Deposit Intangibles         | $                                 | 47,176  |                                 | $      | 30,366 |   | $ | 47,176 |   | $ | 28,955 |   |
| Goodwill                                        |                              | 84,811  |                                 |   | - |   |   | 84,811 |   |   | - |   |
| Customer                Relationship Intangible |                              | 1,867   |                                 |   | 544 |   |   | 1,867 |   |   | 497 |   |
| Total                Intangible Assets          | $                                 | 133,854 |                                 | $      | 30,910 |   | $ | 133,854 |   | $ | 29,452 |   |

----

*Net      Core Deposit Intangibles: *

*Goodwill*

*Other*

**NOTE      6 - DEPOSITS**

| *(Dollars                in Thousands)*        | **March                31, 2007** |      | **December                31, 2006** |   |
|------------------------------------------------|-----------------------------------|-----------|--------------------------------------|--------|
| NOW                Accounts                    | $                                 | 575,740   |                                 | $      | 599,433 |   |
| Money                Market Accounts           |                              | 396,150   |                                 |   | 384,568 |   |
| Savings                Deposits                |                              | 124,970   |                                 |   | 125,500 |   |
| Other                Time Deposits             |                              | 477,327   |                                 |   | 482,139 |   |
| Total                Interest Bearing Deposits | $                                 | 1,574,187 |                                 | $      | 1,591,640 |   |

**NOTE      7 - INCOME TAXES**

|                                    | **Three                Months Ended March 31,** |
|-----------------------------------------|-------------------------------------------------|
| *(Dollars                in Thousands)* |                                            | **2007** |   | **2006** |
| Current:                                |                                            |   |   |   |
| Federal                                 |                                            | $ | 4,054 |   | $ | 4,125 |
| State                                   |                                            |   | 462 |   |   | 402 |
| Deferred:                               |                                            |   |   |   |   |   |
| Federal                                 |                                            |   | (844) |   |   | (456) |
| State                                   |                                            |   | (141) |   |   | (76) |
| Total                                   |                                            | $ | 3,531 |   | $ | 3,995 |

|                              |   |   |   |   |
|-----------------------------------|--------|--------|--------|--------|
| Effective                Tax Rate |   | 33.7%  |   | 35.1%  |

----

**NOTE      8 - S**
**TOCK-BASED      COMPENSATION**

*AIP.*

*Executive      Stock Option Agreement. *

| Options                                       | Shares |   | Weighted-Average                Exercise Price |   | Weighted-Average                Remaining Term |   | Aggregate                Intrinsic Value |   |
|-----------------------------------------------|--------|--------|------------------------------------------------|--------|------------------------------------------------|--------|------------------------------------------|--------|
| Outstanding                at January 1, 2007 |   | 60,384 |                                           | $      | 32.79                                          |   |                                     | 8.3    |   | $ | 151,355 |   |
| Granted                                       |   | -      |                                           |   | -                                              |   |                                     | -      |   |   | - |   |
| Exercised                                     |   | -      |                                           |   | -                                              |   |                                     | -      |   |   | - |   |
| Forfeited                or expired           |   | -      |                                           |   | -                                              |   |                                     | -      |   |   | - |   |
| Outstanding                at March 31, 2007  |   | 60,384 |                                           | $      | 32.79                                          |   |                                     | 6.2    |   | $ | 30,587 |   |
| Exercisable                at March 31, 2007  |   | 47,720 |                                           | $      | 32.79                                          |   |                                     | 6.2    |   | $ | 22,862 |   |

----

*DSPP.      *

*ASPP.      *

|                                    |   | **Three                Months Ended March 31,** |   |
|-----------------------------------------|--------|-------------------------------------------------|--------|
|                                    |   | **2007**                                        |   | **2006** |   |
| Dividend                yield           |   |                                            | 2.0    | % |   | 1.8 | % |
| Expected                volatility      |   |                                            | 24.0   | % |   | 25.0 | % |
| Risk-free                interest rate  |   |                                            | 4.9    | % |   | 4.0 | % |
| Expected                life (in years) |   |                                            | 0.5    |   |   | 0.5 |   |

**NOTE      9 - EMPLOYEE BENEFIT PLANS**

|                                              | **Three                Months Ended****March                31,** |   |
|---------------------------------------------------|-------------------------------------------------------------------|--------|
| *(Dollars                in Thousands)*           | **2007**                                                          |   | **2006** |   |
|                                              |                                                              |   |   |   |
| Discount                Rate                      |                                                              | 6.00   | % |   | 5.75 | % |
| Long-Term                Rate of Return on Assets |                                                              | 8.00   | % |   | 8.00 | % |
|                                              |                                                              |   |   |   |   |   |
| Service                Cost                       | $                                                                 | 1,350  |   | $ | 1,250 |   |
| Interest                Cost                      |                                                              | 1,025  |   |   | 875 |   |
| Expected                Return on Plan Assets     |                                                              | (1,300 | ) |   | (975 | ) |
| Prior                Service Cost Amortization    |                                                              | 100    |   |   | 50 |   |
| Net                Loss Amortization              |                                                              | 250    |   |   | 375 |   |
| Net                Periodic Benefit Cost          | $                                                                 | 1,425  |   | $ | 1,575 |   |

|                                              | **Three                Months Ended****March                31,** |   |
|---------------------------------------------------|-------------------------------------------------------------------|--------|
| *(Dollars                in Thousands)*           | **2007**                                                          |   | **2006** |   |
|                                              |                                                              |   |   |   |
| Discount                Rate                      |                                                              | 6.00   | % |   | 5.75 | % |
| Long-Term                Rate Of Return On Assets |                                                              | N/A    |   |   | N/A |   |
|                                              |                                                              |   |   |   |   |   |
| Service                Cost                       | $                                                                 | 25     |   | $ | 30 |   |
| Interest                Cost                      |                                                              | 63     |   |   | 56 |   |
| Expected                Return On Plan Assets     |                                                              | N/A    |   |   | N/A |   |
| Prior                Service Cost Amortization    |                                                              | 3      |   |   | 15 |   |
| Net                Loss Amortization              |                                                              | 18     |   |   | 19 |   |
| Net                Periodic Benefit Cost          | $                                                                 | 109    |   | $ | 120 |   |

----

**NOTE      10 - COMMITMENTS AND CONTINGENCIES**

*Lending      Commitments*

| *(Dollars                in Millions)*         | **Amount** |   |
|------------------------------------------------|------------|--------|
| Commitments                to Extend Credit(1) | $          | 407.4  |   |
| Standby                Letters of Credit       | $          | 18.5   |   |

*(1)*

*Commitments      include unfunded loans, revolving lines of credit, and other unused      commitments.*

*Contingencies*

**NOTE      11 - COMPREHENSIVE INCOME**

----

**QUARTERLY        FINANCIAL DATA (UNAUDITED)**

|                                                                                 | **2007** |      | **2006** |   | **2005**  |   |
|--------------------------------------------------------------------------------------|----------|-----------|----------|--------|-----------|--------|
| *(Dollars                  in Thousands, Except Per Share**Data)*                    | First    |      | Fourth   |   | Third     |   | Second |   | First |   | Fourth |   | Third |   | Second |   |
| Summary                  of Operations:                                              |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Income                                                     | $        | 41,514    |     | $      | 42,600    |   | $ | 42,512 |   | $ | 41,369 |   | $ | 39,412 |   | $ | 38,780 |   | $ | 36,889 |   | $ | 33,910 |   |
| Interest                  Expense                                                    |     | 13,189    |     |   | 13,003    |   |   | 12,289 |   |   | 11,182 |   |   | 10,282 |   |   | 9,470 |   |   | 7,885 |   |   | 6,788 |   |
| Net                  Interest Income                                                 |     | 28,325    |     |   | 29,597    |   |   | 30,223 |   |   | 30,187 |   |   | 29,130 |   |   | 29,310 |   |   | 29,004 |   |   | 27,122 |   |
| Provision                  for Loan Losses                                           |     | 1,237     |     |   | 460       |   |   | 711 |   |   | 121 |   |   | 667 |   |   | 1,333 |   |   | 376 |   |   | 388 |   |
| Net                  Interest Income AfterProvision                  for Loan Losses |     | 27,088    |     |   | 29,137    |   |   | 29,512 |   |   | 30,066 |   |   | 28,463 |   |   | 27,977 |   |   | 28,628 |   |   | 26,734 |   |
| Noninterest                  Income                                                  |     | 13,962    |     |   | 14,385    |   |   | 14,144 |   |   | 14,003 |   |   | 13,045 |   |   | 12,974 |   |   | 13,123 |   |   | 12,041 |   |
| Merger                  Expense                                                      |     | -         |     |   | -         |   |   | - |   |   | - |   |   | - |   |   | 24 |   |   | 180 |   |   | 234 |   |
| Noninterest                  Expense                                                 |     | 30,562    |     |   | 29,984    |   |   | 30,422 |   |   | 31,070 |   |   | 30,092 |   |   | 29,318 |   |   | 28,429 |   |   | 26,362 |   |
| Income                  Before Provision for Income Taxes                            |     | 10,488    |     |   | 13,538    |   |   | 13,234 |   |   | 12,999 |   |   | 11,416 |   |   | 11,609 |   |   | 13,142 |   |   | 12,179 |   |
| Provision                  for Income Taxes                                          |     | 3,531     |     |   | 4,688     |   |   | 4,554 |   |   | 4,684 |   |   | 3,995 |   |   | 4,150 |   |   | 4,565 |   |   | 4,311 |   |
| Net                  Income                                                          | $        | 6,957     |     | $      | 8,850     |   | $ | 8,680 |   | $ | 8,315 |   | $ | 7,421 |   | $ | 7,459 |   | $ | 8,577 |   | $ | 7,868 |   |
| Net                  Interest Income (FTE)                                           | $        | 28,898    |     | $      | 30,152    |   | $ | 30,745 |   | $ | 30,591 |   | $ | 29,461 |   | $ | 29,652 |   | $ | 29,329 |   | $ | 27,396 |   |
|                                                                                 |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per                  Common Share:                                                   |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income Basic                                                    | $        | .38       |     | $      | .48       |   | $ | .47 |   | $ | .44 |   | $ | .40 |   | $ | .40 |   | $ | .46 |   | $ | .44 |   |
| Net                  Income Diluted                                                  |     | .38       |     |   | .48       |   |   | .47 |   |   | .44 |   |   | .40 |   |   | .40 |   |   | .46 |   |   | .44 |   |
| Dividends                  Declared                                                  |     | .175      |     |   | .175      |   |   | .163 |   |   | .163 |   |   | .163 |   |   | .163 |   |   | .152 |   |   | .152 |   |
| Diluted                  Book Value                                                  |     | 16.97     |     |   | 17.01     |   |   | 17.18 |   |   | 16.81 |   |   | 16.65 |   |   | 16.39 |   |   | 16.17 |   |   | 15.87 |   |
| Market                  Price:                                                       |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| High                                                                                 |     | 35.91     |     |   | 35.98     |   |   | 33.25 |   |   | 35.39 |   |   | 37.97 |   |   | 39.33 |   |   | 38.72 |   |   | 33.46 |   |
| Low                                                                                  |     | 29.79     |     |   | 30.14     |   |   | 29.87 |   |   | 29.51 |   |   | 33.79 |   |   | 33.21 |   |   | 31.78 |   |   | 28.02 |   |
| Close                                                                                |     | 33.30     |     |   | 35.30     |   |   | 31.10 |   |   | 30.20 |   |   | 35.55 |   |   | 34.29 |   |   | 37.71 |   |   | 32.32 |   |
|                                                                                 |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected                  Average                                                    |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances:                                                                            |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                | $        | 1,980,224 |     | $      | 2,003,719 |   | $ | 2,025,112 |   | $ | 2,040,656 |   | $ | 2,048,642 |   | $ | 2,062,775 |   | $ | 2,046,968 |   | $ | 1,932,637 |   |
| Earning                  Assets                                                      |     | 2,211,560 |     |   | 2,238,066 |   |   | 2,241,158 |   |   | 2,278,817 |   |   | 2,275,667 |   |   | 2,279,010 |   |   | 2,250,902 |   |   | 2,170,483 |   |
| Assets                                                                               |     | 2,530,790 |     |   | 2,557,357 |   |   | 2,560,155 |   |   | 2,603,090 |   |   | 2,604,458 |   |   | 2,607,597 |   |   | 2,569,524 |   |   | 2,458,788 |   |
| Deposits                                                                             |     | 2,003,726 |     |   | 2,028,453 |   |   | 2,023,523 |   |   | 2,047,755 |   |   | 2,040,248 |   |   | 2,027,017 |   |   | 2,013,427 |   |   | 1,932,144 |   |
| Shareowners’                  Equity                                           |     | 316,484   |     |   | 323,903   |   |   | 318,041 |   |   | 315,794 |   |   | 311,461 |   |   | 306,208 |   |   | 300,931 |   |   | 278,107 |   |
| Common                  Equivalent Average Shares:                                   |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                |     | 18,409    |     |   | 18,525    |   |   | 18,530 |   |   | 18,633 |   |   | 18,652 |   |   | 18,624 |   |   | 18,623 |   |   | 18,094 |   |
| Diluted                                                                              |     | 18,420    |     |   | 18,569    |   |   | 18,565 |   |   | 18,653 |   |   | 18,665 |   |   | 18,654 |   |   | 18,649 |   |   | 18,102 |   |
|                                                                                 |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                                              |     |      |     |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ROA                                                                                  |     | 1.11      | %        |   | 1.37      | %      |   | 1.35 | % |   | 1.28 | % |   | 1.16 | % |   | 1.14 | % |   | 1.32 | % |   | 1.28 | % |
| ROE                                                                                  |     | 8.91      | %        |   | 10.84     | %      |   | 10.83 | % |   | 10.56 | % |   | 9.66 | % |   | 9.67 | % |   | 11.31 | % |   | 11.35 | % |
| Net                  Interest Margin (FTE)                                           |     | 5.29      | %        |   | 5.35      | %      |   | 5.45 | % |   | 5.38 | % |   | 5.25 | % |   | 5.16 | % |   | 5.17 | % |   | 5.07 | % |
| Efficiency                  Ratio                                                    |     | 67.90     | %        |   | 63.99     | %      |   | 64.35 | % |   | 66.23 | % |   | 67.20 | % |   | 65.22 | % |   | 63.60 | % |   | 63.56 | % |

| *(1)* | *All                  share and per share data have been adjusted to reflect the 5-for-4                  stock                  split effective July 1,                  2005.* |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Item                2.** | **MANAGEMENT'S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|----------------------------|----------------------------------------------------------------------------------------------------------|

|                                                     |   | **Three                Months Ended March 31,** |   |
|----------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                     |   | **2007**                                        |   | **2006** |   |
| Efficiency                ratio                          |   |                                            | 71.31  | % |   | 70.80 | % |
| Effect                of intangible amortization expense |   |                                            | (3.41  | )% |   | (3.60 | )% |
| Operating                efficiency ratio                |   |                                            | 67.90  | % |   | 67.20 | % |

|                                                                            |   | **Three                Months Ended March 31,** |   |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                            |   | **2007**                                        |   | **2006** |   |
| Net                noninterest expense as a percent of average assets           |   |                                            | 2.66   | % |   | 2.65 | % |
| Effect                of intangible amortization expense                        |   |                                            | (0.23  | )% |   | (0.23 | )% |
| Operating                net noninterest expense as a percent of average assets |   |                                            | 2.43   | % |   | 2.42 | % |

----

**CAUTION      CONCERNING FORWARD-LOOKING STATEMENTS**

**BUSINESS      OVERVIEW**

----

**FINANCIAL      OVERVIEW**

*Financial      Performance Highlights -*

| ·   | Quarterly                earnings totaled $7.0 million, or $0.38 per diluted share, decreases                of                6.3%                and 5.0%, respectively, from the first quarter of 2006. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Earnings                for the quarter were negatively impacted by margin compression and                a                higher loan loss provision, but benefited from strong growth in                noninterest income and good control of operating expenses. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Tax                equivalent net interest income declined 1.9% as a result of a 2.8%                reduction in average earning                assets. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Strong                growth of 7.0% was realized in noninterest income, which more than                offset                the decline in net interest income. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Noninterest                expense increased only 1.6% due to implementation of expense control                strategies. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | Slight                decline in credit quality as reflected by a higher loan loss provision                for                the quarter. Allowance for loan losses continues to be adequately                funded                at .87% of total loans and 208% of non-performing                loans. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Well-capitalized                with a risk based capital ratio of                14.83%. |
|--------------------|-------------------------------------------------------------------------------------------|

**RESULTS      OF OPERATIONS**

**Net      Income**

|                                               | **Three                Months Ended March 31,** |   |
|----------------------------------------------------|-------------------------------------------------|--------|
| *(Dollars                in Thousands)*            | **2007**                                        |   | **2006** |   |
| Interest                Income                     | $                                               | 41,514 |   | $ | 39,412 |   |
| Taxable                Equivalent Adjustment(1)    |                                            | 573    |   |   | 331 |   |
| Interest                Income (FTE)               |                                            | 42,087 |   |   | 39,743 |   |
| Interest                Expense                    |                                            | 13,189 |   |   | 10,282 |   |
| Net                Interest Income (FTE)           |                                            | 28,898 |   |   | 29,461 |   |
| Provision                for Loan Losses           |                                            | 1,237  |   |   | 667 |   |
| Taxable                Equivalent Adjustment       |                                            | 573    |   |   | 331 |   |
| Net                Interest Income After Provision |                                            | 27,088 |   |   | 28,463 |   |
| Noninterest                Income                  |                                            | 13,962 |   |   | 13,045 |   |
| Noninterest                Expense                 |                                            | 30,562 |   |   | 30,092 |   |
| Income                Before Income Taxes          |                                            | 10,488 |   |   | 11,416 |   |
| Income                Taxes                        |                                            | 3,531  |   |   | 3,995 |   |
| Net                Income                          | $                                               | 6,957  |   | $ | 7,421 |   |
|                                               |                                            |   |   |   |   |   |
| Return                on Average Assets(2)         |                                            | 1.11   | % |   | 1.16 | % |
| Return                on Average Equity(2)         |                                            | 8.91   | % |   | 9.66 | % |

| *(1)* | *Computed                using a statutory tax rate of                35%* |
|-------|----------------------------------------------------------------------------|

| *(2)* | *Annualized* |
|-------|--------------|

----

**Net      Interest Income**

**Provision      for Loan Losses**

|                                                  | **Three                Months Ended March 31,** |   |
|-------------------------------------------------------|-------------------------------------------------|--------|
| *(Dollars                in Thousands)*               | **2007**                                        |   | **2006** |   |
| CHARGE-OFFS                                           |                                            |   |   |   |
| Commercial,                Financial and Agricultural | $                                               | 560    |   | $ | 322 |   |
| Real                Estate - Construction             |                                            | 108    |   |   | - |   |
| Real                Estate - Commercial               |                                            | 326    |   |   | 291 |   |
| Real                Estate - Residential              |                                            | 67     |   |   | 22 |   |
| Consumer                                              |                                            | 761    |   |   | 591 |   |
| Total                Charge-offs                      |                                            | 1,822  |   |   | 1,226 |   |
|                                                  |                                            |   |   |   |   |   |
| RECOVERIES                                            |                                            |   |   |   |   |   |
| Commercial,                Financial and Agricultural |                                            | 36     |   |   | 62 |   |
| Real                Estate - Construction             |                                            | -      |   |   | - |   |
| Real                Estate - Commercial               |                                            | 5      |   |   | 3 |   |
| Real                Estate - Residential              |                                            | 3      |   |   | 7 |   |
| Consumer                                              |                                            | 432    |   |   | 356 |   |
| Total                Recoveries                       |                                            | 476    |   |   | 428 |   |
|                                                  |                                            |   |   |   |   |   |
| Net                Charge-offs                        | $                                               | 1,346  |   | $ | 798 |   |
|                                                  |                                            |   |   |   |   |   |
| Net                Charge-offs (Annualized) as a      |                                            |   |   |   |   |   |
| Percent                of Average Loans Outstanding,  |                                            |   |   |   |   |   |
| Net                of Unearned Interest               |                                            | .28    | % |   | .16 | % |

----

**Noninterest      Income**

|                                                 | **Three                Months Ended March 31,** |   |
|------------------------------------------------------|-------------------------------------------------|--------|
| *(Dollars                in Thousands)*              | **2007**                                        |   | **2006** |   |
| Noninterest                Income:                   |                                            |   |   |   |
| Service                Charges on Deposit Accounts   | $                                               | 6,045  |   | $ | 5,680 |   |
| Data                Processing                       |                                            | 715    |   |   | 637 |   |
| Asset                Management Fees                 |                                            | 1,225  |   |   | 1,050 |   |
| Retail                Brokerage Fees                 |                                            | 462    |   |   | 483 |   |
| Gain                on Sale of Investment Securities |                                            | 7      |   |   | - |   |
| Mortgage                Banking Revenues             |                                            | 679    |   |   | 721 |   |
| Merchant                Service Fees                 |                                            | 1,936  |   |   | 1,725 |   |
| Interchange                Fees                      |                                            | 910    |   |   | 675 |   |
| ATM/Debit                Card Fees                   |                                            | 641    |   |   | 599 |   |
| Other                                                |                                            | 1,342  |   |   | 1,475 |   |
|                                                 |                                            |   |   |   |   |   |
| Total                Noninterest Income              | $                                               | 13,962 |   | $ | 13,045 |   |

*Service      Charges on Deposit Accounts*

*Asset      Management Fees*

*Mortgage      Banking Revenues*

*Card      Fees*

*Other*

----

**Noninterest      Expense**

|                                     | **Three                Months Ended March 31,** |   |
|------------------------------------------|-------------------------------------------------|--------|
| *(Dollars                in Thousands)*  | **2007**                                        |   | **2006** |   |
| Noninterest                Expense:      |                                            |   |   |   |
| Salaries                                 | $                                               | 12,343 |   | $ | 11,715 |   |
| Associate                Benefits        |                                            | 3,376  |   |   | 3,715 |   |
| Total                Compensation        |                                            | 15,719 |   |   | 15,430 |   |
|                                     |                                            |   |   |   |   |   |
| Premises                                 |                                            | 2,236  |   |   | 2,223 |   |
| Equipment                                |                                            | 2,349  |   |   | 2,500 |   |
| Total                Occupancy           |                                            | 4,585  |   |   | 4,723 |   |
|                                     |                                            |   |   |   |   |   |
| Legal                Fees                |                                            | 507    |   |   | 517 |   |
| Professional                Fees         |                                            | 992    |   |   | 754 |   |
| Processing                Services       |                                            | 382    |   |   | 434 |   |
| Advertising                              |                                            | 864    |   |   | 999 |   |
| Travel                and Entertainment  |                                            | 345    |   |   | 386 |   |
| Printing                and Supplies     |                                            | 514    |   |   | 607 |   |
| Telephone                                |                                            | 547    |   |   | 622 |   |
| Postage                                  |                                            | 340    |   |   | 281 |   |
| Intangible                Amortization   |                                            | 1,459  |   |   | 1,530 |   |
| Interchange                Fees          |                                            | 1,668  |   |   | 1,494 |   |
| Courier                Service           |                                            | 277    |   |   | 330 |   |
| Miscellaneous                            |                                            | 2,363  |   |   | 1,985 |   |
| Total                Other               |                                            | 10,258 |   |   | 9,939 |   |
|                                     |                                            |   |   |   |   |   |
| Total                Noninterest Expense | $                                               | 30,562 |   | $ | 30,092 |   |

*Compensation*

*Occupancy.*

*Other*

----

**Income      Taxes**

**FINANCIAL      CONDITION**

**Funds      Sold**

**Investment      Securities**

**Loans**

**Non-Performing      Assets**

----

**Allowance      for Loan Losses**

**.      **

**Deposits**

**LIQUIDITY      AND CAPITAL RESOURCES**

**Liquidity**

*General*

*Borrowings*

----

*Contractual      Cash Obligations.*

|                                              | **Payments                Due By Period** |   |
|---------------------------------------------------|-------------------------------------------|--------|
| *(Dollars                in Thousands)*           | **1                Year or Less**         |   | **1                - 3 Years** |   | **4                - 5 Years** |   | **After                5 Years** |   | **Total** |   |
| Federal                Home Loan Bank Advances    | $                                         | 12,018 |   | $ | 17,243 |   | $ | 5,547 |   | $ | 17,431 |   | $ | 52,239 |   |
| Subordinated                Notes Payable         |                                      | -      |   |   | - |   |   | - |   |   | 62,887 |   |   | 62,887 |   |
| Operating                Lease Obligations        |                                      | 1,101  |   |   | 2,636 |   |   | 2,071 |   |   | 6,071 |   |   | 11,879 |   |
| Total                Contractual Cash Obligations | $                                         | 13,119 |   | $ | 19,879 |   | $ | 7,618 |   | $ | 86,389 |   | $ | 127,005 |   |

**Capital**

**OFF-BALANCE      SHEET ARRANGEMENTS**

----

**ACCOUNTING      POLICIES**

**Critical      Accounting Policies**

*Allowance      for Loan Losses*

*Intangible      Assets*

*Pension      Assumptions*
** **

----

**Recent      Accounting Pronouncements**

*Statement      of Financial Accounting Standards*

*Financial      Accounting Standards Board Interpretations*

----

**TABLE      I**

**AVERAGE      BALANCES & INTEREST RATES**

| *(Taxable                Equivalent Basis - Dollars in Thousands)* |   | **Three                Months Ended March 31,** |      |
|--------------------------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                                               |   | **2007**                                        |      | **2006** |   |
|                                                               |   | Balance                                         |      | Interest |   | Rate |   | Balance |   | Interest |   | Rate |   |
| **ASSETS**                                                         |   |                                            |      |   |   |   |   |   |   |   |   |   |   |
| Loans,                Net of Unearned Interest(1)(2)               |   | $                                               | 1,980,224 |   | $ | 39,264 |   |   | 8.04 | % | $ | 2,048,642 |   | $ | 37,439 |   |   | 7.41 | % |
| Taxable                Investment Securities                       |   |                                            | 108,377   |   |   | 1,263 |   |   | 4.67 | % |   | 118,055 |   |   | 1,091 |   |   | 3.70 | % |
| Tax-Exempt                Investment Securities(2)                 |   |                                            | 82,627    |   |   | 1,039 |   |   | 5.03 | % |   | 59,368 |   |   | 674 |   |   | 4.54 | % |
| Funds                Sold                                          |   |                                            | 40,332    |   |   | 521 |   |   | 5.17 | % |   | 49,602 |   |   | 539 |   |   | 4.36 | % |
| Total                Earning Assets                                |   |                                            | 2,211,560 |   |   | 42,087 |   |   | 7.71 | % |   | 2,275,667 |   |   | 39,743 |   |   | 7.08 | % |
| Cash                & Due From Banks                           |   |                                            | 88,679    |   |   |   |   |   |   |   |   | 109,907 |   |   |   |   |   |   |   |
| Allowance                for Loan Losses                           |   |                                            | (17,073   | ) |   |   |   |   |   |   |   | (17,582 | ) |   |   |   |   |   |   |
| Other                Assets                                        |   |                                            | 247,624   |   |   |   |   |   |   |   |   | 236,466 |   |   |   |   |   |   |   |
| TOTAL                ASSETS                                        |   | $                                               | 2,530,790 |   |   |   |   |   |   |   | $ | 2,604,458 |   |   |   |   |   |   |   |
|                                                               |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES**                                                    |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                Accounts                                        |   | $                                               | 552,303   |   | $ | 2,626 |   |   | 1.93 | % | $ | 510,270 |   | $ | 1,446 |   |   | 1.15 | % |
| Money                Market Accounts                               |   |                                            | 386,736   |   |   | 3,427 |   |   | 3.59 | % |   | 343,652 |   |   | 2,298 |   |   | 2.71 | % |
| Savings                Accounts                                    |   |                                            | 125,419   |   |   | 78 |   |   | 0.25 | % |   | 139,664 |   |   | 62 |   |   | 0.18 | % |
| Other                Time Deposits                                 |   |                                            | 480,964   |   |   | 4,869 |   |   | 4.11 | % |   | 521,966 |   |   | 3,916 |   |   | 3.04 | % |
| Total                Int. Bearing Deposits                         |   |                                            | 1,545,422 |   |   | 11,000 |   |   | 2.89 | % |   | 1,515,552 |   |   | 7,722 |   |   | 2.07 | % |
| Short-Term                Borrowings                               |   |                                            | 68,911    |   |   | 761 |   |   | 4.46 | % |   | 93,867 |   |   | 824 |   |   | 3.55 | % |
| Subordinated                Notes Payable                          |   |                                            | 62,887    |   |   | 926 |   |   | 5.97 | % |   | 62,887 |   |   | 926 |   |   | 5.97 | % |
| Other                Long-Term Borrowings                          |   |                                            | 43,137    |   |   | 502 |   |   | 4.72 | % |   | 69,966 |   |   | 810 |   |   | 4.70 | % |
| Total                Int. Bearing Liabilities                      |   |                                            | 1,720,357 |   |   | 13,189 |   |   | 3.11 | % |   | 1,742,272 |   |   | 10,282 |   |   | 2.39 | % |
| Noninterest                Bearing Deposits                        |   |                                            | 458,304   |   |   |   |   |   |   |   |   | 524,696 |   |   |   |   |   |   |   |
| Other                Liabilities                                   |   |                                            | 35,645    |   |   |   |   |   |   |   |   | 26,029 |   |   |   |   |   |   |   |
| TOTAL                LIABILITIES                                   |   |                                            | 2,214,306 |   |   |   |   |   |   |   |   | 2,292,997 |   |   |   |   |   |   |   |
|                                                               |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **SHAREOWNERS'                EQUITY**                             |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                SHAREOWNERS' EQUITY                           |   |                                            | 316,484   |   |   |   |   |   |   |   |   | 311,461 |   |   |   |   |   |   |   |
|                                                               |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                LIABILITIES & EQUITY                      |   | $                                               | 2,530,790 |   |   |   |   |   |   |   | $ | 2,604,458 |   |   |   |   |   |   |   |
|                                                               |   |                                            |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                Rate Spread                                |   |                                            |      |   |   |   |   |   | 4.60 | % |   |   |   |   |   |   |   | 4.69 | % |
| Net                Interest Income                                 |   |                                            |      |   | $ | 28,898 |   |   |   |   |   |   |   | $ | 29,461 |   |   |   |   |
| Net                Interest Margin(3)                              |   |                                            |      |   |   |   |   |   | 5.29 | % |   |   |   |   |   |   |   | 5.25 | % |

| *(1)* | *Average                balances include nonaccrual loans. Interest income includes fees                on loans                of approximately $831,000 and $964,000, for the three months ended                March                31, 2007 and 2006,                respectively.* |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *(2)* | *Interest                income includes the effects of taxable equivalent adjustments using                a 35%                tax rate.* |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------|

| *(3)* | *Taxable                equivalent net interest income divided by average earning                assets.* |
|-------|-----------------------------------------------------------------------------------------------------------|

----

| **Item                3.** | **QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET                RISK** |
|----------------------------|----------------------------------------------------------------------------------------------|

**Overview**

**Interest      Rate Risk Management**

**Inflation**

----

**Table      II**

**FINANCIAL      ASSETS AND LIABILITIES MARKET RISK ANALYSIS**

|                                       |   | **As                of March 31, 2007** |      |                      |   |
|--------------------------------------------|--------|-----------------------------------------|-----------|---------------------------|--------|
| *(Dollars                in Thousands)*    |   | **Year                1**               |      | **Year                2** |   | **Year                3** |   | **Year                4** |   | **Year                5** |   | **Beyond** |   | **Total** |   | **Fair                Value** |   |
| Loans                                      |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                Rate                  |   | $                                       | 304,631   |                      | $      | 156,885 |   | $ | 108,340 |   | $ | 43,706 |   | $ | 22,624 |   | $ | 17,821 |   | $ | 653,467 |   | $ | 657,757 |   |
| Average                Interest Rate       |   |                                    | 6.65      | %                         |   | 7.82 | % |   | 7.94 | % |   | 8.03 | % |   | 7.75 | % |   | 6.80 | % |   | 7.28 | % |   |   |   |
| Floating                Rate(2)            |   |                                    | 1,045,359 |                      |   | 158,960 |   |   | 81,890 |   |   | 8,044 |   |   | 6,171 |   |   | 11,949 |   |   | 1,312,374 |   |   | 1,320,989 |   |
| Average                Interest Rate       |   |                                    | 7.03      | %                         |   | 7.21 | % |   | 7.77 | % |   | 7.71 | % |   | 7.85 | % |   | 8.13 | % |   | 7.12 | % |   |   |   |
| Investment                Securities(3)    |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                Rate                  |   |                                    | 65,981    |                      |   | 81,311 |   |   | 28,695 |   |   | 10,833 |   |   | 1,866 |   |   | 1,726 |   |   | 190,411 |   |   | 190,411 |   |
| Average                Interest Rate       |   |                                    | 3.20      | %                         |   | 4.41 | % |   | 4.09 | % |   | 4.17 | % |   | 4.67 | % |   | 4.93 | % |   | 3.93 | % |   |   |   |
| Floating                Rate               |   |                                    | 1,035     |                      |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,035 |   |   | 1,035 |   |
| Average                Interest Rate       |   |                                    | 5.21      | %                         |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5.21 | % |   |   |   |
| Other                Earning Assets        |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Floating                Rate               |   |                                    | 93,832    |                      |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 93,832 |   |   | 93,832 |   |
| Average                Interest Rate       |   |                                    | 5.26      | %                         |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5.26 | % |   |   |   |
| Total                Financial Assets      |   | $                                       | 1,510,838 |                      | $      | 397,156 |   | $ | 218,925 |   | $ | 62,583 |   | $ | 30,661 |   | $ | 30,956 |   | $ | 2,251,119 |   | $ | 2,264,024 |   |
| Average                Interest Rate       |   |                                    | 6.68      | %                         |   | 6.88 | % |   | 7.37 | % |   | 7.32 | % |   | 7.58 | % |   | 7.21 | % |   | 6.82 | % |   |   |   |
|                                       |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits(4)                                |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                Rate Deposits         |   | $                                       | 394,381   |                      | $      | 59,105 |   | $ | 17,765 |   | $ | 4,841 |   | $ | 1,868 |   | $ | 261 |   | $ | 478,221 |   | $ | 407,237 |   |
| Average                Interest Rate       |   |                                    | 4.16      | %                         |   | 4.27 | % |   | 4.25 | % |   | 4.09 | % |   | 4.06 | % |   | 4.91 | % |   | 4.17 | % |   |   |   |
| Floating                Rate Deposits      |   |                                    | 1,095,966 |                      |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 1,095,966 |   |   | 1,095,966 |   |
| Average                Interest Rate       |   |                                    | 2.39      | %                         |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2.39 | % |   |   |   |
| Other                Interest Bearing      |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                |   |                                    |      |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed                Rate Debt             |   |                                    | 4,759     |                      |   | 13,985 |   |   | 3,394 |   |   | 3,153 |   |   | 3,155 |   |   | 14,433 |   |   | 42,879 |   |   | 42,181 |   |
| Average                Interest Rate       |   |                                    | 4.65      | %                         |   | 4.42 | % |   | 4.81 | % |   | 4.94 | % |   | 5.00 | % |   | 4.98 | % |   | 4.75 | % |   |   |   |
| Floating                Rate Debt          |   |                                    | 77,936    |                      |   | - |   |   | 30,928 |   |   | 31,959 |   |   | - |   |   | - |   |   | 140,823 |   |   | 140,870 |   |
| Average                Interest Rate       |   |                                    | 4.13      | %                         |   | - |   |   | 5.71 | % |   | 6.07 | % |   | - |   |   | - |   |   | 4.92 | % |   |   |   |
| Total                Financial Liabilities |   | $                                       | 1,573,042 |                      | $      | 73,090 |   | $ | 52,087 |   | $ | 39,953 |   | $ | 5,023 |   | $ | 14,694 |   | $ | 1,757,889 |   | $ | 1,686,254 |   |
| Average                interest Rate       |   |                                    | 2.93      | %                         |   | 4.30 | % |   | 5.15 | % |   | 5.74 | % |   | 4.65 | % |   | 4.97 | % |   | 3.13 | % |   |   |   |

| *(1)* | *Based                upon expected cash flows, unless otherwise                indicated.* |
|-------|---------------------------------------------------------------------------------------------|

| *(2)* | *Based                upon a combination of expected maturities and repricing                opportunities.* |
|-------|--------------------------------------------------------------------------------------------------------------|

| *(3)* | *Based                upon contractual maturity, except for callable and floating rate                securities, which are based on expected maturity and weighted average                life, respectively.* |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *(4)* | *Savings,                NOW and money market accounts can be repriced at any time, therefore,                all                such balances are included as floating rate deposits in Year 1. Other                time                deposit balances are classified according to                maturity.* |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Item                4.** | **CONTROLS                AND PROCEDURES** |
|----------------------------|--------------------------------------------|

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Control over Financial Reporting**

| **PART                II.** | **OTHER                INFORMATION** |
|-----------------------------|--------------------------------------|

| **Item                1.** | **Legal                Proceedings** |
|----------------------------|--------------------------------------|

| **Item                1.A.** | **Risk                Factors** |
|------------------------------|---------------------------------|

| **Item                2.** | **Unregistered                Sales of Equity Securities and Use of                Proceeds** |
|----------------------------|-----------------------------------------------------------------------------------------------|

| **Period**                                                                   | **Total                  number****of                  shares****purchased** |    | **Average****price                  paid****per                  share** |   | **Total                  number of****shares                  purchased as****part                  of our share****repurchase                  program**(1) |   | **Maximum                  Number****of                  shares that****may                  yet be purchased****under                  our share****repurchase                  program** |   |
|------------------------------------------------------------------------------|------------------------------------------------------------------------------|---------|--------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                         |                                                                         |    |                                                                     |   |                                                                                                                                                         |   |                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| January                  1, 2007 toJanuary                  31, 2007         |                                                                         | 9,364   |                                                                     |   |                                                                                                                                                         | $33.64 |                                                                                                                                                                                       |   |   | 889,201 |   |   |   | 1,282,674 |   |
|  February                  1, 2007 toFebruary                  28, 2007 |                                                                         | 169,244 |                                                                     |   |                                                                                                                                                         | 34.27  |                                                                                                                                                                                       |   |   | 1,058,445 |   |   |   | 1,113,430 |   |
|  March                  1, 2007 toMarch                  31, 2007       |                                                                         | 107,493 |                                                                     |   |                                                                                                                                                         | 33.96  |                                                                                                                                                                                       |   |   | 1,165,938 |   |   |   | 1,005,937 |   |
| Total                                                                        |                                                                         | 286,101 |                                                                     |   |                                                                                                                                                         | $34.13 |                                                                                                                                                                                       |   |   | 1,165,938 |   |   |   | 1,005,937 |   |

| (1) | This                balance represents the number of shares that were repurchased through                the                Capital City Bank Group, Inc. Share Repurchase Program (the “Program”),                which was approved on March 30, 2000, and modified by our Board on                January                24, 2002 and March 22, 2007, under which we were authorized to repurchase                up to 2,171,875 shares of our common stock. The Program is flexible                and                shares are acquired from the public markets and other sources using                free                cash flow. There is no predetermined expiration date for the Program. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Item                3.** | **Defaults                Upon Senior Securities** |
|----------------------------|----------------------------------------------------|

| **Item                4.** | **Submission                of Matters to a Vote of Security                Holders** |
|----------------------------|---------------------------------------------------------------------------------------|

| **Item                5.** | **Other                Information** |
|----------------------------|--------------------------------------|

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

| (A) | Exhibits |
|-----|----------|

| 10.1 | Form                of award agreement issued in connection with the Units awarded under                the                Program pursuant to the Capital City Bank Group, Inc. 2005 Associate                Incentive Plan - incorporated herein by reference to the Registrant’s Form                8-K (filed 1/31/07) (No. 0-13358). |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification                of William G. Smith, Jr., Chairman,                President and Chief Executive Officer of Capital City Bank Group,                Inc.,                Pursuant to Rule 13a-14(a) of the Securities Exchange Act of                1934. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification                of J. Kimbrough Davis, Executive Vice                President and Chief Financial Officer of Capital City Bank Group,                Inc.,                Pursuant to Rule 13a-14(a) of the Securities Exchange Act of                1934. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                of William G. Smith, Jr., Chairman,                President and Chief Executive Officer of Capital City Bank Group,                Inc.,                Pursuant to 18 U.S.C. Section                1350. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification                of J. Kimbrough Davis, Executive Vice                President and Chief Financial Officer of Capital City Bank Group,                Inc.,                Pursuant to 18 U.S.C. Section                1350. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

| /s/                J. Kimbrough Davis                                              |   |
|------------------------------------------------------------------------------------|--------|
| J.                Kimbrough Davis                                                  |   |
| Executive                Vice President and Chief                Financial Officer |   |
|                                                                               |   |
| Date:                May 9, 2007                                                   |   |

----