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 June 30, 2006

                                     OR

        [ ]  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                               59-227354
               -------                               ---------
   (State or other jurisdiction of     (I.R.S. Employer Identification No.)
    incorporation or organization)


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


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


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [X]  No [ ]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer.  See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act.

Large accelerated filer [ ]   Accelerated filer [X]   Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ]  No [X]

At July 31, 2006, 18,530,472 shares of the Registrant's Common Stock, $.01
par value, were outstanding.


                                      1
<PAGE>


                        CAPITAL CITY BANK GROUP, INC.

            QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2006

                             TABLE OF CONTENTS


PART I                                                                   PAGE
-----------------------------------------------------------------------------

1.        Consolidated Financial Statements                                 4

2.        Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  15

3.        Quantitative and Qualitative Disclosure About Market Risk        31

4.        Controls and Procedures                                          34

PART II

1.        Legal Proceedings                                                34

1.A.      Risk Factors                                                     34

2.        Unregistered Sales of Equity Securities and
            Use of Proceeds                                                34

3.        Defaults Upon Senior Securities                                  35

4.        Submission of Matters to a Vote of Security Holders              35

5.        Other Information                                                36

6.        Exhibits                                                         36

Signatures                                                                 36


                                      2
<PAGE>



                             INTRODUCTORY NOTE:
              Caution Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, among others, statements about our
beliefs, plans, objectives, goals, expectations, estimates and intentions
that are subject to significant risks and uncertainties and are subject to
change based on various factors, many of which are beyond our control.  The
words "may," "could," "should," "would," "believe," "anticipate," "estimate,"
"expect," "intend," "plan," "target," "goal," and similar expressions are
intended to identify forward-looking statements.

All forward-looking statements, by their nature, are subject to risks and
uncertainties.  Our actual future results may differ materially from those
set forth in our forward-looking statements.

For information concerning these factors and related matters, see Part I,
Item 2, "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Part II, Item 1A "Risk Factors" in this Quarterly
Report on Form 10-Q, and the following sections of our Annual Report on Form
10-K for the year ended December 31, 2005 (the "2005 Form 10-K"): (a)
"Introductory Note"; (b) "Risk Factors" in Part I, Item 1A; and (c)
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part II, Item 7.  However, other factors besides those
referenced also could adversely affect our results, and you should not
consider any such list of factors to be a complete set of all potential risks
or uncertainties.  Any forward-looking statements made by us or on our behalf
speak only as of the date they are made.  We do not undertake to update any
forward-looking statement, except as required by applicable law.


                                      3
<PAGE>



PART I.  FINANCIAL INFORMATION
ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
                                  CAPITAL CITY BANK GROUP, INC.
                                CONSOLIDATED STATEMENTS OF INCOME
                                  FOR THE PERIODS ENDED JUNE 30
                                          (Unaudited)

                                                  THREE MONTHS ENDED         SIX MONTHS ENDED
                                                        JUNE 30,                  JUNE 30,
                                                  ------------------        -------------------
(Dollars in Thousands, Except Per Share Data)       2006        2005          2006        2005
-----------------------------------------------------------------------------------------------
<S>                                               <C>         <C>           <C>         <C>
INTEREST INCOME
Interest and Fees on Loans                        $38,967     $32,105       $76,310     $60,947
Investment Securities:
   U.S. Treasury                                       98         121           177         257
   U.S. Govt. Agencies and Corporations               929         834         1,743       1,654
   States and Political Subdivisions                  583         335         1,023         717
   Other Securities                                   206         157           403         292
Funds Sold                                            586         358         1,125         517
                                                  -------     -------       -------     -------
       Total Interest Income                       41,369      33,910        80,781      64,384

INTEREST EXPENSE
Deposits                                            8,716       4,618        16,438       8,927
Short-Term Borrowings                                 776         734         1,600       1,184
Subordinated Notes Payable                            926         667         1,852       1,108
Other Long-Term Borrowings                            764         769         1,574       1,489
                                                  -------     -------       -------     -------
       Total Interest Expense                      11,182       6,788        21,464      12,708
                                                  -------     -------       -------     -------

Net Interest Income                                30,187      27,122        59,317      51,676
Provision for Loan Losses                             121         388           788         798
                                                  -------     -------       -------     -------
Net Interest Income After Provision
  for Loan Losses                                  30,066      26,734        58,529      50,878
                                                  -------     -------       -------     -------

NONINTEREST INCOME
Service Charges on Deposit Accounts                 6,096       5,035        11,776       9,383
Data Processing                                       703         650         1,340       1,257
Asset Management Fees                               1,155       1,013         2,205       2,125
Securities Transactions                                (4)          -            (4)          -
Mortgage Banking Revenues                             903       1,036         1,624       1,799
Other                                               5,150       4,307        10,107       8,537
                                                  -------     -------       -------     -------
       Total Noninterest Income                    14,003      12,041        27,048      23,101
                                                  -------     -------       -------     -------

NONINTEREST EXPENSE
Salaries and Associate Benefits                    15,204      13,187        30,634      25,747
Occupancy, Net                                      2,358       2,035         4,581       3,972
Furniture and Equipment                             2,661       2,192         5,161       4,304
Intangible Amortization                             1,536       1,296         3,066       2,492
Merger Expense                                          -         234             -         234
Other                                               9,311       7,652        17,720      15,114
                                                  -------     -------       -------     -------
       Total Noninterest Expense                   31,070      26,596        61,162      51,863

Income Before Income Taxes                         12,999      12,179        24,415      22,116
Income Taxes                                        4,684       4,311         8,679       7,871
                                                  -------     -------       -------     -------

NET INCOME                                        $ 8,315     $ 7,868       $15,736     $14,245
                                                  =======     =======       =======     =======
BASIC NET INCOME PER SHARE                        $   .44     $   .44       $   .84     $   .80
                                                  =======     =======       =======     =======
DILUTED NET INCOME PER SHARE                      $   .44     $   .44       $   .84     $   .80
                                                  =======     =======       =======     =======

Average Basic Shares Outstanding               18,633,132  18,094,256    18,642,387  17,898,253
                                               ==========  ==========    ==========  ==========
Average Diluted Shares Outstanding             18,652,963  18,102,200    18,657,691  17,908,580
                                               ==========  ==========    ==========  ==========


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

</TABLE>
                                                    4
<PAGE>
<TABLE>


                                CAPITAL CITY BANK GROUP, INC.
                       CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                          AS OF JUNE 30, 2006 AND DECEMBER 31, 2005
                                        (Unaudited)


                                                       June 30,         December 31,
(Dollars In Thousands, Except Share Data)                2006               2005
------------------------------------------------------------------------------------
<S>                                                   <C>               <S>
ASSETS
Cash and Due From Banks                               $  103,078         $  105,195
Funds Sold and Interest Bearing Deposits                 126,210             61,164
                                                      ----------         ----------
  Total Cash and Cash Equivalents                        229,288            166,359
Investment Securities, Available-for-Sale                191,232            171,019

Loans, Net of Unearned Interest                        2,052,860          2,067,494
  Allowance for Loan Losses                              (17,264)           (17,410)
                                                      ----------         ----------
    Loans, Net                                         2,035,596          2,050,084

Premises and  Equipment, Net                               81,407             73,818
Goodwill                                                  84,810             84,829
Other Intangible Assets                                   22,612             25,622
Other Assets                                              52,541             53,731
                                                      ----------         ----------
      Total Assets                                    $2,697,486         $2,625,462
                                                      ==========         ==========
LIABILITIES
Deposits:
  Noninterest Bearing Deposits                        $  572,549         $  559,492
  Interest Bearing Deposits                            1,581,310          1,519,854
                                                      ----------         ----------
    Total Deposits                                     2,153,859          2,079,346

Short-Term Borrowings                                     77,571             82,973
Subordinated Notes Payable                                62,887             62,887
Other Long-Term Borrowings                                63,022             69,630
Other Liabilities                                         28,403             24,850
                                                      ----------         ----------
      Total Liabilities                                2,385,742          2,319,686

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; 18,530,469 and 18,631,706
  shares issued and outstanding at June 30, 2006
  and December 31, 2005, respectively                        185                186
Additional Paid-In Capital                                80,272             83,304
Retained Earnings                                        233,201            223,532
Accumulated Other Comprehensive Loss, Net of Tax          (1,914)            (1,246)
                                                      ----------         ----------
      Total Shareowners' Equity                          311,744            305,776
                                                      ----------         ----------
        Total Liabilities and Shareowners' Equity     $2,697,486         $2,625,462
                                                      ==========         ==========

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

</TABLE>
                                           5
<PAGE>

<TABLE>

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
(Dollars in Thousands, Except Per Share Data)

                                                       Additional                   Accumulated Other
                                           Common       Paid-In        Retained       Comprehensive
                                           Stock        Capital        Earnings     Loss, Net of Taxes     Total
-----------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>             <C>          <C>                  <C>
Balance, December 31, 2005                 $186         $83,304        $223,532         $(1,246)         $305,776
Comprehensive Income:
  Net Income                                  -               -          15,736               -
  Net Change in Unrealized Loss
    On Available-for-Sale Securities          -               -               -            (668)
Total Comprehensive Income                    -               -               -               -            15,068
Cash Dividends ($.3250 per share)             -               -          (6,067)              -            (6,067)
Stock Performance Plan Compensation           -             889               -               -               889
Issuance of Common Stock                      1             918               -               -               919
Repurchase of Common Stock                   (2)         (4,839)              -               -            (4,841)
                                           ----         -------        --------         -------          --------

Balance, June 30, 2006                     $185         $80,272        $233,201         $(1,914)         $311,744
                                           ====         =======        ========         =======          ========


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

</TABLE>
                                                            6
<PAGE>
<TABLE>


                            CAPITAL CITY BANK GROUP, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE SIX MONTH PERIODS ENDED JUNE 30
                                     (Unaudited)

(Dollars in Thousands)                                      2006            2005
----------------------------------------------------------------------------------
<S>                                                       <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                $ 15,736        $ 14,245
Adjustments to Reconcile Net Income to
  Cash Provided by Operating Activities:
    Provision for Loan Losses                                  788             798
    Depreciation                                             3,539           2,769
    Net Securities Amortization                                362             783
    Amortization of Intangible Assets                        3,066           2,492
    Origination of Loans Held-for-Sale                     (95,580)        (99,574)
    Proceeds From Sales of Loans Held-for-Sale              97,968         100,195
    Net Gain From Sales of Loans Held-for-Sale              (1,624)         (1,799)
    Non-Cash Compensation                                      889             339
    Deferred Income Taxes                                    1,831           1,587
    Net Decrease (Increase) in Other Assets                  2,000          (4,539)
    Net Increase in Other Liabilities                        1,966           8,167
                                                          --------        --------
Net Cash Provided By Operating Activities                   30,941          25,463
                                                          --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES
Securities Available--for-Sale:
  Purchases                                                (85,590)        (29,468)
  Sales                                                        283          34,729
  Payments, Maturities, and Calls                           63,614          42,628
Net Decrease (Increase) in Loans                            12,297         (96,867)
Net Cash Acquired in Acquisition                                 -          37,412
Purchase of Premises & Equipment                           (11,409)         (9,918)
Proceeds From Sales of Premises & Equipment                    280             134
                                                          --------        --------
Net Cash Used In Investing Activities                      (20,525)        (21,350)
                                                          --------        --------

CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Deposits                                    74,513           4,157
Net Decrease in Short-Term Borrowings                       (8,878)        (74,909)
Proceeds from Subordinated Note Payable                          -          31,959
Increase in Other Long-Term Borrowings                       3,250           3,600
Repayment of Other Long-Term Borrowings                     (6,382)         51,134
Dividends Paid                                              (6,067)         (5,541)
Repurchase of Common Stock                                  (4,841)              -
Issuance of Common Stock                                       918             925
                                                          --------        --------
Net Cash Provided By Financing Activities                   52,513          11,325
                                                          --------        --------

Net Increase in Cash and Cash Equivalents                   62,929          15,438
Cash and Cash Equivalents at Beginning of Period           166,359         161,545
                                                          --------        --------
Cash and Cash Equivalents at End of Period                $229,288        $176,983
                                                          ========        ========

Supplemental Disclosure:
  Interest Paid on Deposits                               $ 16,105        $  8,210
                                                          ========        ========
  Interest Paid on Debt                                   $  5,092        $  3,525
                                                          ========        ========
  Taxes Paid                                              $  8,135        $  6,468
                                                          ========        ========
  Loans Transferred to Other Real Estate                  $    638        $     99
                                                          ========        ========
  Issuance of Common Stock as Non-Cash Compensation       $    889        $    339
                                                          ========        ========
  Transfer of Current Portion of Long-Term Borrowings
    to Short-Term Borrowings                              $  3,061        $     43
                                                          ========        ========


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

</TABLE>
                                            7
<PAGE>



CAPITAL CITY BANK GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  MANAGEMENT'S OPINION AND ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission, including Regulation S-X.  Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted
pursuant to such rules and regulations.  Prior period financial statements
have been reformatted and/or amounts reclassified, as necessary, to conform
with the current presentation.

In the opinion of management, the consolidated financial statements contain
all adjustments, which are those of a recurring nature, and disclosures
necessary to present fairly the financial position of the Company as of June
30, 2006 and December 31, 2005, the results of operations for the three and
six month periods ended June 30, 2006 and 2005, and cash flows for the six
month periods ended June 30, 2006 and 2005.

The Company and its subsidiary follow accounting principles generally
accepted in the United States of America and reporting practices applicable
to the banking industry.  The principles that materially affect its financial
position, results of operations and cash flows are set forth in the Notes to
Consolidated Financial Statements which are included in the Company's 2005
Annual Report on Form 10-K.

Stock-based Compensation

On January 1, 2006, the Company changed its accounting policy related to
stock-based compensation in connection with the adoption of Statement of
Financial Accounting Standards ("SFAS") No. 123R, "Share-Based Payment
(Revised 2004)" ("SFAS 123R").  See Note 7 - Stock-Based Compensation for
additional information.

(2)  INVESTMENT SECURITIES

The amortized cost and related market value of investment securities
available-for-sale at June 30, 2006 and December 31, 2005 were as follows:


<TABLE>
                                                          June 30, 2006
                                           -------------------------------------------
                                           Amortized  Unrealized  Unrealized   Market
(Dollars in Thousands)                       Cost       Gains       Losses      Value
--------------------------------------------------------------------------------------
<S>                                        <C>        <C>         <C>         <C>
U.S. Treasury                              $ 11,064      $  -       $  122    $ 10,942
U.S. Government Agencies and Corporations    60,934         -        1,350      59,584
States and Political Subdivisions            82,017         9          797      81,229
Mortgage-Backed Securities                   25,851         -          807      25,044
Other Securities(1)                          14,433         -            -      14,433
                                           --------      ----       ------    --------
     Total Investment Securities           $194,299      $  9       $3,076    $191,232
                                           ========      ====       ======    ========

                                                        December 31, 2005
                                           -------------------------------------------
                                           Amortized  Unrealized  Unrealized   Market
(Dollars in Thousands)                       Cost       Gains       Losses      Value
--------------------------------------------------------------------------------------
U.S. Treasury                              $  9,065      $ -        $   50    $  9,015
U.S. Government Agencies and Corporations    75,233        -         1,017      74,216
States and Political Subdivisions            53,611       44           512      53,143
Mortgage-Backed Securities                   20,948       35           452      20,531
Other Securities(1)                          14,114        -             -      14,114
                                           --------      ----       ------    --------
     Total Investment Securities           $172,971      $79        $2,031    $171,019
                                           ========      ====       ======    ========

(1) FHLB and FRB stock recorded at cost.

</TABLE>
                                            8
<PAGE>



(3)  LOANS

The composition of the Company's loan portfolio at June 30, 2006 and December
31, 2005 was as follows:

<TABLE>

(Dollars in Thousands)                    June 30, 2006     December 31, 2005
-----------------------------------------------------------------------------
<S>                                       <C>               <C>
Commercial, Financial and Agricultural     $  220,345          $  218,434
Real Estate-Construction                      180,049             160,914
Real Estate-Commercial                        672,881             718,741
Real Estate-Residential                       560,435             553,124
Real Estate-Home Equity                       171,835             165,337
Real Estate-Loans Held-for-Sale                 5,695               4,875
Consumer                                      241,620             246,069
                                           ----------          ----------
   Loans, Net of Unearned Interest         $2,052,860          $2,067,494
                                           ==========          ==========
</TABLE>

(4)  ALLOWANCE FOR LOAN LOSSES

An analysis of the changes in the allowance for loan losses for the six month
periods ended June 30, 2006 and 2005, is as follows:

<TABLE>

(Dollars in Thousands)                            2006                2005
----------------------------------------------------------------------------
<S>                                              <C>                 <C>
Balance, Beginning of Period                     $17,410             $16,037
Acquired Reserves                                      -               1,385
Provision for Loan Losses                            788                 798
Recoveries on Loans Previously Charged-Off           907                 943
Loans Charged-Off                                 (1,841)             (1,712)
                                                 -------             -------
Balance, End of Period                           $17,264             $17,451
                                                 =======             =======
</TABLE>

Impaired loans are primarily defined as all nonaccruing loans for the loan
categories which are included within the scope of SFAS No. 114, "Accounting
by Creditors for Impairment of a Loan."  Selected information pertaining to
impaired loans is depicted in the table below:



<TABLE>
                                           June 30, 2006         December 31, 2005
                                       --------------------     --------------------
                                                  Valuation                Valuation
(Dollars in Thousands)                 Balance    Allowance     Balance    Allowance
------------------------------------------------------------------------------------
<S>                                    <C>        <C>           <C>        <C>
Impaired Loans:
With Related Valuation Allowance        $5,079      $2,377       $5,612     $2,915
Without Related Valuation Allowance      3,218           -        1,658          -

</TABLE>



(5) INTANGIBLE ASSETS

The Company had intangible assets of $107.4 million and $110.5 million at
June 30, 2006 and December 31, 2005, respectively.  Intangible assets were as
follows:


<TABLE>
                                       June 30, 2006            December 31, 2005
                                   ----------------------     ----------------------
                                    Gross    Accumulated       Gross    Accumulated
(Dollars in Thousands)              Amount   Amortization      Amount   Amortization
------------------------------------------------------------------------------------
<S>                                <C>       <C>              <C>       <C>
Core Deposit Intangibles           $ 47,176    $26,133        $ 47,176    $23,312
Goodwill                             88,596      3,786          88,615      3,786
Customer Relationship Intangible      1,867        401           1,867        305
Non-Compete Agreement                   539        436             483        287
                                   --------    -------        --------    -------
  Total Intangible Assets          $138,178    $30,756        $138,141    $27,690

</TABLE>


Net Core Deposit Intangibles:  As of June 30, 2006 and December 31, 2005, the
Company had net core deposit intangibles of $21.0 million and $23.9 million,
respectively.  Amortization expense for the first six months of 2006 and 2005
was $2.8 million and $2.3 million, respectively.  Estimated annual
amortization expense is $5.6 million.


                                      9
<PAGE>


Goodwill:  As of June 30, 2006 and December 31, 2005, the Company had
goodwill, net of accumulated amortization, of $84.8 million.  Goodwill is the
Company's only intangible asset that is no longer subject to amortization
under the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets."

Other:  As of June 30, 2006 and December 31, 2005, the Company had a customer
relationship intangible, net of accumulated amortization, of $1.5 million and
$1.6 million, respectively.  This intangible was recorded as a result of the
March 2004 acquisition of trust customer relationships from Synovus Trust
Company.  Amortization expense for the first six months of 2006 and 2005 was
$96,000.  Estimated annual amortization expense is $191,000 based on use of a
10-year useful life.

As of June 30, 2006 and December 31, 2005, the Company also had a non-compete
intangible, net of accumulated amortization, of $103,000 and $196,000,
respectively.  This intangible was recorded as a result of the October 2004
acquisition of Farmers and Merchants Bank of Dublin, Georgia.  Amortization
expense for the first six months of 2006 and 2005 was $149,000 and $118,000,
respectively.  Estimated amortization expense for the remainder of 2006 is
$103,000.


(6)  DEPOSITS

The composition of the Company's interest bearing deposits at June 30, 2006
and December 31, 2005 was as follows:

<TABLE>

(Dollars in Thousands)                 June 30, 2006    December 31, 2005
-------------------------------------------------------------------------
<S>                                    <C>              <C>
NOW Accounts                            $  555,350         $  520,878
Money Market Accounts                      377,958            331,094
Savings Deposits                           135,330            144,296
Other Time Deposits                        512,672            523,586
                                        ----------         ----------
  Total Interest Bearing Deposits       $1,581,310         $1,519,854
                                        ==========         ==========
</TABLE>


(7)  STOCK-BASED COMPENSATION

In accordance with the Company's adoption of SFAS No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), in the first quarter of 2003, the
cost related to stock-based associate compensation included in net income has
been accounted for under the fair value method in all reported periods.

On January 1, 2006, the Company adopted SFAS 123R.  The Company continues to
include the cost of its share-based compensation plans in net income under
the fair value method.

As of June 30, 2006, the Company had three stock-based compensation plans,
consisting of the 2005 Associate Incentive Plan ("AIP"), the 2005 Associate
Stock Purchase Plan ("ASPP"), and the 2005 Director Stock Purchase Plan
("DSPP").  For 2006, the Company also has a stock option arrangement with a
key executive officer.  Total compensation expense associated with these
plans for the six months ended June 30, 2006 and 2005, was approximately
$889,000 and $538,000, respectively.

2005 AIP.  The Company's 2005 AIP allows the Company's Board of Directors to
award key associates various forms of equity-based incentive compensation.
Under the 2005 AIP, the Company has adopted the Stock-Based Incentive Plan
(the "Incentive Plan"), effective January 1, 2006, which is a performance-
based equity bonus plan for selected members of management, including all
executive officers.  Under the Incentive Plan, all participants are eligible
to earn an equity award, consisting of performance shares, in each year of
the five-year period ending December 31, 2010.  Annual awards are tied to the
annual earnings progression necessary to achieve the Project 2010 goal.  The
grant-date fair value of an annual compensation award is $1.5 million.
A total of 43,437 shares are eligible for issuance annually.


                                      10
<PAGE>


At the end of each calendar year, the Compensation Committee will confirm
whether the performance goals have been met prior to the payout of any
awards.  Any performance shares earned under the Incentive Plan will be
issued in the calendar quarter following the calendar year in which the
shares were earned.

In accordance with the provisions of SFAS 123R, the Company recognized
expense of approximately $745,000 for the first six months of 2006 related to
the Incentive Plan.  Under a substantially similar predecessor plan, the
Company recognized expense of $381,000 for the first six months of 2005.
A total of 875,000 shares of common stock have been reserved for issuance
under the 2005 AIP.  To date, the Company has issued 28,093 shares of common
stock.

2005 DSPP.  The Company's DSPP allows the directors to purchase the Company's
common stock at a price equal to 90% of the closing price on the date of
purchase.  Stock purchases under the DSPP are limited to the amount of the
directors' annual retainer and meeting fees.  The DSPP has 93,750 shares
reserved for issuance.  A total of 13,591 shares have been issued since the
inception of the DSPP.  For the first six months of 2006, the Company issued
7,002 shares under the DSPP and recognized $24,000 in expense related to this
plan.  For the first six months of 2005, the Company issued 5,123 shares and
recognized $18,000 in expense related to the DSPP.

2005 ASPP.  Under the Company's ASPP, substantially all associates may
purchase the Company's common stock through payroll deductions at a price
equal to 90% of the lower of the fair market value at the beginning or end of
each six-month offering period.  Stock purchases under the ASPP are limited
to 10% of an associate's eligible compensation, up to a maximum of $25,000
(fair market value on each enrollment date) in any plan year.  Shares are
issued at the beginning of the quarter following each six-month offering
period.  The ASPP has 593,750 shares of common stock reserved for issuance.
A total of 26,938 shares have been issued since inception of the ASPP.  For
the first six months of 2006, the Company issued 9,343 shares under the ASPP
and recognized $45,000 in expense related to this plan.  For the first six
months of 2005, the Company issued 8,928 shares and recognized $42,000 in
expense related to the ASPP.

Based on the Black-Scholes option pricing model, the weighted average
estimated fair value of the purchase rights granted under the ASPP Plan was
$6.22 for the first six months of 2006.  For the first six months of 2005,
the weighted average fair value of the purchase rights granted was $5.64.
In calculating compensation, the fair value of each stock purchase right was
estimated on the date of grant using the following weighted average
assumptions:

<TABLE>
                              Six Months Ended
                                  June 30,
                              ----------------
                              2006       2005
----------------------------------------------
<S>                           <C>        <C>
Dividend yield                 1.8%       1.9%
Expected volatility           25.0%      26.0%
Risk-free interest rate        4.0%       2.2%
Expected life (in years)       0.5        0.5

</TABLE>

Executive Stock Option Agreement.  In 2006, the Company's Board of Directors
approved a stock option agreement for a key executive officer (William G.
Smith, Jr. - Chairman, President and CEO, CCBG).  Similar stock option
agreements were approved in 2003-2005.  These agreements grant a non-
qualified stock option award upon achieving certain annual earnings per share
conditions set by the Board, subject to certain vesting requirements.  The
options granted under the agreements have a term of ten years and vest at a
rate of one-third on each of the first, second, and third anniversaries of
the date of grant.  Under the 2004 and 2003 agreements, 37,246 and 23,138
options, respectively, were issued, none of which have been exercised.  The
fair value of a 2004 option was $13.42, and the fair value of a 2003 option
was $11.64.  The exercise prices for the 2004 and 2003 options are $32.69 and
$32.96, respectively.  Under the 2005 agreement, the earnings per share
conditions were not met; therefore, no economic value was earned by the
executive.  In accordance with the provisions of SFAS 123R and SFAS 123, the
Company recognized expense of approximately $95,000 and $97,000 for the first
six months of 2006 and 2005, respectively, related to the aforementioned
agreements.


                                      11
<PAGE>



A summary of the status of the Company's option shares as of June 30, 2006 is
presented below:

<TABLE>
                                                           Weighted-
                                              Weighted-     Average
                                               Average     Remaining     Aggregate
                                              Exercise    Contractual    Intrinsic
Options                             Shares      Price        Term          Value
----------------------------------------------------------------------------------
<S>                                 <C>       <C>         <C>            <C>
Outstanding at January 1, 2006      60,384     $32.79         8.6        $ 88,161
Granted                                  -          -           -               -
Exercised                                -          -           -               -
Forfeited or expired                     -          -           -               -
                                    ------     ------         ---        --------
Outstanding at June 30, 2006        60,384     $32.79         8.1        $      -
                                    ======     ======         ===        ========
Exercisable at June 30, 2006        27,841     $32.79         8.1        $      -
                                    ======     ======         ===        ========
</TABLE>

As of June 30, 2006, there was $220,000 of total unrecognized compensation
cost related to the nonvested option shares granted under the agreements.
That cost is expected to be recognized over a remaining weighted-average
period of 13 months.


(8)  EMPLOYEE BENEFIT PLANS

The components of the net periodic benefit costs for the Company's qualified
benefit pension plan were as follows:

<TABLE>
                                            Three Months Ended       Six Months Ended
                                                 June 30,                June 30,
                                            ------------------      ------------------
(Dollars in Thousands)                       2006        2005        2006        2005
--------------------------------------------------------------------------------------
<S>                                         <C>         <C>         <C>         <C>
Discount Rate                                5.75%       6.00%       5.75%       6.00%
Long-Term Rate of Return on Assets           8.00%       8.00%       8.00%       8.00%

Service Cost                                $1,250      $1,040      $2,500      $2,080
Interest Cost                                  875         800       1,750       1,600
Expected Return on Plan Assets                (975)       (798)     (1,950)     (1,596)
Prior Service Cost Amortization                 50          55         100         110
Net Loss Amortization                          375         295         750         590
Net Periodic Benefit Cost                   $1,575      $1,392      $3,150      $2,784

</TABLE>

The components of the net periodic benefit costs for the Company's
Supplemental Executive Retirement Plan ("SERP") were as follows:

<TABLE>
                                            Three Months Ended       Six Months Ended
                                                 June 30,                June 30,
                                            ------------------      ------------------
(Dollars in Thousands)                       2006        2005        2006        2005
--------------------------------------------------------------------------------------
<S>                                          <C>         <C>         <C>         <C>
Discount Rate                                5.75%       6.00%       5.75%       6.00%
Long-Term Rate Of Return On Assets            N/A         N/A         N/A         N/A

Service Cost                                 $ 30        $ 35        $ 60        $ 70
Interest Cost                                  56          54         112         108
Expected Return On Plan Assets                N/A         N/A         N/A         N/A
Prior Service Cost Amortization                15          15          30          30
Net Loss Amortization                          19          21          38          42
Net Periodic Benefit Cost                    $120        $125        $240        $250

</TABLE>
                                             12
<PAGE>



(9) COMMITMENTS AND CONTINGENCIES

Lending Commitments.  The Company is a party to financial instruments with
off-balance sheet risks in the normal course of business to meet the
financing needs of its customers.  These financial instruments consist of
commitments to extend credit and standby letters of credit.

The Company's maximum exposure to credit loss under standby letters of credit
and commitments to extend credit is represented by the contractual amount of
those instruments.  The Company uses the same credit policies in establishing
commitments and issuing letters of credit as it does for on-balance sheet
instruments.  As of June 30, 2006, the amounts associated with the Company's
off-balance sheet obligations were as follows:

<TABLE>

(Dollars in Millions)                  Amount
----------------------------------------------
<S>                                    <C>
Commitments to Extend Credit(1)        $454.6
Standby Letters of Credit              $ 19.1

(1) Commitments include unfunded loans, revolving lines of credit, and other
    unused commitments.

</TABLE>

Commitments to extend credit are agreements to lend to a customer so long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since many of the commitments are
expected to expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements.

Contingencies.  The Company is a party to lawsuits and claims arising out of
the normal course of business.  In management's opinion, there are no known
pending claims or litigation, the outcome of which would, individually or in
the aggregate, have a material effect on the consolidated results of
operations, financial position, or cash flows of the Company.


(10)  COMPREHENSIVE INCOME

SFAS No. 130, "Reporting Comprehensive Income," requires that certain
transactions and other economic events that bypass the income statement be
displayed as other comprehensive income (loss).  Comprehensive income totaled
$7.7 million and $15.1 million, respectively, for the three and six months
ended June 30, 2006, and $8.3 million and $13.9 million, respectively, for
the comparable periods in 2005.  The Company's comprehensive income consists
of net income and changes in unrealized gains (losses) on securities
available-for-sale, net of income taxes.  Changes in unrealized gains
(losses), net of taxes, on securities totaled $(576,000) and $(668,000),
respectively, for the three and six months ended June 30, 2006, and $452,000
and $(345,000), respectively, for the three and six months ended June 30,
2005.  Reclassification adjustments consist only of realized gains and losses
on sales of investment securities and were not material for the six months
ended June 30, 2006 and 2005.


                                      13
<PAGE>

<TABLE>

QUARTERLY FINANCIAL DATA (UNAUDITED)
 (Dollars in Thousands, Except Per Share Data)

                                2006                                2005                                2004
                       ----------------------  ----------------------------------------------  ----------------------
                         Second      First       Fourth      Third       Second      First       Fourth      Third
---------------------------------------------------------------------------------------------------------------------
<S>                    <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Summary of Operations:
  Interest Income      $   41,369  $   39,412  $   38,780  $   36,889  $   33,910  $   30,474  $   29,930  $   24,660
  Interest Expense         11,182      10,282       9,470       7,885       6,788       5,920       5,634       3,408
                       ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
  Net Interest Income      30,187      29,130      29,310      29,004      27,122      24,554      24,296      21,252
  Provision for
    Loan Losses               121         667       1,333         376         388         410         300         300
                       ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
  Net Interest Income
    After Provision
    for Loan Losses        30,066      28,463      27,977      28,628      26,734      24,144      23,996      20,952
  Gain on Sale of Credit
    Card Portfolios             -           -           -           -           -           -         324       6,857
  Noninterest Income       14,003      13,045      12,974      13,123      12,041      11,060      11,596      10,864
  Conversion/
    Merger Expense              -           -          24         180         234           -         436          68
  Noninterest Expense      31,070      30,092      29,318      28,429      26,362      25,267      24,481      21,565
                       ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
  Income Before
    Provision for
    Income Taxes           12,999      11,416      11,609      13,142      12,179       9,937      10,999      17,040
  Provision for
    Income Taxes            4,684       3,995       4,150       4,565       4,311       3,560       3,737       6,221
                       ----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
  Net Income           $    8,315  $    7,421  $    7,459  $    8,577  $    7,868  $    6,377  $    7,262  $   10,819
                       ==========  ==========  ==========  ==========  ==========  ==========  ==========  ==========
  Net Interest
    Income (FTE)       $   30,591  $   29,461  $   29,652  $   29,329  $   27,396  $   24,835  $   24,619  $   21,528

Per Common Share:
  Net Income Basic     $      .44  $      .40  $      .40  $      .46  $      .44  $      .36  $      .40  $      .66
  Net Income Diluted          .44         .40         .40         .46         .44         .36         .40         .66
  Dividends Declared         .163        .163        .163        .152        .152        .152        .152        .144
  Diluted Book Value        16.81       16.65       16.39       16.17       15.87       14.69       14.51       13.19
  Market Price:
    High                    35.39       37.97       39.33       38.72       33.46       33.60       36.78       32.96
    Low                     29.51       33.79       33.21       31.78       28.02       29.30       30.17       26.66
    Close                   30.20       35.55       34.29       37.71       32.32       32.41       33.44       30.97

Selected Average
Balances:
  Loans                $2,040,656  $2,048,642  $2,062,775  $2,046,968  $1,932,637  $1,827,327  $1,779,736  $1,524,401
  Earning Assets        2,278,817   2,275,667   2,279,010   2,250,902   2,170,483   2,047,049   2,066,111   1,734,708
  Assets                2,603,090   2,604,458   2,607,597   2,569,524   2,458,788   2,306,807   2,322,870   1,941,372
  Deposits              2,047,755   2,040,248   2,027,017   2,013,427   1,932,144   1,847,378   1,853,588   1,545,224
  Shareowners' Equity     315,794     311,461     306,208     300,931     278,107     260,946     248,773     217,273
  Common Equivalent
    Average Shares:
      Basic                18,633      18,652      18,624      18,623      18,094      17,700      17,444      16,604
      Diluted              18,653      18,665      18,654      18,649      18,102      17,708      17,451      16,609

Ratios:
  ROA                       1.28%       1.16%       1.14%       1.32%       1.28%       1.12%       1.24%       2.22%(1)
  ROE                      10.56%       9.66%       9.67%      11.31%      11.35%       9.91%      11.61%      19.81%(1)
  Net Interest
    Margin (FTE)            5.38%       5.25%       5.16%       5.17%       5.07%       4.92%       4.75%       4.94%
  Efficiency Ratio         66.23%      67.20%      65.22%      63.60%      63.56%      67.06%      63.85%      52.60%(1)

(1) Includes $6.9 million ($4.2 million after-tax) one-time gain on sale of credit card portfolio.

</TABLE>
                                                             14
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

Management's discussion and analysis ("MD&A") provides supplemental
information, which sets forth the major factors that have affected our
financial condition and results of operations and should be read in
conjunction with the Consolidated Financial Statements and related notes.
The MD&A is divided into subsections entitled "Business Overview," "Financial
Overview," "Results of Operations," "Financial Condition," "Liquidity and
Capital Resources," "Off-Balance Sheet Arrangements," and "Accounting
Policies."  Information therein should facilitate a better understanding of
the major factors and trends that affect our earnings performance and
financial condition, and how our performance during 2006 compares with prior
years. Throughout this section, Capital City Bank Group, Inc., and its
subsidiary, collectively, are referred to as "CCBG," "Company," "we," "us,"
or "our."

The period-to-date averages used in this report are based on daily balances
for each respective period. In certain circumstances, comparing average
balances for the comparable quarters of consecutive years may be more
meaningful than simply analyzing year-to-date averages. Therefore, where
appropriate, quarterly averages have been presented for analysis and have
been noted as such.  See Table I for average balances and interest rates
presented on a quarterly basis.

In this MD&A, we present an operating efficiency ratio and an operating net
noninterest expense as a percent of average assets, both of which are not
calculated based on accounting principles generally accepted in the United
State ("GAAP"), but that we believe provide important information
regarding our results of operations.  Our calculation of the operating
efficiency ratio is computed by dividing non-interest expense less intangible
amortization and one-time merger expenses, by the sum of tax equivalent net
interest income and noninterest income.  We calculate our operating net
noninterest expense as a percent of average assets by subtracting noninterest
expense excluding intangible amortization and one-time merger expenses from
noninterest income.  We believe that excluding intangible amortization and
one-time merger expenses in our calculations better reflect our periodic
expenses and is more reflective of normalized operations.

Although we believe the above-mentioned non-GAAP financial measures enhance
investors' understanding of our business and performance, these non-GAAP
financial measures should not be considered an alternative to GAAP.

We provide reconciliations for all non-GAAP financial measures below:

Reconciliation of operating efficiency ratio to efficiency ratio

<TABLE>
                                                  Six Months Ended
                                                      June 30
                                                 -------------------
                                                 2006          2005
--------------------------------------------------------------------
<S>                                             <C>           <C>
Efficiency ratio                                70.22%        68.85%
Effect of intangible amortization and
  one-time merger expenses                      (3.52)%       (3.63)%
Operating efficiency ratio                      66.70%        65.22%

</TABLE>
<TABLE>

Reconciliation of operating net noninterest expense to net noninterest expense
                                                  Six Months Ended
                                                      June 30
                                                 -------------------
                                                 2006          2005
--------------------------------------------------------------------
<S>                                             <C>           <C>
Net noninterest expense as a percent of
  average assets                                 2.64%         2.43%
Effect of intangible amortization and
  one-time merger expenses                      (0.24)%       (0.23)%
Operating net noninterest expense as a
  percent of average assets                      2.40%         2.20%

</TABLE>
                                      16
<PAGE>


The following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto included in this
Quarterly Report on Form 10-Q.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including this MD&A section, contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.  These forward-looking statements include,
among others, statements about our beliefs, plans, objectives, goals,
expectations, estimates and intentions that are subject to significant risks
and uncertainties and are subject to change based on various factors, many of
which are beyond our control. The words "may," "could," "should," "would,"
"believe," "anticipate," "estimate," "expect," "intend," "plan," "target,"
"goal," and similar expressions are intended to identify forward-looking
statements.

All forward-looking statements, by their nature, are subject to risks and
uncertainties.  Our actual future results may differ materially from those
set forth in our forward-looking statements.  Please see the Introductory
Note and Item 1A. Risk Factors of our Annual Report on Form 10-K, which
should be read in conjunction with this Quarterly Report (as updated by
Item 1A, "Risk Factors," in Part II of this Quarterly Report), and in our
other filings made from time to time with the SEC after the date of this
report.  Our ability to achieve our financial objectives could be adversely
affected by the factors discussed in detail in Item 1A, "Risk Factors," in
our Annual Report on Form 10-K, as well as:

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

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

     *  effects of harsh weather conditions, including hurricanes;

     *  inflation, interest rate, market and monetary fluctuations;

     *  effect of changes in the stock market and other capital markets;

     *  legislative or regulatory changes;

     *  willingness of customers to accept third-party products and services
        for 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;

     *  changes in consumer spending and savings habits;

     *  growth and profitability of our noninterest income;

     *  changes in accounting principles, policies, practices or guidelines;

     *  other risks described from time to time in filings with the
        Securities and Exchange Commission; and

     *  our ability to manage the risks involved in the foregoing.


                                      16
<PAGE>

However, other factors besides those listed above, in our Quarterly Report or
in our Annual Report also could adversely affect our results, and you should
not consider any such list of factors to be a complete set of all potential
risks or uncertainties.  Any forward-looking statements made by us or on our
behalf speak only as of the date they are made.  We do not undertake to
update any forward-looking statement, except as required by applicable law.

BUSINESS OVERVIEW

We are a financial holding company headquartered in Tallahassee, Florida and
are the parent of our wholly-owned subsidiary, Capital City Bank (the "Bank"
or "CCB").  The Bank offers a broad array of products and services through a
total of 69 full-service offices located in Florida, Georgia, and Alabama.
The Bank also has mortgage lending offices in three additional Florida
communities, and one Georgia community.  The Bank offers commercial and
retail banking services, as well as trust and asset management, merchant
services, brokerage and data processing services.

Our profitability, like most financial institutions, is dependent to a large
extent upon net interest income, which is the difference between the interest
received on earning assets, such as loans and securities, and the interest
paid on interest-bearing liabilities, principally deposits and borrowings.
Results of operations are also affected by the provision for loan losses,
operating expenses such as salaries and employee benefits, occupancy and
other operating expenses including income taxes, and non-interest income such
as service charges on deposit accounts, asset management and trust fees,
mortgage banking revenues, merchant service fees, brokerage and data
processing revenues.

Our philosophy is to grow and prosper, building long-term relationships based
on quality service, high ethical standards, and safe and sound banking
practices.  We are a super-community bank in the relationship banking
business with a locally oriented, community-based focus, which is augmented
by experienced, centralized support in select specialized areas.  Our local
market orientation is reflected in our network of banking office locations,
experienced community executives, and community advisory boards which support
our focus on responding to local banking needs.  We strive to offer a broad
array of sophisticated products and to provide quality service by empowering
associates to make decisions in their local markets.

Pursuant to our long-term strategic initiative, "Project 2010", we have
continued our expansion, emphasizing a combination of growth in existing
markets and acquisitions.  Acquisitions will continue to be focused on a
three state area including Florida, Georgia, and Alabama with a particular
focus on financial institutions, which are $100 million to $400 million in
asset size and generally located on the outskirts of major metropolitan
areas.  We continue to evaluate de novo expansion opportunities in attractive
new markets in the event that acquisition opportunities are not feasible.
Other expansion opportunities that will be evaluated include asset
management, insurance, and mortgage banking.

Recent Acquisition.  On May 20, 2005, we completed our merger with First
Alachua Banking Corporation ("FABC"), headquartered in Alachua, Florida.  We
issued approximately 906,000 shares of common stock and paid approximately
$29.0 million in cash for a total purchase price of $58.0 million.  FABC's
wholly-owned subsidiary, First National Bank of Alachua, had $228.3 million
in assets at closing with seven offices in Alachua County and an eighth
office in Hastings, Florida, which is in St. Johns County.


                                      17
<PAGE>


FINANCIAL OVERVIEW

A summary overview of our financial performance for 2006 versus 2005 is
provided below.

2006 Financial Performance Highlights -

   *  Earnings of $8.3 million, up 5.7% and $15.7 million, up 10.5% for the
      three and six months ended June 30, 2006 as compared to the same
      periods in 2005.

   *  Diluted earnings per share of $.44 for the second quarter of 2006
      consistent with the same period in 2005.  Earnings per diluted share
      for the six months ended June 30, 2006 of $.84 represents a 5.0%
      increase over the same period in 2005.

   *  Growth in earnings was attributable to improvement in operating
      revenues of 12.8% and 15.5% for the three and six month periods,
      respectively, driven primarily by higher net interest income and
      noninterest income.

   *  Taxable equivalent net interest income grew 11.7% and 15.0% for the
      three and six month periods, respectively, due to earning asset growth
      and an improved net interest margin.

   *  Net interest margin percentage improved 31 basis points and 32 basis
      points for the three and six month periods, respectively, driven by
      favorable repricing spread and higher yield on new loan production.

   *  Noninterest income grew 16.3% and 17.1% for the three and six month
      periods, respectively, due primarily to higher deposit service charge
      fees and card processing fees.

   *  Continued strong credit quality as reflected by a nonperforming asset
      ratio of .28% and an annualized net charge-off ratio of .03% for the
      second quarter of 2006 compared to .08% for the same period in 2005.
      At quarter-end the allowance for loan losses was .84% of outstanding
      loans and provided coverage of 326% of nonperforming loans compared to
      .85% and 289%, respectively, for the same period in 2005.

   *  Credit quality remains strong and a key driver in bank performance and
      growth.  Nonperforming assets totaled $5.8 million, or .28% of total
      loans and other real estate at quarter-end compared to .30% and .28%,
      respectively, for the second quarter of 2005 and first quarter of 2006.

   *  Average deposits grew 6.0% and 8.1% for the three and six month
      periods, respectively, due to our May 2005 acquisition and strong
      growth in balances related to "Absolutely Free" deposit products, and
      our Cash Power money market product.

   *  We remain well-capitalized with a risk based capital ratio of 13.92%.

RESULTS OF OPERATIONS

Net Income

Earnings for the three and six months ended June 30, 2006 were $8.3 million,
or $.44 per diluted share, and $15.7 million, or $.84 per diluted share,
respectively.  This compared to $7.9 million, or $.44 per diluted share and
$14.2 million, or $.80 per diluted share in 2005.  Results include the impact
of the acquisition of FABC in May 2005.

Growth in earnings for the second quarter of 2006 was primarily attributable
to an increase in operating revenue (defined as net interest income plus
noninterest income) of $5.0 million, or 12.8%, and a decrease in our loan
loss provision of $267,000, or 68.8%, partially offset by an increase in
noninterest expense of $4.5 million, or 16.8%, and income taxes of $373,000,
or 8.7%.  The increase in operating revenue


                                      18
<PAGE>


reflects an 11.3% increase in net interest income and a 16.3% increase in
noninterest income.

Growth in earnings for the six month period of $1.5 million, or 10.5% was
primarily attributable to an increase in operating revenue (defined as net
interest income plus noninterest income) of $11.6 million, or 15.5%,
partially offset by an increase in noninterest expense of $9.3 million, or
17.9%, and income taxes of $808,000, or 10.3%.  The increase in operating
revenue reflects an 14.8% increase in net interest income and a 17.1%
increase in noninterest income.

A condensed earnings summary is presented below:


<TABLE>
                                        Three Months Ended       Six Months Ended
                                             June 30,                June 30,
                                        ------------------      ------------------
(Dollars in Thousands)                    2006      2005          2006      2005
----------------------------------------------------------------------------------
<S>                                      <C>       <C>           <C>       <C>
Interest Income                          $41,369   $33,910       $80,781   $64,384
Taxable Equivalent Adjustment(1)             404       274           735       555
                                         -------   -------       -------   -------
Interest Income (FTE)                     41,773    34,184        81,516    64,939
Interest Expense                         (11,182)   (6,788)      (21,464)  (12,708)
                                         -------   -------       -------   -------
Net Interest Income (FTE)                 30,591    27,396        60,052    52,231
Provision for Loan Losses                   (121)     (388)         (788)     (798)
Taxable Equivalent Adjustment               (404)     (274)         (735)     (555)
                                         -------   -------       -------   -------
Net Interest Income After Provision       30,066    26,734        58,529    50,878
Noninterest Income                        14,003    12,041        27,048    23,101
Merger Expense                                 -       234             -       234
Noninterest Expense                      (31,070)  (26,362)      (61,162)  (51,629)
                                         -------   -------       -------   -------
Income Before Income Taxes                12,999    12,179        24,415    22,116
Income Taxes                              (4,684)   (4,311)       (8,679)   (7,871)
                                         -------   -------       -------   -------
Net Income                               $ 8,315   $ 7,868       $15,736   $14,245
                                         =======   =======       =======   =======

Percent Change                             5.68%    22.12%        10.47%    26.17%
Return on Average Assets(2)                1.28%     1.28%         1.22%     1.21%
Return on Average Equity(2)               10.56%    11.35%        10.12%    10.66%

(1) Computed using a statutory tax rate of 35%
(2) Annualized

</TABLE>


Net Interest Income

Net interest income represents the Company's single largest source of
earnings and is equal to interest income and fees generated by earning
assets, less interest expense paid on interest bearing liabilities.  Second
quarter of 2006 taxable-equivalent net interest income increased $3.2
million, or 11.7%, over the comparable quarter in 2005.  During the first
half of 2006, taxable-equivalent net interest income increased $7.8 million,
or 15.0%, respectively, over the first half of 2005.  This increase was
caused by the effect of our acquisition of FABC, higher earning asset yields
and a slight improvement in earning asset mix, partially offset by higher
funding costs and a change in deposit mix. The increase in yields and funding
costs are a result of the higher interest rate environment.  The combination
of these factors resulted in a 31 basis point improvement in the net interest
margin as compared to the second quarter of 2005.  Table I provides a
comparative analysis of our average balances and interest rates.

For the three month period ended June 30, 2006, taxable-equivalent interest
income increased $7.6 million or 22.2%, over the comparable period in 2005.
During the first half of 2006, taxable-equivalent interest income improved
$16.6 million, or 25.5%, respectively, over the comparable period in 2005.
The increase was attributable to a change in earning asset mix and higher
yields on earning assets. Earning asset yields improved 103 basis points to
7.35% in the second quarter of 2006 from 6.32% in the second quarter of 2005
and 7.08% from the prior quarter, primarily attributable to the higher
interest rate environment.  We anticipate that our income on earning assets
will expand during the third quarter due to the higher rate environment.


                                      19
<PAGE>


Interest expense for the three and six month periods ended June 30, 2006
increased $4.4 million, or 64.7% and $8.8 million, or 68.9%, respectively,
from the comparable prior year periods.  The unfavorable variance is
attributable to higher rates paid on all interest bearing liabilities and an
increase in long-term debt costs resulting from debt secured to fund the FABC
acquisition.  The average rate paid on interest bearing liabilities of 2.58%
in the second quarter of 2006 represents an increase of 89 and 19 basis
points, respectively, over the second quarter of 2005 and first quarter of
2006.  We anticipate that our interest expense will continue to increase in
the third quarter as a result of the higher rate environment and increased
competition for deposits.

Our interest rate spread (defined as the average fully taxable-equivalent
yield on earning assets less the average rate paid on interest bearing
liabilities) increased from 4.56% in the first half of 2005 to 4.72% in the
comparable period of 2006, reflecting the higher yield on earning assets.

Our net yield on earning assets (defined as fully taxable-equivalent net
interest income divided by average earning assets) was 5.38% and 5.31%,
respectively, for the three and six month periods of 2006, versus 5.07% and
4.99%, respectively, for the comparable periods in 2005.  The increase in
margin reflects higher asset yields driven by rising interest rates.  Net
interest income is expected to expand slightly during the third quarter,
which is attributable to anticipated higher net yield on earning assets and
other factors noted above.

Provision for Loan Losses

The provision for loan losses was $121,000 and $788,000, respectively, for
the three and six month periods ended June 30, 2006, compared to $388,000 and
$798,000 for the same periods in 2005.  The decrease in the provision for
both of the aforementioned periods was due to a lower level of required
reserves reflective of improved credit quality.

Net charge-offs totaled $136,000, or .03% of average loans for the second
quarter of 2006 compared to $362,000, or .08% for the second quarter of 2005.
For the six-month period ended June 30, 2006, net charge-offs totaled
$934,000, or .09% of average loans compared to $769,000, or .08% of average
loans for the comparable period in 2005.  At quarter-end the allowance for
loan losses was .84% of outstanding loans and provided coverage of 326% of
nonperforming loans.



<TABLE>

Charge-off activity for the respective periods is set forth below:

                                          Three Months Ended        Six Months Ended
                                               June 30,                 June 30,
                                          ------------------       -------------------
(Dollars in Thousands)                     2006        2005         2006        2005
--------------------------------------------------------------------------------------
<S>                                       <S>         <S>          <S>         <S>
CHARGE-OFFS
Commercial, Financial and Agricultural    $  144      $  302       $  466      $  390
Real Estate - Construction                     -           -            -           -
Real Estate - Commercial                       -           2          291           6
Real Estate - Residential                     23          37           46          62
Consumer                                     448         536        1,038       1,254
                                          ------      ------       ------      ------
  Total Charge-offs                          615         877        1,841       1,712
                                          ------      ------       ------      ------

RECOVERIES
Commercial, Financial and Agricultural        63          98          126         107
Real Estate - Construction                     -           -            -           -
Real Estate - Commercial                       2           -            4           -
Real Estate - Residential                      2          14            8          16
Consumer                                     412         403          769         820
                                          ------      ------       ------      ------
  Total Recoveries                           479         515          907         943
                                          ------      ------       ------      ------

Net Charge-offs                           $  136      $  362       $  934      $  769
                                          ======      ======       ======      ======

Net Charge-offs (Annualized) as a
  Percent of Average Loans Outstanding,
  Net of Unearned Interest                  .03%        .08%         .09%        .08%
                                          ======      ======       ======      ======


</TABLE>


Noninterest Income

Noninterest income increased $2.0 million, or 16.3%, and $3.9 million, or
17.1%, respectively, over the comparable three and six month periods in 2005,
primarily due to higher deposit service charge fees, retail brokerage fees,
and card processing fees.   Noninterest income represented 31.7% and 31.3% of
operating revenue for the three and six month periods of 2006 compared to
30.7% and 30.9% for the same periods in 2005.  The increase is due to the
aforementioned strong growth in noninterest income.

The table below reflects the major components of noninterest income.


<TABLE>
                                        Three Months Ended        Six Months Ended
                                              June 30,                 June 30,
                                        ------------------      -------------------
(Dollars in Thousands)                    2006       2005         2006        2005
-----------------------------------------------------------------------------------
<S>                                     <C>        <C>          <C>         <C>
Noninterest Income:
  Service Charges on Deposit Accounts   $ 6,096    $ 5,035      $11,776     $ 9,383
  Data Processing                           703        650        1,340       1,257
  Asset Management Fees                   1,155      1,013        2,205       2,125
  Retail Brokerage Fees                     502        313          985         612
  Mortgage Banking Revenues                 903      1,036        1,624       1,799
  Merchant Service Fees                   1,793      1,532        3,518       3,096
  Interchange Fees                          788        535        1,464       1,026
  ATM/Debit Card Fees                       627        535        1,226       1,074
  Other                                   1,436      1,392        2,910       2,729
                                        -------    -------      -------     -------
Total Noninterest Income                $14,003    $12,041      $27,048     $23,101
                                        =======    =======      =======     =======
</TABLE>


Various significant components of noninterest income are discussed in more
detail below.

Service Charges on Deposit Accounts.  Deposit service charge fees increased
$1.1 million, or 21.1%, and $2.4 million, or 25.5%, respectively, over the
comparable three and six month periods in 2005.  The increase reflects higher
overdraft and nonsufficient funds fees due primarily to growth in deposit
accounts attributable to an increase in free checking accounts and improved
fee collection efforts.


                                      21
<PAGE>


Asset Management Fees.  Income from asset management activities increased
$142,000, or 14.0%, and $80,000, or 3.8%, respectively, over the comparable
three and six month periods in 2005.  The improvement for both periods is
primarily due to growth in new business within existing and new markets.  At
June 30, 2006, assets under management totaled $685.0 million, representing
an increase of $34.0 million, or 5.2% from the comparable period in 2005.

Mortgage Banking Revenues.  Mortgage banking revenues decreased $133,000, or
12.8%, and $175,000, or 9.7%, respectively, from the comparable three and six
month periods in 2005.  The decrease reflects the local and national trend of
a slower housing market and a decreased level of refinance activity.

Card Fees.  Card processing fees (including merchant services fees,
interchange fees, and ATM/debit card fees) increased $606,000, or 23.3%, and
$1.0 million, or 19.5%, respectively, over the comparable three and six
periods in 2005.  The increase in merchant service fees is primarily due to
higher transaction volume reflective of growth in merchant accounts.  Higher
interchange fees and ATM/debit card fees reflect an increase in deposit
accounts.

Other.  Other income increased $286,000, or 12.1%, and $638,000, or 13.9%,
respectively, over the comparable three and six month periods in 2005 due
primarily to increases in retail brokerage fees, asset based lending fees,
data processing fees, and a one-time gain on the sale of a real estate parcel
in the amount of $109,000.

Noninterest Expense

Noninterest expense increased $4.5 million, or 16.8%, and $9.3 million, or
17.9%, respectively, over the comparable three and six month periods in 2005.

The table below reflects the major components of noninterest expense.

<TABLE>
                                 Three Months Ended        Six Months Ended
                                      June 30,                 June 30,
                                -------------------      --------------------
(Dollars in Thousands)            2006        2005         2006        2005
-----------------------------------------------------------------------------
<S>                             <C>         <C>          <C>         <C>
Noninterest Expense:
  Salaries                      $11,444     $ 9,980      $23,159     $19,638
  Associate Benefits              3,760       3,207        7,475       6,109
                                -------     -------      -------     -------
    Total Compensation           15,204      13,187       30,634      25,747

  Premises                        2,358       2,035        4,581       3,972
  Equipment                       2,661       2,192        5,161       4,304
                                -------     -------      -------     -------
    Total Occupancy               5,019       4,227        9,742       8,276

  Legal Fees                        445         444          962         812
  Professional Fees                 865         879        1,618       1,575
  Processing Services               419         349          854         748
  Advertising                     1,253         747        2,252       1,948
  Travel and Entertainment          485         340          871         604
  Printing and Supplies             670         666        1,277       1,117
  Telephone                         588         559        1,210       1,078
  Postage                           321         291          602         617
  Intangible Amortization         1,536       1,296        3,066       2,492
  Interchange Fees                1,546       1,349        3,040       2,690
  Courier Service                   327         334          657         641
  Miscellaneous                   2,392       1,928        4,377       3,518
                                -------     -------      -------     -------

Total Noninterest Expense       $31,070     $26,596      $61,162     $51,863
                                =======     =======      =======     =======
</TABLE>


                                      21
<PAGE>


Various significant components of noninterest expense are discussed in more
detail below.

Compensation.  Salaries and associate benefits expense increased $2.0
million, or 15.3%, and $4.9 million, or 19.0% over the comparable three and
six month periods in 2005.  For the first half of the year, we experienced
increases in associate salaries of $3.3 million, payroll tax expense of
$196,000, associate insurance expense of $365,000, pension plan expense of
$382,000, and stock-based compensation of $507,000.  The increase in
associate salaries and payroll tax expense reflects the addition of FABC
associates, annual merit/market based raises for associates, and lower
realized loan cost.  Realized loan cost reflects the impact of SFAS No. 91
"Accounting for Nonrefundable Fees and Costs Associated with Acquiring
Loans", which requires deferral and amortization of loan costs that are
accounted for as a credit offset to salary expense.  The decrease in loan
production for the first half of the year reduced the amount of this offset
as compared to the first half of 2005.  The increase in expense for insurance
and pension benefits is reflective of an increase in eligible participants.
The higher pension expense is also due to a lower discount rate used for the
2006 expense projection.  Higher stock based compensation reflects an
increase in plan participants and higher target awards due to the adoption of
our new Stock-Based Incentive Plan.

Occupancy.  Occupancy expense (including premises and equipment) increased
$792,000, or 18.7%, and $1.5 million, or 17.7%, respectively over the
comparable three and six month periods in 2005.  For the first half of the
year, we experienced increases in depreciation of $770,000, maintenance and
repairs (building and FF&E) of $190,000, utilities of $174,000, maintenance
agreements (FF&E) of $298,000, and building insurance of $66,000 from the
comparable period in 2005, all of which reflect the increase in the number of
banking offices from our May 2005 acquisition and new banking office openings
during the later part of 2005.

Other.  Other noninterest expense increased $1.7 million, or 18.1%, and $2.9
million, or 16.5%, respectively over the three and six month periods in 2005.
For the first half of the year, the increase was primarily attributable to
higher expense for the following categories: 1) legal fees - $150,000, 2)
advertising - $304,000, 3) travel and entertainment - $267,000, 4) printing
and supplies - $160,000, 5) telephone expense - $132,000, 6) intangible
amortization - $574,000, 7) interchange fees - $350,000, and 8) miscellaneous
- $859,000.  Legal expenses have increased due to a general increase in legal
services tied to corporate activities.  The increase in advertising expense
is due to an increase in promotional expenses associated with the addition of
new banking offices in late 2005 and an expansion in our line of free
checking products.  The higher expense for travel and entertainment is linked
primarily to associate related events that took place during the first half
of the year.  The increase in printing and supplies expense was
driven by an increase in the number of banking offices requiring printed
brochures for bank products and services, and supplies.  Telephone expense
increased also due to an increase in banking offices.  The increase in
intangible amortization reflects new core deposit amortization from the FABC
acquisition.  The increase in interchange fees is due to increased merchant
card transaction volume.  Miscellaneous expense grew due to increases in
other losses, ATM/debit card production, associate hiring expense, and
seminars/education expense.

Operating net noninterest expense (noninterest income minus noninterest
expense, excluding intangible amortization and one-time merger expenses) as a
percent of average assets was 2.40% for the first half of 2006 compared to
2.20% in 2005.  Our operating efficiency ratio (noninterest expense,
excluding intangible amortization and one-time merger expenses, expressed as
a percent of the sum of taxable-equivalent net interest income plus
noninterest income) was 66.70% for the first half of 2006 compared to 65.23%
for the same period in 2005 due to expense growth as discussed above.

Income Taxes

Relative to the prior year periods, the provision for income taxes increased
$373,000, or 8.7%, during the second quarter and $808,000, or 10.3%, during
the first six months


                                      23
<PAGE>


of 2006, reflecting higher taxable income.  Our effective tax rate for the
first half of 2006 was 35.55% compared to 35.59% for the same period in 2005.


FINANCIAL CONDITION

Asset and liability balances include the integration of FABC in May 2005.

Average assets decreased $4.5 million, or .17%, to $2.603 billion for the
quarter-ended June 30, 2006 from $2.608 billion in the fourth quarter of
2005.  Average earning assets of $2.279 billion decreased $193,000, or .01%,
from the fourth quarter of 2005.  A decrease in average loans of $22.1
million was partially offset by a $5.4 million increase in investment
securities and a $16.5 million increase in average short term investments.
These variances are discussed in more detail below.

Funds Sold

We ended the second quarter with approximately $35.7 million in average net
overnight funds sold, compared to $5.7 million net overnight funds purchased
in the fourth quarter of 2005.  The improvement reflects the increase in
deposits that is discussed in further detail below (Deposits).  Growth in
deposits during the first part of the year has reduced the bank's position in
overnight funds purchased.

Investment Securities

Our investment portfolio is a significant component of our operations and, as
such, it functions as a key element of liquidity and asset/liability
management.  As of June 30, 2006, the average investment portfolio increased
$5.4 million, or 2.9%, from the fourth quarter of 2005.  We will continue to
evaluate the need to purchase securities for the investment portfolio
throughout 2006, taking into consideration liquidity needed to fund loan
growth and to meet pledging requirements.

Securities classified as available-for-sale are recorded at fair value and
unrealized gains and losses associated with these securities are recorded,
net of tax, as a separate component of shareowners' equity.  At June 30, 2006
and December 31, 2005, shareowners' equity included a net unrealized loss of
$1.9 million and $1.2 million, respectively.

Loans

Average loans for the second quarter decreased $22.1 million, or 1.07%, from
the fourth quarter, due to higher than expected loan activity (principal pay-
downs and pay-offs).  We expect the loan pipeline to remain stable and loans
outstanding to remain flat for the second half of the year.

Our nonperforming loans were $5.3 million at June 30, 2006 and December 31,
2005.  As a percent of nonperforming loans, the allowance for loan losses
represented 326% at June 30, 2006 and 331% at December 31, 2005.
Nonperforming loans include nonaccruing and restructured loans.  Other real
estate, which includes property acquired either through foreclosure or by
receiving a deed in lieu of foreclosure, was $0.5 million at June 30, 2006
versus $0.3 million at December 31, 2005.  The ratio of nonperforming assets
as a percent of loans plus other real estate was .28% at June 30, 2006,
compared to .27% at December 31, 2005.

We maintain an allowance for loan losses at a level sufficient to provide for
the estimated credit losses inherent in the loan portfolio as of the balance
sheet date.  Credit losses arise from borrowers' inability or unwillingness
to repay, and from other risks inherent in the lending process, including
collateral risk, operations risk, concentration risk and economic risk.  All
related risks of lending are considered when assessing the adequacy of the
loan loss reserve.  The allowance for loan losses is established through a
provision charged to expense.  Loans are charged against the allowance when
management believes collection of the principal is unlikely.  The allowance
for loan losses is based on management's judgment of overall loan quality.
This is a significant estimate based on a detailed analysis of the loan
portfolio.  The


                                      24
<PAGE>


balance can and will change based on changes in the assessment of the
portfolio's overall credit quality.  We evaluate the adequacy of the
allowance for loan losses on a quarterly basis.

The allowance for loan losses at June 30, 2006 was $17.3 million, compared to
$17.4 million at December 31, 2005.  At June 30, 2006 and December 31, 2005,
the allowance represented 0.84% of total loans.  While there can be no
assurance that we will not sustain loan losses in a particular period that
are substantial in relation to the size of the allowance, our assessment of
the loan portfolio does not indicate a likelihood of this occurrence.  It is
management's opinion that the allowance at June 30, 2006 is adequate to
absorb losses inherent in the loan portfolio at quarter-end.

Deposits

Average deposits for the second quarter of 2006 increased $23.7 million, or
1.17%, from the fourth quarter of 2005 due to continued strong increases in
NOW ($26.3 million) and money market ($55.8 million) account balances.  The
increases reflect new free checking deposits and an increase in Cash Power
money market balances.

The ratio of average noninterest bearing deposits to total deposits was 25.5%
for the second quarter of 2006, compared to 26.8% for the fourth quarter of
2005.  For the same period, the ratio of average interest bearing liabilities
to average earning assets was 75.3% and 75.8%, respectively.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity

General.  Liquidity for a banking institution is the availability of funds to
meet increased loan demand, excessive deposit withdrawals, and the payment of
other contractual cash obligations.  Management monitors our financial
position in an effort to ensure we have ready access to sufficient liquid
funds to meet normal transaction requirements and take advantage of
investment opportunities and cover unforeseen liquidity demands.  In addition
to core deposit growth, sources of funds available to meet liquidity demands
include cash received through ordinary business activities (i.e., collection
of interest and fees), federal funds sold, loan and investment maturities,
our bank lines of credit, approved lines for the purchase of federal funds by
CCB and Federal Home Loan Bank ("FHLB") advances.

Average liquidity (defined as funds sold and interest bearing deposits with
other banks) for the second quarter of 2006 was approximately $48.8 million,
an increase of $16.5 million from the fourth quarter of 2005.  The increase
is primarily reflective of deposit growth.  Liquidity levels should fluctuate
during the third quarter consistent with planned loan growth.

Borrowings.  We have the ability to draw on a $25.0 million revolving credit
note, due on October 15, 2007.  Interest is payable quarterly at LIBOR plus
an applicable margin on advances.  The revolving credit note is unsecured.
The existing loan agreement contains certain financial covenants that we must
maintain.  At June 30, 2006, we were in compliance with all of the terms of
the agreement and had $25.0 million available under the credit facility.

For the first half of the year, the Bank made FHLB advance payments totaling
approximately $6.4 million and obtained one new FHLB advance for $3.2
million.

We issued a $32.0 million junior subordinated deferrable interest note in May
2005 to a wholly owned Delaware statutory trust, Capital City Bank Group
Capital Trust II ("CCBG Capital Trust II").  Interest payments are due
quarterly at a fixed rate of 6.07% for the first five years, then adjust
annually thereafter based on the three month LIBOR plus a margin of 1.80%.
The note matures on June 15, 2035.  The proceeds of the borrowing were used
to fund the cash portion of the FABC purchase price.


                                      25
<PAGE>


Contractual Cash Obligations.  We maintain certain contractual arrangements
to make future cash payments.  The table below details those future cash
payment obligations as of June 30, 2006.  Payments for borrowings do not
include interest.  Payments related to leases are based on actual payments
specified in the underlying contracts.


<TABLE>
                                           Payments Due By Period
                                     -------------------------------------------
                                      1 Year    1 - 3   4 - 5   After
(Dollars in Thousands)               or Less    Years   Years  5 Years    Total
--------------------------------------------------------------------------------
<S>                                  <C>      <C>      <C>     <C>      <C>
Federal Home Loan Bank Advances      $31,414  $31,010  $6,349  $26,673  $ 95,446
Subordinated Notes Payable                 -        -       -   62,887    62,887
Operating Lease Obligations              734    2,709   2,226    7,088    12,757
                                     -------  -------  ------  -------  --------
Total Contractual Cash Obligations   $32,148  $33,719  $8,576  $96,647  $171,090
                                     =======  =======  ======  =======  ========
</TABLE>


Capital

Equity capital was $311.7 million as of June 30, 2006 compared to $305.8
million as of December 31, 2005.  Management continues to monitor our capital
position in relation to our level of assets with the objective of maintaining
a strong capital position.  The leverage ratio was 10.35% at June 30, 2006
compared to 10.27% at December 31, 2005.  Further, the risk-adjusted capital
ratio of 13.92% at June 30, 2006 exceeds the 8.0% minimum requirement under
the risk-based regulatory guidelines.  As allowed by the Federal Reserve
Board capital guidelines the trust preferred securities issued by Capital
City Bank Group Capital Trust I and CCBG Capital Trust II are included as
Tier 1 capital in our capital calculations.

Adequate capital and financial strength is paramount to the stability of CCBG
and the Bank.  Cash dividends declared and paid should not place unnecessary
strain on our capital levels.  Although a consistent dividend payment is
believed to be favorably viewed by the financial markets and shareowners, the
Board of Directors will declare dividends only if we are considered to have
adequate capital.  Future capital requirements and corporate plans are
considered when the Board considers a dividend payment.  Dividends declared
and paid during the second quarter of 2006 totaled $.1625 per share compared
to $.1520 per share for the second quarter of 2005, an increase of 6.9%.  The
dividend payout ratios for the second quarter ended 2006 and 2005 were 36.8%
and 34.5%, respectively.

State and federal regulations as well as our long-term debt agreements place
certain restrictions on the payment of dividends by both CCBG and the Bank.
At June 30, 2006, these regulations and covenants did not impair CCBG or the
Bank's ability to declare and pay dividends or to meet other existing
obligations in the normal course of business.

During the first six months of 2006, shareowners' equity increased $6.0
million, or 3.9%, on an annualized basis.  Growth in equity during the first
six months of the year was positively impacted by net income of $15.7
million, the issuance of common stock of $0.9 million and, stock-based
compensation accretion of $0.9 million.  Equity was reduced by dividends paid
during the first six months of the year by $6.1 million, or $.3250 per share,
an increase in the net unrealized loss on available-for-sale securities of
$0.7 million, and the repurchase of common stock of $4.8 million.  At June
30, 2006, our common stock had a book value of $16.81 per diluted share
compared to $16.39 at December 31, 2005.

Our Board of Directors has authorized the repurchase of up to 1,171,875
shares of our outstanding common stock.  The purchases are made in the open
market or in privately negotiated transactions.  To date, we have repurchased
a total of 864,760 shares at an average purchase price of $18.28 per share.
We repurchased 148,876 shares of our common stock in the second quarter of
2006 at an average purchase price of $32.41 per share.


                                      26
<PAGE>


OFF-BALANCE SHEET ARRANGEMENTS

We do not currently engage in the use of derivative instruments to hedge
interest rate risks.  However, we are a party to financial instruments with
off-balance sheet risks in the normal course of business to meet the
financing needs of our clients.

At June 30, 2006, we had $454.6 million in commitments to extend credit and
$19.1 million in standby letters of credit.  Commitments to extend credit are
agreements to lend to a client so long as there is no violation of any
condition established in the contract.  Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a
fee.  Since many of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future
cash requirements.  Standby letters of credit are conditional commitments
issued by us to guarantee the performance of a client to a third party.  We
use the same credit policies in establishing commitments and issuing letters
of credit as we do for on-balance sheet instruments.

If commitments arising from these financial instruments continue to require
funding at historical levels, management does not anticipate that such
funding will adversely impact its ability to meet on-going obligations.  In
the event these commitments require funding in excess of historical levels,
management believes current liquidity, available lines of credit from the
FHLB, investment security maturities and our revolving credit facility
provide a sufficient source of funds to meet these commitments.


ACCOUNTING POLICIES

Critical Accounting Policies

The consolidated financial statements and accompanying Notes to Consolidated
Financial Statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which require us to make
various estimates and assumptions (see Note 1 in the Notes to Consolidated
Financial Statements).  We believe that, of our significant accounting
policies, the following may involve a higher degree of judgment and
complexity.

Allowance for Loan Losses.  The allowance for loan losses is established
through a charge to the provision for loan losses.  Provisions are made to
reserve for estimated losses in loan balances.  The allowance for loan losses
is a significant estimate and is evaluated quarterly by us for adequacy.  The
use of different estimates or assumptions could produce a different required
allowance, and thereby a larger or smaller provision recognized as expense in
any given reporting period.  A further discussion of the allowance for loan
losses can be found in the section entitled "Allowance for Loan Losses" and
Note 1 in the Notes to Consolidated Financial Statements in our 2005 Annual
Report on Form 10-K.

Intangible Assets.  Intangible assets consist primarily of goodwill, core
deposit assets, and other identifiable intangibles that were recognized in
connection with various acquisitions.  Goodwill represents the excess of the
cost of acquired businesses over the fair market value of their identifiable
net assets.  We perform an impairment review on an annual basis to determine
if there has been impairment of our goodwill.  We have determined that no
impairment existed at December 31, 2005.  Impairment testing requires
management to make significant judgments and estimates relating to the fair
value of its identified reporting units.  Significant changes to these
estimates may have a material impact on our reported results.

Core deposit assets represent the premium we paid for core deposits.  Core
deposit intangibles are amortized on the straight-line method over various
periods ranging from 5-10 years.  Generally, core deposits refer to
nonpublic, non-maturing deposits including noninterest-bearing deposits, NOW,
money market and savings.  We make certain estimates relating to the useful
life of these assets, and rate of run-off based on the nature of the specific
assets and the client bases acquired.  If there is a reason to


                                      27
<PAGE>


believe there has been a permanent loss in value, management will assess
these assets for impairment.  Any changes in the original estimates may
materially affect reported earnings.

Pension Assumptions.  We have a defined benefit pension plan for the benefit
of substantially all of our associates.  Our funding policy with respect to
the pension plan is to contribute amounts to the plan sufficient to meet
minimum funding requirements as set by law.  Pension expense, reflected in
the Consolidated Statements of Income in noninterest expense as "Salaries and
Associate Benefits," is determined by an external actuarial valuation based
on assumptions that are evaluated annually as of December 31, the measurement
date for the pension obligation.  The Consolidated Statements of Financial
Condition reflect an accrued pension benefit cost due to funding levels and
unrecognized actuarial amounts.  The most significant assumptions used in
calculating the pension obligation are the weighted-average discount rate
used to determine the present value of the pension obligation, the weighted-
average expected long-term rate of return on plan assets, and the assumed
rate of annual compensation increases.  These assumptions are re-evaluated
annually with the external actuaries, taking into consideration both current
market conditions and anticipated long-term market conditions.

The weighted-average discount rate is determined by matching anticipated
Retirement Plan cash flows for a 30-year period to long-term corporate Aa-
rated bonds and solving for the underlying rate of return, which investing in
such securities would generate.  This methodology is applied consistently
from year-to-year.  We anticipate using a 5.75% discount rate for 2006.

The weighted-average expected long-term rate of return on plan assets is
determined based on the current and anticipated future mix of assets in the
plan.  The assets currently consist of equity securities, U.S. Government and
Government agency debt securities, and other securities (typically temporary
liquid funds awaiting investment).  We anticipate using a rate of return on
plan assets of 8.0% for 2006.

The assumed rate of annual compensation increases of 5.50% for 2006 is based
on expected trends in salaries and the employee base.  This assumption is not
expected to change materially in 2006.

Information on components of our net periodic benefit cost is provided in
Note 8 of the Notes to Consolidated Financial Statements included herein and
Note 12 of the Notes to Consolidated Financial Statements in our 2005 Annual
Report on Form 10-K.

Recent Accounting Pronouncements

SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments."
SFAS 155 amends SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities" and SFAS 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities."  SFAS 155 (i) permits
fair value re-measurement for any hybrid financial instrument that contains
an embedded derivative that otherwise would require bifurcation, (ii)
clarifies which interest-only strips and principal-only strips are not
subject to the requirements of SFAS 133, (iii) establishes a requirement to
evaluate interests in securitized financial assets to identify interests that
are freestanding derivatives or that are hybrid financial instruments that
contain an embedded derivative requiring bifurcation, (iv) clarifies that
concentrations of credit risk in the form of subordination are not embedded
derivatives, and (v) amends SFAS 140 to eliminate the prohibition on a
qualifying special purpose entity from holding a derivative financial
instrument that pertains to a beneficial interest other than another
derivative financial instrument.  SFAS 155 is effective for us on January 1,
2007, and is not expected to have a significant impact on our financial
statements.


                                      28
<PAGE>


In July 2006, the FASB issued FASB Interpretation 48, "Accounting for Income
Tax Uncertainties" ("FIN 48").  FIN 48 defines the threshold for recognizing
the benefits of tax return positions in the financial statements as "more-
likely-than-not" to be sustained by the taxing authority.  The recently
issued literature also provides guidance on the derecognition, measurement
and classification of income tax uncertainties, along with any related
interest and penalties.  FIN 48 also includes guidance concerning accounting
for income tax uncertainties in interim periods and increases the level of
disclosures associated with any recorded income tax uncertainties.  FIN 48 is
effective for fiscal years beginning after December 15, 2006.  The
differences between the amounts recognized in the statements of financial
position prior to the adoption of FIN 48 and the amounts reported after
adoption will be accounted for as a cumulative-effect adjustment recorded to
the beginning balance of retained earnings.  We are currently evaluating the
potential impact of FIN 48 on our consolidated financial statements.


                                      29
<PAGE>
<TABLE>


TABLE I
AVERAGE BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)

                                                   FOR THREE MONTHS ENDED JUNE 30,
                                                  2006                          005
                                       --------------------------   --------------------------
                                         Balance  Interest  Rate      Balance  Interest  Rate
                                       ---------- --------  -----   ---------- --------  -----
<S>                                    <C>         <C>      <C>     <C>         <C>      <C>
ASSETS
Loans, Net of Unearned Interest(1)(2)  $2,040,656  $39,059  7.68%   $1,932,637  $32,200  6.68%
Taxable Investment Securities             114,521    1,233  4.30%      149,958    1,113  2.96%
Tax-Exempt Investment Securities(2)        74,862      895  4.78%       41,316      513  4.97%
Funds Sold                                 48,778      586  4.75%       46,572      358  3.04%
                                       ----------  -------  ----    ----------  -------  ----
   Total Earning Assets                 2,278,817   41,773  7.35%    2,170,483   34,184  6.32%
Cash & Due From Banks                      99,830                      104,336
Allowance for Loan Losses                 (17,443)                    (16,998)
Other Assets                              241,886                      200,967
                                       ----------                   ----------
      TOTAL ASSETS                     $2,603,090                   $2,458,788

LIABILITIES
NOW Accounts                           $  510,088  $ 1,664  1.31%   $  413,799  $   560  0.54%
Money Market Accounts                     363,754    2,642  2.91%      270,195      830  1.23%
Savings Accounts                          136,168       67  0.20%      155,286       75  0.19%
Other Time Deposits                       518,679    4,343  3.36%      547,919    3,153  2.31%
                                       ----------  -------  ----    ----------  -------  ----
   Total Int. Bearing Deposits          1,528,689    8,716  2.29%    1,387,199    4,618  1.34%
Short-Term Borrowings                      82,846      776  3.75%      108,508      734  2.71%
Subordinated Notes Payable                 62,887      926  5.91%       45,681      667  5.86%
Other Long-Term Borrowings                 63,597      764  4.82%       68,975      769  4.47%
                                       ----------  -------  ----    ----------  -------  ----
   Total Int. Bearing Liabilities       1,738,019   11,182  2.58%    1,610,363    6,788  1.69%
Noninterest Bearing Deposits              519,066                      544,945
Other Liabilities                          30,211                       25,373
                                       ----------                   ----------
     TOTAL LIABILITIES                  2,287,296                    2,180,681

SHAREOWNERS' EQUITY
     TOTAL SHAREOWNERS' EQUITY            315,794                     278,107
                                       ----------                   ----------

     TOTAL LIABILITIES & EQUITY        $2,603,090                   $2,458,788
                                       ==========                   ==========

Interest Rate Spread                                        4.77%                        4.63%
                                                            ====                         ====
Net Interest Income                                $30,591                       $27,396
                                                   =======                       =======
Net Interest Margin(3)                                      5.38%                        5.07%
                                                            ====                         ====


                                                    FOR SIX MONTHS ENDED JUNE 30,
                                                  2006                          005
                                       --------------------------   --------------------------
                                         Balance  Interest  Rate      Balance  Interest  Rate
                                       ---------- --------  -----   ---------- --------  -----
<S>                                    <C>         <C>      <C>     <C>         <C>      <C>
ASSETS
Loans, Net of Unearned Interest(1)(2)  $2,044,627  $76,498  7.54%   $1,880,272  $61,120  6.56%
Taxable Investment Securities              16,278    2,323  3.99%      151,740    2,203  2.91%
Tax-Exempt Investment Securities(2)        67,158    1,570  4.67%       42,615    1,099  5.16%
Funds Sold                                 49,188    1,125  4.56%       34,479      517  2.98%
                                       ----------  -------  ----    ----------  -------  ----
   Total Earning Assets                 2,277,251   81,516  7.21%    2,109,106   64,939  6.21%
Cash & Due From Banks                     104,841                      100,848
Allowance for Loan Losses                 (17,512)                     (16,585)
Other Assets                              239,190                      189,849
                                       ----------                   ----------
      TOTAL ASSETS                     $2,603,770                   $2,383,218
                                       ==========                   ==========

LIABILITIES
NOW Accounts                           $  510,178  $ 3,110  1.23%   $  386,626  $ 1,007  0.53%
Money Market Accounts                     353,759    4,940  2.82%      261,072    1,455  1.12%
Savings Accounts                          137,906      130  0.19%      151,502      151  0.20%
Other Time Deposits                       520,314    8,258  3.20%      549,983    6,314  2.31%
                                       ----------  -------  ----    ----------  -------  ----
   Total Int. Bearing Deposits          1,522,157   16,438  2.18%    1,349,183    8,927  1.33%
Short-Term Borrowings                      88,326    1,600  3.64%       94,125    1,184  2.54%
Subordinated Notes Payable                 62,887    1,852  5.94%       38,345    1,108  5.83%
Other Long-Term Borrowings                 66,763    1,574  4.75%       68,590    1,489  4.38%
                                       ----------  -------  ----    ----------  -------  ----
   Total Int. Bearing Liabilities       1,740,133   21,464  2.49%    1,550,243   12,708  1.65%
Noninterest Bearing Deposits              521,865                      540,812
Other Liabilities                          28,132                       22,589
     TOTAL LIABILITIES                  2,290,130                    2,113,644

SHAREOWNERS' EQUITY
     TOTAL SHAREOWNERS' EQUITY            313,640                      269,574
                                       ----------                   ----------

     TOTAL LIABILITIES & EQUITY         2,603,770                   $2,383,218
                                       ==========                   ==========

Interest Rate Spread                                        4.72%                        4.56%
                                                            ====                         ====
Net Interest Income                                $60,052                      $52,231
                                                   =======                       =======
Net Interest Margin(3)                                      5.31%                        4.99%
                                                            ====                         ====


(1) Average balances include nonaccrual loans.  Interest income includes fees on loans of $979,128
    and $1.9 million, for the three and six months ended June 30, 2006, versus $820,478 and $1.3 million
    for the comparable periods ended June 30, 2005.

(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.


</TABLE>
                                                       30
<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Overview

Market risk management arises from changes in interest rates, exchange rates,
commodity prices, and equity prices.  We have risk management policies to
monitor and limit exposure to market risk and do not participate in
activities that give rise to significant market risk involving exchange
rates, commodity prices, or equity prices.  In asset and liability management
activities, policies are in place that are designed to minimize structural
interest rate risk.

Interest Rate Risk Management

The normal course of business activity exposes us to interest rate risk.
Fluctuations in interest rates may result in changes in the fair market value
of our financial instruments, cash flows and net interest income. We seek to
avoid fluctuations in our net interest margin and to maximize net interest
income within acceptable levels of risk through periods of changing interest
rates.  Accordingly, our interest rate sensitivity and liquidity are
monitored on an ongoing basis by our Asset and Liability Committee ("ALCO"),
which oversees market risk management and establishes risk measures, limits
and policy guidelines for managing the amount of interest rate risk and its
effects on net interest income and capital.  A variety of measures are used
to provide for a comprehensive view of the magnitude of interest rate risk,
the distribution of risk, the level of risk over time and the exposure to
changes in certain interest rate relationships.

ALCO continuously monitors and manages the balance between interest rate-
sensitive assets and liabilities.  ALCO's objective is to manage the impact
of fluctuating market rates on net interest income within acceptable levels.
In order to meet this objective, management may adjust the rates charged/paid
on loans/deposits or may shorten/lengthen the duration of assets or
liabilities within the parameters set by ALCO.

Our financial assets and liabilities are classified as other-than-trading.
An analysis of the other-than-trading financial components, including the
fair values, are presented in Table II.  This table presents our consolidated
interest rate sensitivity position as of June 30, 2006 based upon certain
assumptions as set forth in the Notes to the Table.  The objective of
interest rate sensitivity analysis is to measure the impact on our net
interest income due to fluctuations in interest rates.  The asset and
liability values presented in Table II may not necessarily be indicative of
our interest rate sensitivity over an extended period of time.

We expect rising rates to have a favorable impact on the net interest margin,
subject to the magnitude and timeframe over which the rate changes occur.
However, as general interest rates rise or fall, other factors such as
current market conditions and competition may impact how we respond to
changing rates and thus impact the magnitude of change in net interest
income.  Non-maturity deposits offer management greater discretion as to the
direction, timing, and magnitude of interest rate changes and can have a
material impact on our interest rate sensitivity.  In addition, the relative
level of interest rates as compared to the current yields/rates of existing
assets/liabilities can impact both the direction and magnitude of the change
in net interest margin as rates rise and fall from one period to the next.


                                      31
<PAGE>


Inflation

The impact of inflation on the banking industry differs significantly from
that of other industries in which a large portion of total resources are
invested in fixed assets such as property, plant and equipment.

Assets and liabilities of financial institutions are virtually all monetary
in nature, and therefore are primarily impacted by interest rates rather than
changing prices.  While the general level of inflation underlies most
interest rates, interest rates react more to changes in the expected rate of
inflation and to changes in monetary and fiscal policy.  Net interest income
and the interest rate spread are good measures of our ability to react to
changing interest rates and are discussed in further detail in the section
entitled "Results of Operations."


                                      32
<PAGE>

<TABLE>

Table II
FINANCIAL ASSETS AND LIABILITIES MARKET RISK ANALYSIS(1)
(Other Than Trading Portfolio)

                                                         As of June 30, 2006                                   Fair
(Dollars in Thousands)        Year 1      Year 2     Year 3     Year 4     Year 5     Beyond      Total        Value
-----------------------------------------------------------------------------------------------------------------------
<S>                         <C>          <C>        <C>         <C>        <C>        <C>       <C>          <C>
Loans
  Fixed Rate                $  305,779   $155,784   $116,878    $55,001    $26,097    $20,923   $  680,463   $  679,515
    Average Interest Rate        6.30%      7.47%      7.53%      7.27%      6.92%      6.04%        6.87%
  Floating Rate(2)           1,100,334    145,866    106,947      7,242      4,814      7,195    1,372,397    1,372,397
    Average Interest Rate        6.78%      6.61%      7.21%      7.61%      7.69%      7.89%        6.81%
Investment Securities(3)
  Fixed Rate                    43,248     58,180     56,426      3,696     10,213     17,987      189,750      189,750
    Average Interest Rate        3.05%      3.74%      4.23%      4.38%      4.08%      5.52%        3.93%
  Floating Rate                  1,482          -          -          -          -          -        1,482        1,482
    Average Interest Rate        5.09%          -          -          -          -          -        5.09%
Other Earning Assets
  Floating Rate                126,211          -          -          -          -          -      126,211      126,211
    Average Interest Rates       4.82%          -          -          -          -          -        4.82%
Total Financial Assets      $1,557,053   $359,830   $280,251    $65,939    $41,123    $46,105   $2,370,302   $2,367,387
    Average Interest Rates       6.43%      6.52%      6.74%      7.15%      6.30%      6.12%        6.49%

Deposits(4)
  Fixed Rate Deposits       $  419,299   $ 61,548   $ 21,558    $ 7,976    $ 3,045    $   257   $  513,682   $  423,834
    Average Interest Rates       3.53%      3.66%      3.83%      3.77%      4.11%      4.93%        3.56%
  Floating Rate Deposits     1,067,628          -          -          -          -          -    1,067,628    1,067,628
    Average Interest Rates       1.94%          -          -          -          -          -        1.94%
Other Interest Bearing
    Liabilities
  Fixed Rate Debt                3,981     14,545     13,610      3,509      3,281     24,097       63,022       61,025
    Average Interest Rate        4.74%      4.43%      4.46%      4.64%      5.06%      5.26%        4.82%
  Floating Rate Debt            77,571          -          -     30,928     31,959          -      140,458      140,458
    Average Interest Rate        3.50%          -          -      5.71%      6.07%          -        4.57%
Total Financial Liabilities $1,568,479   $ 76,092   $ 35,169    $74,371    $ 6,325    $24,354   $1,784,790   $1,692,945
    Average interest Rate        2.45%      3.80%      4.07%      5.61%      4.60%      5.25%        2.72%


(1)  Based upon expected cashflows, 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.

</TABLE>
                                                          33
<PAGE>


ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of June 30, 2006, the end of the period covered by this Form 10-Q, our
management, including our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934).  Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer each concluded that as of June 30, 2006, the end of the
period covered by this Form 10-Q, we maintained effective disclosure controls
and procedures.

Changes in Internal Control over Financial Reporting

Our management, including the Chief Executive Officer and Chief Financial
Officer, has reviewed our internal control.  There have been no significant
changes in our internal control during our most recently completed fiscal
quarter, nor subsequent to the date of their evaluation, that could
significantly affect our internal control over financial reporting.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

We are party to lawsuits and claims arising out of the normal course of
business.  In management's opinion, there are no known pending claims or
litigation, the outcome of which would, individually or in the aggregate,
have a material effect on our consolidated results of operations, financial
position, or cash flows.


Item 1.A.  Risk Factors

In addition to the other information set forth in this Quarterly Report on
Form 10-Q, you should carefully consider the factors discussed in Part I,
"Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2005, which could materially affect our business, financial
condition or future results. The risks described in our Annual Report on Form
10-K are not the only risks we face.  Additional risks and uncertainties not
currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial condition and/or
operating results.


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table contains information about all purchases made by or on
behalf of us or any affiliated purchaser (as defined in Rule 10b-18(a)(3)
under the Exchange Act) of shares or other units of any class of our equity
securities that is registered pursuant to Section 12 of the Exchange Act.


                                 34
<PAGE>

<TABLE>
                                                                               Maximum Number
                                                                               of shares that
                                                                                 may yet be
                           Total                       Total number of           purchased
                          number       Average       shares purchased as       under our share
                        of shares     price paid       part of our share         repurchase
Period                  purchased     per share      repurchase program(1)         program
-----------------------------------------------------------------------------------------------
<S>                     <C>           <C>            <C>                        <C>
April 1, 2006 to              -             -                    -                 455,991
April 30, 2006

May 1, 2006 to            47,300        $32.71              763,184                408,691
May 31, 2006

June 1, 2006 to          101,576         32.27              864,760                307,115
June 30, 2006
                        --------       -------             --------               --------
Total                    148,876        $32.41              864,760                307,115
                        ========       =======             ========               ========


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

</TABLE>



Item 3.  Defaults Upon Senior Securities

  None.


Item 4.  Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders of Capital City Bank Group, Inc. was held
on April 25, 2006.  Proxies for the meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, and there was no
solicitation in opposition to management's solicitations.  The following
summarizes all matters voted upon at this meeting.

1. The following directors were elected for terms expiring as noted.  These
   individuals served on the Board of Directors prior to the Annual Meeting.
   The number of votes cast were as follows:

   For terms to expire at                     Against
   the 2009 annual meeting:        For        Withheld
   ----------------------------------------------------
   DuBose Ausley                15,635,678    149,636
   Frederick Carroll, III       15,768,143     17,171
   John K. Humphress            15,767,211     18,103
   Henry Lewis III              15,744,434     40,880


                                      35
<PAGE>


2. The shareowners ratified the selection of KPMG LLP as the Company's
   independent auditors for the fiscal year ending December 31, 2006.  The
   number of votes cast were as follows:

                          Against/         Abstentions/
              For         Withheld       Broker Non-Vote
           ---------------------------------------------
           15,761,858      11,506            11,950


Item 5.  Other Information

  None.


Item 6.  Exhibits

(A) Exhibits

10.1  Form of Participant Agreement for the Capital City Bank Group, Inc.
      Long-Term Incentive Plan.

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

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned Chief Financial Officer hereunto duly authorized.

CAPITAL CITY BANK GROUP, INC.
        (Registrant)


/s/ J. Kimbrough Davis
-----------------------------
J. Kimbrough Davis
Executive Vice President and
Chief Financial Officer

Date:  August 9, 2006





1