Capital City Bank Group Inc. in Tallahassee, Fla., said Monday that it lost $1.7 million in the fourth quarter, or 10 cents per diluted share, as a result of increases in chargeoffs and nonperforming loans.

In the fourth quarter of 2007, the $2.5 billion-asset company earned $4.8 million, or 29 cents a share.

William G. Smith Jr., Capital City's chairman, president, and chief executive, said in a press release that its management team took "aggressive action with problem credits" during the quarter, charging off $6.1 million and adding $6.5 million to its loan-loss reserves.

For the full year, it doubled its loan-loss reserve, to $37 million, or 1.89% of total loans.

"Capital City expects to be working the collections process aggressively, often going for court-ordered judgments to produce cash from liquidations occurring ahead of the lengthy foreclosure process," Mr. Smith said. "We want history to eventually show that we had the most effective strategy and results among the Florida banks for managing our institution through this cycle."

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