8-K - CCBG - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,

DC 20549

FORM

8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 24, 2023

CAPITAL CITY BANK GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida

0-13358

59-2273542

(State of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

217 North Monroe Street,

Tallahassee

Florida

32301

(Address of principal executive offices

(Zip Code)

Registrant's telephone number, including

area code: (

850

)

402-7821

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended

to simultaneously satisfy the filing obligation of the registrant

under any of the following provisions (see General Instruction A.2.

below):

☐

Written communications pursuant to Rule 425

under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange

Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange

Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, Par value $0.01

CCBG

Nasdaq Stock Market

, LLC

Indicate by check mark whether the registrant is an emerging growth

company as defined in Rule 405 of the Securities Act of 1933

(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of

1934 (§240.12b-2 of this chapter).

Emerging growth company

☐

If an emerging growth company,

indicate by check mark if the registrant has elected not to use the extended transition period

for

complying with any new or revised financial accounting standards pursuant

to Section 13(a) of The Exchange Act.

☐

CAPITAL CITY BANK

GROUP,

INC.

FORM 8-

CURRENT REPORT

Item 2.02.

Results of Operations and Financial Condition.

On October 24, 2023, Capital City Bank Group, Inc. (“CCBG”) issued an earnings press

release reporting CCBG’s financial

results for the three and nine month periods ended September 30, 2023.

A copy of the press release is attached as Exhibit 99.1 hereto

and incorporated herein by reference.

The information furnished under Item 2.02 of this Current Report, including

the Exhibits attached hereto, shall not be deemed

“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor

shall it be deemed incorporated by reference in any

filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference

in such filing.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Item No.

Description of Exhibit

99.1

Press release, dated October 24, 2023.

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 hereunto duly authorized.

CAPITAL CITY BANK

GROUP,

INC.

Date:

October 24, 2023

By:

/s/ Jeptha E. Larkin

Jeptha E. Larkin,

Executive Vice President

and Chief Financial Officer

EXHIBIT INDEX

Exhibit

Number

Description

99.1

Press release, dated October 24, 2023

ex991

Capital City Bank Group, Inc.

Reports Third Quarter 2023

Results

TALLAHASSEE, Fla.

(October 24, 2023) – Capital City Bank Group, Inc. (NASDAQ: CCBG) today

reported net income

attributable to common shareowners of $13.2 million, or $0.78 per diluted

share, for the third quarter of 2023 compared to $14.6

million, or $0.85 per diluted share, for the second quarter of 2023, and $11.3

million, or $0.67 per diluted share, for the third quarter

of 2022.

For the first nine months of 2023, net income attributable to common shareowners

totaled $42.7 million, or $2.51 per diluted share,

compared to net income of $28.5 million, or $1.68 per diluted share, for the same period

of 2022.

QUARTER HIGHLIGHTS (3

Quarter 2023 versus 2

Quarter 2023)

Income Statement

●

Tax-equivalent

net interest income totaled $39.2 million compared

to $40.1 million for the prior quarter and reflected higher

deposit cost and lower overnight funds interest (seasonal

low in public funds deposits) – total deposit cost increased

15 basis

points to 58 basis points – net interest margin

decreased three basis

points to 4.02%

●

Continued strong credit

quality metrics – slightly higher loan loss provision

expense of $0.2 million increased the allowance

coverage ratio from 1.05% to 1.07% - net loan

charge-offs were 17 basis points

(annualized) of average loans

●

Noninterest income decreased

$2.7 million, or 11.8%,

due to lower mortgage banking revenues of $1.0

million and a $1.4 million

gain on the sale of mortgage servicing rights in second quarter of 2023

Capital City Home Loans realized a net loss of $0.04 per

share for the quarter compared

to break even for the prior

quarter reflective of challenging residential

mortgage secondary market conditions

●

Noninterest expense decreased

$0.9 million, or 2.1%, primarily due to a non-recurring

consulting payment of $0.8 million in the

prior quarter related to the outsourcing

of our core processing

system

Balance Sheet

●

Loan balances grew $15.0 million, or 0.6% (average),

and $26.4 million, or 1.0% (end of period)

●

Deposit balances (including repurchase

agreements) declined by $115.3

million, or 3.1% (average), and $248.1 million, or 6.5%

(end of period), primarily due to a seasonal low point for public fund balances

●

Tangible

book value per share increased $0.50,

or 2.6%, in third quarter bringing the year-to-date

increase to $2.09, or 11.8%

●

Repurchased 36,411

shares of common stock in the third

quarter of 2023 bringing the year-to-date total to 102,147

“The solid results achieved this quarter continue what has been a year of

strong financial performance by Capital City Bank

Group,” said William G. Smith, Jr.,

Chairman, President and CEO of Capital City Bank Group. “The diversity of our revenues,

strong core deposit franchise and stable credit have been key drivers.

Our associates continue to embody our client-centric culture

by consistently striving to exceed expectations for our clients and serve as their

trusted financial partners. As we look toward 2024,

we remain focused on client acquisition and exploring opportunities to foster

stronger relationships and further enhance the overall

client experience.”

Discussion of Operating Results

Net Interest Income/Net Interest

Margin

Tax-equivalent net

interest income for the third quarter of 2023 totaled $39.2 million, compared

to $40.1 million for the second

quarter of 2023, and $33.4 million for the third quarter of 2022.

Compared to the second quarter of 2023, the decrease reflected

higher deposit interest expense and a lower level of interest income

from overnight funds, partially offset by higher loan interest due

to loan growth and higher interest rates.

For the first nine months of 2023, tax-equivalent net interest income

totaled $119.8 million

compared to $86.6 million for the same period of 2022.

The increases over both prior year periods were driven by strong loan

growth and higher interest rates across a majority of our earning assets.

Our net interest margin for the third quarter of 2023 was 4.02%, a decrease

of three basis points from the second quarter of 2023 and

an increase of 71 basis points over the third quarter of 2022.

For the month of September 2023, our net interest margin was 4.10%.

For the first nine months of 2023, our net interest margin

was 4.03%, an increase of 112 basis points over the same period of

2022.

The increase compared to all prior periods reflected a combination of higher interest

rates and loan growth, partially offset by a

higher cost of deposits.

For the third quarter of 2023, our cost of funds was 66 basis points, an increase of 15 basis points

over the

second quarter of 2023 and an increase of 46 basis points over the third quarter

of 2022.

Our total cost of deposits (including

noninterest bearing accounts) was 58 basis points, 43 basis points, and

11 basis points, respectively,

for the same periods.

Provision for Credit Losses

We recorded

a provision for credit losses of $2.4 million for the third quarter of 2023 compared

to $2.2 million for the second

quarter of 2023 and $2.1 million for the third quarter of 2022.

The increase in the provision compared to the second quarter of 2023

was primarily attributable to loan growth and an increase in net loan charge

-offs.

For the first nine months of 2023, we recorded a

provision for credit losses of $7.8 million compared to $3.6 million for

the same period of 2022.

The higher level of provision in

2023 was primarily driven by loan growth and also reflected the favorable

impact in 2022 of the release of reserves held for

pandemic related losses.

We discuss the allowance

for credit losses further below.

Noninterest Income and Noninterest

Expense

Noninterest income for the third quarter of 2023 totaled $20.2 million compared

to $22.9 million for the second quarter of 2023 and

$22.9 million for the third quarter of 2022.

The $2.7 million decrease from the second quarter of 2023 reflected a decrease

in other

income of $1.5 million, mortgage banking revenues of $1.0 million,

wealth management fees of $0.2 million and bank card fees of

$0.1 million, partially offset by an increase in deposit fees of $0.1

million.

The decrease in other income was attributable to a $1.4

million gain from the sale of mortgage servicing rights realized in the second

quarter of 2023.

The decrease in mortgage banking

revenues was attributable to market driven lower gain on sale margins

and a lower volume of mandatory delivery loan sales which

provide a higher gain on sale percentage.

Compared to the third quarter of 2022, the $2.8 million decrease in noninterest

income reflected decreases in mortgage banking

revenues of $2.3 million, deposit fees of $0.5 million, and bank card fees of $0.2 million,

partially offset by an increase in other

income of $0.2

million.

For the first nine months of 2023, noninterest income totaled $65.3 million

compared to $73.7 million for

the same period of 2022 with the $8.4 million decrease primarily attributable

to lower mortgage banking revenues of $7.5 million,

wealth management fees of $2.4 million, deposit fees of $0.6 million, and

bank card fees of $0.4 million, partially offset by a $2.5

million increase in other income.

Compared to both prior year periods, the decrease in mortgage banking revenues was driven

lower production volume in 2023 reflective of the rapid increase in interest rates,

lower market driven gain on sale margins, and a

lower level of mandatory delivery loan sales.

The decrease in deposit fees from both prior year periods was primarily attributable

a higher earnings credit rate for commercial deposit accounts and lower

service charge fees.

For the nine-month period, the

decrease in wealth management fees was attributable to lower insurance commissions

which reflected the sale of large policies in

2022.

Further, the increase in other income was primarily

due to a $1.4 million gain from the sale of mortgage servicing rights and

increases in miscellaneous income of $0.5 million, loan servicing fees of

$0.2 million, and vendor volume rebates of $0.2 million.

Noninterest expense for the third quarter of 2023 totaled $41.6 million compared

to $42.5 million for the second quarter of 2023

and $39.8 million for the third quarter of 2022.

Compared to the second quarter of 2023, the $0.9 million decrease was primarily

due to a $0.8 million non-recurring expense in the second quarter of 2023

related to a consulting engagement to assist in negotiating

a multi-year contract for the outsourcing of our core processing system.

Compared to the third quarter of 2022, the $1.8 million increase in noninterest

expense reflected increases in other expense of $1.1

million and occupancy expense of $0.8 million, partially offset by

a decrease in compensation expense of $0.1 million.

The

increase in other expense was largely driven by a $0.7 million increase

in pension plan expense (non-service-related component)

and the increase in occupancy reflected the addition of four new banking offices

in mid-to-late 2022 and higher property/equipment

insurance premiums.

For the first nine months of 2023, noninterest expense totaled $124.6 million compared

to $119.5 million for

the same period of 2022 with the $5.1 million increase attributable to increases in other

expense of $2.7 million, occupancy expense

of $2.2 million, and compensation expense of $0.2 million.

The increase in other expense was primarily due to a $1.6 million

increase in pension plan expense (non-service related component),

the aforementioned consulting engagement expense of $0.8

million, and increases in loan servicing expense of $0.8 million, FDIC insurance

expense of $0.6 million, and miscellaneous

expense of $0.6 million, partially offset by lower OREO expense of

$1.8 million related to a gain from the sale of a banking office.

The increase in occupancy expense reflected the addition of banking offices

in 2022 and higher insurance premiums.

The slight

unfavorable variance in compensation expense reflected a $1.7

million increase in salary expense (primarily,

the addition of staffing

in our new markets and annual merit) that was partially offset by

a $1.5 million decrease in associate benefit expense.

The variance

in associate benefit expense was primarily due to a $2.2 million decrease

in pension plan expense (service cost) that was partially

offset by increases in associate insurance expense of $0.5 million and

stock-based compensation of $0.1 million.

Income Taxes

We realized income

tax expense of $3.2 million (effective rate of 20.9%) for the third quarter of

2023 compared to $3.5 million

(effective rate of 19.6%) for the second quarter of 2023

and $3.1 million (effective rate of 21.4%) for the third quarter of 2022.

For

the first nine months of 2023, we realized income tax expense of $10.9 million

(effective rate of 20.7%) compared to $7.5 million

(effective rate of 20.3%) for the same period of 2022.

The increase in our effective tax rate for the third quarter of 2023 was

primarily due to a lower level of pre-tax income from CCHL in relation

to our consolidated income as the non-controlling interest

adjustment for CCHL is accounted for as a permanent tax adjustment.

Further, the second quarter of 2023 effective

rate reflected a

higher level of tax benefit accrued from an investment in a solar tax credit equity fund.

Absent discrete items or unexpected

variance in the timing of the tax benefit accrued from our solar tax credit

equity fund investment, we expect our annual effective tax

rate to approximate 20-21% for 2023.

Discussion of Financial Condition

Earning Assets

Average earning

assets totaled $3.877 billion for the third quarter of 2023, a decrease of $97.8 million, or

2.5%, from the second

quarter of 2023, and a decrease of $155.8 million, or 3.9%, from the fourth

quarter of 2022.

The decrease from both prior periods

was attributable to lower deposit balances (see below –

Deposits

The mix of earning assets continues to improve as overnight

funds are being utilized to fund loan growth.

Average loans

held for investment (“HFI”) increased $15.0 million, or 0.6%, over the second

quarter of 2023 and $233.3 million, or

9.6%, over the fourth quarter of 2022.

Period end loans increased $26.4 million, or 1.0%, over the second quarter of 2023

and

$168.2 million, or 6.7%, over the fourth quarter of 2022.

Compared to both prior periods, the loan growth was primarily in the

residential real estate category and was partially offset by lower indirect

auto and construction loan balances.

Allowance for Credit Losses

At September 30, 2023, the allowance for credit losses for HFI loans totaled $28.9

million compared to $28.0 million at June 30,

2023 and $24.7 million at December 31, 2022.

Activity within the allowance is provided on Page 9.

The increase in the allowance

over both prior periods was driven primarily by loan growth.

Further, the increase from December 31, 2022 reflected

a higher loss

rate for the residential real estate portfolio due to slower prepayment

speeds.

At September 30, 2023, the allowance represented

1.07% of HFI loans compared to 1.05% at June 30, 2023, and 0.98% at December 31,

2022.

Credit

Quality

Credit quality metrics remained strong for the quarter.

Nonperforming assets (nonaccrual loans and other real estate) totaled $4.7

million at September 30, 2023 compared to $6.6 million at June 30,

2023 and $2.7 million at December 31, 2022.

At September 30,

2023, nonperforming assets as a percent of total assets equaled 0.11%,

compared to 0.15% at June 30, 2023 and 0.06% at December

31, 2022.

Nonaccrual loans totaled $4.7 million at September 30, 2023, a $1.9 million

decrease from June 30, 2023 and a $2.4

million increase over December 31, 2022.

Further, classified loans totaled $21.8 million at September

30, 2023, a $6.8 million

increase over June 30, 2023 and a $2.5 million increase over December 31, 2022.

The increase in the current period was primarily

attributable to the downgrade of one hotel loan that is performing as agreed

on scheduled payments.

Deposits

Average total

deposits were $3.597 billion for the third quarter of 2023, a decrease of $122.7 million, or 3.3%,

from the second

quarter of 2023 and a decrease of $206.2 million, or 5.4%, from the fourth quarter

of 2022.

Compared to both prior periods, the

decreases were primarily attributable to lower noninterest bearing, savings, and

NOW balances, partially offset by higher money

market balances.

Compared to the second quarter of 2023, the decrease in NOW account balances was primarily

due to the seasonal

reduction in public fund balances held by our institutional and municipal

clients.

At September 30, 2023, total deposits were $3.540 billion, a decrease of $248.4

million, or 6.6%, from June 30, 2023 and a decline

of $398.9 million, or 10.1%, from December 31, 2022.

Our public fund deposit balances declined $205 million and $245 million

from June 30, 2023 and December 31, 2022, respectively,

and reflected the seasonal decline in those balances which will begin to

increase in the fourth quarter as municipal tax receipts are received.

In addition, the decrease from June 30, 2023 reflected a short-

term deposit of $103 million (in the NOW category) made late in June by a municipal

client that was subsequently moved in mid-

July.

The remaining portion of the decrease reflected continued client spend of stimulus

savings and clients seeking higher yielding

investment products outside the Bank, a portion of which have moved to our

wealth division.

Additionally, compared to both

prior

periods, we realized a remix of deposit balances of $32 million and $99 million, respectively,

as noninterest bearing accounts

migrated into interest bearing accounts (primarily NOW and money market

accounts).

Business deposit transaction accounts classified as repurchase agreements

averaged $25.4 million for the third quarter of 2023, an

increase of $7.5 million over the second quarter of 2023 and $16.9 million over

the fourth quarter of 2022.

At September 30, 2023,

repurchase agreement balances were $22.9 million compared to $22.6

million at June 30, 2023 and $6.6 million at December 31,

2022.

Liquidity

The Bank maintained an average net overnight funds (deposits with banks plus

FED funds sold less FED funds purchased) sold

position of $136.6 million in the third quarter of 2023 compared to $218.9

million in the second quarter of 2023 and $469.4 million

in the fourth quarter of 2022.

The declining overnight funds position reflected growth in average

loans and lower average deposit

balances.

At September 30, 2023, we had the ability to generate approximately $1.587 billion

(excludes overnight funds position of $95

million) in additional liquidity through various sources including

various federal funds purchased lines, Federal Home Loan Bank

borrowings, the Federal Reserve Discount Window,

and brokered deposits.

We also view our

investment portfolio as a liquidity source and have the option to pledge securities in our

portfolio as collateral for

borrowings or deposits, and/or to sell selected securities.

Our portfolio consists of debt issued by the U.S. Treasury,

U.S.

governmental agencies, municipal governments, and corporate entities.

At September 30, 2023, the weighted-average maturity and

duration of our portfolio were 2.90 years and 2.61 years, respectively,

and the available-for-sale portfolio had a net unrealized tax-

effected loss of $31.0 million.

Capital

Shareowners’ equity was $428.6 million at September 30, 2023

compared to $420.8 million at June 30, 2023 and $394.0 million at

December 31, 2022.

For the first nine months of 2023, shareowners’ equity was positively impacted by net

income attributable to

common shareowners of $42.7 million, a $2.4 million decrease in the unrealized

loss on investment securities, the issuance of stock

of $2.2 million, stock compensation accretion of $1.0 million, and a $0.4

million increase in the fair value of the interest rate swap

related to subordinated debt.

Shareowners’ equity was reduced by common stock dividends of $9.5

million ($0.56 per share), the

repurchase of stock of $3.1 million (102,147 shares), and net adjustments totaling

$1.5 million related to transactions under our

stock compensation plans.

At September 30, 2023, our total risk-based capital ratio was 16.58%

compared to 15.95% at June 30, 2023 and 15.52% at

December 31, 2022.

Our common equity tier 1 capital ratio was 13.56%, 13.02%, and 12.64%, respectively,

on these dates.

Our

leverage ratio was 10.19%, 9.74%, and 9.06%, respectively,

on these dates.

At September 30, 2023, all our regulatory capital ratios

exceeded the threshold to be designated as “well-capitalized” under the

Basel III capital standards.

Further, our tangible common

equity ratio was 8.28% at September 30, 2023 compared to 7.61% and 6.79% at June

30, 2023 and December 31, 2022,

respectively.

If our unrealized held-to-maturity securities losses of $33.1 million (after-tax)

were recognized in accumulated other

comprehensive loss, our adjusted tangible capital ratio would be 7.46%.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest

publicly traded financial holding companies headquartered

in Florida and has approximately $4.1

billion in assets.

We provide

a full range of banking services, including traditional deposit

and credit services, mortgage banking, asset management, trust, merchant

services, bankcards,

securities brokerage services and

financial advisory services, including the sale of life insurance, risk management

and asset protection services.

Our bank

subsidiary, Capital City Bank,

was founded in 1895 and now has 63 banking offices and 100 ATM

s/ITMs in Florida, Georgia and

Alabama.

For more information about Capital City Bank Group, Inc., visit www.ccbg.com

FORWARD

-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans

and expectations that are subject to uncertainties and

risks, which could cause our future results to differ materially.

The words “may,” “could,” “should,”

“would,” “believe,”

“anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “vision,”

“goal,” and similar expressions are intended to identify

forward-looking statements. The following factors, among others, could cause our actual

results to differ: our ability to successfully

manage credit risk, interest rate risk, liquidity risk, and other risks inherent

to our industry; legislative or regulatory changes; adverse

developments in the financial services industry generally,

such as the recent bank failures and any related impacts on depositor

behavior; the effects of changes in the level of checking or

savings account deposits and the competition for deposits on our funding

costs, net interest margin and ability to replace maturing deposits and

advances, as necessary; the effects of actions taken

governmental agencies to stabilize the financial system and the effectiv

eness of such actions; changes in monetary and fiscal policies

of the U.S. Government; inflation, interest rate, market and monetary fluctuations;

the effects of security breaches and computer

viruses that may affect our computer systems or fraud related

to debit card products; the accuracy of our financial statement

estimates and assumptions, including the estimates used for our allowance

for credit losses, deferred tax asset valuation and pension

plan; changes in our liquidity position; changes in accounting principles, policies,

practices or guidelines; the frequency and

magnitude of foreclosure of our loans; the effects of our lack of

a diversified loan portfolio, including the risks of loan segments,

geographic and industry concentrations; the strength of the United

States economy in general and the strength of the local economies

in which we conduct operations; our ability to declare and pay dividends,

the payment of which is subject to our capital

requirements; changes in the securities and real estate markets; structural changes

in the markets for origination, sale and servicing

of residential mortgages; uncertainty in the pricing of residential mortgage

loans that we sell, as well as competition for the mortgage

servicing rights related to these loans and related interest rate risk or price risk resulting

from retaining mortgage servicing rights and

the potential effects of higher interest rates on our loan origination

volumes; the effect of corporate restructuring, acquisitions or

dispositions, including the actual restructuring and other related charges

and the failure to achieve the expected gains, revenue

growth or expense savings from such corporate restructuring, acquisitions

or dispositions; the effects of natural disasters, harsh

weather conditions (including hurricanes), widespread health emergencies

(including pandemics, such as the COVID-19 pandemic),

military conflict, terrorism, civil unrest or other geopolitical events; our

ability to comply with the extensive laws and regulations to

which we are subject, including the laws for each jurisdiction where we operate;

the willingness of clients to accept third-party

products and services rather than our products and services and vice versa; increased

competition and its effect on pricing;

technological changes; the outcomes of litigation or regulatory proceedings;

negative publicity and the impact on our reputation;

changes in consumer spending and saving habits; growth and profitability

of our noninterest income; the limited trading activity of

our common stock; the concentration of ownership of our common

stock; anti-takeover provisions under federal and state law as

well as our Articles of Incorporation and our Bylaws; other risks described from

time to time in our filings with the Securities and

Exchange Commission; and our ability to manage the risks involved in

the foregoing.

Additional factors can be found in our Annual

Report on Form 10-K for the fiscal year ended December 31, 2022, and our

other filings with the SEC, which are available at the

SEC’s internet site (http://www.sec.gov).

Forward-looking statements in this Press Release speak only as of the date of the Press

Release, and we assume no obligation to update forward-looking statements

or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURES

Unaudited

We present a tangible

common equity ratio and a tangible book value per diluted share that removes the effect

of goodwill and other

intangibles resulting from merger and acquisition activity.

We believe these measures

are useful to investors because it allows

investors to more easily compare our capital adequacy to other companies in the

industry.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data)

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

Dec 31, 2022

Sep 30, 2022

Shareowners' Equity (GAAP)

428,610

420,779

411,240

394,016

373,165

Less: Goodwill and Other Intangibles (GAAP)

92,973

93,013

93,053

93,093

93,133

Tangible Shareowners' Equity (non-GAAP)

335,637

327,766

318,187

300,923

280,032

Total Assets (GAAP)

4,147,191

4,399,563

4,409,742

4,525,958

4,332,671

Less: Goodwill and Other Intangibles (GAAP)

92,973

93,013

93,053

93,093

93,133

Tangible Assets (non-GAAP)

4,054,218

4,306,550

4,316,689

4,432,865

4,239,538

Tangible Common Equity Ratio (non-GAAP)

A/B

8.28%

7.61%

7.37%

6.79%

6.61%

Actual Diluted Shares Outstanding (GAAP)

16,997,886

17,025,023

17,049,913

17,039,401

16,998,177

Tangible Book Value

per Diluted Share (non-GAAP)

A/C

19.75

19.25

18.66

17.66

16.47

CAPITAL CITY BANK

GROUP,

INC.

EARNINGS HIGHLIGHTS

Unaudited

Three Months Ended

Nine Months Ended

(Dollars in thousands, except per share data)

Sep 30, 2023

Jun 30, 2023

Sep 30, 2022

Sep 30, 2023

Sep 30, 2022

EARNINGS

Net Income Attributable to Common Shareowners

13,202

14,551

11,315

42,707

28,483

Diluted Net Income Per Share

0.78

0.85

0.67

2.51

1.68

PERFORMANCE

Return on Average Assets (annualized)

1.24

1.35

1.03

1.32

0.88

Return on Average Equity (annualized)

12.25

13.94

11.83

13.70

10.05

Net Interest Margin

4.02

4.05

3.31

4.03

2.91

Noninterest Income as % of Operating Revenue

34.01

36.38

40.76

35.33

46.03

Efficiency Ratio

70.09

67.55

70.66

67.32

74.60

CAPITAL ADEQUACY

Tier 1 Capital

15.41

14.84

14.80

15.41

14.80

Total Capital

16.58

15.95

15.75

16.58

15.75

Leverage

10.19

9.74

8.91

10.19

8.91

Common Equity Tier 1

13.56

13.02

12.83

13.56

12.83

Tangible Common Equity

(1)

8.28

7.61

6.61

8.28

6.61

Equity to Assets

10.33

9.56

8.61

10.33

8.61

ASSET QUALITY

Allowance as % of Non-Performing Loans

614.71

422.23

934.53

614.71

934.53

Allowance as a % of Loans HFI

1.07

1.05

0.96

1.07

0.96

Net Charge-Offs as % of Average Loans HFI

0.17

0.07

0.12

0.16

0.17

Nonperforming Assets as % of Loans HFI and OREO

0.17

0.25

0.10

0.17

0.10

Nonperforming Assets as % of Total Assets

0.11

0.15

0.06

0.11

0.06

STOCK PERFORMANCE

High

33.44

34.16

33.93

36.86

33.93

Low

28.64

28.03

27.41

28.03

24.43

29.83

30.64

31.11

29.83

31.11

Average Daily Trading Volume

26,774

33,412

30,546

33,936

26,677

(1)

Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a

reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK GROUP, INC.

CONSOLIDATED STATEMENT

OF FINANCIAL CONDITION

Unaudited

2023

2022

(Dollars in thousands)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

ASSETS

Cash and Due From Banks

72,379

83,679

84,549

72,114

72,686

Funds Sold and Interest Bearing Deposits

95,119

285,129

303,403

528,536

497,679

Total Cash and Cash Equivalents

167,498

368,808

387,952

600,650

570,365

Investment Securities Available for Sale

334,052

386,220

402,943

413,294

416,745

Investment Securities Held to Maturity

632,076

641,398

651,755

660,744

676,178

Other Equity Securities

3,585

1,703

1,883

1,349

Total Investment Securities

969,713

1,029,321

1,056,581

1,074,048

1,094,272

Loans Held for Sale

53,093

67,908

55,118

54,635

50,304

Loans Held for Investment ("HFI"):

Commercial, Financial, & Agricultural

221,704

227,219

236,263

247,362

246,304

Real Estate - Construction

197,526

226,404

253,903

234,519

237,718

Real Estate - Commercial

828,234

831,285

798,438

782,557

715,870

Real Estate - Residential

954,447

876,867

827,124

721,759

573,963

Real Estate - Home Equity

203,902

203,150

207,241

208,120

202,512

Consumer

285,122

295,646

305,324

324,450

347,949

Other Loans

1,401

5,425

7,660

5,346

20,822

Overdrafts

1,076

1,007

931

1,067

1,047

Total Loans Held for Investment

2,693,412

2,667,003

2,636,884

2,525,180

2,346,185

Allowance for Credit Losses

(28,854)

(27,964)

(26,507)

(24,736)

(22,510)

Loans Held for Investment, Net

2,664,558

2,639,039

2,610,377

2,500,444

2,323,675

Premises and Equipment, Net

81,677

82,062

82,055

82,138

81,736

Goodwill and Other Intangibles

92,973

93,013

93,053

93,093

93,133

Other Real Estate Owned

431

Other Assets

117,678

119,411

124,593

120,519

119,173

Total Other Assets

292,329

294,487

299,714

296,181

294,055

Total Assets

4,147,191

4,399,563

4,409,742

4,525,958

4,332,671

LIABILITIES

Deposits:

Noninterest Bearing Deposits

1,472,165

1,520,134

1,601,388

1,653,620

1,737,046

NOW Accounts

1,092,996

1,269,839

1,242,721

1,290,494

990,021

Money Market Accounts

304,323

321,743

271,880

267,383

292,932

Savings Accounts

571,003

590,245

617,310

637,374

646,526

Certificates of Deposit

99,958

86,905

90,621

90,446

92,853

Total Deposits

3,540,445

3,788,866

3,823,920

3,939,317

3,759,378

Repurchase Agreements

22,910

22,619

4,429

6,583

6,943

Other Short-Term Borrowings

18,786

28,054

22,203

50,210

45,328

Subordinated Notes Payable

52,887

Other Long-Term Borrowings

364

414

463

513

562

Other Liabilities

75,585

77,192

85,878

73,675

84,657

Total Liabilities

3,710,977

3,970,032

3,989,780

4,123,185

3,949,755

Temporary Equity

7,604

8,752

8,722

8,757

9,751

SHAREOWNERS' EQUITY

Common Stock

170

Additional Paid-In Capital

36,182

36,853

37,512

37,331

36,234

Retained Earnings

426,934

417,128

405,634

393,744

384,964

Accumulated Other Comprehensive Loss, Net of Tax

(34,676)

(33,372)

(32,076)

(37,229)

(48,203)

Total Shareowners' Equity

428,610

420,779

411,240

394,016

373,165

Total Liabilities, Temporary Equity and Shareowners' Equity

4,147,191

4,399,563

4,409,742

4,525,958

4,332,671

OTHER BALANCE SHEET DATA

Earning Assets

3,811,337

4,049,361

4,051,987

4,182,399

3,988,440

Interest Bearing Liabilities

2,163,227

2,372,706

2,302,514

2,395,890

2,128,052

Book Value Per Diluted Share

25.22

24.72

24.12

23.12

21.95

Tangible Book Value

Per Diluted Share

(1)

19.75

19.25

18.66

17.66

16.47

Actual Basic Shares Outstanding

16,958

16,992

17,022

16,987

16,962

Actual Diluted Shares Outstanding

16,998

17,025

17,050

17,039

16,998

(1)

Tangible book value per diluted share is a non-GAAP financial measure. For additional

information, including a reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK

GROUP,

INC.

CONSOLIDATED STATEMENT

OF OPERATIONS

Unaudited

2023

2022

Nine Months Ended

September 30,

(Dollars in thousands, except per share data)

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

2023

2022

INTEREST INCOME

Loans, including Fees

39,212

37,477

34,880

31,916

27,761

111,569

73,966

Investment Securities

4,561

4,815

4,924

4,847

4,372

14,300

11,108

Federal Funds Sold and Interest Bearing Deposits

1,848

2,782

4,111

4,463

3,231

8,741

5,048

Total Interest Income

45,621

45,074

43,915

41,226

35,364

134,610

90,122

INTEREST EXPENSE

Deposits

5,214

4,008

2,488

1,902

1,052

11,710

1,542

Repurchase Agreements

190

115

314

Other Short-Term Borrowings

440

336

452

683

531

1,228

1,065

Subordinated Notes Payable

625

604

571

522

443

1,800

1,130

Other Long-Term Borrowings

Total Interest Expense

6,473

5,068

3,526

3,122

2,037

15,067

3,766

Net Interest Income

39,148

40,006

40,389

38,104

33,327

119,543

86,356

Provision for Credit Losses

2,443

2,219

3,130

3,521

2,099

7,792

3,641

Net Interest Income after Provision for Credit Losses

36,705

37,787

37,259

34,583

31,228

111,751

82,715

NONINTEREST INCOME

Deposit Fees

5,456

5,326

5,239

5,536

5,947

16,021

16,585

Bank Card Fees

3,684

3,795

3,726

3,744

3,860

11,205

11,657

Wealth Management Fees

3,984

4,149

3,928

3,649

3,937

12,061

14,410

Mortgage Banking Revenues

4,819

5,837

6,995

5,497

7,116

17,651

25,127

Other

2,237

3,766

2,360

2,546

2,074

8,363

5,876

Total Noninterest Income

20,180

22,873

22,248

20,972

22,934

65,301

73,655

NONINTEREST EXPENSE

Compensation

24,648

24,884

25,636

25,565

24,738

75,168

74,977

Occupancy, Net

6,980

6,820

6,762

6,253

6,153

20,562

18,321

Other

10,014

10,830

8,057

10,469

8,919

28,901

26,243

Total Noninterest Expense

41,642

42,534

40,455

42,287

39,810

124,631

119,541

OPERATING PROFIT

15,243

18,126

19,052

13,268

14,352

52,421

36,829

Income Tax Expense

3,190

3,544

4,133

2,599

3,074

10,867

7,486

Net Income

12,053

14,582

14,919

10,669

11,278

41,554

29,343

Pre-Tax Loss (Income) Attributable to Noncontrolling Interest

1,149

(31)

995

1,153

(860)

NET INCOME ATTRIBUTABLE

COMMON SHAREOWNERS

13,202

14,551

14,954

11,664

11,315

42,707

28,483

PER COMMON SHARE

Basic Net Income

0.78

0.86

0.88

0.69

0.67

2.52

1.68

Diluted Net Income

0.78

0.85

0.88

0.68

0.67

2.51

1.68

Cash Dividend

0.20

0.18

0.17

0.56

0.49

AVERAGE

Basic

16,985

17,002

17,016

16,963

16,960

17,001

16,947

Diluted

17,025

17,035

17,045

17,016

16,996

17,031

16,973

CAPITAL CITY BANK GROUP,

INC.

ALLOWANCE FOR CREDIT LOSSES ("ACL")

AND CREDIT QUALITY

Unaudited

2023

2022

Nine Months Ended

September 30,

(Dollars in thousands, except per share data)

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

2023

2022

ACL - HELD FOR INVESTMENT LOANS

Balance at Beginning of Period

27,964

26,507

24,736

22,510

21,281

24,736

21,606

Provision for Credit Losses

2,043

1,944

3,291

3,543

1,931

7,278

3,522

Net Charge-Offs (Recoveries)

1,153

487

1,520

1,317

702

3,160

2,618

Balance at End of Period

28,854

27,964

26,507

24,736

22,510

28,854

22,510

As a % of Loans HFI

1.07%

1.05%

1.01%

0.98%

0.96%

1.07%

0.96%

As a % of Nonperforming Loans

614.71%

422.23%

577.63%

1,076.89%

934.53%

614.71%

934.53%

ACL - UNFUNDED COMMITMENTS

Balance at Beginning of Period

3,120

2,833

2,989

3,012

2,853

2,989

2,897

Provision for Credit Losses

382

287

(156)

(23)

159

513

115

Balance at End of Period

(1)

3,502

3,120

2,833

2,989

3,012

3,502

3,012

ACL - DEBT SECURITIES

Provision for Credit Losses

(12)

(5)

CHARGE-OFFS

Commercial, Financial and Agricultural

164

129

294

1,179

Real Estate - Construction

Real Estate - Commercial

120

267

Real Estate - Home Equity

160

Consumer

1,340

993

1,732

976

770

4,065

1,925

Overdrafts

659

894

634

720

989

2,187

2,429

Total Charge-Offs

2,075

1,980

2,650

2,073

1,762

6,705

5,833

RECOVERIES

Commercial, Financial and Agricultural

194

282

Real Estate - Construction

Real Estate - Commercial

Real Estate - Residential

132

219

186

Real Estate - Home Equity

131

209

147

Consumer

418

514

571

175

260

1,503

896

Overdrafts

376

633

373

409

666

1,382

1,601

Total Recoveries

922

1,493

1,130

756

1,060

3,545

3,215

NET CHARGE-OFFS (RECOVERIES)

1,153

487

1,520

1,317

702

3,160

2,618

Net Charge-Offs as a % of Average Loans

HFI

(2)

0.17%

0.07%

0.24%

0.21%

0.12%

0.16%

0.17%

CREDIT QUALITY

Nonaccruing Loans

4,694

6,623

4,589

2,297

2,409

Other Real Estate Owned

431

Total Nonperforming Assets ("NPAs")

4,695

6,624

4,602

2,728

2,422

Past Due Loans 30-89 Days

5,577

4,207

5,061

7,829

6,263

Past Due Loans 90 Days or More

Classified Loans

21,812

14,973

12,179

19,342

20,988

Nonperforming Loans as a % of Loans HFI

0.17%

0.25%

0.17%

0.09%

0.10%

NPAs as a % of Loans HFI and Other Real Estate

0.17%

0.25%

0.17%

0.11%

0.10%

NPAs as a % of

Total Assets

0.11%

0.15%

0.10%

0.06%

(1)

Recorded in other liabilities

(2)

Annualized

CAPITAL CITY BANK GROUP,

INC.

AVERAGE

BALANCE AND INTEREST RATES

Unaudited

Third Quarter 2023

Second Quarter 2023

First Quarter 2023

Fourth Quarter 2022

Third Quarter 2022

Sep 2023 YTD

Sep 2022 YTD

(Dollars in thousands)

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

Average

Balance

Interest

Average

Rate

ASSETS:

Loans Held for Sale

62,768

971

6.14

54,350

801

5.90

55,110

644

4.74

42,910

581

5.38

55,164

486

4.82

57,438

2,416

5.62

50,387

1,594

4.23

Loans Held for Investment

(1)

2,672,653

38,323

5.69

2,657,693

36,758

5.55

2,582,395

34,331

5.39

2,439,379

31,418

5.11

2,264,075

27,354

4.76

2,637,911

109,412

5.55

2,105,211

72,598

4.61

Investment Securities

Taxable Investment Securities

1,002,547

4,549

1.80

1,041,202

4,804

1.84

1,061,372

4,912

1.86

1,078,265

4,835

1.78

1,117,789

4,359

1.55

1,034,825

14,265

1.84

1,105,822

11,082

1.34

Tax-Exempt Investment Securities

(1)

2,456

2.66

2,656

2.47

2,840

2.36

2,827

2.36

2,939

2.30

2,649

2.49

2,614

1.90

Total Investment Securities

1,005,003

4,566

1.81

1,043,858

4,820

1.84

1,064,212

4,929

1.86

1,081,092

4,852

1.78

1,120,728

4,376

1.55

1,037,474

14,315

1.84

1,108,436

11,119

1.34

Federal Funds Sold and Interest Bearing

Deposits

136,556

1,848

5.37

218,902

2,782

5.10

360,971

4,111

4.62

469,352

4,463

3.77

569,984

3,231

2.25

237,987

8,741

4.91

710,559

5,048

0.95

Total Earning Assets

3,876,980

45,708

4.68

3,974,803

45,161

4.56

4,062,688

44,015

4.39

4,032,733

41,314

4.07

4,009,951

35,447

3.51

3,970,810

134,884

4.54

3,974,593

90,359

3.04

Cash and Due From Banks

75,941

75,854

74,639

74,178

79,527

75,483

77,856

Allowance for Credit Losses

(29,172)

(27,893)

(25,637)

(22,596)

(21,509)

(27,581)

(21,382)

Other Assets

295,106

297,837

300,175

297,510

289,709

297,688

284,546

Total Assets

4,218,855

4,320,601

4,411,865

4,381,825

4,357,678

4,316,400

4,315,613

LIABILITIES:

Noninterest Bearing Deposits

1,474,574

1,539,877

1,601,750

1,662,443

1,726,918

1,538,268

1,700,800

NOW Accounts

1,125,171

3,489

1.23

1,200,400

3,038

1.01

1,228,928

2,152

0.71

1,133,733

1,725

0.60

1,016,475

868

0.34

1,184,453

8,679

0.98

1,042,958

1,074

0.14

Money Market Accounts

322,623

1,294

1.59

288,466

747

1.04

267,573

208

0.31

273,328

0.09

288,758

0.10

293,089

2,249

1.03

286,804

140

0.07

Savings Accounts

579,245

200

0.14

602,848

120

0.08

629,388

0.05

641,153

0.05

643,640

0.05

603,643

396

0.09

623,986

229

0.05

Time Deposits

95,203

231

0.96

87,973

103

0.47

89,675

0.24

92,385

0.15

94,073

0.14

90,970

386

0.57

95,408

0.14

Total Interest Bearing Deposits

2,122,242

5,214

0.97

2,179,687

4,008

0.74

2,215,564

2,488

0.46

2,140,599

1,902

0.35

2,042,946

1,052

0.20

2,172,155

11,710

0.72

2,049,156

1,542

0.10

Total Deposits

3,596,816

5,214

0.58

3,719,564

4,008

0.43

3,817,314

2,488

0.26

3,803,041

1,902

0.20

3,769,864

1,052

0.11

3,710,423

11,710

0.42

3,749,956

1,542

0.05

Repurchase Agreements

25,356

190

2.98

17,888

115

2.58

9,343

0.37

8,464

0.34

11,665

0.18

17,588

314

2.39

7,971

0.11

Other Short-Term Borrowings

24,306

440

7.17

17,834

336

7.54

37,766

452

4.86

42,380

683

6.39

35,014

531

6.01

26,586

1,228

6.17

29,020

1,065

4.90

Subordinated Notes Payable

52,887

625

4.62

52,887

604

4.52

52,887

571

4.32

52,887

522

3.86

52,887

443

3.28

52,887

1,800

4.49

52,887

1,130

2.82

Other Long-Term Borrowings

387

4.73

431

4.80

480

4.80

530

4.80

580

4.74

433

4.78

710

4.58

Total Interest Bearing Liabilities

2,225,178

6,473

1.15

2,268,727

5,068

0.90

2,316,040

3,526

0.62

2,244,860

3,122

0.55

2,143,092

2,037

0.38

2,269,649

15,067

0.89

2,139,744

3,766

0.24

Other Liabilities

83,099

84,305

81,206

84,585

98,501

82,877

86,055

Total Liabilities

3,782,851

3,892,909

3,998,996

3,991,888

3,968,511

3,890,794

3,926,599

Temporary Equity

8,424

8,935

8,802

9,367

9,862

8,719

10,156

SHAREOWNERS' EQUITY:

427,580

418,757

404,067

380,570

379,305

416,887

378,858

Total Liabilities, Temporary

Equity and

Shareowners' Equity

4,218,855

4,320,601

4,411,865

4,381,825

4,357,678

4,316,400

4,315,613

Interest Rate Spread

39,235

3.52

40,093

3.66

40,489

3.77

38,192

3.52

33,410

3.13

119,817

3.65

86,593

2.80

Interest Income and Rate Earned

(1)

45,708

4.68

45,161

4.56

44,015

4.39

41,314

4.07

35,447

3.51

134,884

4.54

90,359

3.04

Interest Expense and Rate Paid

(2)

6,473

0.66

5,068

0.51

3,526

0.35

3,122

0.31

2,037

0.20

15,067

0.51

3,766

0.13

Net Interest Margin

39,235

4.02

40,093

4.05

40,489

4.04

38,192

3.76

33,410

3.31

119,817

4.03

86,593

2.91

(1)

Interest and average rates are

calculated on a tax-equivalent basis using a 21% Federal tax rate.

(2)

Rate calculated based on average earning assets.