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):

January 26, 2021

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

-K

CURRENT REPORT

Item 2.02.

Results of Operations and Financial Condition.

On January 26, 2021, Capital City Bank Group, Inc. (“CCBG”)

issued an earnings press release reporting CCBG’s

financial

results for the year ended December 31, 2020.

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 Exhibit 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 January 26, 2021.

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:

January 26, 2021

By:

/s/ J.Kimbrough Davis

J. Kimbrough Davis,

Executive Vice President and

Chief Financial Officer

EXHIBIT INDEX

Exhibit

Number

Description

99.1

Press release, dated January 26, 2021

exhibit991

Capital City Bank Group, Inc.

Reports Fourth Quarter 2020 Results

TALLAHASSEE, Fla.

(January 26, 2021) – Capital City Bank Group, Inc. (NASDAQ:

CCBG) today reported net income of $7.7

million, or $0.46 per diluted share for the fourth quarter of 20

20 compared to net income of $10.4 million, or $0.62 per diluted share

for the third quarter of 2020, and $8.6 million, or $0.51

per diluted share,

for the fourth quarter of 2019.

For the full year of 2020, net income totaled $31.6 million, or $1.88

per diluted share, compared to net income of $30.8 million, or

$1.83 per diluted share, for 2019.

Fourth Quarter 2020 HIGHLIGHTS

●

Operating revenues (excluding mortgage

fees) improved 1.8%

Net interest income held firm, declining

$0.1 million

7% increase in other fee revenues

(deposit, bankcard, and wealth management)

●

Noninterest expense included $0.9

million related to other real

estate valuation adjustments ($0.5 million) and other expenses

totaling $0.4 million (additional funding for our foundation

and consulting/legal costs related

to a strategic initiative)

●

Period-end core loans (excluding SBA

PPP) increased $20 million, or 1.1% sequentially

SBA PPP loan forgiveness pay-offs totaled

$12 million - $178 million in balances and $3.2 million in related

fees remain at

period-end

●

Credit quality remains

strong with no significant probl

em loan migration

97%

of loan balances for pandemic related extensions

have resumed payments – only $9

million remains on extension

●

Capital City Home Loans (“CCHL”) contributed $0.10 per

Full Year

2020 HIGHLIGHTS

●

Operating revenues (excluding mortgage

fees) held firm as unfavorable asset re-pricing was offset

by SBA PPP loan fees and

higher other fee revenues

●

Loan balances buoyed by SBA PPP loan originations which

totaled $190 million

Core loan balances (excluding SBA

PPP) held firm due to stronger loan product

ion in the fourth quarter

●

Reserve build of $6.6 million (provision

of $9.0 million less net charge-offs of $2.4

million) in response to potential credit

losses

related to the pandemic

Allowance coverage ratio (excluding SBA PPP) was 1.30%

at year-end

●

Deposits grew $572 million (period-end)

and $307 million (average) and reflected

stimulus inflows as well as strong core

deposit

growth

●

Acquired 51% ownership in Brand

Mortgage, LLC on March 1, 2020 (renamed

CCHL) – contributed $0.52 per share

“Our strategic alliance with CCHL and the origination of $190

million in SBA PPP loans more than offset the adverse impact

of our

reserve build and lower interest rates, resulting in year over year

earnings growth,” said William G. Smith, Jr.,

Chairman, President

and CEO.

“As we entered 2020,

I certainly didn’t anticipate the difficulties we would

face, but I could not be prouder of our team’s

response to the COVID-19 pandemic.

We continue to

put the safety and well-being of our associates and clients first, as

we reach

out to assist our communities through the origination of SBA

PPP loans, grants and volunteer hours, and endeavor to meet the needs

of our clients through both in-person and virtual delivery channels.

2021 will bring challenges and opportunities, but I am confident

our team has the skills and capacity to successfully navigate the

future, and we will continue to focus on implementing strategies that

produce long-term value for our shareowners.

My outlook for Capital City remains optimistic,

and I appreciate your continued

support.”

COVID-19 Update

●

We continue to monitor

and adhere to national guidelines and local safety ordinances to

protect both clients and associates and

respond to changing conditions with the pandemic and its impact on

client and associate interactions

●

We continue to monitor

COVID-19 case count trends in our markets and respond appropriately

to help ensure client and associate

safety

●

On November 24, 2020 we proactively closed lobby access to clients in

response to higher case count trends in our markets -

banking services are being provided via drive-thru or in-person by appointme

nt only (subject to safety protocols)

●

On November 30, 2020 we reinstated remote work arrangements for

non-retail associates

●

We continue to provide

enhanced digital banking options available for banking products and

access to sales associates

●

We continue to support

clients with the Small Business Administration Payment Protection

Program (“SBA PPP”) by actively

assisting with the Round 1 forgiveness process and will offer

funding for clients eligible for Round 2

Discussion of Operating Results

Summary Overview

Compared to the third quarter of 2020,

the $5.6 million decrease in operating profit was attributable to a $4.5

million decrease in

noninterest income, a $1.0 million increase in noninterest expense,

and a $0.1

million decrease in net interest income.

Compared to the fourth quarter of 2019, the $1.7 million increase

in operating profit was attributable to a $16.7 million increase in

noninterest income, partially offset by higher noninterest expense

of $12.2 million, a $1.5 million increase in the provision for credit

losses and lower net interest income of $1.3 million.

The $12.1 million increase in operating profit for the full year

2020 versus 2019 was attributable to higher noninterest income of

$58.1 million, partially offset by higher noninterest expense of

$36.4 million, a $7.6 million increase in the provision for credit

losses and lower net interest income of $2.0 million.

The aforementioned year over year variances primarily reflect

the acquisition of a 51% membership interest and consolidation

CCHL on March 1, 2020.

Our return on average assets (“ROA”) was 0.84%

and our return on average equity (“ROE”) was 8.97%

for the fourth quarter of

2020.

These metrics were 1.17% and 12.16%

for the third quarter of 2020,

respectively, and 1.14%

and 10.39%

for the fourth

quarter of 2019, respectively.

For the full year 2020, our ROA was 0.93% and our ROE was 9.36

compared to 1.03% and 9.72%,

respectively, for 2019.

Net Interest Income/Net Interest

Margin

Tax-equivalent net interest income

for the fourth quarter of 2020 was $25.1

million compared to $25.2 million for the third quarter

of 2020 and $26.4 million for the fourth quarter of 2019.

For the full year 2020, tax-equivalent net interest income totaled $101.

million compared to $103.9 million for 2019.

The decrease compared to all prior periods reflected lower rates

earned on investment

securities and variable/adjustable rate loans.

The year-over-year decline also reflected lower rates on

overnight funds.

Partially

offsetting these declines were higher volumes of earning assets

including lower yielding SBA PPP loans and overnight funds.

The federal funds target rate has remained in the range

of 0.00%-0.25% since March 2020 when the Fed reduced its overnight

rate

by 150 basis points, and as a result we continue to experience

lower repricing of our variable/adjustable rate earning assets and

investment securities.

Our overall cost of funds remained low during the fourth quarter

of 2020 at 0.14%, an increase of one basis

point compared to the third quarter of 2020, due to a higher mix of seasonal

public deposits.

Our net interest margin for the fourth quarter of 20

20 was 3.00%, a decrease of 12 basis points from the third quarter of 20

20 and 89

basis points from the fourth quarter of 2019.

For the full year 2020, the net interest margin decreased 55

basis points to 3.30%.

The

decreases

were primarily attributable to significant growth in overnight funds which

reduced our margin.

Our net interest margin

for the fourth quarter of 2020,

excluding the impact of overnight funds in excess of $200

million, was 3.50%.

We discuss the effect

of the pandemic related stimulus programs on our balance sheet

in more detail below under

Discussion of Financial Condition

Provision for Credit Loss

The provision for credit losses was $1.3 million for both the third

and fourth quarters

of 2020,

and was negative $0.2

million for the

fourth quarter of 2019.

For the full year 2020, the provision was $9.6 million ($9.0 million for loans held for

investment (“HFI”)

and $0.6 million for unfunded loan commitments) compared to

$2.0 million in 2019.

The higher provision in 2020 reflected

expected losses due to deterioration in economic conditions related

to COVID-19.

We discuss the allowance

for credit losses and

COVID-19 exposure further below.

Noninterest Income and Noninterest

Expense

CCHL’s

mortgage banking operations impacted our noninterest income

and noninterest expense for the three and twelve month

periods ended December 31, 2020, and thus, the period over

period comparisons reflect the impact of the CCHL consolidation,

which occurred on March 1, 2020.

The table below provides an overview of CCHL’s

impact on our noninterest income and

noninterest expense for 2020.

Noninterest income for the fourth quarter of 2020 totaled

$30.5 million compared to $35.0 million for the third quarter of 2020

and

$15.5 million for the fourth quarter of 2019.

For the full year 2020, noninterest income totaled $111

.2 million compared to $53.1

million for 2019.

The decrease from the third quarter of 2020 was primarily due to lower

mortgage banking revenues which

reflected a seasonal slowdown in loan production and a lower

gain on sale margin.

The improvement over both periods of 2019 was

primarily attributable to higher mortgage banking revenues at CCHL with higher

wealth management fees and bank card fees

contributing, but to a lesser extent.

For the full year 2020, deposit fees declined primarily due

to the impact of government stimulus

in the second quarter related to the COVID-19 pandemic.

The decline in fees realized in the second quarter reversed in the third

and

fourth quarters

of 2020 reflecting higher utilization

of our overdraft product.

Noninterest expense for the fourth quarter of 2020 totaled

$41.3 million compared to $40.3 million for the third quarter of 2020

and

$29.1 million for the fourth quarter of 2019.

The increase over the third quarter of 2020 was primarily attributable to

higher

compensation expense of $0.6 million and other real estate expense of

$0.3 million.

The increase in compensation reflected higher

commission expense of $0.2 million, salary expense of $0.2

million, and cash incentive expense of $0.2 million.

Valuation

adjustments totaling $0.5 million for two properties drove

the increase in other real estate expense.

In addition, we recognized $0.4

million in expenses during the fourth quarter of 2020 related

to additional funding of our foundation and consulting/legal

costs for a

strategic initiative.

For the full year 2020, noninterest expense totaled $150

.0 million, an increase of $36.4 million over 2019 primarily attributable to

the addition of expenses at CCHL, including compensation expense of

$32.4 million, occupancy expense of $2.8 million, and other

expense of $4.8 million.

Core CCBG noninterest expense decreased $3.6 million and

reflected lower compensation expense of $2.5

million, ORE expense of $0.4

million, and other expense of $2.2

million,

partially offset by higher occupancy expense of $1.

million.

The decrease in compensation expense was primarily attributable to

lower commission expense of $2.2 million related to

the transfer of our legacy mortgage production division to CCHL

and to a lesser extent, higher realized loan cost of $0.4

million

related to the aforementioned increase in SBA PPP loan

originations.

A $1.0 million gain from the sale of a banking office

in the

first quarter of 2020 drove the reduction in ORE expense.

The decline in other expense was primarily attributable to

lower service

cost expense for our pension plan.

Higher expense for FF&E depreciation and maintenance agreements (related

to technology

investment and upgrades), higher than normal premises maintenance,

and pandemic related cleaning/supply costs drove the increase

in occupancy.

The same aforementioned factors drove the decrease in compensation,

occupancy, and other expense

from the fourth

quarter of 2019.

Overall, CCHL contributed

significantly to the improvement in our efficiency ratio

for 2020.

Three Months Ended

Twelve Months Ended

Dec 31, 2020

Sep 30, 2020

Dec 31, 2019

Dec 31, 2020

Dec 31, 2019

(Dollars in thousands)

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Deposit Fees

4,713

4,316

4,980

17,800

19,472

Bank Card Fees

3,462

3,389

3,131

13,044

11,994

Wealth Management Fees

3,069

2,808

2,761

11,035

10,480

Mortgage Banking Fees

302

17,409

208

22,775

1,542

1,889

61,455

5,321

Other

1,205

363

1,182

287

1,414

4,992

950

5,786

Total Noninterest Income

12,751

17,772

11,903

23,062

13,828

48,760

62,405

53,053

Salaries

12,384

10,398

11,603

10,753

13,374

49,072

31,774

50,688

Other Associate Benefits

3,470

200

3,616

192

3,989

14,789

645

15,664

Total Compensation

16,124

10,598

15,219

10,945

17,363

63,861

32,419

66,352

Occupancy, Net

5,056

920

5,061

845

4,680

19,895

2,764

18,436

Other

6,899

1,751

6,930

1,342

7,099

26,225

4,798

28,821

Total Noninterest Expense

28,079

13,269

27,210

13,132

29,142

109,981

39,981

113,609

Income Taxes

We realized

income tax expense of $2.8 million (effective rate of 22%)

for the fourth quarter of 2020 compared to $3.2 million

(effective rate of 17%) for the third quarter of 20

20 and $2.5 million (effective rate of 23%) for the fourth quarter

of 2019.

For the

full year 2020, we realized income tax expense of $10.2

million (effective rate of 19%) compared to $10.0 million (effective

rate of

24%) for the same period of 2019.

Tax expense for the fourth

quarter of 2020 was unfavorably impacted by a $0.3

million discrete

tax expense.

The decrease in our effective tax rate in 2020 reflected

the impact of converting CCHL to a partnership for tax

purposes in the second quarter of 2020.

Absent discrete items, we expect our annual effective tax rate

to approximate 18%-19% in

2021.

Discussion of Financial Condition

Earning Assets

Average earning assets were

$3.337 billion for the fourth quarter of 2020, an increase of $113.6

million, or 3.5%,

over the third

quarter of 2020, and an increase of $642.7 million, or 23.9%

over the fourth quarter of 2019.

The increase over both prior periods

was primarily driven by higher deposit balances, which funded

growth in both overnight funds sold and SBA PPP loans.

Deposit

balances increased as a result of strong core deposit growth, in addition

to funding retained at the bank from SBA PPP loans, and

various other stimulus programs.

We maintained an average

net overnight funds (deposits with banks plus FED funds sold less FED

funds purchased) sold position of

$705.1 million during the fourth quarter of 2020 compared

to an average net overnight funds sold position of $567.9 million

in the

third quarter of 2020 and $228.1 million in the fourth quarter

of 2019.

The increase compared to both prior periods was driven by

strong core deposit growth, in addition to pandemic related stimulus programs

(see below –

Funding

Average loans HFI decreased

$11.7 million, or 0.6%, from the third quarter of

2020 and increased $159.4 million, or 8.7%, over the

fourth quarter of 2019.

In 2020, we originated SBA PPP loans totaling $190 million (reflected

in the commercial loan category)

which averaged $185 million in the fourth quarter and totaled

$178 million at period-end.

Compared to the third quarter of 2020,

the decline in average loans was primarily due to lower commercial

and commercial mortgage balances with the decline in

commercial loans due to the reduction in SBA PPP loans and

lower utilization of commercial lines of credit reflective of the

economic slowdown.

Period-end HFI loans increased $8.3 million, or 0.4%,

over the third quarter of 2020 and increased $170.5

million, or 9.3%, over the fourth quarter of 2019.

The increase over the third quarter of 2020 reflected higher home equity,

construction, and residential loan balances.

To date, approximately $12

million in SBA PPP loans have been forgiven and paid-off

Forgiveness applications are expected to

accelerate over the next three to six months driven by the recent COVID

Relief Bill which allows a streamlined forgiveness

application process for loans of $150,000 and less.

At December 31, 2020, SBA PPP loans of $150,000 or less totaled

$69 million.

SBA PPP loan fees totaled approximately $0.8 million for the fourth quarter

of 2020, $0.6 million for the third quarter of 2020,

and

$0.4 million for the second quarter of 2020.

At December 31, 2020 we had $3.2 million (net) in deferred SBA PPP

loan fees.

Allowance for Credit Losses

At December 31, 2020, the allowance for credit losses totaled

$23.8 million compared to $23.1 million at September 30,

2020 and

$13.9 million at December 31, 2019.

At December 31, 2020, the allowance represented 1.19% of HFI loans and provided

coverage

of 406%

of nonperforming loans compared to 1.16% and 420%, respectively,

at September 30, 2020 and 0.75% and 311%,

respectively, at December 31,

2019.

At December 31, 2020, excluding SBA PPP loans (100% government guaranteed)

the

allowance represented 1.30%

of loans held for investment.

The adoption of ASC 326 (“CECL”) on January 1, 2020

had an impact of $4.0 million ($3.3 million increase in the allowance for

credit losses and $0.7 million increase in the allowance for unfunded

loan commitments (other liability account)).

The $6.6 million

build (provision of $9.0 million less net charge

-offs of $2.4 million) in the allowance for credit losses in 2020

was attributable to

stressed economic conditions related to the COVID-19 pandemic

and its potential effect on rates of default.

Credit Quality/COVID-19 Exposure

Nonperforming assets (nonaccrual loans and OREO) totaled $6.7

million at December 31, 2020, comparable to September 30,

2020,

and a $1.3 million increase over December 31, 2019.

Nonaccrual loans totaled $5.9 million at December 31,

2020, a $0.4 million

increase over September 30, 2020 and a $1.4 million increase

over December 31, 2019.

The balance of OREO totaled $0.8 million

at December 31, 2020, a decrease of $0.4 million from September 30,

2020 and a $0.1 million decrease from December 31,

2019.

We continue to analyze

our loan portfolio for segments that have been affected

by the stressed economic and business conditions

caused by the pandemic.

Certain at-risk segments total 8% of our loan balances at December

31, 2020, including hotel (3%),

restaurant (1%),

retail and shopping centers (3%), and other (1%).

The other segment includes churches, non-profits, education, and

recreational.

To assist our clients, in mid-March

of 2020, we began allowing short term 60 to 90 day loan extensions

for affected

borrowers.

We have extended

loans totaling $333 million of which 75%

were for commercial borrowers and 25%

were for

consumer borrowers.

Approximately $324 million, or 97%

of the loan balances associated with these borrowers have resumed

making regularly scheduled payments.

Of the $9 million that remains on extension, no loans were classified

at December 31, 2020.

Of the $324 million that have resumed payments, loan balances

totaling $3.5 million were over 30 days delinquent and an additional

$0.4 million was on nonaccrual status at December 31, 2020.

Funding (Deposits/Debt)

Average total deposits were

$3.066 billion for the fourth quarter of 2020, an increase of $94.9

million, or 3.2%, over the third

quarter of 2020 and $541.2 million, or 21.4%,

over the fourth quarter of 2019.

The estimated deposit inflows related to the first

round of pandemic related stimulus programs that occurred primarily

during the second quarter were $179 million (SBA PPP)

and

$64 million (Economic Impact Payment stimulus checks).

Average seasonal public

funds increased $30 million over the third

quarter of 2020 and $81 million over the fourth quarter of 2019.

For each quarter during 2020, we’ve also realized strong core

deposit growth.

Given these large increases as well as the incoming second

round of stimulus checks, the potential exists for our

deposit levels to be volatile in 2021 due to the uncertain timing of the outflows

of the stimulus related balances and the economic

recovery.

It is anticipated that current liquidity levels will remain robust

due to our strong overnight funds sold position.

Average short-term borrowings

increased $20.7 million over the third quarter of 2020 and $8

7.8 million over the fourth quarter of

2019, which reflected warehouse line borrowings used to support

CCHL’s

loans held for sale.

Capital

Shareowners’ equity was $320.8 million at December 31, 2020

compared to $339.4 million at September 30, 2020 and $327.0

million at December 31, 2019.

For the full year of 2020, shareowners’ equity was positively impacted by

net income of $31.6

million, a $1.8 million increase in the unrealized gain on investment

securities,

net adjustments totaling $1.4 million related to

transactions under our stock compensation plans, stock compensation

accretion of $0.9

million, and a $0.4 million increase in fair

value of the interest rate swap related to subordinated deb

Shareowners’ equity was reduced by an $18.2 million increase

in the

accumulated other comprehensive loss for our pension plan, common

stock dividends of $9.6 million ($0.57 per share), a $3.1

million (net of tax) adjustment to retained earnings for the adoption

of CECL, reclassification of $9.4 million to temporary equity to

increase the redemption value of the non-controlling interest in CCHL,

and share repurchases of $2.0 million (99,952 shares).

At December 31, 2020, our total risk-based capital ratio was 17.

30%

compared to 17.88% at September 30, 2020 and 17.90% at

December 31, 2019.

Our common equity tier 1 capital ratio was 13.71%, 14.20%, and 14.47

%, respectively, on these dates.

Our

leverage ratio was 9.33%, 9.64%, and 11.25%,

respectively, on these dates.

All of 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 6.25% at December 31, 2020 compared to 7.16%

and 8.06%

at September 30,

2020 and December 31, 2019,

respectively.

Our

tangible capital ratio was unfavorably impacted at December 31,

2020 by the aforementioned annual adjustment to the other

comprehensive loss for our pension plan which was negatively impacted

due to the lower discount rate used to calculate the present

value of the pension obligation.

The lower discount rate reflected the significant decline in long-term

interest rates in 2020.

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 $3.8 billion in assets.

We provide

a full range of banking services, including traditional deposi

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

services, bankcards and securities brokerage services.

Our bank subsidiary, Capital City Bank,

was founded in 1895 and now has 57 banking offices and

86 ATMs/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 following factors, among others, could cause our actual results to

differ: the magnitude and duration of the COVID-19

pandemic and its impact on the global economy and financial market

conditions

and our business, results of operations and financial condition, including

the impact of our participation in government programs

related to COVID-19; the accuracy of the our financial statement

estimates and assumptions; legislative or regulatory changes;

fluctuations in inflation, interest rates, or monetary policies; the effects

of security breaches and computer viruses that may affect

our

computer systems or fraud related to debit card products; changes

in consumer spending and savings habits; our growth and

profitability; the strength of the U.S. economy and the local economies where

we conduct operations; the effects of a non-diversified

loan portfolio, including the risks of geographic and industry

concentrations; natural disasters, widespread health emergencies,

military conflict, terrorism or other geopolitical events; changes in the stock

market and other capital and real estate markets;

customer acceptance of third-party products and services; increased

competition and its effect on pricing; negative publicity and

the

impact on our reputation; technological changes, especially changes that allow

out of market competitors to compete in our

markets; changes in accounting; 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,

2019, 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

We present a

tangible common equity ratio and a tangible book value per diluted share

that removes the effect of goodwill 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)

Dec 31, 2020

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Shareowners' Equity (GAAP)

320,837

339,425

335,057

328,507

327,016

Less: Goodwill (GAAP)

89,095

89,275

84,811

Tangible Shareowners' Equity (non-GAAP)

231,742

250,330

245,962

239,232

242,205

Total Assets (GAAP)

3,798,071

3,587,041

3,499,524

3,086,523

3,088,953

Less: Goodwill (GAAP)

89,095

89,275

84,811

Tangible Assets (non-GAAP)

3,708,976

3,497,946

3,410,429

2,997,248

3,004,142

Tangible Common Equity Ratio (non-GAAP)

A/B

6.25%

7.16%

7.21%

7.98%

8.06%

Actual Diluted Shares Outstanding (GAAP)

16,844,997

16,800,563

16,821,743

16,845,462

16,855,161

Tangible Book Value

per Diluted Share (non-GAAP)

A/C

13.76

14.90

14.62

14.20

14.37

CAPITAL CITY BANK

GROUP,

INC.

EARNINGS HIGHLIGHTS

Unaudited

Three Months Ended

Twelve Months Ended

(Dollars in thousands, except per share data)

Dec 31, 2020

Sep 30, 2020

Dec 31, 2019

Dec 31, 2020

Dec 31, 2019

EARNINGS

Net Income Attributable to Common Shareowners

7,746

10,397

8,565

31,576

30,807

Diluted Net Income Per Share

0.46

0.62

0.51

1.88

1.83

PERFORMANCE

Return on Average Assets

0.84

1.17

1.14

0.93

1.03

Return on Average Equity

8.97

12.16

10.39

9.36

9.72

Net Interest Margin

3.00

3.12

3.89

3.30

3.85

Noninterest Income as % of Operating Revenue

55.00

58.19

34.50

52.32

33.92

Efficiency Ratio

74.36

67.01

72.48

70.43

72.40

CAPITAL ADEQUACY

Tier 1 Capital

16.19

16.77

17.16

16.19

17.16

Total Capital

17.30

17.88

17.90

17.30

17.90

Leverage

9.33

9.64

11.25

9.33

11.25

Common Equity Tier 1

13.71

14.20

14.47

13.71

14.47

Tangible Common Equity

(1)

6.25

7.16

8.06

6.25

8.06

Equity to Assets

8.45

9.46

10.59

8.45

10.59

ASSET QUALITY

Allowance as % of Non-Performing Loans

405.66

420.30

310.99

405.66

310.99

Allowance as a % of Loans HFI

1.19

1.16

0.75

1.19

0.75

Net Charge-Offs as % of Average Loans HFI

0.09

0.11

0.05

0.12

0.13

Nonperforming Assets as % of Loans HFI and OREO

0.33

0.34

0.29

0.33

0.29

Nonperforming Assets as % of Total Assets

0.18

0.19

0.18

STOCK PERFORMANCE

High

26.35

21.71

30.95

30.62

30.95

Low

18.14

17.55

25.75

15.61

21.04

24.58

18.79

30.50

24.58

30.50

Average Daily Trading Volume

22,271

28,517

41,247

35,125

27,496

(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

2020

2019

(Dollars in thousands)

Fourth Quarter

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

ASSETS

Cash and Due From Banks

67,919

76,509

75,155

72,676

60,087

Funds Sold and Interest Bearing Deposits

860,630

626,104

513,273

196,936

318,336

Total Cash and Cash Equivalents

928,549

702,613

588,428

269,612

378,423

Investment Securities Available for Sale

324,870

328,253

341,180

382,514

403,601

Investment Securities Held to Maturity

169,939

202,593

232,178

251,792

239,539

Total Investment Securities

494,809

530,846

573,358

634,306

643,140

Loans Held for Sale ("HFS")

114,039

116,561

76,610

82,598

9,509

Loans Held for Investment ("HFI"):

Commercial, Financial, & Agricultural

393,930

402,997

421,270

249,020

255,365

Real Estate - Construction

135,831

125,804

117,794

122,595

115,018

Real Estate - Commercial

648,393

656,064

662,434

656,084

625,556

Real Estate - Residential

342,664

335,713

353,831

354,150

353,642

Real Estate - Home Equity

205,479

197,363

194,479

196,443

197,360

Consumer

269,520

268,393

266,417

275,982

279,565

Other Loans

9,879

10,488

4,883

6,580

7,808

Overdrafts

730

1,339

1,069

1,533

1,615

Total Loans Held for Investment

2,006,426

1,998,161

2,022,177

1,862,387

1,835,929

Allowance for Credit Losses

(23,816)

(23,137)

(22,457)

(21,083)

(13,905)

Loans Held for Investment, Net

1,982,610

1,975,024

1,999,720

1,841,304

1,822,024

Premises and Equipment, Net

86,791

87,192

87,972

87,684

84,543

Goodwill

89,095

89,275

84,811

Other Real Estate Owned

808

1,227

1,059

1,463

953

Other Assets

101,370

84,483

83,282

80,281

65,550

Total Other Assets

278,064

261,997

261,408

258,703

235,857

Total Assets

3,798,071

3,587,041

3,499,524

3,086,523

3,088,953

LIABILITIES

Deposits:

Noninterest Bearing Deposits

1,328,809

1,378,314

1,377,033

1,066,607

1,044,699

NOW Accounts

1,046,408

827,506

808,244

779,467

902,499

Money Market Accounts

266,649

247,823

240,754

210,124

217,839

Regular Savings Accounts

474,100

451,944

423,924

384,480

374,396

Certificates of Deposit

101,594

103,859

105,041

104,907

106,021

Total Deposits

3,217,560

3,009,446

2,954,996

2,545,585

2,645,454

Short-Term Borrowings

79,654

90,936

63,958

76,516

6,404

Subordinated Notes Payable

52,887

Other Long-Term Borrowings

3,057

5,268

5,583

5,896

6,514

Other Liabilities

102,076

71,880

75,702

70,044

50,678

Total Liabilities

3,455,234

3,230,417

3,153,126

2,750,928

2,761,937

Temporary Equity

22,000

17,199

11,341

7,088

SHAREOWNERS' EQUITY

Common Stock

168

Additional Paid-In Capital

32,283

31,425

31,575

32,100

32,092

Retained Earnings

332,528

333,545

328,570

321,772

322,937

Accumulated Other Comprehensive Loss, Net of Tax

(44,142)

(25,713)

(25,256)

(25,533)

(28,181)

Total Shareowners' Equity

320,837

339,425

335,057

328,507

327,016

Total Liabilities, Temporary Equity and Shareowners' Equity

3,798,071

3,587,041

3,499,524

3,086,523

3,088,953

OTHER BALANCE SHEET DATA

Earning Assets

3,475,904

3,271,672

3,185,418

2,776,228

2,806,913

Interest Bearing Liabilities

2,024,349

1,780,223

1,700,391

1,614,277

1,666,560

Book Value Per Diluted Share

19.05

20.20

19.92

19.50

19.40

Tangible Book Value

Per Diluted Share

(1)

13.76

14.90

14.62

14.20

14.37

Actual Basic Shares Outstanding

16,791

16,761

16,780

16,812

16,772

Actual Diluted Shares Outstanding

16,845

16,801

16,822

16,845

16,855

(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

Twelve Months Ended

2020

2019

December 31,

(Dollars in thousands, except per share data)

Fourth

Quarter

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

2020

2019

INTEREST INCOME

Interest and Fees on Loans

23,878

23,594

23,687

23,593

23,842

94,752

94,215

Investment Securities

2,096

2,426

2,737

3,015

3,221

10,274

13,434

Funds Sold

180

146

757

945

1,171

5,187

Total Interest Income

26,154

26,166

26,512

27,365

28,008

106,197

112,836

INTEREST EXPENSE

Deposits

201

190

218

939

1,157

1,548

6,840

Short-Term Borrowings

639

498

421

132

1,690

109

Subordinated Notes Payable

311

316

374

471

525

1,472

2,287

Other Long-Term Borrowings

161

257

Total Interest Expense

1,181

1,044

1,054

1,592

1,754

4,871

9,493

Net Interest Income

24,973

25,122

25,458

25,773

26,254

101,326

103,343

Provision for Credit Losses

1,342

1,308

2,005

4,990

(162)

9,645

2,027

Net Interest Income after Provision for

Credit Losses

23,631

23,814

23,453

20,783

26,416

91,681

101,316

NONINTEREST INCOME

Deposit Fees

4,713

4,316

3,756

5,015

4,980

17,800

19,472

Bank Card Fees

3,462

3,389

3,142

3,051

3,131

13,044

11,994

Wealth Management Fees

3,069

2,808

2,554

2,604

2,761

11,035

10,480

Mortgage Banking Fees

17,711

22,983

19,397

3,253

1,542

63,344

5,321

Other

1,568

1,469

1,350

1,555

1,414

5,942

5,786

Total Noninterest Income

30,523

34,965

30,199

15,478

13,828

111,165

53,053

NONINTEREST EXPENSE

Compensation

26,722

26,164

23,658

19,736

17,363

96,280

66,352

Occupancy, Net

5,976

5,906

5,798

4,979

4,680

22,659

18,436

Other Real Estate, Net

567

219

116

(798)

102

104

546

Other

8,083

8,053

7,731

7,052

6,997

30,919

28,275

Total Noninterest Expense

41,348

40,342

37,303

30,969

29,142

149,962

113,609

OPERATING PROFIT

12,806

18,437

16,349

5,292

11,102

52,884

40,760

Income Tax Expense

2,833

3,165

2,950

1,282

2,537

10,230

9,953

Net Income

9,973

15,272

13,399

4,010

8,565

42,654

30,807

Pre-Tax Income Attributable to Noncontrolling Interest

(2,227)

(4,875)

(4,253)

277

(11,078)

NET INCOME ATTRIBUTABLE

COMMON SHAREOWNERS

7,746

10,397

9,146

4,287

8,565

31,576

30,807

PER COMMON SHARE

Basic Net Income

0.46

0.62

0.55

0.25

0.51

1.88

1.84

Diluted Net Income

0.46

0.62

0.55

0.25

0.51

1.88

1.83

Cash Dividend

0.15

0.14

0.13

0.57

0.48

AVERAGE

Basic

16,763

16,771

16,797

16,808

16,750

16,785

16,770

Diluted

16,817

16,810

16,839

16,842

16,834

16,822

16,827

CAPITAL CITY BANK GROUP,

INC.

ALLOWANCE FOR CREDIT LOSSES

AND RISK ELEMENT ASSETS

Unaudited

Twelve Months Ended

2020

2019

December 31,

(Dollars in thousands, except per share data)

Fourth

Quarter

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

2020

2019

ALLOWANCE FOR CREDIT LOSSES

Balance at Beginning of Period

23,137

22,457

21,083

13,905

14,319

13,905

14,210

Impact of Adopting ASC 326 (CECL)

3,269

Provision for Credit Losses - HFI

1,165

1,265

1,615

4,990

(162)

9,035

2,027

Net Charge-Offs

486

585

241

1,081

252

2,393

2,332

Balance at End of Period

(2)

23,816

23,137

22,457

21,083

13,905

23,816

13,905

As a % of Loans HFI

1.19%

1.16%

1.11%

1.13%

0.75%

1.19%

0.75%

As a % of Nonperforming Loans

405.66%

420.30%

322.37%

432.61%

310.99%

405.66%

310.99%

CHARGE-OFFS

Commercial, Financial and Agricultural

104

137

186

362

149

789

768

Real Estate - Construction

281

Real Estate - Commercial

214

Real Estate - Residential

110

150

400

Real Estate - Home Equity

151

430

Consumer

668

619

634

864

819

2,785

2,878

Overdrafts

(3)

564

450

541

702

2,257

Total Charge-Offs

1,384

1,282

1,414

2,080

1,086

6,160

4,971

RECOVERIES

Commercial, Financial and Agricultural

127

252

345

Real Estate - Construction

Real Estate - Commercial

191

266

318

578

Real Estate - Residential

153

116

279

429

Real Estate - Home Equity

178

175

Consumer

306

280

365

268

300

1,219

1,112

Overdrafts

(3)

258

237

549

427

1,471

Total Recoveries

898

697

1,173

999

834

3,767

2,639

NET CHARGE-OFFS

486

585

241

1,081

252

2,393

2,332

Net Charge-Offs as a % of Average Loans HFI

(1)

0.09%

0.11%

0.05%

0.23%

0.05%

0.12%

0.13%

RISK ELEMENT ASSETS

Nonaccruing Loans

5,871

5,505

6,966

4,874

4,472

Other Real Estate Owned

808

1,227

1,059

1,463

953

Total Nonperforming Assets ("NPAs")

6,679

6,732

8,025

6,337

5,425

Past Due Loans 30-89 Days

4,594

3,191

2,948

5,077

4,871

Past Due Loans 90 Days or More

Classified Loans

17,631

16,772

17,091

16,548

20,847

Performing Troubled Debt Restructuring's

13,887

14,693

15,133

15,934

16,888

Nonperforming Loans as a % of Loans HFI

0.29%

0.28%

0.34%

0.26%

0.24%

NPAs as a % of Loans HFI and Other Real Estate

0.33%

0.34%

0.40%

0.34%

0.29%

NPAs as a % of

Total Assets

0.18%

0.19%

0.23%

0.21%

0.18%

(1)

Annualized

(2)

Does not include $1.6 million for unfunded commitments recorded in other liabilities at 12/31/2020.

(3)

Prior to the first quarter 2020, overdraft losses were reflected in

noninterest income (deposit fees).

CAPITAL CITY BANK GROUP,

INC.

AVERAGE

BALANCE AND INTEREST RATES

(1)

Unaudited

Fourth Quarter 2020

Third Quarter 2020

Second Quarter 2020

First Quarter 2020

Fourth Quarter 2019

Dec 2020 YTD

Dec 2019 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 HFI and HFS

2,114,522

23,981

4.52

2,097,700

23,698

4.50

2,057,925

23,785

4.65

1,882,703

23,692

5.06

1,846,190

23,958

5.15

2,038,701

95,156

4.67

1,822,087

94,662

5.20

Investment Securities

Taxable Investment Securities

513,277

2,072

1.61

553,395

2,401

1.73

601,509

2,708

1.80

629,512

2,995

1.91

610,046

3,186

2.08

574,199

10,176

1.77

612,541

13,123

2.14

Tax-Exempt Investment Securities

4,485

2.71

4,860

2.66

5,865

2.51

5,293

1.86

10,327

1.67

5,123

124

2.42

24,471

390

1.60

Total Investment Securities

517,762

2,102

1.62

558,255

2,433

1.74

607,374

2,745

1.81

634,805

3,020

1.91

620,373

3,229

2.08

579,322

10,300

1.78

637,012

13,513

2.12

Funds Sold

705,125

180

0.10

567,883

146

0.10

351,473

0.10

234,372

757

1.30

228,137

945

1.64

465,652

1,171

0.25

237,999

5,187

2.18

Total Earning Assets

3,337,409

26,263

3.14

3,223,838

26,277

3.25

3,016,772

26,618

3.55

2,751,880

27,469

4.01

2,694,700

28,132

4.14

3,083,675

106,627

3.46

2,697,098

113,362

4.20

Cash and Due From Banks

73,968

69,893

72,647

56,958

53,174

68,386

52,453

Allowance for Loan Losses

(23,725)

(22,948)

(21,642)

(14,389)

(14,759)

(20,690)

(14,622)

Other Assets

264,784

268,549

261,449

244,339

249,089

259,700

252,127

Total Assets

3,652,436

3,539,332

3,329,226

3,038,788

2,982,204

3,391,071

2,987,056

LIABILITIES:

Interest Bearing Deposits

NOW Accounts

879,564

0.03

826,776

0.03

789,378

0.04

808,811

725

0.36

755,625

889

0.47

826,280

930

0.11

805,134

5,502

0.68

Money Market Accounts

261,543

0.05

247,185

0.05

222,377

0.07

212,211

117

0.22

227,479

170

0.30

235,931

223

0.09

235,845

946

0.40

Savings Accounts

466,116

0.05

438,762

0.05

409,366

0.05

379,237

0.05

372,518

0.05

423,529

207

0.05

370,430

182

0.05

Time Deposits

102,809

0.17

104,522

0.16

104,718

0.19

105,542

0.19

108,407

0.19

104,393

188

0.18

113,499

210

0.19

Total Interest Bearing Deposits

1,710,032

201

0.05

1,617,245

190

0.05

1,525,839

218

0.06

1,505,801

939

0.25

1,464,029

1,157

0.31

1,590,133

1,548

0.10

1,524,908

6,840

0.45

Short-Term Borrowings

95,280

639

2.67

74,557

498

2.66

73,377

421

2.31

32,915

132

1.61

7,448

0.87

69,119

1,690

2.44

9,275

109

1.19

Subordinated Notes Payable

52,887

311

2.30

52,887

316

2.34

52,887

374

2.80

52,887

471

3.52

52,887

525

3.88

52,887

1,472

2.74

52,887

2,287

4.26

Other Long-Term Borrowings

3,700

3.18

5,453

2.91

5,766

2.84

6,312

3.21

6,723

3.33

5,304

161

3.03

7,393

257

3.48

Total Interest Bearing Liabilities

1,861,899

1,181

0.25

1,750,142

1,044

0.24

1,657,869

1,054

0.26

1,597,915

1,592

0.40

1,531,087

1,754

0.45

1,717,443

4,871

0.28

1,594,463

9,493

0.60

Noninterest Bearing Deposits

1,356,104

1,354,032

1,257,614

1,046,889

1,060,922

1,254,214

1,012,581

Other Liabilities

74,605

83,192

72,073

59,587

63,291

72,400

62,940

Total Liabilities

3,292,608

3,187,366

2,987,556

2,704,391

2,655,300

3,044,057

2,669,984

Temporary Equity

16,154

11,893

8,155

2,506.00

9,701

SHAREOWNERS' EQUITY:

343,674

340,073

333,515

331,891

326,904

337,313

317,072

Total Liabilities, Temporary

Equity and

Shareowners' Equity

3,652,436

3,539,332

3,329,226

3,038,788

2,982,204

3,391,071

2,987,056

Interest Rate Spread

25,082

2.88

25,233

3.01

25,564

3.30

25,877

3.61

26,378

3.69

101,756

3.18

103,869

3.61

Interest Income and Rate Earned

(1)

26,263

3.14

26,277

3.25

26,618

3.55

27,469

4.01

28,132

4.14

106,627

3.46

113,362

4.20

Interest Expense and Rate Paid

(2)

1,181

0.14

1,044

0.13

1,054

0.14

1,592

0.23

1,754

0.26

4,871

0.16

9,493

0.35

Net Interest Margin

25,082

3.00

25,233

3.12

25,564

3.41

25,877

3.78

26,378

3.89

101,756

3.30

103,869

3.85

(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.