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 27, 2020

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 October 27, 2020, Capital City Bank Group, Inc. (“CCBG”)

issued an earnings press release reporting CCBG’s

financial

results for the three and nine month period ended September

30, 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 October 27, 2020.

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 27, 2020

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 October 27, 2020

exhibit991

Capital City Bank Group, Inc.

Reports Third Quarter 2020 Results

TALLAHASSEE, Fla.

(October 27, 2020) – Capital City Bank Group, Inc. (NASDAQ:

CCBG) today reported net income of $10.4

million, or $0.62 per diluted share for the third quarter of 20

20 compared to net income of $9.1 million, or $0.55 per

diluted share for

the second quarter of 2020,

and $8.5 million, or $0.50 per diluted share for the third quarter of 201

For the first nine months of

2020,

net income totaled $23.8 million, or $1.42 per diluted share, compared

to net income of $22.2 million, or $1.32 per diluted

share, for the same period of 2019.

QUARTER HIGHLIGHTS

●

Return on assets improved to 1.17%

and return on equity to 12.16%

●

Diversified revenue and strong

balance sheet continue to buffer impact of pandemic and

lower interest rates

●

Strong performance by Capital City Home Loans

(“CCHL”) contributed significantly ($0.23 per share)

●

11% increase

in other fee revenues (deposit, bankcard,

and wealth management)

●

Credit quality remains

strong with no significant problem

loan migration

●

88% of loan balances extended in the first and second quarter

have resumed payments

“Although the environment remains challenging, Capital City reported

a strong third quarter, up 12.7% over the second quarter,”

said William G. Smith, Jr.,

Chairman, President and CEO.

“I am proud of both our financial performance and how our team has

responded 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.

The mortgage market has been robust and we have benefitted

from our alliance with CCHL, which contributed $0.23

per share in the third quarter – up from $0.20 per share in the second

quarter.

Earnings from CCHL and SBA PPP loan fees have helped to

mitigate the adverse impacts of a lower interest rate environment and

reserve build attributable to the adoption of CECL and COVID

-19.

Hopefully, we will continue to experience

economic

improvement during the fourth quarter and into 2021.

I am proud of what our team has accomplished in a very difficult

year, and I

remain optimistic about the long-term outlook for Capital City.

Thank you for your continued support.”

COVID-19 Update

●

Lobby access remains open for all of our banking offices

and operations are subject to national guidelines and local safety

ordinances to protect both clients and associates – we will continue to

monitor changing conditions with the pandemic and its

impact on client and associate interactions within our banking offices

●

Most operational associates returned to work in early June, but we

have extended some remote work arrangements on a case-by-

case basis

●

Enhanced digital access options are available for banking products

and access to sales associates

●

We continue to monitor

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

to help ensure client and associate

safety

●

We continue to support

clients with the Small Business Administration Payment Protection

Program (“SBA PPP”) by actively

assisting with the forgiveness process

Discussion of Operating Results

Summary Overview

Compared to the second quarter of 2020, the $2.1

million increase in operating profit was attributable to a $4.7

million increase in

noninterest income and a $0.7 million decrease in the provision

for credit losses, partially offset by higher noninterest expense

$3.0 million and lower net interest income of $0.3

million.

Compared to the third quarter of 2019,

the $7.0 million increase in operating profit was attributable to a $21

.1 million increase in

noninterest income, partially offset by higher noninterest expense

of $12.5 million, a $0.5 million increase in the provision for credit

losses and lower net interest income of $1.1 million.

The $10.4 million increase in operating profit for the first nine months

of 2020 versus the comparable period of 2019 was

attributable to higher noninterest income of $41.4 million, partially offset

by higher noninterest expense of $24.2

million, a $6.1

million increase in the provision for credit losses and lower net interest income

of $0.7

million.

The aforementioned period over period variances reflect the acquisition

of a 51% membership interest and consolidation of CCHL

late in the first quarter of 2020.

Our return on average assets (“ROA”) was 1.17% and our return on average

equity (“ROE”) was 12.16%

for the third quarter of

2020.

These metrics were 1.10%

and 11.03%

for the second quarter of 2020, respectively,

and 1.14%

and 10.51%

for the third

quarter of 2019, respectively.

For the first nine months of 2020, our ROA was 0.96%

and our ROE was 9.50%

compared to 1.00%

and 9.48%, respectively, for the

same period of 2019.

Net Interest Income/Net Interest

Margin

Tax-equivalent net interest income

for the third quarter of 2020 was $25.2

million compared

to $25.6 million for the second quarter

of 2020 and $26.3 million for the third quarter of 201

For the first nine months of 2020, tax-equivalent net interest income totaled

$76.7 million compared to $77.5 million in 2019.

The decrease compared to all prior periods reflected lower rates earned

overnight funds, investment securities and variable rate loans,

partially offset by lower cost for deposits.

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 third quarter

of 2020 at 0.13% compared to 0.14% for the

second quarter of 2020.

Due to highly competitive fixed-rate loan pricing in our markets, we continue to review

our loan pricing and

make adjustments where we believe appropriate and prudent.

Our net interest margin for the third quarter of 20

20 was 3.12%, a decrease of 29 basis points from the second quarter of 20

20 and 80

basis points from the third quarter of 2019.

For the first nine months of 2020, the net interest margin decreased

42 basis points to

3.42%.

The decrease compared to all prior periods was primarily attributable to

considerable growth in overnight funds which

reduced our margin.

Our net interest margin for the third quarter of 2020

excluding the impact of SBA PPP loans, was 3.17%.

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 for the third quarter of 2020

was $1.3 million compared to $2.0 million for the second quarter

2020 and $0.8

million for the third quarter of 2019.

For the first nine months of 2020, the provision was $8.3 million compared

$2.2 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 nine month

periods ended September 30, 2020, and thus, the period over

period comparisons reflect the impact of the CCHL consolidation,

which occurred late in the first quarter 2020.

The table below provides an overview of CCHL’s

impact on our noninterest income

and noninterest expense for 2020.

Noninterest income for the third quarter of 2020 totaled $35.0 million compared

to $30.2 million for the second quarter of 2020 and

$13.9 million for the third quarter of 2019.

For the first nine months of 2020, noninterest income totaled $80.6

million compared to

$39.2 million for same period of 2019.

The improvement over all prior periods was primarily attributable

to higher mortgage

banking revenues at CCHL.

Higher deposit fees, bank card fees, and wealth management

fees contributed to the increase over the

second quarter of 2020.

Compared to both prior year periods, deposit fees declined primarily due

to the impact of government

stimulus during the second quarter related to the COVID-19 pandemic,

but were partially offset by higher debit card

activity which

drove improvement in bank card fees.

The downward trend in deposit fees we realized in the second quarter

of 2020 reversed in the

third quarter of 2020 reflecting higher utilization of our overdraft

product.

Noninterest expense for the third quarter of 2020 totaled

$40.3 million compared to $37.3 million for the second quarter of 2020

and $27.9 million for the third quarter of 2019.

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

higher

compensation expense of $2.5 million and other expense of $0.4

million.

The increase in compensation reflected higher

commission expense of $1.6 million related to higher mortgage production

volume at CCHL and lower realized loan cost (credit

offset to salary expense) of $1.0 million related to the high

level of SBA PPP loan originations in the second quarter.

Higher

amortization expense for mortgage servicing rights at CCHL and

Core CCBG expenses (debit card losses, activity based costs, and

miscellaneous expenses)

drove the increase in other expense.

For the first nine months of 2020, noninterest expense totaled

$108.6 million,

an increase of $24.2

million over the same period of

2019 primarily attributable to the addition of expenses at CCHL, including

compensation expense of $21.8 million, occupancy

expense of $1.8 million, and other expense of $3.0 million.

Core CCBG noninterest expense decreased $2.6 million and reflected

lower compensation expense of $1.2 million, ORE expense of $0.9

million, and other expense of $1.6 million, partially offset by

higher occupancy expense of $1.1 million.

The decrease in compensation expense was primarily attributable

to higher realized loan

cost of $0.6 million related to the aforementioned increase in SBA

PPP loan originations and lower stock compensation expense of

$0.5 million.

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), deferred maintenance for

premises, and pandemic related cleaning/supply costs drove the increase

in occupancy.

The same aforementioned factors drove the

increase over the third quarter of 2019.

Overall, CCHL has contributed significantly to the improvement in our efficiency

ratio for 2020.

Three Months Ended

Nine Months Ended

Sep 30, 2020

Jun 30, 2020

Sep 30, 2019

Sep 30, 2020

Sep 30, 2019

(Dollars in thousands)

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Core

CCBG

CCHL

Deposit Fees

4,316

3,756

4,961

13,087

14,492

Bank Card Fees

3,389

3,142

2,972

9,582

8,863

Wealth Management Fees

2,808

2,554

2,992

7,966

7,719

Mortgage Banking Fees

208

22,775

241

19,156

1,587

44,046

3,779

Other

1,182

287

1,147

203

1,391

3,787

587

4,372

Total Noninterest Income

11,903

23,062

10,840

19,359

13,903

36,009

44,633

39,225

Salaries

11,603

10,753

11,596

8,381

12,533

36,687

21,376

37,314

Other Associate Benefits

3,616

192

3,477

204

3,670

11,049

446

11,675

Total Compensation

15,219

10,945

15,073

8,585

16,203

47,736

21,822

48,989

Occupancy, Net

5,061

845

5,030

768

4,710

14,839

1,844

13,756

Other

6,930

1,342

6,599

1,248

6,960

19,325

3,048

21,722

Total Noninterest Expense

27,210

13,132

26,702

10,601

27,873

81,900

26,714

84,467

Income Taxes

We realized

income tax expense of $3.2 million (effective rate of 17%)

for the third quarter of 2020 compared to $2.9 million

(effective rate of 18%) for the second quarter of 20

20 and $3.0 million (effective rate of 26%) for the third quarter

of 2019.

For the

first nine months of 2020, we realized income tax expense of $7.4

million (effective rate of 18%) compared to $7.4 million

(effective rate of 25%) for the same period of 2019.

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% for the remainder of 2020

Discussion of Financial Condition

Earning Assets

Average earning assets were

$3.224 billion for the third quarter of 2020

an increase of $207.1 million, or 6.9%

over the second

quarter of 2020,

and an increase of $529.1 million, or 19.6%

over the fourth quarter of 2019.

The increase over both prior periods

was primarily driven by higher deposit balances which funded growth in the

loan portfolio and overnight funds sold.

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

$567.9 million during the third quarter of 2020 compared to an average net

overnight funds sold position of $351.5 million in the

second quarter of 2020 and $228.1 million in the fourth quarter of 201

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 held

for investment (“HFI”) increased $22.2 million, or 1.1%, over

the second quarter of 2020 and $171.1 million, or

9.3%, over the fourth quarter of 2019.

We originated SBA PPP

loans totaling $190 million (reflected in the commercial loan

category) which averaged $190 million in the third quarter and $1

34 million in the second quarter.

Period-end HFI loans decreased

$24.0, or 1.2%, from the second quarter of 2020 and increased

$162.2 million, or 8.8%, over the fourth quarter of 2019.

The decline

in the core loan portfolio (ex-SBA PPP loans) has been driven

by residential real estate loan run-off reflective of the

lower rate

environment and refinancing activity as well as lower utilization

of commercial lines of credit reflective of the economic slowdown.

To date, our

borrowers have submitted a nominal level of SBA PPP forgiveness

applications, but these applications are expected to

accelerate over the next six months.

Amortized SBA PPP loan fees totaled approximately $0.6

million for the third quarter of 2020

and $0.4 million for the second quarter of 2020.

At September 30, 2020, we had approximately $4.0 million (net) in deferred

SBA

PPP loan fees.

Allowance for Credit Losses

At September 30, 2020, the allowance for credit losses totaled

$23.1 million compared to $22.5 million at June 30, 2020 and $13.9

million at December 31, 2019.

At September 30, 2020, the allowance represented 1.16% of outstanding loans

held for investment

(HFI) and provided coverage of 420%

of nonperforming loans compared to 1.11%

and 322%, respectively, at June

30, 2020 and

0.75% and 311%, respectively,

at December 31, 2019.

At September 30, 2020, excluding SBA PPP loans (100% government

guaranteed),

the allowance represented 1.28% 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 $6.4 million

build (provision of $8.3 million less net charge

-offs of $1.9

million) in the allowance for credit losses for the first nine months of

2020 was attributable to deterioration in economic conditions,

primarily a higher rate of unemployment due 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 September 30, 2020, a $1.3 million decrease from June

30, 2020, and a $1.3 million increase over December 31, 2019.

Nonaccrual loans totaled $5.5 million at September 30, 2020, a

$1.5

million decrease from June 30, 2020 and a $1.0 million increase over

December 31, 2019.

The balance of OREO totaled $1.2

million at September 30, 2020, an increase of $0.2 million over

June 30, 2020 and a $0.3 million increase over 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 September 30,

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.

A roll-forward of loan extension activity is provided in the table below.

Approximately 83% of the $325 million in

loans extended were for commercial borrowers and 17% for

consumer borrowers.

Approximately $285 million, or 88% of the loan

balances associated with these borrowers have resumed making regularly scheduled

payments.

Of the $40 million that remains on

extension, approximately $2 million was classified at September 30,

2020 and $26 million is related to six hotel loans which were

not classified, but continue to be monitored closely.

% Loans Extended

At October 2, 2020

(Dollars in thousands)

Loans

Loan Amount

Loans

$ Loans

Loans Extended

2,333

325,014

Loans Resuming Payments

(2,129)

(284,548)

91%

88%

Loans Still on Extension

204

40,466

12%

Funding (Deposits/Debt)

Average total deposits were

$2.971 billion for the third quarter of 2020,

an increase of $187.8 million, or 6.8% over the second

quarter of 2020,

and an increase of $446.3 million, or 17.7%

over the fourth quarter of 2019.

Period end deposit balances grew

$54.4 million and $364.0 million over the second quarter of 2020

and fourth quarter of 2019, respectively,

indicating strong growth

in core deposit balances.

The estimated deposit inflows related to the two pandemic related

stimulus programs that occurred

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

and $64 million (Economic Impact Payment stimulus checks).

Given these large increases, the potential exists for

our deposit levels to be volatile over the coming quarters due to the

uncertain

timing of the outflows of the stimulus related deposits and the economic

recovery.

It is anticipated that current liquidity levels will

remain robust due to our strong overnight funds sold position. We

monitor deposit rates on an ongoing basis and adjust if necessary,

as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings increased

$0.9 million over the second quarter of 2020 and $65.8 million over

the fourth quarter of 2019

short-term borrowings (warehouse lines used to support HFS loans) were

added as part of the CCHL integration.

Capital

Shareowners’ equity was $339.4 million at September 30, 2020

compared to $335.1 million at June 30, 2020 and $327.0 million at

December 31, 2019.

For the first nine months of 2020, shareowners’ equity was positively impacted

by net income of $23.8

million, a $2.4 million increase in the unrealized gain on investment

securities,

net adjustments totaling $0.9

million related to

transactions under our stock compensation plans, and stock compensation

accretion of $0.6

million.

Shareowners’ equity was

reduced by common stock dividends of $7.1 million ($0.42

per share), a $3.1 million (net of tax) adjustment to retained earnings for

the adoption of CECL, reclassification of $3.1 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 September 30, 2020, our total risk-based capital ratio was

17.88% compared to 17.60% at June 30, 2020 and 17.90% at

December 31, 2019.

Our common equity tier 1 capital ratio was 14.20%, 14.01%,

and 14.47%, respectively, on these dates.

Our

leverage ratio was 9.64%, 10.12%, 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 7.16%

at September 30, 2020 compared to 7.21%

and 8.06%

at June 30,

2020 and December 31, 2019,

respectively.

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 $3.6 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 and securities brokerage services.

Our bank subsidiary, Capital City Bank,

was founded in 1895 and now has 57 banking offices and

85 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)

Sep 30, 2020

Jun 30, 2020

Mar 31, 2020

Dec 31, 2019

Sep 30, 2019

Shareowners' Equity (GAAP)

339,425

335,057

328,507

327,016

321,562

Less: Goodwill (GAAP)

89,095

89,275

84,811

Tangible Shareowners' Equity (non-GAAP)

250,330

245,962

239,232

242,205

236,751

Total Assets (GAAP)

3,587,041

3,499,524

3,086,523

3,088,953

2,934,513

Less: Goodwill (GAAP)

89,095

89,275

84,811

Tangible Assets (non-GAAP)

3,497,946

3,410,429

2,997,248

3,004,142

2,849,702

Tangible Common Equity Ratio (non-GAAP)

A/B

7.16%

7.21%

7.98%

8.06%

8.31%

Actual Diluted Shares Outstanding (GAAP)

16,800,563

16,821,743

16,845,462

16,855,161

16,797,241

Tangible Book Value

per Diluted Share (non-GAAP)

A/C

14.90

14.62

14.20

14.37

14.09

CAPITAL CITY BANK

GROUP,

INC.

EARNINGS HIGHLIGHTS

Unaudited

Three Months Ended

Nine Months Ended

(Dollars in thousands, except per share data)

Sep 30, 2020

Jun 30, 2020

Sep 30, 2019

Sep 30, 2020

Sep 30, 2019

EARNINGS

Net Income Attributable to Common Shareowners

10,397

9,146

8,481

23,830

22,242

Diluted Net Income Per Share

0.62

0.55

0.50

1.42

1.32

PERFORMANCE

Return on Average Assets

1.17

1.10

1.14

0.96

1.00

Return on Average Equity

12.16

11.03

10.51

9.50

9.48

Net Interest Margin

3.12

3.41

3.92

3.42

3.84

Noninterest Income as % of Operating Revenue

58.19

54.26

34.67

51.37

33.72

Efficiency Ratio

67.01

66.90

69.27

69.04

72.37

CAPITAL ADEQUACY

Tier 1 Capital

16.77

16.59

16.83

16.77

16.83

Total Capital

17.88

17.60

17.59

17.88

17.59

Leverage

9.64

10.12

11.09

9.64

11.09

Common Equity Tier 1

14.20

14.01

14.13

14.20

14.13

Tangible Common Equity

(1)

7.16

7.21

8.31

7.16

8.31

Equity to Assets

9.46

9.57

10.96

9.46

10.96

ASSET QUALITY

Allowance as % of Non-Performing Loans

420.30

322.37

290.55

420.30

290.55

Allowance as a % of Loans HFI

1.16

1.11

0.78

1.16

0.78

Net Charge-Offs as % of Average Loans HFI

0.11

0.05

0.23

0.13

0.15

Nonperforming Assets as % of Loans HFI and OREO

0.34

0.40

0.30

0.34

0.30

Nonperforming Assets as % of Total Assets

0.19

0.23

0.19

STOCK PERFORMANCE

High

21.71

23.99

28.00

30.62

28.00

Low

17.55

16.16

23.70

15.61

21.04

18.79

20.95

27.45

18.79

27.45

Average Daily Trading Volume

28,517

49,569

25,596

39,477

22,815

(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)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

ASSETS

Cash and Due From Banks

76,509

75,155

72,676

60,087

61,151

Funds Sold and Interest Bearing Deposits

626,104

513,273

196,936

318,336

177,389

Total Cash and Cash Equivalents

702,613

588,428

269,612

378,423

238,540

Investment Securities Available for Sale

328,253

341,180

382,514

403,601

376,981

Investment Securities Held to Maturity

202,593

232,178

251,792

239,539

240,303

Total Investment Securities

530,846

573,358

634,306

643,140

617,284

Loans Held for Sale ("HFS")

116,561

76,610

82,598

9,509

13,075

Loans Held for Investment ("HFI"):

Commercial, Financial, & Agricultural

402,997

421,270

249,020

255,365

259,870

Real Estate - Construction

125,804

117,794

122,595

115,018

111,358

Real Estate - Commercial

656,064

662,434

656,084

625,556

610,726

Real Estate - Residential

335,713

353,831

354,150

353,642

354,545

Real Estate - Home Equity

197,363

194,479

196,443

197,360

197,326

Consumer

268,393

266,417

275,982

279,565

277,970

Other Loans

10,488

4,883

6,580

7,808

14,248

Overdrafts

1,339

1,069

1,533

1,615

1,710

Total Loans Held for Investment

1,998,161

2,022,177

1,862,387

1,835,929

1,827,753

Allowance for Credit Losses

(23,137)

(22,457)

(21,083)

(13,905)

(14,319)

Loans Held for Investment, Net

1,975,024

1,999,720

1,841,304

1,822,024

1,813,434

Premises and Equipment, Net

87,192

87,972

87,684

84,543

85,810

Goodwill

89,095

89,275

84,811

Other Real Estate Owned

1,227

1,059

1,463

953

526

Other Assets

84,483

83,282

80,281

65,550

81,033

Total Other Assets

261,997

261,408

258,703

235,857

252,180

Total Assets

3,587,041

3,499,524

3,086,523

3,088,953

2,934,513

LIABILITIES

Deposits:

Noninterest Bearing Deposits

1,378,314

1,377,033

1,066,607

1,044,699

1,022,774

NOW Accounts

827,506

808,244

779,467

902,499

728,395

Money Market Accounts

247,823

240,754

210,124

217,839

239,410

Regular Savings Accounts

451,944

423,924

384,480

374,396

372,601

Certificates of Deposit

103,859

105,041

104,907

106,021

109,827

Total Deposits

3,009,446

2,954,996

2,545,585

2,645,454

2,473,007

Short-Term Borrowings

90,936

63,958

76,516

6,404

10,622

Subordinated Notes Payable

52,887

Other Long-Term Borrowings

5,268

5,583

5,896

6,514

6,963

Other Liabilities

71,880

75,702

70,044

50,678

69,472

Total Liabilities

3,230,417

3,153,126

2,750,928

2,761,937

2,612,951

Temporary Equity

17,199

11,341

7,088

SHAREOWNERS' EQUITY

Common Stock

168

167

Additional Paid-In Capital

31,425

31,575

32,100

32,092

31,075

Retained Earnings

333,545

328,570

321,772

322,937

316,551

Accumulated Other Comprehensive Loss, Net of Tax

(25,713)

(25,256)

(25,533)

(28,181)

(26,231)

Total Shareowners' Equity

339,425

335,057

328,507

327,016

321,562

Total Liabilities, Temporary Equity and Shareowners' Equity

3,587,041

3,499,524

3,086,523

3,088,953

2,934,513

OTHER BALANCE SHEET DATA

Earning Assets

3,271,672

3,185,418

2,776,228

2,806,913

2,635,501

Interest Bearing Liabilities

1,780,223

1,700,391

1,614,277

1,666,560

1,520,705

Book Value Per Diluted Share

20.20

19.92

19.50

19.40

19.14

Tangible Book Value

Per Diluted Share

(1)

14.90

14.62

14.20

14.37

14.09

Actual Basic Shares Outstanding

16,761

16,780

16,812

16,772

16,749

Actual Diluted Shares Outstanding

16,801

16,822

16,845

16,855

16,797

(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

Nine Months Ended

2020

2019

September 30,

(Dollars in thousands, except per share data)

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

2020

2019

INTEREST INCOME

Interest and Fees on Loans

23,594

23,687

23,593

23,842

23,992

70,874

70,373

Investment Securities

2,426

2,737

3,015

3,221

3,307

8,178

10,213

Funds Sold

146

757

945

1,142

991

4,242

Total Interest Income

26,166

26,512

27,365

28,008

28,441

80,043

84,828

INTEREST EXPENSE

Deposits

190

218

939

1,157

1,596

1,347

5,683

Short-Term Borrowings

498

421

132

1,051

Subordinated Notes Payable

316

374

471

525

558

1,161

1,762

Other Long-Term Borrowings

131

201

Total Interest Expense

1,044

1,054

1,592

1,754

2,244

3,690

7,739

Net Interest Income

25,122

25,458

25,773

26,254

26,197

76,353

77,089

Provision for Credit Losses

1,308

2,005

4,990

(162)

776

8,303

2,189

Net Interest Income after Provision for

Credit Losses

23,814

23,453

20,783

26,416

25,421

68,050

74,900

NONINTEREST INCOME

Deposit Fees

4,316

3,756

5,015

4,980

4,961

13,087

14,492

Bank Card Fees

3,389

3,142

3,051

3,131

2,972

9,582

8,863

Wealth Management Fees

2,808

2,554

2,604

2,761

2,992

7,966

7,719

Mortgage Banking Fees

22,983

19,397

3,253

1,542

1,587

45,633

3,779

Other

1,469

1,350

1,555

1,414

1,391

4,374

4,372

Total Noninterest Income

34,965

30,199

15,478

13,828

13,903

80,642

39,225

NONINTEREST EXPENSE

Compensation

26,164

23,658

19,736

17,363

16,203

69,558

48,989

Occupancy, Net

5,906

5,798

4,979

4,680

4,710

16,683

13,756

Other Real Estate, Net

219

116

(798)

102

(463)

444

Other

8,053

7,731

7,052

6,997

6,954

22,836

21,278

Total Noninterest Expense

40,342

37,303

30,969

29,142

27,873

108,614

84,467

OPERATING PROFIT

18,437

16,349

5,292

11,102

11,451

40,078

29,658

Income Tax Expense

3,165

2,950

1,282

2,537

2,970

7,397

7,416

Net Income

15,272

13,399

4,010

8,565

8,481

32,681

22,242

Pre-Tax Income Attributable to Noncontrolling Interest

(4,875)

(4,253)

277

(8,851)

NET INCOME ATTRIBUTABLE

COMMON SHAREOWNERS

10,397

9,146

4,287

8,565

8,481

23,830

22,242

PER COMMON SHARE

Basic Net Income

0.62

0.55

0.25

0.51

1.42

1.33

Diluted Net Income

0.62

0.55

0.25

0.51

0.50

1.42

1.32

Cash Dividend

0.14

0.13

0.42

0.35

AVERAGE

Basic

16,771

16,797

16,808

16,750

16,747

16,792

16,776

Diluted

16,810

16,839

16,842

16,834

16,795

16,823

16,810

CAPITAL CITY BANK GROUP,

INC.

ALLOWANCE FOR CREDIT LOSSES

AND RISK ELEMENT ASSETS

Unaudited

Nine Months Ended

2020

2019

September 30,

(Dollars in thousands, except per share data)

Third

Quarter

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

2020

2019

ALLOWANCE FOR CREDIT LOSSES

Balance at Beginning of Period

22,457

21,083

13,905

14,319

14,593

13,905

14,210

Impact of Adopting ASC 326 (CECL)

3,269

Provision for Credit Losses - HFI

1,265

1,615

4,990

(162)

776

7,870

2,189

Net Charge-Offs

585

241

1,081

252

1,050

1,907

2,080

Balance at End of Period

(2)

23,137

22,457

21,083

13,905

14,319

23,137

14,319

As a % of Loans HFI

1.16%

1.11%

1.13%

0.75%

0.78%

1.16%

0.78%

As a % of Nonperforming Loans

420.30%

322.37%

432.61%

310.99%

290.55%

420.30%

290.55%

CHARGE-OFFS

Commercial, Financial and Agricultural

137

186

362

149

289

685

619

Real Estate - Construction

223

Real Estate - Commercial

181

Real Estate - Residential

110

112

373

Real Estate - Home Equity

333

141

430

Consumer

619

634

864

819

744

2,117

2,059

Overdrafts

(3)

450

541

702

1,693

Total Charge-Offs

1,282

1,414

2,080

1,086

1,659

4,776

3,885

RECOVERIES

Commercial, Financial and Agricultural

127

188

218

Real Estate - Construction

Real Estate - Commercial

191

266

142

291

312

Real Estate - Residential

116

126

313

Real Estate - Home Equity

138

150

Consumer

280

365

268

300

277

913

812

Overdrafts

(3)

237

549

427

1,213

Total Recoveries

697

1,173

999

834

609

2,869

1,805

NET CHARGE-OFFS

585

241

1,081

252

1,050

1,907

2,080

Net Charge-Offs as a % of Average Loans HFI

(1)

0.11%

0.05%

0.23%

0.05%

0.23%

0.13%

0.15%

RISK ELEMENT ASSETS

Nonaccruing Loans

5,505

6,966

4,874

4,472

4,928

Other Real Estate Owned

1,227

1,059

1,463

953

526

Total Nonperforming Assets ("NPAs")

6,732

8,025

6,337

5,425

5,454

Past Due Loans 30-89 Days

3,191

2,948

5,077

4,871

5,120

Past Due Loans 90 Days or More

Classified Loans

16,772

17,091

16,548

20,847

21,323

Performing Troubled Debt Restructuring's

14,693

15,133

15,934

16,888

18,284

Nonperforming Loans as a % of Loans HFI

0.28%

0.34%

0.26%

0.24%

0.27%

NPAs as a % of Loans HFI and Other Real Estate

0.34%

0.40%

0.34%

0.29%

0.30%

NPAs as a % of

Total Assets

0.19%

0.23%

0.21%

0.18%

0.19%

(1)

Annualized

(2)

Does not include $1.5 million for unfunded commitments recorded in other liabilities at 9/30/2020.

(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

Third Quarter 2020

Second Quarter 2020

First Quarter 2020

Fourth Quarter 2019

Third Quarter 2019

Sep 2020 YTD

Sep 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

2,097,700

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

1,837,548

24,113

5.21

2,013,243

71,175

4.73

1,813,964

70,705

5.21

Investment Securities

Taxable Investment Securities

553,395

2,401

1.73

601,509

2,708

1.80

629,512

2,995

1.91

610,046

3,186

2.08

607,363

3,249

2.13

594,654

8,104

1.82

613,382

9,936

2.16

Tax-Exempt Investment Securities

4,860

2.66

5,865

2.51

5,293

1.86

10,327

1.67

18,041

1.63

5,338

2.34

29,237

347

1.59

Total Investment Securities

558,255

2,433

1.74

607,374

2,745

1.81

634,805

3,020

1.91

620,373

3,229

2.08

625,404

3,322

2.12

599,992

8,198

1.82

642,619

10,283

2.13

Funds Sold

567,883

146

0.10

351,473

0.10

234,372

757

1.30

228,137

945

1.64

207,129

1,142

2.19

385,245

991

0.34

241,323

4,242

2.35

Total Earning Assets

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

2,670,081

28,577

4.25

2,998,480

80,364

3.58

2,697,906

85,230

4.22

Cash and Due From Banks

69,893

72,647

56,958

53,174

50,981

66,512

52,210

Allowance for Loan Losses

(22,948)

(21,642)

(14,389)

(14,759)

(14,863)

(19,672)

(14,576)

Other Assets

268,549

261,449

244,339

249,089

253,111

257,993

253,152

Total Assets

3,539,332

3,329,226

3,038,788

2,982,204

2,959,310

3,303,313

2,988,692

LIABILITIES:

Interest Bearing Deposits

NOW Accounts

826,776

0.03

789,378

0.04

808,811

725

0.36

755,625

889

0.47

749,678

1,235

0.65

808,389

864

0.14

821,819

4,613

0.75

Money Market Accounts

247,185

0.05

222,377

0.07

212,211

117

0.22

227,479

170

0.30

238,565

264

0.44

227,331

189

0.11

238,664

775

0.43

Savings Accounts

438,762

0.05

409,366

0.05

379,237

0.05

372,518

0.05

372,593

0.05

409,230

150

0.05

369,726

136

0.05

Time Deposits

104,522

0.16

104,718

0.19

105,542

0.19

108,407

0.19

111,447

0.18

104,925

144

0.18

115,215

159

0.18

Total Interest Bearing Deposits

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

1,472,283

1,596

0.43

1,549,875

1,347

0.12

1,545,424

5,683

0.49

Short-Term Borrowings

74,557

498

2.66

73,377

421

2.31

32,915

132

1.61

7,448

0.87

8,697

1.24

60,335

1,051

2.33

9,890

1.27

Subordinated Notes Payable

52,887

316

2.34

52,887

374

2.80

52,887

471

3.52

52,887

525

3.88

52,887

558

4.13

52,887

1,161

2.89

52,887

1,762

4.39

Other Long-Term Borrowings

5,453

2.91

5,766

2.84

6,312

3.21

6,723

3.33

7,158

3.47

5,842

131

3.00

7,619

201

3.52

Total Interest Bearing Liabilities

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

1,541,025

2,244

0.58

1,668,939

3,690

0.30

1,615,820

7,739

0.64

Noninterest Bearing Deposits

1,354,032

1,257,614

1,046,889

1,060,922

1,023,472

1,220,002

996,290

Other Liabilities

83,192

72,073

59,587

63,291

74,540

71,661

62,823

Total Liabilities

3,187,366

2,987,556

2,704,391

2,655,300

2,639,037

2,960,602

2,674,933

Temporary Equity

11,893

8,155

2,506

7,534

SHAREOWNERS' EQUITY:

340,073

333,515

331,891

326,904

320,273

335,177

313,759

Total Liabilities, Temporary

Equity and

Shareowners' Equity

3,539,332

3,329,226

3,038,788

2,982,204

2,959,310

3,303,313

2,988,692

Interest Rate Spread

25,233

3.01

25,564

3.30

25,877

3.61

26,378

3.69

26,333

3.67

76,674

3.29

77,491

3.58

Interest Income and Rate Earned

(1)

26,277

3.25

26,618

3.55

27,469

4.01

28,132

4.14

28,577

4.25

80,364

3.58

85,230

4.22

Interest Expense and Rate Paid

(2)

1,044

0.13

1,054

0.14

1,592

0.23

1,754

0.26

2,244

0.33

3,690

0.16

7,739

0.38

Net Interest Margin

25,233

3.12

25,564

3.41

25,877

3.78

26,378

3.89

26,333

3.92

76,674

3.42

77,491

3.84

(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.