• Capital City Bank Group, Inc. Reports Third Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 25 Oct 2022 07:00:02   America/New_York

    TALLAHASSEE, Fla., Oct. 25, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $11.3 million, or $0.67 per diluted share, for the third quarter of 2022 compared to net income of $8.7 million, or $0.51 per diluted share, for the second quarter of 2022, and $10.1 million, or $0.60 per diluted share, for the third quarter of 2021.

    For the first nine months of 2022, net income attributable to common shareowners totaled $28.5 million, or $1.68 per diluted share, compared to net income of $27.0 million, or $1.60 per diluted share, for the same period of 2021.

    QUARTER HIGHLIGHTS (3rd Quarter 2022 versus 2nd Quarter 2022)

    • Continued strong growth in net interest income of 18% - net interest margin percentage grew 44 bps to 3.31%
    • Solid loan growth of 6.0% (end of period) and 8.6% (average)
    • Continued strong credit quality metrics – higher credit loss provision driven primarily by loan growth
    • Noninterest income decreased $2.0 million, or 7.9%, due to lower mortgage banking revenues at CCHL -- strong adjustable rate portfolio production by CCHL contributed to loan growth for the quarter
    • Noninterest expense decreased $0.7 million, or 1.7%, primarily due to lower mortgage and wealth commissions, partially offset by higher performance-based compensation
    • Tangible book value per share increased $0.07, or 0.4%

    “We continued to see steady loan growth and margin expansion this quarter, which contributed to nice improvement in our operating leverage,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “I was particularly pleased to see tangible book value growth and stable deposit balances, both current headwinds for the industry. On a relative basis, our residential mortgage business has held up well given the higher rate environment and slowdown in secondary market loan sales, and we continued to use our balance sheet to book a steady flow of adjustable rate portfolio production, which has contributed to our earnings. Our credit metrics remain strong, and a large portion of our credit loss provision for the quarter was driven by loan growth. While the environment remains highly uncertain, I like our positioning, particularly, the value that our core deposit franchise should contribute in a higher rate environment. I also feel good about our credit risk management discipline. The team is excited to open two new full-service offices in Watersound, Florida and Marietta, Georgia in the fourth quarter and to ramp up our service to those communities. As we plan for 2023, we are focused on strategies that will further diversify and grow our revenue base, both product and geography, and improve our efficiency.”

    Discussion of Operating Results

    Net Interest Income/Net Interest Margin

    Tax-equivalent net interest income for the third quarter of 2022 totaled $33.4 million, compared to $28.4 million for the second quarter of 2022, and $27.7 million for the third quarter of 2021. For the first nine months of 2022, tax-equivalent net interest income totaled $86.6 million compared to $78.4 million for the same period of 2021. Compared to the referenced prior periods, the increase primarily reflected strong loan growth, higher investment balances, and higher rates across a majority of our earning assets.

    Our net interest margin for the third quarter of 2022 was 3.31%, an increase of 44 basis points over the second quarter of 2022 and 33 basis points over the third quarter of 2021, both driven by higher interest rates and an overall improved earning asset mix. For the month of September 2022, our net interest margin was 3.41%. Excluding the impact of overnight funds in excess of $200 million, our net interest margin for the third quarter of 2022 was 3.54%. Compared to the nine month period of 2021, the net interest margin remained flat at 2.91% as the favorable impact of higher interest rates and an improved earning asset mix offset the favorable impact in 2021 from a significant level of SBA PPP fee income.

    Provision for Credit Losses

    We recorded a provision for credit losses of $2.1 million for the third quarter of 2022 compared to $1.5 million in the second quarter of 2022 and no provision for the third quarter of 2021. For the first nine months of 2022, the provision was $3.6 million compared to a benefit of $1.6 million for the same period of 2021. The higher level of provision compared to all prior periods was primarily attributable to strong loan growth. The credit loss provision in 2021 was favorably impacted by strong loan recoveries. We discuss the allowance for credit losses further below. 

    Noninterest Income and Noninterest Expense

    Noninterest income for the third quarter of 2022 totaled $22.9 million compared to $24.9 million for the second quarter of 2022 and $26.6 million for the third quarter of 2021. The $2.0 million decrease from the second quarter of 2022 was primarily attributable to lower mortgage banking revenues of $1.9 million. Compared to the third quarter of 2021, the $3.6 million decrease was attributable to lower mortgage banking revenues of $5.2 million, partially offset by higher deposit fees of $0.9 million, other income of $0.3 million, and wealth management fees of $0.3 million.

    For the first nine months of 2022, noninterest income totaled $73.7 million compared to $82.9 million for the same period of 2021 and reflected lower mortgage banking revenues of $17.5 million, partially offset by higher deposit fees of $3.0 million and wealth management fees of $4.4 million (primarily insurance revenues of $3.5 million and retail brokerage fees of $0.9 million). Lower mortgage banking revenues for 2022 reflected a reduction in refinancing activity and, to a lesser degree, lower purchase mortgage originations primarily driven by higher interest rates. In addition, gain on sale margins have been pressured due to a lower level of governmental loan originations and mandatory delivery loan sales (both of which provide a higher gain on sale percentage). During 2022, strong best efforts origination volume has allowed us to book a steady flow of adjustable rate residential loans in our portfolio and has contributed to loan growth and earnings. In addition, continued stability in our construction/permanent loan program has partially offset the slowdown in secondary market originations. For 2022, Capital City Home Loans (CCHL) contributed $0.5 million ($0.03 per diluted share) to earnings versus $3.4 million ($0.21 per diluted share) in 2021, which has largely been offset by a $1.2 million ($0.07 per diluted share) contribution to earnings by Capital City Strategic Wealth (CCSW) and improvement in both deposit fees and retail brokerage fees, which reflects our continued commitment to revenue diversification.

    Noninterest expense for the third quarter of 2022 totaled $39.8 million compared to $40.5 million for the second quarter of 2022 and $39.7 million for the third quarter of 2021. The $0.7 million decrease from the second quarter of 2022 was primarily attributable to lower variable/performance-based compensation expense at CCHL and CCSW totaling $1.5 million, partially offset by variable/performance-based compensation of $0.6 million and base salaries (primarily annual merit raises) of $0.2 million at the Bank. Compared to the third quarter of 2021, the $0.1 million increase reflected higher other real estate expense of $1.0 million, partially offset by lower compensation expense of $0.5 million and pension settlement expense of $0.4 million. The higher level of other real estate expense was attributable to a gain from the sale of a banking office in the third quarter of 2021. The decrease in compensation expense reflected lower variable/performance-based compensation at CCHL totaling $1.6 million, partially offset by higher variable/performance-based compensation of $0.7 million and base salaries of $0.3 million at the Bank.

    For the first nine months of 2022, noninterest expense totaled $119.5 million compared to $122.3 million for the same period of 2021 and reflected lower compensation expense of $1.7 million, pension settlement expense of $2.0 million, and other expense of $0.8 million, partially offset by higher other real estate expense of $1.4 million and occupancy expense of $0.3 million. The reduction in compensation expense was primarily due to lower variable/performance-based compensation at CCHL totaling $7.0 million, partially offset by higher variable/performance-based compensation totaling $2.8 million, base salaries (merit and new market staffing additions) of $2.0 million, and associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million at the Bank. A lower level of lump sum retirement payments drove the decrease in pension settlement expense compared to both prior year periods. We expect additional pension settlement expense for the remainder of 2022 based on our current estimate of lump sum pension pay-outs to retirees. The net $0.8 million decrease in other expense reflected lower pension plan expense (non-service component) of $3.7 million that was partially offset by higher advertising and travel/entertainment expense totaling $1.0 million (return to pre-pandemic levels and market expansion), mortgage servicing right amortization of $0.6 million at CCHL, other losses of $0.5 million (debit card fraud), and other miscellaneous expenses related to training, hiring, and variable loan related costs. The sale of two banking offices in 2021 drove the increase in other real estate expense.

    Income Taxes

    We realized income tax expense of $3.1 million (effective rate of 21.4%) for the third quarter of 2022 compared to $2.2 million (effective rate of 19.4%) for the second quarter of 2022 and $2.9 million (effective rate of 20.3%) for the third quarter of 2021. For the first nine months of 2022, we realized income tax expense of $7.5 million (effective rate of 20.3%) compared to $7.8 million (effective rate of 19.4%) for the same period of 2021. Absent discrete items, we expect our annual effective tax rate to approximate 21%.

    Discussion of Financial Condition

    Earning Assets

    Average earning assets totaled $4.010 billion for the third quarter of 2022, an increase of $35.7 million, or 0.9%, over the second quarter of 2022, and an increase of $218.6 million, or 5.8%, over the fourth quarter of 2021. The increase over both prior periods was primarily driven by higher deposit balances (see below – Funding). The mix of earning assets continues to improve driven by strong loan growth.

    We maintained an average net overnight funds (interest bearing deposits with banks plus FED funds sold less FED funds purchased) sold position of $570.0 million in the third quarter of 2022 compared to $691.9 million in the second quarter of 2022 and $789.1 million in the fourth quarter of 2021. The declining overnight funds position reflects growth in average loans.

    Average loans held for investment (“HFI”) increased $179.4 million, or 8.6%, over the second quarter of 2022 and increased $315.8 million, or 16.2%, over the fourth quarter of 2021. Period end loans increased $132.5 million, or 6.0%, over the second quarter of 2022 and $414.7 million, or 21.5%, over the fourth quarter of 2021. The growth in 2022 has been broad based with increases realized in all loan categories, more significantly, residential mortgage, residential construction and commercial real estate. The slowdown in secondary market residential loan sales has allowed us to book a steady flow of CCHL’s adjustable rate production in our loan portfolio through 2022.

    Allowance for Credit Losses

    At September 30, 2022, the allowance for credit losses for HFI loans totaled $22.5 million compared to $21.3 million at June 30, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 9. The $1.2 million increase in the allowance for the third quarter was driven by incremental reserves needed for loan growth and, to a lesser extent, a higher projected rate of unemployment and its potential effect on rates of default. Net charge-offs decreased $0.4 million to $0.7 million for the third quarter of 2022. At September 30, 2022, the allowance represented 0.96% of HFI loans and provided coverage of 964% of nonperforming loans compared to 0.96% and 678%, respectively, at June 30, 2022, and 1.12% and 500%, respectively, at December 31, 2021.

    Credit Quality

    Overall credit quality remains strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $2.4 million at September 30, 2022 compared to $3.2 million at June 30, 2022 and $4.3 million at December 31, 2021. At September 30, 2022, nonperforming assets as a percent of total assets equaled 0.06%, compared to 0.07% at June 30, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $2.4 million at September 30, 2022, a $0.7 million decrease from June 30, 2022 and a $1.9 million decrease from December 31, 2021. Further, classified loans increased $1.4 million over the second quarter of 2022 to $21.0 million.

    Funding (Deposits/Debt)

    Average total deposits were $3.770 billion for the third quarter of 2022, an increase of $4.5 million, or 0.1%, over the second quarter of 2022 and $220.7 million, or 6.2%, over the fourth quarter of 2021. Compared to the second quarter of 2022, the increase reflected higher noninterest bearing and savings balances. Compared to the fourth quarter of 2021, we have had strong growth in our noninterest bearing deposits, NOW accounts, and savings account balances. Over the past few years, we have experienced strong core deposit growth. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment. It is anticipated that liquidity levels will remain strong given our current level of overnight funds.

    Average borrowings increased $14.9 million over the second quarter of 2022, primarily due to an increase in short-term repurchase agreements and CCHL’s warehouse line.

    Capital

    Shareowners’ equity was $373.2 million at September 30, 2022 compared to $371.7 million at June 30, 2022 and $383.2 million at December 31, 2021. For the first nine months of 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $28.5 million, a $3.3 million increase in the fair value of the interest rate swap related to subordinated debt, stock compensation accretion of $0.9 million, net adjustments totaling $0.8 million related to transactions under our stock compensation plans, and a $0.4 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $8.3 million ($0.49 per share) and a $35.6 million increase in the unrealized loss on investment securities.

    At September 30, 2022, our total risk-based capital ratio was 15.75% compared to 16.07% at June 30, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 12.83%, 13.07%, and 13.86%, respectively, on these dates. Our leverage ratio was 8.91%, 8.77%, and 8.95%, respectively, on these dates. Further, our tangible common equity ratio was 6.61% at September 30, 2022 compared to 6.54% and 6.95% at June 30, 2022 and December 31, 2021, respectively. The decline in our regulatory capital ratios compared to 2021 was attributable to strong loan growth during 2022. At September 30, 2022, all of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.

    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 $4.3 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 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: fluctuations in inflation, interest rates, or monetary policies; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; the effects of security breaches and computer viruses that may affect our computer systems; 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; risks from the ongoing COVID-19 pandemic; 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, 2021, 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 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, 2022Jun 30, 2022Mar 31, 2022Dec 31, 2021Sep 30, 2021
    Shareowners' Equity (GAAP) $373,165 $371,675 $372,145 $383,166 $348,868 
    Less: Goodwill and Other Intangibles (GAAP)  93,133  93,173  93,213  93,253  93,293 
    Tangible Shareowners' Equity (non-GAAP)A 280,032  278,502  278,932  289,913  255,575 
    Total Assets (GAAP)  4,332,671  4,354,297  4,310,045  4,263,849  4,048,733 
    Less: Goodwill and Other Intangibles (GAAP)  93,133  93,173  93,213  93,253  93,293 
    Tangible Assets (non-GAAP)B$4,239,538 $4,261,124 $4,216,832 $4,170,596 $3,955,440 
    Tangible Common Equity Ratio (non-GAAP)A/B 6.61% 6.54% 6.61% 6.95% 6.46%
    Actual Diluted Shares Outstanding (GAAP)C 16,998,177  16,981,614  16,962,362  16,935,389  16,911,715 
    Tangible Book Value per Diluted Share (non-GAAP)A/C$16.47 $16.40 $16.44 $17.12 $15.11 


    CAPITAL CITY BANK GROUP, INC.           
    EARNINGS HIGHLIGHTS           
    Unaudited           
                
      Three Months Ended Nine Months Ended 
    (Dollars in thousands, except per share data) Sep 30, 2022 Jun 30, 2022 Sep 30, 2021 Sep 30, 2022 Sep 30, 2021 
    EARNINGS           
    Net Income Attributable to Common Shareowners$11,315$8,713$10,091$28,483$27,024  
    Diluted Net Income Per Share$0.67$0.51$0.60$1.68$1.60  
    PERFORMANCE           
    Return on Average Assets 1.03%0.81%0.99%0.88%0.92 %
    Return on Average Equity 11.83 9.36 11.72 10.05 10.87  
    Net Interest Margin 3.31 2.87 2.98 2.91 2.91  
    Noninterest Income as % of Operating Revenue 40.76 46.78 48.99 46.03 51.47  
    Efficiency Ratio 70.66%75.96%73.09%74.60%75.83 %
    CAPITAL ADEQUACY           
    Tier 1 Capital 14.80%15.13%15.69%14.80%15.69 %
    Total Capital 15.75 16.07 16.70 15.75 16.70  
    Leverage 8.91 8.77 9.05 8.91 9.05  
    Common Equity Tier 1 12.83 13.07 13.45 12.83 13.45  
    Tangible Common Equity (1) 6.61 6.54 6.46 6.61 6.46  
    Equity to Assets 8.61%8.54%8.62%8.61%8.62 %
    ASSET QUALITY           
    Allowance as % of Non-Performing Loans 934.53%677.57%710.39%934.53%710.39 %
    Allowance as a % of Loans HFI 0.96 0.96 1.11 0.96 1.11  
    Net Charge-Offs as % of Average Loans HFI 0.12 0.22 0.03 0.17 (0.05) 
    Nonperforming Assets as % of Loans HFI and OREO 0.10 0.15 0.17 0.10 0.17  
    Nonperforming Assets as % of Total Assets 0.06%0.07%0.08%0.06%0.08 %
    STOCK PERFORMANCE           
    High$33.93$28.55$26.10$33.93$28.98  
    Low 27.41 24.43 22.02 24.43 21.42  
    Close$31.11$27.89$24.74$31.11$24.74  
    Average Daily Trading Volume 30,546 25,342 30,515 26,677 29,925  
                
    (1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.    
                


    CAPITAL CITY BANK GROUP, INC.          
    CONSOLIDATED STATEMENT OF FINANCIAL CONDITION      
    Unaudited          
               
     2022  2021 
    (Dollars in thousands)Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
    ASSETS          
    Cash and Due From Banks$72,686 $91,209 $77,963 $65,313 $73,132 
    Funds Sold and Interest Bearing Deposits 497,679  603,315  790,465  970,041  708,988 
    Total Cash and Cash Equivalents 570,365  694,524  868,428  1,035,354  782,120 
               
    Investment Securities Available for Sale 416,745  601,405  624,361  654,611  645,844 
    Investment Securities Held to Maturity 676,178  528,258  518,678  339,601  341,228 
    Other Equity Securities 1,349  900  855  861  - 
    Total Investment Securities 1,094,272  1,130,563  1,143,894  995,073  987,072 
               
    Loans Held for Sale 50,304  48,708  50,815  52,532  77,036 
               
    Loans Held for Investment ("HFI"):          
    Commercial, Financial, & Agricultural 246,304  247,902  230,213  223,086  218,929 
    Real Estate - Construction 237,718  225,664  174,293  174,394  177,443 
    Real Estate - Commercial 715,870  699,093  669,110  663,550  683,379 
    Real Estate - Residential 573,963  478,121  368,020  346,756  355,958 
    Real Estate - Home Equity 202,512  194,658  188,174  187,821  187,642 
    Consumer 347,949  359,906  347,785  321,511  309,983 
    Other Loans 20,822  6,854  6,692  13,265  6,792 
    Overdrafts 1,047  1,455  1,222  1,082  1,299 
    Total Loans Held for Investment 2,346,185  2,213,653  1,985,509  1,931,465  1,941,425 
    Allowance for Credit Losses (22,510) (21,281) (20,756) (21,606) (21,500)
    Loans Held for Investment, Net 2,323,675  2,192,372  1,964,753  1,909,859  1,919,925 
               
    Premises and Equipment, Net 81,736  82,932  82,518  83,412  84,750 
    Goodwill and Other Intangibles 93,133  93,173  93,213  93,253  93,293 
    Other Real Estate Owned 13  90  17  17  192 
    Other Assets 119,173  111,935  106,407  94,349  104,345 
    Total Other Assets 294,055  288,130  282,155  271,031  282,580 
    Total Assets$4,332,671 $4,354,297 $4,310,045 $4,263,849 $4,048,733 
    LIABILITIES          
    Deposits:          
    Noninterest Bearing Deposits$1,737,046 $1,724,671 $1,704,329 $1,668,912 $1,592,345 
    NOW Accounts 990,021  1,036,757  1,062,498  1,070,154  926,201 
    Money Market Accounts 292,932  289,337  288,877  274,611  286,065 
    Regular Savings Accounts 646,526  639,594  614,599  599,811  559,714 
    Certificates of Deposit 92,853  95,899  95,204  99,374  101,637 
    Total Deposits 3,759,378  3,786,258  3,765,507  3,712,862  3,465,962 
               
    Short-Term Borrowings 52,271  39,463  30,865  34,557  51,410 
    Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
    Other Long-Term Borrowings 562  612  806  884  1,610 
    Other Liabilities 84,657  93,319  77,323  67,735  113,720 
    Total Liabilities 3,949,755  3,972,539  3,927,388  3,868,925  3,685,589 
               
    Temporary Equity 9,751  10,083  10,512  11,758  14,276 
    SHAREOWNERS' EQUITY          
    Common Stock 170  170  169  169  169 
    Additional Paid-In Capital 36,234  35,738  35,188  34,423  33,876 
    Retained Earnings 384,964  376,532  370,531  364,788  359,550 
    Accumulated Other Comprehensive Loss, Net of Tax (48,203) (40,765) (33,743) (16,214) (44,727)
    Total Shareowners' Equity 373,165  371,675  372,145  383,166  348,868 
    Total Liabilities, Temporary Equity and Shareowners' Equity$4,332,671 $4,354,297 $4,310,045 $4,263,849 $4,048,733 
    OTHER BALANCE SHEET DATA          
    Earning Assets$3,988,440 $3,996,238 $3,970,684 $3,949,111 $3,714,521 
    Interest Bearing Liabilities 2,128,052  2,154,549  2,145,736  2,132,278  1,979,524 
    Book Value Per Diluted Share$21.95 $21.89 $21.94 $22.63 $20.63 
    Tangible Book Value Per Diluted Share(1) 16.47  16.40  16.44  17.12  15.11 
    Actual Basic Shares Outstanding 16,962  16,959  16,948  16,892  16,878 
    Actual Diluted Shares Outstanding 16,998  16,982  16,962  16,935  16,912 
    (1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.


                   
    CAPITAL CITY BANK GROUP, INC.              
    CONSOLIDATED STATEMENT OF OPERATIONS           
    Unaudited              
                   
      2022  2021  September 30,
    (Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2022  2021 
    INTEREST INCOME              
    Loans, including Fees$27,761 $24,072 $22,133 $22,744 $25,885 $73,966 $73,817 
    Investment Securities 4,372  3,840  2,896  2,505  2,350  11,108  6,287 
    Federal Funds Sold and Interest Bearing Deposits 3,231  1,408  409  300  285  5,048  698 
    Total Interest Income 35,364  29,320  25,438  25,549  28,520  90,122  80,802 
    INTEREST EXPENSE              
    Deposits 1,052  266  224  213  210  1,542  626 
    Short-Term Borrowings 536  343  192  307  317  1,071  1,053 
    Subordinated Notes Payable 443  370  317  306  307  1,130  922 
    Other Long-Term Borrowings 6  8  9  12  14  23  51 
    Total Interest Expense 2,037  987  742  838  848  3,766  2,652 
    Net Interest Income 33,327  28,333  24,696  24,711  27,672  86,356  78,150 
    Provision for Credit Losses 2,099  1,542  -  -  -  3,641  (1,553)
    Net Interest Income after Provision for Credit Losses 31,228  26,791  24,696  24,711  27,672  82,715  79,703 
    NONINTEREST INCOME              
    Deposit Fees 5,947  5,447  5,191  5,300  5,075  16,585  13,582 
    Bank Card Fees 3,860  4,034  3,763  3,872  3,786  11,657  11,402 
    Wealth Management Fees 3,937  4,403  6,070  3,706  3,623  14,410  9,987 
    Mortgage Banking Revenues 7,116  9,065  8,946  9,800  12,283  25,127  42,625 
    Other 2,074  1,954  1,848  1,994  1,807  5,876  5,277 
    Total Noninterest Income 22,934  24,903  25,818  24,672  26,574  73,655  82,873 
    NONINTEREST EXPENSE              
    Compensation 24,738  25,383  24,856  24,783  25,245  74,977  76,687 
    Occupancy, Net 6,153  6,075  6,093  5,960  6,032  18,321  17,972 
    Other Real Estate, Net (92) (29) 25  26  (1,126) (96) (1,514)
    Pension Settlement 102  169  209  572  500  480  2,500 
    Other 8,909  8,900  8,050  8,866  9,051  25,859  26,656 
    Total Noninterest Expense 39,810  40,498  39,233  40,207  39,702  119,541  122,301 
    OPERATING PROFIT 14,352  11,196  11,281  9,176  14,544  36,829  40,275 
    Income Tax Expense 3,074  2,177  2,235  2,040  2,949  7,486  7,795 
    Net Income 11,278  9,019  9,046  7,136  11,595  29,343  32,480 
    Pre-Tax Income Attributable to Noncontrolling Interest 37  (306) (591) (764) (1,504) (860) (5,456)
    NET INCOME ATTRIBUTABLE TO
    COMMON SHAREOWNERS    		$11,315 $8,713 $8,455 $6,372 $10,091 $28,483 $27,024 
    PER COMMON SHARE              
    Basic Net Income$0.67 $0.51 $0.50 $0.38 $0.60 $1.68 $1.60 
    Diluted Net Income 0.67  0.51  0.50  0.38  0.60  1.68  1.60 
    Cash Dividend$0.17 $0.16 $0.16 $0.16 $0.16 $0.49 $0.46 
    AVERAGE SHARES              
    Basic 16,960  16,949  16,931  16,880  16,875  16,947  16,857 
    Diluted 16,996  16,971  16,946  16,923  16,909  16,973  16,886 


    CAPITAL CITY BANK GROUP, INC.              
    ALLOWANCE FOR CREDIT LOSSES ("ACL")            
    AND CREDIT QUALITY              
    Unaudited              
                   
      2022  2021  September 30,
    (Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2022  2021 
    ACL - HELD FOR INVESTMENT LOANS              
    Balance at Beginning of Period$21,281 $20,756 $21,606 $21,500 $22,175 $21,606 $23,816 
    Provision for Credit Losses 1,931  1,670  (79) 200  (546) 3,522  (3,042)
    Net Charge-Offs (Recoveries) 702  1,145  771  94  129  2,618  (726)
    Balance at End of Period$22,510 $21,281 $20,756 $21,606 $21,500 $22,510 $21,500 
    As a % of Loans HFI 0.96% 0.96% 1.05% 1.12% 1.11% 0.96% 1.11%
    As a % of Nonperforming Loans 934.53% 677.57% 760.83% 499.93% 710.39% 934.53% 710.39%
    ACL - UNFUNDED COMMITMENTS              
    Balance at Beginning of Period 2,853 $2,976 $2,897 $3,117 $2,587 $2,897 $1,644 
    Provision for Credit Losses 159  (123) 79  (220) 530  115  1,473 
    Balance at End of Period(1) 3,012  2,853  2,976  2,897  3,117  3,012  3,117 
    ACL - DEBT SECURITIES              
    Provision for Credit Losses$9 $(5)$- $20 $16 $4 $16 
    CHARGE-OFFS              
    Commercial, Financial and Agricultural$2 $1,104 $73 $101 $37 $1,179 $138 
    Real Estate - Construction -  -  -  -  -  -  - 
    Real Estate - Commercial 1  -  266  -  405  267  405 
    Real Estate - Residential -  -  -  20  17  -  88 
    Real Estate - Home Equity -  -  33  9  15  33  94 
    Consumer 770  533  622  254  221  1,925  1,015 
    Overdrafts 989  660  780  678  1,093  2,429  2,025 
    Total Charge-Offs$1,762 $2,297 $1,774 $1,062 $1,788 $5,833 $3,765 
    RECOVERIES              
    Commercial, Financial and Agricultural$58 $59 $165 $148 $66 $282 $305 
    Real Estate - Construction 2  -  8  -  10  10  10 
    Real Estate - Commercial 8  56  29  25  169  93  840 
    Real Estate - Residential 44  115  27  33  401  186  720 
    Real Estate - Home Equity 22  67  58  173  46  147  240 
    Consumer 260  453  183  214  334  896  977 
    Overdrafts 666  402  533  375  633  1,601  1,399 
    Total Recoveries$1,060 $1,152 $1,003 $968 $1,659 $3,215 $4,491 
    NET CHARGE-OFFS (RECOVERIES)$702 $1,145 $771 $94 $129 $2,618 $(726)
    Net Charge-Offs as a % of Average Loans HFI(2) 0.12% 0.22% 0.16% 0.02% 0.03% 0.17% (0.05)%
    CREDIT QUALITY              
    Nonaccruing Loans$2,409 $3,141 $2,728 $4,322 $3,026     
    Other Real Estate Owned 13  90  17  17  192     
    Total Nonperforming Assets ("NPAs")$2,422 $3,231 $2,745 $4,339 $3,218     
                   
    Past Due Loans 30-89 Days$6,263 $3,554 $3,120 $3,600 $3,360     
    Past Due Loans 90 Days or More -  -  -  -  -     
    Classified Loans 20,988  19,620  22,348  17,912  16,310     
    Performing Troubled Debt Restructurings$6,261 $6,728 $7,304 $7,643 $7,919     
                   
    Nonperforming Loans as a % of Loans HFI 0.10% 0.14% 0.14% 0.22% 0.16%    
    NPAs as a % of Loans HFI and Other Real Estate 0.10% 0.15% 0.14% 0.22% 0.17%    
    NPAs as a % of Total Assets 0.06% 0.07% 0.06% 0.10% 0.08%    
                   
    (1) Recorded in other liabilities              
    (2) Annualized              


    CAPITAL CITY BANK GROUP, INC.                                       
    AVERAGE BALANCE AND INTEREST RATES                                       
    Unaudited                                                  
                                                       
      Third Quarter 2022  Second Quarter 2022  First Quarter 2022  Fourth Quarter 2021  Third Quarter 2021   Sep 2022 YTD  Sep 2021 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$55,164 $486 4.82%$52,860 $711 4.44%$43,004 $397 3.19%$62,809  522 3.29%$67,753 $497 2.91% $50,387 $1,594 4.23%$83,558 $2,033 3.24%
    Loans Held for Investment(1) 2,264,075  27,354 4.76  2,084,679  23,433 4.53  1,963,578  21,811 4.52  1,948,324  22,296 4.54  1,974,132  25,458 5.12   2,105,211  72,598 4.61  2,018,168  72,036 4.76 
                                                       
    Investment Securities                                                  
    Taxable Investment Securities 1,117,789  4,359 1.55  1,142,269  3,834 1.34  1,056,736  2,889 1.10  987,700  2,493 1.00  904,962  2,333 1.03   1,105,822  11,082 1.34  708,606  6,232 1.17 
    Tax-Exempt Investment Securities(1) 2,939  17 2.30  2,488  10 1.73  2,409  10 1.60  3,380  17 2.07  4,332  25 2.31   2,614  37 1.90  3,904  73 2.49 
                                                       
    Total Investment Securities 1,120,728  4,376 1.55  1,144,757  3,844 1.34  1,059,145  2,899 1.10  991,080  2,510 1.01  909,294  2,358 1.03   1,108,436  11,119 1.34  712,510  6,305 1.18 
                                                       
    Federal Funds Sold and Interest Bearing Deposits 569,984  3,231 2.25  691,925  1,408 0.82  873,097  409 0.19  789,100  300 0.15  741,944  285 0.15   710,559  5,048 0.95  791,466  698 0.12 
                                                       
    Total Earning Assets 4,009,951 $35,447 3.51% 3,974,221 $29,396 2.97% 3,938,824 $25,516 2.63% 3,791,313 $25,628 2.68% 3,693,123 $28,598 3.07%  3,974,593 $90,359 3.04% 3,605,702 $81,072 3.01%
                                                       
    Cash and Due From Banks 79,527       79,730       74,253       73,752       72,773        77,856       71,956      
    Allowance for Credit Losses (21,509)      (20,984)      (21,655)      (22,127)      (22,817)       (21,382)      (23,241)     
    Other Assets 289,709       288,421       275,353       284,999       283,534        284,546       281,162      
                                                       
    Total Assets$4,357,678      $4,321,388      $4,266,775      $4,127,937      $4,026,613       $4,315,613      $3,935,579      
                                                       
    LIABILITIES:                                                  
    Interest Bearing Deposits                                                  
    NOW Accounts$1,016,475 $868 0.34%$1,033,190 $120 0.05%$1,079,906 $86 0.03%$963,778 $72 0.03%$945,788 $72 0.03% $1,042,958 $1,074 0.14%$965,839 $222 0.03%
    Money Market Accounts 288,758  71 0.10  286,210  36 0.05  285,406  33 0.05  289,335  34 0.05  282,860  34 0.05   286,804  140 0.07  274,990  100 0.05 
    Savings Accounts 643,640  80 0.05  628,472  77 0.05  599,359  72 0.05  573,563  71 0.05  551,383  68 0.05   623,986  229 0.05  524,710  192 0.05 
    Time Deposits 94,073  33 0.14  95,132  33 0.14  97,054  33 0.14  101,037  36 0.14  102,765  36 0.14   95,408  99 0.14  102,619  112 0.15 
    Total Interest Bearing Deposits 2,042,946  1,052 0.20% 2,043,004  266 0.05% 2,061,725  224 0.04% 1,927,713  213 0.04% 1,882,796  210 0.04%  2,049,156  1,542 0.10% 1,868,158  626 0.04%
                                                       
    Short-Term Borrowings 46,679  536 4.56% 31,782  343 4.33% 32,353  192 2.40% 46,355  307 2.63% 49,773  317 2.53%  36,991  1,071 3.87% 55,923  1,053 2.52%
    Subordinated Notes Payable 52,887  443 3.28  52,887  370 2.76  52,887  317 2.40  52,887  306 2.26  52,887  307 2.27   52,887  1,130 2.82  52,887  922 2.30 
    Other Long-Term Borrowings 580  6 4.74  722  8 4.54  833  9 4.49  1,414  12 3.50  1,652  14 3.37   710  23 4.58  2,046  51 3.29 
                                                       
    Total Interest Bearing Liabilities 2,143,092 $2,037 0.38% 2,128,395 $987 0.19% 2,147,798 $742 0.14% 2,028,369 $838 0.16% 1,987,108 $848 0.17%  2,139,744 $3,766 0.24% 1,979,014 $2,652 0.18%
                                                       
    Noninterest Bearing Deposits 1,726,918       1,722,325       1,652,337       1,621,432       1,564,892        1,700,800       1,490,787      
    Other Liabilities 98,501       87,207       72,166       114,657       112,707        86,055       110,526      
                                                       
    Total Liabilities 3,968,511       3,937,927       3,872,301       3,764,458       3,664,707        3,926,599       3,580,327      
    Temporary Equity 9,862       10,096       10,518       13,339       20,446        10,156       22,920      
                                                       
    SHAREOWNERS' EQUITY: 379,305       373,365       383,956       350,140       341,460        378,858       332,332      
                                                       
    Total Liabilities, Temporary Equity and Shareowners' Equity$4,357,678      $4,321,388      $4,266,775      $4,127,937      $4,026,613       $4,315,613      $3,935,579      
                                                       
    Interest Rate Spread  $33,410 3.13%  $28,409 2.78%  $24,774 2.49%  $24,790 2.52%  $27,750 2.91%   $86,593 2.80%  $78,420 2.83%
                                                       
    Interest Income and Rate Earned(1)   35,447 3.51    29,396 2.97    25,516 2.63    25,628 2.68    28,598 3.07     90,359 3.04    81,072 3.01 
    Interest Expense and Rate Paid(2)   2,037 0.20    987 0.10    742 0.08    838 0.09    848 0.09     3,766 0.13    2,652 0.10 
                                                       
    Net Interest Margin  $33,410 3.31%  $28,409 2.87%  $24,774 2.55%  $24,790 2.60%  $27,750 2.98%   $86,593 2.91%  $78,420 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.                                              


    For Information Contact:
    J. Kimbrough Davis
    Executive Vice President and Chief Financial Officer
    850.402.7820


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