Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2021 Results

TALLAHASSEE, Fla., Jan. 25, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $6.4 million, or $0.38 per diluted share, for the fourth quarter of 2021 compared to net income of $10.1 million, or $0.60 per diluted share, for the third quarter of 2021, and $7.7 million, or $0.46 per diluted share, for the fourth quarter of 2020.

For the full year of 2021, net income totaled $33.4 million, or $1.98 per diluted share, compared to net income of $31.6 million, or $1.88 per diluted share, for 2020.

Fourth Quarter 2021 HIGHLIGHTS

• Operating revenues (excluding mortgage revenues and SBA PPP loan income) improved 1.9%

• Capital City Home Loans (“CCHL”) contributed $0.03 per share versus $0.06 per share in the prior quarter reflective of a typical seasonal slowdown

• Noninterest expense increased $0.5 million, or 1.3%, on higher other real estate expense related to a third quarter gain of $1.0 million on the sale of a banking office

• Average loans, excluding PPP loans, grew $8 million and average investment securities increased $82 million

• Noninterest expense included a pension settlement charge of $0.6 million or $0.03 per share

• Strong credit quality metrics resulted in no loan loss provision and an allowance coverage ratio of 1.12%

• Average Deposits grew $101 million, or 2.9%, primarily due to a seasonal increase in public fund inflows

• Capital growth of $34.3 million ($2.03 per share), or 9.8%, primarily attributable to a favorable adjustment for year-end pension plan re-measurement

Full Year 2021 HIGHLIGHTS

• 2021 net income totaled $33.4 million, a record year

• Operating revenues (excluding mortgage revenues and SBA PPP loan income) improved 1.4%

• CCHL contributed $0.23 per share versus $0.52 per share in 2020

• Average loans, excluding PPP loans, grew $76 million and average investment securities increased $203 million

• Negative loan loss provision of $1.6 million

• Noninterest expense included pension settlement charges totaling $3.1 million or $0.15 per share

• Average Deposits grew $563 million, or 19.8%, reflective of government stimulus related inflows

• Capital growth of $62.3 million ($3.69 per share), or 19.4%

“Capital City reported record earnings in 2021,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “SBA PPP loan income, pristine credit quality and growth in our fee-based businesses drove earnings, more than offsetting the adverse impacts of a normalizing mortgage market, pension settlement charges and a lower interest rate environment. We are well positioned for rising interest rates given our asset sensitive balance sheet and the favorable impact higher interest rates have on our pension related other comprehensive loss. Year over year, the favorable pension equity adjustment added $2.01 per share to book value. As I look toward 2022, I am excited about the prospects of our recent addition of Capital City Strategic Wealth (a financial planning/advisory service), which gained traction in the latter half of 2021, and our market expansion in the western panhandle of Florida and the northern arc of Atlanta. While challenges remain, we are identifying opportunities and executing on strategies we believe are sustainable and add long-term value for our shareowners. I am optimistic about the future and appreciate your continued support.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2021 totaled $24.8 million compared to $27.8 million for the third quarter of 2021 and $25.1 million for the fourth quarter of 2020. For the full year 2021 tax-equivalent net interest income totaled $103.2 million compared to $101.8 million for 2020. Compared to the third quarter of 2021 and the fourth quarter of 2020, the decrease was primarily due to lower SBA PPP loan income. Compared to the full year 2020, the increase was primarily attributable to higher SBA PPP loan income and higher average loan balances, partially offset by unfavorable rate repricing due to a generally lower rate environment.

Our net interest margin for the fourth quarter of 2021 was 2.60%, a decrease of 38 basis points over the third quarter of 2021 and a decrease of 40 basis points from the fourth quarter of 2020. Compared to both prior periods, the decrease was attributable to a decline in SBA PPP loan income, in conjunction with growth in earning assets (driven by deposit inflows), which negatively impacts our margin percentage. For the full year 2021, the net interest margin declined 47 basis points compared to 2020, primarily driven by growth in earning assets. Our net interest margin for the fourth quarter of 2021, excluding the impact of overnight funds in excess of $200 million, was 3.10%.

Provision for Credit Loss

We did not record a provision for credit losses for the fourth quarter of 2021. This compares to provision expense of $1.3 million for the fourth quarter of 2020. For the full year 2021, we recorded a negative provision of $1.6 million compared to provision expense of $9.6 million for 2020. The lower provision in 2021 was attributable to improvements in forecasted economic conditions, favorable loan migration and net loan recoveries totaling $0.6 million. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the fourth quarter of 2021 totaled $24.7 million compared to $26.6 million for the third quarter of 2021 and $30.5 million for the fourth quarter of 2020. For the full year 2021, noninterest income totaled $107.5 million compared to $111.2 million for 2020. The decrease from all prior periods was primarily attributable to lower mortgage banking revenues that were partially offset by strong gains in deposit fees, bank card fees, and wealth management fees. The decline in mortgage banking revenues for the fourth quarter of 2021 reflected a normal seasonal decline in loan purchase activity. Year over year, the decline in mortgage banking revenues was driven generally by lower refinancing activity, a shift in production mix (lower government versus conventional product), and lower market driven gain on sale margins. Additional detail on our mortgage banking operation (CCHL) is provided on Page 11. The increase in deposit fees reflected the conversion, in the third quarter of 2021, of the remaining free checking accounts to a monthly maintenance fee account type. The increase in wealth management fees was primarily attributable to higher retail brokerage transaction volume and advisory accounts added from the acquisition of Capital City Strategic Wealth on May 1, 2021. To a lesser extent, higher trust fees contributed to the increase in wealth management fees driven by higher assets under management. The increase in bank card fees generally reflected an increase in card-not-present debit card transactions and increased consumer spending.

Noninterest expense for the fourth quarter of 2021 totaled $40.2 million compared to $39.7 million for the third quarter of 2021 and $41.3 million for the fourth quarter of 2020. The increase over the third quarter of 2021 was primarily attributable to higher other real estate expense of $1.2 million, partially offset by lower compensation expense of $0.5 million. The increase in other real estate expense reflected a gain on the sale of a banking office in the third quarter of 2021. The decrease in compensation was attributable to lower commission expense at CCHL. Compared to the fourth quarter of 2020, the decrease was primarily due to lower commission expense at CCHL.

For the full year 2021, noninterest expense totaled $162.5 million compared to $150.0 million for 2021. The $12.5 million increase was attributable to the addition of expenses at CCHL (March 1, 2020 acquisition) of $2.3 million and higher expenses at the core bank totaling $10.2 million. The increase in expenses at the core bank were primarily due to higher compensation expense of $3.7 million (merit raises, pension/service cost expense, and realized loan cost), pension settlement expense of $3.1 million, and an increase in other expense of $5.0 million, partially offset by lower other real estate expense of $1.6 million. The increase in other expense was primarily attributable to higher expense of $2.1 million for the non-service cost component of our pension plan attributable to the utilization of a lower discount rate for plan liabilities. Higher processing fees of $0.7 million (debit card volume), professional fees of $0.6 million, occupancy expense of $0.5 million, and FDIC insurance of $0.5 million (higher asset size) also contributed to the increase in other expense.

Income Taxes

We realized income tax expense of $2.0 million (effective rate of 22%) for the fourth quarter of 2021 compared to $2.9 million (effective rate of 20%) for the third quarter of 2021 and $2.8 million (effective rate of 22%) for the fourth quarter of 2020. For the full year 2021, we realized income tax expense of $9.8 million (effective rate of 20%) compared to $10.2 million (effective rate of 19%) for the same period of 2020. Tax expense for the fourth quarter of 2021 and 2020 was unfavorably impacted by discrete tax expense of $0.1 million and $0.3 million, respectively. Absent discrete items, we expect our annual effective tax rate to approximate 19%-20% in 2022.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $3.791 billion for the fourth quarter of 2021, an increase of $98.2 million, or 2.7%, over the third quarter of 2021, and an increase of $453.9 million, or 13.6%, over the fourth quarter of 2020. The increase over both prior periods was primarily driven by higher deposit balances. Deposit balances increased as a result of strong core deposit growth, SBA PPP loan proceeds deposited in client accounts, 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 $789.1 million in the fourth quarter of 2021 compared to an average net overnight funds sold position of $741.9 million in the third quarter of 2021 and $705.1 million in the fourth quarter of 2020. 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”) decreased $25.8 million, or 1.3%, from the third quarter of 2021 and decreased $45.1 million, or 2.3%, from the fourth quarter of 2020. Excluding SBA PPP loans, average loans HFI increased $7.8 million compared to the third quarter of 2021, and increased $133.1 million compared to the fourth quarter of 2020. Compared to the third quarter of 2021 the increase in average loans (excluding PPP loans) reflected growth in construction and indirect loans, partially offset by declines in the remaining loan products. Compared to the fourth quarter of 2020, we realized growth in construction, residential, commercial real estate and indirect loans. At December 31, 2021, remaining SBA PPP loan balances and fees totaled less than $0.2 million.

Allowance for Credit Losses

At December 31, 2021, the allowance for credit losses for HFI loans totaled $21.6 million compared to $21.5 million at September 30, 2021 and $23.8 million at December 31, 2020. Activity within the allowance is provided on Page 9. At December 31, 2021, the allowance represented 1.12% of HFI loans and provided coverage of 546% of nonperforming loans compared to 1.11% and 710%, respectively, at September 30, 2021, and 1.19% and 406%, respectively, at December 31, 2020. At December 31, 2021, excluding SBA PPP loans (100% government guaranteed), the allowance represented 1.12% of HFI loans compared to 1.30% at December 31, 2020.

Credit Quality

Overall credit quality continues to remain strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $4.3 million at December 31, 2021 compared to $3.2 million at September 30, 2021 and $6.7 million at December 31, 2020. At December 31, 2021, nonperforming assets as a percentage of total assets was stable at 0.10%. Nonaccrual loans totaled $4.3 million at December 31, 2021, a $1.3 million increase over September 30, 2021 and a $1.5 million decrease from December 31, 2020.

Funding (Deposits/Debt)

Average total deposits were $3.549 billion for the fourth quarter of 2021, an increase of $101.5 million, or 2.9%, over the third quarter of 2021 and $483.0 million, or 15.8%, over the fourth quarter of 2020. Compared to both prior periods, growth in average total deposits was experienced in all products except certificates of deposit, with the strongest growth occurring in our noninterest bearing deposits and savings account balances. Over the past 18 months, multiple government stimulus programs have been implemented, including those under the CARES Act and the American Rescue Plan Act, which are responsible for a large part of the growth in average deposits. Given these increases, the potential exists for our deposit levels to be volatile into 2022 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. The Bank continues to strategically consider ways to safely deploy a portion of this liquidity.

Average short-term borrowings decreased $3.4 million from the third quarter of 2021 and declined $48.9 million from the fourth quarter of 2020, both of which reflected a seasonal fluctuation in warehouse line borrowing needs to support CCHL’s loans held for sale.

Capital

Shareowners’ equity was $383.2 million at December 31, 2021 compared to $348.9 million at September 30, 2021 and $320.8 million at December 31, 2020. For the full year 2021, shareowners’ equity was positively impacted by net income of $33.4 million, a $34.1 million decrease in the accumulated other comprehensive loss for our pension plan, a $1.1 million increase in fair value of the interest rate swap related to subordinated debt, net adjustments totaling $1.4 million related to transactions under our stock compensation plans, stock compensation accretion of $0.8 million, and reclassification of $9.3 million from temporary equity to decrease the redemption value of the non-controlling interest in CCHL. Shareowners’ equity was reduced by common stock dividends of $10.5 million ($0.62 per share) and a $7.3 million decrease in the unrealized gain on investment securities.

At December 31, 2021, our total risk-based capital ratio was 17.15% compared to 16.70% at September 30, 2021 and 17.30% at December 31, 2020. Our common equity tier 1 capital ratio was 13.86%, 13.45%, and 13.71%, respectively, on these dates. Our leverage ratio was 8.95%, 9.05%, and 9.33%, 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 6.95% at December 31, 2021 compared to 6.46% and 6.25% at September 30, 2021 and December 31, 2020, respectively. Our tangible capital ratio was favorably impacted at December 31, 2021 by the aforementioned annual adjustment to the other comprehensive loss for our pension plan. The favorable adjustment was primarily attributable to the utilization of higher discount rates to re-measure the present value of the projected benefit obligation and a strong return on plan assets for 2021.

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 life insurance. 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 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, 2020, 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)		Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Shareowners' Equity (GAAP)		$	383,166		$	348,868		$	335,880		$	324,426		$	320,837
Less: Goodwill and Other Intangibles (GAAP)			93,253			93,293			93,333			89,095			89,095
Tangible Shareowners' Equity (non-GAAP)	A		289,913			255,575			242,547			235,331			231,742
Total Assets (GAAP)			4,263,849			4,048,733			4,011,459			3,929,884			3,798,071
Less: Goodwill and Other Intangibles (GAAP)			93,253			93,293			93,333			89,095			89,095
Tangible Assets (non-GAAP)	B	$	4,170,596		$	3,955,440		$	3,918,126		$	3,840,789		$	3,708,976
Tangible Common Equity Ratio (non-GAAP)	A/B		6.95	%		6.46	%		6.19	%		6.13	%		6.25	%
Actual Diluted Shares Outstanding (GAAP)	C		16,935,389			16,911,715			16,901,375			16,875,719			16,844,997
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	17.12		$	15.11		$	14.35		$	13.94		$	13.76

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
		Three Months Ended						Twelve Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2021		Sep 30, 2021		Dec 31, 2020		Dec 31, 2021			Dec 31, 2020
EARNINGS
Net Income Attributable to Common Shareowners	$	6,372	$	10,091	$	7,746	$	33,396		$	31,576
Diluted Net Income Per Share	$	0.38	$	0.60	$	0.46	$	1.98		$	1.88
PERFORMANCE
Return on Average Assets		0.61	%	0.99	%	0.84	%	0.84		%	0.93	%
Return on Average Equity		7.22		11.72		8.97		9.92			9.36
Net Interest Margin		2.60		2.98		3.00		2.83			3.30
Noninterest Income as % of Operating Revenue		49.96		48.99		55.00		51.11			52.32
Efficiency Ratio		81.29	%	73.09	%	74.36	%	77.11		%	70.43	%
CAPITAL ADEQUACY
Tier 1 Capital		16.14	%	15.69	%	16.19	%	16.14		%	16.19	%
Total Capital		17.15		16.70		17.30		17.15			17.30
Leverage		8.95		9.05		9.33		8.95			9.33
Common Equity Tier 1		13.86		13.45		13.71		13.86			13.71
Tangible Common Equity (1)		6.95		6.46		6.25		6.95			6.25
Equity to Assets		8.99	%	8.62	%	8.45	%	8.99		%	8.45	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		499.93	%	710.39	%	405.66	%	499.93		%	405.66	%
Allowance as a % of Loans HFI		1.12		1.11		1.19		1.12			1.19
Net Charge-Offs as % of Average Loans HFI		0.02		0.03		0.09		(0.03	)		0.12
Nonperforming Assets as % of Loans HFI and OREO		0.22		0.17		0.33		0.22			0.33
Nonperforming Assets as % of Total Assets		0.10	%	0.08	%	0.18	%	0.10		%	0.18	%
STOCK PERFORMANCE
High	$	29.00	$	26.10	$	26.35	$	29.00		$	30.62
Low		24.77		22.02		18.14		21.42			15.61
Close	$	26.40	$	24.74	$	24.58	$	26.40		$	24.58
Average Daily Trading Volume		29,900		30,515		22,271		29,919			35,125
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
	2021													2020
(Dollars in thousands)	Fourth Quarter				Third Quarter			Second Quarter			First Quarter			Fourth Quarter
ASSETS
Cash and Due From Banks	$	65,313		$	73,132		$	78,894		$	73,973		$	67,919
Funds Sold and Interest Bearing Deposits		970,041			708,988			766,920			851,910			860,630
Total Cash and Cash Equivalents		1,035,354			782,120			845,814			925,883			928,549
Investment Securities Available for Sale		654,611			645,844			480,890			406,245			324,870
Investment Securities Held to Maturity		339,601			341,228			325,559			199,109			169,939
Other Equity Securities		861			-			-			-			-
Total Investment Securities		995,073			987,072			806,449			605,354			494,809
Loans Held for Sale		52,532			77,036			80,821			82,081			114,039
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		223,086			218,929			292,953			413,819			393,930
Real Estate - Construction		174,394			177,443			149,884			138,104			135,831
Real Estate - Commercial		663,550			683,379			707,599			669,158			648,393
Real Estate - Residential		346,756			355,958			362,018			358,849			342,664
Real Estate - Home Equity		187,821			187,642			190,078			202,099			205,479
Consumer		321,511			309,983			298,464			267,666			269,520
Other Loans		13,265			6,792			6,439			7,082			9,879
Overdrafts		1,082			1,299			1,227			950			730
Total Loans Held for Investment		1,931,465			1,941,425			2,008,662			2,057,727			2,006,426
Allowance for Credit Losses		(21,606	)		(21,500	)		(22,175	)		(22,026	)		(23,816	)
Loans Held for Investment, Net		1,909,859			1,919,925			1,986,487			2,035,701			1,982,610
Premises and Equipment, Net		83,412			84,750			85,745			86,370			86,791
Goodwill and Other Intangibles		93,253			93,293			93,333			89,095			89,095
Other Real Estate Owned		17			192			1,192			110			808
Other Assets		94,349			104,345			111,618			105,290			101,370
Total Other Assets		271,031			282,580			291,888			280,865			278,064
Total Assets	$	4,263,849		$	4,048,733		$	4,011,459		$	3,929,884		$	3,798,071
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,668,912		$	1,592,345		$	1,552,864		$	1,473,891		$	1,328,809
NOW Accounts		1,070,154			926,201			970,705			993,571			1,046,408
Money Market Accounts		274,611			286,065			280,805			269,041			266,649
Regular Savings Accounts		599,811			559,714			539,477			518,373			474,100
Certificates of Deposit		99,374			101,637			103,070			103,232			101,594
Total Deposits		3,712,862			3,465,962			3,446,921			3,358,108			3,217,560
Short-Term Borrowings		34,557			51,410			47,200			55,687			79,654
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		884			1,610			1,720			1,829			3,057
Other Liabilities		67,735			113,720			105,534			109,487			102,076
Total Liabilities		3,868,925			3,685,589			3,654,262			3,577,998			3,455,234
Temporary Equity		11,758			14,276			21,317			27,460			22,000
SHAREOWNERS' EQUITY
Common Stock		169			169			169			169			168
Additional Paid-In Capital		34,423			33,876			33,560			32,804			32,283
Retained Earnings		364,788			359,550			345,574			335,324			332,528
Accumulated Other Comprehensive Loss, Net of Tax		(16,214	)		(44,727	)		(43,423	)		(43,871	)		(44,142	)
Total Shareowners' Equity		383,166			348,868			335,880			324,426			320,837
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,263,849		$	4,048,733		$	4,011,459		$	3,929,884		$	3,798,071
OTHER BALANCE SHEET DATA
Earning Assets	$	3,949,111		$	3,714,521		$	3,662,852		$	3,597,071		$	3,475,904
Interest Bearing Liabilities		2,132,278			1,979,524			1,995,864			1,994,620			2,024,349
Book Value Per Diluted Share	$	22.63		$	20.63		$	19.87		$	19.22		$	19.05
Tangible Book Value Per Diluted Share(1)		17.12			15.11			14.35			13.94			13.76
Actual Basic Shares Outstanding		16,892			16,878			16,874			16,852			16,791
Actual Diluted Shares Outstanding		16,935			16,912			16,901			16,876			16,845
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
		2021												2020			December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2021			2020
INTEREST INCOME
Interest and Fees on Loans	$	22,744		$	25,885		$	24,582		$	23,350		$	23,878		$	96,561		$	94,752
Investment Securities		2,505			2,350			2,054			1,883			2,096			8,792			10,274
Funds Sold		300			285			200			213			180			998			1,171
Total Interest Income		25,549			28,520			26,836			25,446			26,154			106,351			106,197
INTEREST EXPENSE
Deposits		213			210			208			208			201			839			1,548
Short-Term Borrowings		307			317			324			412			639			1,360			1,690
Subordinated Notes Payable		306			307			308			307			311			1,228			1,472
Other Long-Term Borrowings		12			14			16			21			30			63			161
Total Interest Expense		838			848			856			948			1,181			3,490			4,871
Net Interest Income		24,711			27,672			25,980			24,498			24,973			102,861			101,326
Provision for Credit Losses		-			-			(571	)		(982	)		1,342			(1,553	)		9,645
Net Interest Income after Provision for Credit Losses		24,711			27,672			26,551			25,480			23,631			104,414			91,681
NONINTEREST INCOME
Deposit Fees		5,300			5,075			4,236			4,271			4,713			18,882			17,800
Bank Card Fees		3,872			3,786			3,998			3,618			3,462			15,274			13,044
Wealth Management Fees		3,706			3,623			3,274			3,090			3,069			13,693			11,035
Mortgage Banking Revenues		9,800			12,283			13,217			17,125			17,711			52,425			63,344
Other		1,994			1,807			1,748			1,722			1,568			7,271			5,942
Total Noninterest Income		24,672			26,574			26,473			29,826			30,523			107,545			111,165
NONINTEREST EXPENSE
Compensation		24,783			25,245			25,378			26,064			26,722			101,470			96,280
Occupancy, Net		5,960			6,032			5,973			5,967			5,976			23,932			22,659
Other Real Estate, Net		26			(1,126	)		(270	)		(118	)		567			(1,488	)		104
Pension Settlement		572			500			2,000			-			-			3,072			-
Other		8,866			9,051			9,042			8,563			8,083			35,522			30,919
Total Noninterest Expense		40,207			39,702			42,123			40,476			41,348			162,508			149,962
OPERATING PROFIT		9,176			14,544			10,901			14,830			12,806			49,451			52,884
Income Tax Expense		2,040			2,949			2,059			2,787			2,833			9,835			10,230
Net Income		7,136			11,595			8,842			12,043			9,973			39,616			42,654
Pre-Tax Income Attributable to Noncontrolling Interest		(764	)		(1,504	)		(1,415	)		(2,537	)		(2,227	)		(6,220	)		(11,078	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	6,372		$	10,091		$	7,427		$	9,506		$	7,746		$	33,396		$	31,576
PER COMMON SHARE
Basic Net Income	$	0.38		$	0.60		$	0.44		$	0.56		$	0.46		$	1.98		$	1.88
Diluted Net Income		0.38			0.60			0.44			0.56			0.46			1.98			1.88
Cash Dividend	$	0.16		$	0.16		$	0.15		$	0.15		$	0.15		$	0.62		$	0.57
AVERAGE SHARES
Basic		16,880			16,875			16,858			16,838			16,763			16,863			16,785
Diluted		16,923			16,909			16,885			16,862			16,817			16,893			16,822

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND RISK ELEMENT ASSETS
Unaudited
		2021												2020			December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2021			2020
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	21,500		$	22,175		$	22,026		$	23,816		$	23,137		$	23,816		$	13,905
Impact of Adopting ASC 326 (CECL)		-			-			-			-			-			-			3,269
Provision for Credit Losses		200			(546	)		(184	)		(2,312	)		1,165			(2,842	)		9,035
Net Charge-Offs (Recoveries)		94			129			(333	)		(522	)		486			(632	)		2,393
Balance at End of Period	$	21,606		$	21,500		$	22,175		$	22,026		$	23,816		$	21,606		$	23,816
As a % of Loans HFI		1.12	%		1.11	%		1.10	%		1.07	%		1.19	%		1.12	%		1.19	%
As a % of Nonperforming Loans		499.93			710.39	%		433.93	%		410.78	%		405.66	%		499.93	%		405.66	%
ACL - DEBT SECURITIES
Provision for Credit Losses	$	20		$	16		$	-		$	-		$	-		$	36		$	-
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period		3,117		$	2,587		$	2,974		$	1,644		$	1,467		$	1,644		$	157
Impact of Adopting ASC 326 (CECL)		-			-			-			-			-			-			876
Provision for Credit Losses		(220	)		530			(387	)		1,330			177			1,253			611
Balance at End of Period(1)		2,897			3,117			2,587			2,974			1,644			2,897			1,644
CHARGE-OFFS
Commercial, Financial and Agricultural	$	101		$	37		$	32		$	69		$	104		$	239		$	789
Real Estate - Construction		-			-			-			-			-			-			-
Real Estate - Commercial		-			405			-			-			-			405			28
Real Estate - Residential		20			17			65			6			38			108			150
Real Estate - Home Equity		9			15			74			5			10			103			151
Consumer		254			221			230			564			668			1,269			2,785
Overdrafts		678			1,093			440			492			564			2,703			2,257
Total Charge-Offs	$	1,062