Capital City Bank Group, Inc. Reports Fourth Quarter 2022 Results

Capital City Bank Group

TALLAHASSEE, Fla., Jan. 24, 2023 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $11.7 million, or $0.68 per diluted share, for the fourth quarter of 2022 compared to net income of $11.3 million, or $0.67 per diluted share, for the third quarter of 2022, and $6.4 million, or $0.38 per diluted share, for the fourth quarter of 2021.

For the full year of 2022, net income attributable to common shareowners totaled $40.1 million, or $2.36 per diluted share, compared to net income of $33.4 million, or $1.98 per diluted share, for the same period of 2021.

QUARTER HIGHLIGHTS (4th Quarter 2022 versus 3rd Quarter 2022)

• Continued strong growth in net interest income of 14% - net interest margin percentage grew 45 basis points to 3.76% - deposit cost well controlled at 20 basis points (total deposits) and 35 basis points (interest bearing deposits)

• Loan growth of $179 million, or 7.6% (end of period) and $175 million, or 7.7% (average)

• Continued strong credit quality metrics – higher credit loss provision primarily driven by loan growth

• Noninterest income decreased $1.9 million, or 8.5%, primarily due to lower mortgage banking revenues at CCHL – strong adjustable rate portfolio production by CCHL contributed to loan growth for the quarter

• Noninterest expense included a pension settlement charge of $1.8 million, or $0.08 per share

• Tangible book value per share increased $1.19, or 7.2%, primarily due to strong earnings and a favorable re-measurement adjustment for pension plan

Full Year 2022 HIGHLIGHTS

• Strong growth in net interest income of 21% reflected improved earning asset mix and strength of deposit franchise

• Loan growth of $594 million, or 30.7% (end of period) and $189 million, or 9.4% (year-to-date average)

• Average Deposits grew $356 million, or 10.5%

• CCHL contribution decreased $0.24 per share due to slower secondary market loan sales, but was more than offset by strong adjustable rate production for our loan portfolio, and higher wealth and deposit fees

• Noninterest expense included pension settlement charges totaling $2.3 million or $0.11 per share

• Tangible book value per share increased $0.54, or 3.2%, primarily due to strong earnings and a favorable re-measurement adjustment for pension plan, partially offset by higher unrealized investment security losses

“Capital City finished out the year with another solid quarter highlighted by continued net interest margin expansion and nice tangible book value growth,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “I am proud of our associates who produced another record year of earnings. For the quarter and year, we realized strong loan growth, stable deposit growth, maintained good control of our deposit cost, and credit quality was strong. Still, we remain vigilant in the face of economic uncertainty. As we begin 2023, I am confident in our positioning, markets and strategic initiatives. Thank you to our associates for their tireless efforts serving our clients with excellence and to our shareowners for their continued support.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2022 totaled $38.2 million, compared to $33.4 million for the third quarter of 2022, and $24.8 million for the fourth quarter of 2021. For the full year of 2022, tax-equivalent net interest income totaled $124.8 million compared to $103.2 million for the same period of 2021. Compared to the third quarter of 2022, the increase primarily reflected strong loan growth and higher interest rates across a majority of our earning assets. Compared to both prior year periods, the increase reflected strong loan growth, higher interest rates, and growth in the investment portfolio.

Our net interest margin for the fourth quarter of 2022 was 3.76%, an increase of 45 basis points over the third quarter of 2022 and 116 basis points over the fourth quarter of 2021, both driven by higher interest rates and an overall improved earning asset mix. For the fourth quarter of 2022, our cost of funds was 31 basis points, an increase of 11 basis points over the third quarter of 2022 and 22 basis points over the fourth quarter of 2021. Our cost of interest bearing deposits was 35 basis points, 20 basis points, and 4 basis points for the same aforementioned periods. For the month of December 2022, our net interest margin was 3.86%. Compared to the full year of 2021, the net interest margin increased by 30 basis points to 3.13% 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 Paycheck Protection Program fee income.

Provision for Credit Losses

We recorded a provision for credit losses of $3.5 million for the fourth quarter of 2022 compared to $2.1 million in the third quarter of 2022 and no provision for the fourth quarter of 2021. For the full year of 2022, the provision was $7.2 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 and weaker projected economic conditions, primarily a higher rate of unemployment. 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 fourth quarter of 2022 totaled $21.0 million compared to $22.9 million for the third quarter of 2022 and $24.7 million for the fourth quarter of 2021. The $1.9 million decrease from the third quarter of 2022 was attributable to lower mortgage banking revenues of $1.6 million, wealth management fees of $0.3 million, deposit fees of $0.4 million, and bank card fees of $0.1 million, partially offset by higher other income of $0.5 million. The decrease in deposit fees was partially attributable to three less processing days in the fourth quarter. Compared to the fourth quarter of 2021, the $3.7 million decrease was attributable to lower mortgage banking revenues of $4.3 million, wealth management fees of $0.1 million, and bank card fees of $0.1 million, partially offset by higher other income of $0.6 million and deposit fees of $0.2 million.

For the full year of 2022, noninterest income totaled $94.6 million compared to $107.5 million for the same period of 2021 and reflected lower mortgage banking revenues of $21.8 million, partially offset by higher wealth management fees of $4.4 million, deposit fees of $3.2 million, other income of $1.2 million, and bank card fees of $0.1 million. Lower mortgage banking revenues at Capital City Home Loans (“CCHL”) 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 were 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). Throughout 2022, strong best efforts origination volume allowed us to book a steady flow of adjustable rate residential loans in our portfolio which contributed to loan growth and earnings. In addition, continued stability in our construction/permanent loan program partially offset the slowdown in secondary market originations. For 2022, CCHL realized a $0.2 million net loss ($0.01 per diluted share) versus $3.9 million net income ($0.23 per diluted share) in 2021.

Noninterest expense for the fourth quarter of 2022 totaled $42.3 million compared to $39.8 million for the third quarter of 2022 and $40.2 million for the fourth quarter of 2021. The $2.5 million increase over the third quarter of 2022 was primarily attributable to higher other expense of $1.6 million and compensation expense of $0.8 million. Higher pension plan settlement expense of $1.7 million drove the increase in other expense. The increase in compensation expense was primarily due to higher variable/performance-based compensation of $0.3 million and lower realized loan cost of $0.3 million (credit offset to salary expense). Compared to the fourth quarter of 2021, the $2.1 million increase reflected higher other expense of $1.0 million, compensation expense of $0.8 million, and occupancy expense of $0.3 million. The increase in other expense reflected higher expense for legal, travel/entertainment, FDIC insurance fees, mortgage servicing right amortization, and loan servicing costs. The higher level of compensation expense was due to higher base salary expense reflective of annual merit raises and staffing additions related to new market expansion during 2022 and stock based compensation expense related to improved company performance for 2022.

For the full year 2022, noninterest expense totaled $161.8 million compared to $162.5 million for the same period of 2021 and reflected lower compensation expense of $0.9 million and other expense of $0.4 million, partially offset by higher occupancy expense of $0.6 million. The reduction in compensation expense was primarily due to lower variable/performance-based compensation of $7.7 million and base salaries of $1.3 million at CCHL, partially offset by higher compensation at Capital City Bank, including variable/performance-based compensation totaling $2.5 million, base salaries (merit and new market staffing additions) of $3.1 million, lower realized loan cost of $1.4 million (credit offset to salary expense), associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million and stock compensation expense of $0.7 million. The decrease in other expense was primarily due to a decrease in pension related costs, including $4.9 million for the non-service related component and $0.8 million for pension plan settlement expense, partially offset by higher expense for other real estate expense of $1.2 million, travel/entertainment and advertising costs totaling $1.3 million (return to pre-pandemic levels and market expansion), other losses of $0.9 million (primarily debit card and check fraud), mortgage servicing right amortization of $0.6 million, VISA Class B share swap conversion ratio payments of $0.4 million, FDIC insurance fees of $0.3 million, and other miscellaneous costs for training, hiring, and variable expenses related to loan production. Gains from the sale of two banking offices in 2021 drove the increase in other real estate expense. The increase in occupancy expense is related to lease expense for four new banking offices added in 2022 and various software purchases, including network security and end of life upgrades.

Income Taxes

We realized income tax expense of $2.6 million (effective rate of 19.6%) for the fourth quarter of 2022 compared to $3.1 million (effective rate of 21.4%) for the third quarter of 2022 and $2.0 million (effective rate of 22.2%) for the fourth quarter of 2021. The decrease in the effective tax rate for the fourth quarter of 2022 was due to a favorable $0.4 million discrete tax item related to our SERP plan. For the full year of 2022, we realized income tax expense of $10.1 million (effective rate of 20.1%) compared to $9.8 million (effective rate of 19.9%) for the same period of 2021. Absent discrete items, we expect our annual effective tax rate to approximate 21%-22% in 2023.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.033 billion for the fourth quarter of 2022, an increase of $22.8 million, or 0.6%, over the third quarter of 2022, and an increase of $241.4 million, or 6.4%, 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 $469.4 million in the fourth quarter of 2022 compared to $570.0 million in the third 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 $175.3 million, or 7.7%, over the third quarter of 2022 and $491.1 million, or 25.2%, over the fourth quarter of 2021. Period end loans increased $179.0 million, or 7.6%, over the third quarter of 2022 and $593.7 million, or 30.7%, over the fourth quarter of 2021. The growth in 2022 was broad based with increases realized in all loan categories, more significantly, in the residential real estate, construction, and commercial real estate categories.

Allowance for Credit Losses

At December 31, 2022, the allowance for credit losses for HFI loans totaled $24.7 million compared to $22.5 million at September 30, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 12. Incremental allowance related to loan growth, a higher projected rate of unemployment and its effect on rates of default, and slower prepayment speeds (due to higher interest rates) were all contributing factors driving the increase in the allowance during 2022. At December 31, 2022, the allowance represented 0.98% of HFI loans compared to 0.96% at September 30, 2022, and 1.12% at December 31, 2021.

Credit Quality

Overall credit quality remains strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $2.7 million at December 31, 2022 compared to $2.4 million at September 30, 2022 and $4.3 million at December 31, 2021. At December 31, 2022, nonperforming assets as a percent of total assets equaled 0.06%, compared to 0.06% at September 30, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $2.2 million at December 31, 2022, a $0.2 million decrease from September 30, 2022 and a $2.1 million decrease from December 31, 2021. Further, classified loans totaled $19.3 million at December 31, 2022, a $1.6 million decrease from September 30, 2022 and a $1.4 million increase over December 31, 2021.

Funding (Deposits/Debt)

Average total deposits were $3.803 billion for the fourth quarter of 2022, an increase of $33.2 million, or 0.9%, over the third quarter of 2022 and $253.9 million, or 7.2%, over the fourth quarter of 2021. Compared to the third quarter of 2022, the increase reflected higher NOW account balances, primarily due to a seasonal increase in our public fund deposits. Compared to the fourth quarter of 2021, we have had strong growth in our noninterest bearing, NOW, and savings account balances. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment.

Capital

Shareowners’ equity was $394.0 million at December 31, 2022 compared to $373.2 million at September 30, 2022 and $383.2 million at December 31, 2021. For the full year 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $40.1 million, a $3.1 million increase in the fair value of the interest rate swap related to subordinated debt, stock compensation accretion of $1.3 million, net adjustments totaling $1.6 million related to transactions under our stock compensation plans, and an $8.7 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $11.2 million ($0.66 per share) and a $32.8 million increase in the unrealized loss on investment securities.

At December 31, 2022, our total risk-based capital ratio was 15.52% compared to 15.75% at September 30, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 12.64%, 12.83%, and 13.86%, respectively, on these dates. Our leverage ratio was 9.06%, 8.91%, and 8.95%, respectively, on these dates. Further, our tangible common equity ratio was 6.79% at December 31, 2022 compared to 6.61% and 6.95% at September 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 December 31, 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 $4.5 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 58 banking offices and 89 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 words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “vision,” “goal,” and similar expressions are intended to identify forward-looking statements. The following factors, among others, could cause our actual results to differ: our ability to successfully manage credit risk, interest rate risk, liquidity risk, and other risks inherent to our industry; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary and fiscal policies; the effects of security breaches and computer viruses that may affect our computer systems; the accuracy of our financial statement estimates and assumptions; fraud related to debit card products; changes in accounting principles, policies, practices, or guidelines; the frequency and magnitude of foreclosure on our loans; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; the strength of the U.S. economy and the local economies where we conduct operations; our ability to declare and pay dividends, the payment of which is subject to our capital requirements; changes in the stock market and other capital and real estate markets; structural changes in the markets for origination, sale and servicing of residential mortgages; uncertainty in the pricing of residential mortgage loans that we sell, as well as competition for the mortgage servicing rights related to these loans and related interest rate risk or price risk resulting from retaining mortgage servicing rights and the potential effects of higher interest rates on our loan origination volumes; the effect of corporate restructuring, acquisitions or dispositions, including the actual restructuring and other related charges and the failure to achieve the expected gains, revenue growth or expense savings from such corporate restructuring, acquisitions or dispositions; the effects of natural disasters, harsh weather conditions (including hurricanes), widespread health emergencies (including pandemics, such as the COVID-19 pandemic), military conflict, terrorism, civil unrest or other geopolitical events; our ability to comply with the extensive laws and regulations to which we are subject, including the laws for each jurisdiction where we operate; the willingness of clients to accept third-party products and services rather than our products and services and vice versa; increased competition and its effect on pricing; technological changes; the outcomes of litigation or regulatory proceedings; negative publicity and the impact on our reputation; changes in consumer spending and saving habits; growth and profitability of our noninterest income; the limited trading activity of our common stock; the concentration of ownership of our common stock; anti-takeover provisions under federal and state law as well as our Articles of Incorporation and our Bylaws; other risks described from time to time in our filings with the Securities and Exchange Commission; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 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)		Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021
Shareowners' Equity (GAAP)		$	394,016		$	373,165		$	371,675		$	372,145		$	383,166
Less: Goodwill and Other Intangibles (GAAP)			93,093			93,133			93,173			93,213			93,253
Tangible Shareowners' Equity (non-GAAP)	A		300,923			280,032			278,502			278,932			289,913
Total Assets (GAAP)			4,525,958			4,332,671			4,354,297			4,310,045			4,263,849
Less: Goodwill and Other Intangibles (GAAP)			93,093			93,133			93,173			93,213			93,253
Tangible Assets (non-GAAP)	B	$	4,432,865		$	4,239,538		$	4,261,124		$	4,216,832		$	4,170,596
Tangible Common Equity Ratio (non-GAAP)	A/B		6.79	%		6.61	%		6.54	%		6.61	%		6.95	%
Actual Diluted Shares Outstanding (GAAP)	C		17,039,401			16,998,177			16,981,614			16,962,362			16,935,389
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	17.66		$	16.47		$	16.40		$	16.44		$	17.12

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
		Three Months Ended						Twelve Months Ended
(Dollars in thousands, except per share data)		Dec 31, 2022		Sep 30, 2022		Dec 31, 2021		Dec 31, 2022		Dec 31, 2021
EARNINGS
Net Income Attributable to Common Shareowners	$	11,664	$	11,315	$	6,372	$	40,147	$	33,396
Diluted Net Income Per Share	$	0.68	$	0.67	$	0.38	$	2.36	$	1.98
PERFORMANCE
Return on Average Assets		1.06	%	1.03	%	0.61	%	0.93	%	0.84		%
Return on Average Equity		12.16		11.83		7.22		10.58		9.92
Net Interest Margin		3.76		3.31		2.60		3.13		2.83
Noninterest Income as % of Operating Revenue		35.50		40.76		49.96		43.19		51.11
Efficiency Ratio		71.47	%	70.66	%	81.29	%	73.76	%	77.11		%
CAPITAL ADEQUACY
Tier 1 Capital		14.53	%	14.80	%	16.14	%	14.53	%	16.14		%
Total Capital		15.52		15.75		17.15		15.52		17.15
Leverage		9.06		8.91		8.95		9.06		8.95
Common Equity Tier 1		12.64		12.83		13.86		12.64		13.86
Tangible Common Equity (1)		6.79		6.61		6.95		6.79		6.95
Equity to Assets		8.71	%	8.61	%	8.99	%	8.71	%	8.99		%
ASSET QUALITY
Allowance as % of Non-Performing Loans		1,076.89	%	934.53	%	499.93	%	1,076.89	%	499.93		%
Allowance as a % of Loans HFI		0.98		0.96		1.12		0.98		1.12
Net Charge-Offs as % of Average Loans HFI		0.21		0.12		0.02		0.18		(0.03	)
Nonperforming Assets as % of Loans HFI and OREO		0.11		0.10		0.22		0.11		0.22
Nonperforming Assets as % of Total Assets		0.06	%	0.06	%	0.10	%	0.06	%	0.10		%
STOCK PERFORMANCE
High	$	36.23	$	33.93	$	29.00	$	36.23	$	29.00
Low		31.14		27.41		24.77		24.43		21.42
Close	$	32.50	$	31.11	$	26.40	$	32.50	$	26.40
Average Daily Trading Volume		31,894		30,546		29,900		27,987		29,919
(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
	2022													2021
(Dollars in thousands)	Fourth Quarter				Third Quarter			Second Quarter			First Quarter			Fourth Quarter
ASSETS
Cash and Due From Banks	$	72,114		$	72,686		$	91,209		$	77,963		$	65,313
Funds Sold and Interest Bearing Deposits		528,536			497,679			603,315			790,465			970,041
Total Cash and Cash Equivalents		600,650			570,365			694,524			868,428			1,035,354
Investment Securities Available for Sale		413,294			416,745			601,405			624,361			654,611
Investment Securities Held to Maturity		660,744			676,178			528,258			518,678			339,601
Other Equity Securities		10			1,349			900			855			861
Total Investment Securities		1,074,048			1,094,272			1,130,563			1,143,894			995,073
Loans Held for Sale		54,635			50,304			48,708			50,815			52,532
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		247,362			246,304			247,902			230,213			223,086
Real Estate - Construction		234,519			237,718			225,664			174,293			174,394
Real Estate - Commercial		782,557			715,870			699,093			669,110			663,550
Real Estate - Residential		721,759			573,963			478,121			368,020			346,756
Real Estate - Home Equity		208,120			202,512			194,658			188,174			187,821
Consumer		324,450			347,949			359,906			347,785			321,511
Other Loans		5,346			20,822			6,854			6,692			13,265
Overdrafts		1,067			1,047			1,455			1,222			1,082
Total Loans Held for Investment		2,525,180			2,346,185			2,213,653			1,985,509			1,931,465
Allowance for Credit Losses		(24,736	)		(22,510	)		(21,281	)		(20,756	)		(21,606	)
Loans Held for Investment, Net		2,500,444			2,323,675			2,192,372			1,964,753			1,909,859
Premises and Equipment, Net		82,138			81,736			82,932			82,518			83,412
Goodwill and Other Intangibles		93,093			93,133			93,173			93,213			93,253
Other Real Estate Owned		431			13			90			17			17
Other Assets		120,519			119,173			111,935			106,407			94,349
Total Other Assets		296,181			294,055			288,130			282,155			271,031
Total Assets	$	4,525,958		$	4,332,671		$	4,354,297		$	4,310,045		$	4,263,849
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,653,620		$	1,737,046		$	1,724,671		$	1,704,329		$	1,668,912
NOW Accounts		1,290,494			990,021			1,036,757			1,062,498			1,070,154
Money Market Accounts		267,383			292,932			289,337			288,877			274,611
Savings Accounts		637,374			646,526			639,594			614,599			599,811
Certificates of Deposit		90,446			92,853			95,899			95,204			99,374
Total Deposits		3,939,317			3,759,378			3,786,258			3,765,507			3,712,862
Short-Term Borrowings		56,793			52,271			39,463			30,865			34,557
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		513			562			612			806			884
Other Liabilities		73,675			84,657			93,319			77,323			67,735
Total Liabilities		4,123,185			3,949,755			3,972,539			3,927,388			3,868,925
Temporary Equity		8,757			9,751			10,083			10,512			11,758
SHAREOWNERS' EQUITY
Common Stock		170			170			170			169			169
Additional Paid-In Capital		37,331			36,234			35,738			35,188			34,423
Retained Earnings		393,744			384,964			376,532			370,531			364,788
Accumulated Other Comprehensive Loss, Net of Tax		(37,229	)		(48,203	)		(40,765	)		(33,743	)		(16,214	)
Total Shareowners' Equity		394,016			373,165			371,675			372,145			383,166
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,525,958		$	4,332,671		$	4,354,297		$	4,310,045		$	4,263,849
OTHER BALANCE SHEET DATA
Earning Assets	$	4,182,399		$	3,988,440		$	3,996,238		$	3,970,684		$	3,949,111
Interest Bearing Liabilities		2,395,890			2,128,052			2,154,549			2,145,736			2,132,278
Book Value Per Diluted Share	$	23.12		$	21.95		$	21.89		$	21.94		$	22.63
Tangible Book Value Per Diluted Share(1)		17.66			16.47			16.40			16.44			17.12
Actual Basic Shares Outstanding		16,987			16,962			16,959			16,948			16,892
Actual Diluted Shares Outstanding		17,039			16,998			16,982			16,962			16,935
(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
		2022										2021			December 31,
(Dollars in thousands, except per share data)		Fourth Quarter		Third Quarter		Second Quarter			First Quarter			Fourth Quarter			2022		2021
INTEREST INCOME
Loans, including Fees	$	31,916	$	27,761	$	24,072		$	22,133		$	22,744		$	105,882	$	96,561
Investment Securities		4,847		4,372		3,840			2,896			2,505			15,955		8,792
Federal Funds Sold and Interest Bearing Deposits		4,463		3,231		1,408			409			300			9,511		998
Total Interest Income		41,226		35,364		29,320			25,438			25,549			131,348		106,351
INTEREST EXPENSE
Deposits		1,902		1,052		266			224			213			3,444		839
Short-Term Borrowings		690		536		343			192			307			1,761		1,360
Subordinated Notes Payable		522		443		370			317			306			1,652		1,228
Other Long-Term Borrowings		8		6		8			9			12			31		63
Total Interest Expense		3,122		2,037		987			742			838			6,888		3,490
Net Interest Income		38,104		33,327		28,333			24,696			24,711			124,460		102,861
Provision for Credit Losses		3,521		2,099		1,542			-			-			7,162		(1,553	)
Net Interest Income after Provision for Credit Losses		34,583		31,228		26,791			24,696			24,711			117,298		104,414
NONINTEREST INCOME
Deposit Fees		5,536		5,947		5,447			5,191			5,300			22,121		18,882
Bank Card Fees		3,744		3,860		4,034			3,763			3,872			15,401		15,274
Wealth Management Fees		3,649		3,937		4,403			6,070			3,706			18,059		13,693
Mortgage Banking Revenues		5,497		7,116		9,065			8,946			9,800			30,624		52,425
Other		2,546		2,074		1,954			1,848			1,994			8,422		7,271
Total Noninterest Income		20,972		22,934		24,903			25,818			24,672			94,627		107,545
NONINTEREST EXPENSE
Compensation		25,565		24,738		25,383			24,856			24,783			100,542		101,470
Occupancy, Net		6,253		6,153		6,075			6,093			5,960			24,574		23,932
Other		10,469		8,919		9,040			8,284			9,464			36,712		37,106
Total Noninterest Expense		42,287		39,810		40,498			39,233			40,207			161,828		162,508
OPERATING PROFIT		13,268		14,352		11,196			11,281			9,176			50,097		49,451
Income Tax Expense		2,599		3,074		2,177			2,235			2,040			10,085		9,835
Net Income		10,669		11,278		9,019			9,046			7,136			40,012		39,616
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest		995		37		(306	)		(591	)		(764	)		135		(6,220	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	11,664	$	11,315	$	8,713		$	8,455		$	6,372		$	40,147	$	33,396
PER COMMON SHARE
Basic Net Income	$	0.69	$	0.67	$	0.51		$	0.50		$	0.38		$	2.37	$	1.98
Diluted Net Income		0.68		0.67		0.51			0.50			0.38			2.36		1.98
Cash Dividend	$	0.17	$	0.17	$	0.16		$	0.16		$	0.16		$	0.66	$	0.62
AVERAGE SHARES
Basic		16,963		16,960		16,949			16,931			16,880			16,951		16,863
Diluted		17,016		16,996		16,971			16,946			16,923			16,985		16,893

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND CREDIT QUALITY
Unaudited
		2022												2021			December 31,
(Dollars in thousands, except per share data)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter			2022			2021
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	22,510		$	21,281		$	20,756		$	21,606		$	21,500		$	21,606		$	23,816
Provision for Credit Losses		3,543			1,931			1,670			(79)			200			7,065			(2,842)
Net Charge-Offs (Recoveries)		1,317			702			1,145			771			94			3,935			(632)
Balance at End of Period	$	24,736		$	22,510		$	21,281		$	20,756		$	21,606		$	24,736		$	21,606
As a % of Loans HFI		0.98%			0.96%			0.96%			1.05%			1.12%			0.98%			1.12%
As a % of Nonperforming Loans		1,076.89%			934.53%			677.57%			760.83%			499.93%			1,076.89%			499.93%
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period		3,012		$	2,853		$	2,976		$	2,897		$	3,117		$	2,897		$	1,644
Provision for Credit Losses		(23)			159			(123)			79			(220)			92			1,253
Balance at End of Period(1)		2,989			3,012			2,853			2,976			2,897