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

    Source: Nasdaq GlobeNewswire / 26 Jul 2022 06:00:01   America/Chicago

    TALLAHASSEE, Fla., July 26, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $8.7 million, or $0.51 per diluted share, for the second quarter of 2022 compared to net income of $8.5 million, or $0.50 per diluted share, for the first quarter of 2022, and $7.4 million, or $0.44 per diluted share, for the second quarter of 2021.

    For the first six months of 2022, net income attributable to common shareowners totaled $17.2 million, or $1.01 per diluted share, compared to net income of $16.9 million, or $1.00 per diluted share, for the same period of 2021.

    QUARTER HIGHLIGHTS (2nd Quarter 2022 versus 1st Quarter 2022)

    • Net interest income grew 14.7% driven by strong loan growth and higher interest rates
    • Period end loan balances grew $228.1 million, or 11.5%, with residential loan purchases from Capital City Home Loans (CCHL) contributing $132 million and solid growth from residential construction and commercial mortgage
    • Provision for credit losses increased $1.5 million driven by strong loan growth – overall credit quality remained strong
    • Average deposit balances grew $51.3 million, or 1.4%, driven by higher noninterest bearing and savings balances
    • Noninterest income decreased $0.9 million, or 3.5%, due to lower insurance commission revenues at Capital City Strategic Wealth (CCSW), which had a very strong first quarter – deposit, bank card, and retail brokerage fees all realized solid improvement
    • Noninterest expense increased $1.3 million, or 3.2%, primarily due to higher performance-based compensation and to a lesser extent annual merit raises and staffing additions in new markets
    • Tangible book value per share declined $0.04, or 0.2%, buoyed by strong earnings that significantly mitigated the impact of rapidly increasing interest rates and the related impact on our unrealized loss on investment securities

    “Strong loan growth and higher rates produced another quarter of solid financial performance,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “The quality of our core deposit base, deployment of liquidity into the loan portfolio and higher interest rates all contributed to an increase in our net interest margin percentage of 32 basis points during the second quarter. The $1.5 million loan loss provision recorded in this quarter was primarily driven by loan growth as our credit quality metrics remain very favorable. From a macro-economic perspective, we continue to face a high level of uncertainty. While much of this is out of our control, we believe we are well positioned to navigate through this year and beyond. Although higher rates will generate unrealized losses in our available-for-sale investment portfolio, our asset-sensitive balance sheet and pension liability should respond well to rising rates. Additionally, our expansion efforts in west Florida and the northern arc of Atlanta are producing favorable results. While challenges remain, we continue to focus on identifying opportunities and executing strategies we believe are sustainable and add long-term value for our shareowners.”

    Discussion of Operating Results

    Net Interest Income/Net Interest Margin

    Tax-equivalent net interest income for the second quarter of 2022 totaled $28.4 million, compared to $24.8 million for the first quarter of 2022, and $26.1 million for the second quarter of 2021. For the first six months of 2022, tax-equivalent net interest income totaled $53.2 million compared to $50.7 million for the same period of 2021. Compared to the referenced prior periods, the increase reflected higher interest rates, strong loan growth, and higher investment balances.

    Our net interest margin for the second quarter of 2022 was 2.87%, an increase of 32 basis points over the first quarter of 2022 primarily attributable to higher interest rates and an overall improved earning asset mix. For the month of June 2022, our net interest margin was 3.05%. Excluding the impact of overnight funds in excess of $200 million, our net interest margin for the second quarter of 2022 was 3.24%. Compared to the three and six month periods of 2021, the net interest margin decreased two and 16 basis points, respectively, primarily due to growth in earning assets (driven by higher deposit balances), which drove net interest income dollars higher, but negatively impacted the margin percentage.

    Provision for Credit Losses

    We recorded a provision for credit losses of $1.5 million for the second quarter of 2022 compared to no provision in the first quarter of 2022 and a provision benefit of $0.6 million for the second quarter of 2021. Compared to the first quarter of 2022, the higher level of provision was primarily attributable to strong loan growth. For the first six months of 2022, the provision was $1.5 million compared to a benefit of $1.6 million for the same period of 2021. Improvement in credit quality and the release of reserves held for pandemic related losses favorably impacted our provision for credit losses in 2022. We discuss the allowance for credit losses further below.

    Noninterest Income and Noninterest Expense

    Noninterest income for the second quarter of 2022 totaled $24.9 million compared to $25.8 million for the first quarter of 2022 and $26.5 million for the second quarter of 2021. The $0.9 million decrease from the first quarter of 2022 was primarily attributable to lower wealth management fees of $1.7 million, which reflected lower insurance revenues at CCSW of $1.9 million that were partially offset by higher retail brokerage fees of $0.3 million. Combined deposit and bank card fees increased $0.5 million and mortgage banking fees increased $0.1 million. Compared to the second quarter of 2021, the $1.6 million decrease was primarily attributable to lower mortgage banking revenues of $4.2 million that were partially offset by higher deposit fees of $1.2 million and wealth management fees of $1.1 million (insurance revenues of $0.7 million and retail brokerage fees of $0.4 million). For the first six months of 2022, noninterest income totaled $50.7 million compared to $56.3 million for the same period of 2021 with the $5.6 million decrease largely driven by lower mortgage banking fees of $12.3 million partially offset by higher deposit fees of $2.1 million and wealth management fees of $4.1 million (insurance revenues of $3.4 million and retail brokerage fees of $0.7 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 both governmental loan product originations and mandatory delivery loan sales (both of which provide a higher gain percentage). Strong best efforts (portfolio product) origination volume and continued stability in our construction/permanent loan program have partially offset the slowdown in secondary market originations. For 2022, CCHL contributed $0.6 million ($0.03 per diluted share) to earnings versus $2.5 million ($0.14 per diluted share) in 2021, which has largely been offset by a $1.2 million ($0.07 per diluted share) contribution to earnings by CCSW and improvement in both retail brokerage fees and deposit fees which reflects our continued focus on and commitment to revenue diversification.

    Noninterest expense for the second quarter of 2022 totaled $40.5 million compared to $39.2 million for the first quarter of 2022 and $42.1 million for the second quarter of 2021. The $1.3 million increase over the first quarter of 2022 was driven by a $0.9 million increase in other expense and higher compensation of $0.5 million. Higher expense for advertising ($0.2 million), processing ($0.1 million), and travel/entertainment ($0.1 million) drove the increase in other expense. Other expense also reflects a $0.2 million expense for our VISA share swap agreement, which is triggered when VISA funds their merchant litigation reserve which happens infrequently. The $0.5 million increase in compensation was driven by higher salary expense of $0.8 million (CCHL commissions, annual merit, and staffing additions in new markets) that was partially offset by lower associate benefit expense of $0.3 million. Compared to the second quarter of 2021, the $1.6 million decrease was primarily attributable to lower pension settlement expense of $1.8 million. Other expense decreased $0.1 million and reflected lower base pension plan expense of $0.8 million partially offset by higher expense for advertising and miscellaneous (includes $0.2 million VISA share swap expense). For the first six months of 2022, noninterest expense totaled $79.7 million compared to $82.6 million for the same period of 2021 with the $2.9 million decrease primarily attributable to lower pension settlement expense of $1.6 million and lower compensation expense of $1.2 million. The decrease in compensation expense reflected lower salary expense of $1.4 million partially offset by higher associate benefit expense of $0.2 million. Lower performance-based compensation (commissions/incentives) at CCHL partially offset by higher performance based compensation at CCSW and lower realized loan cost (credit offset by salary expense) at the Bank drove the variance in salary expense. To date, the impact of inflation and higher prices on our cost structure has not been significant. While operating in a very tight labor market, we have mitigated the impact of salary pressures by not replacing certain positions that became vacant. Further, we have realized higher than historical increases in certain premises and processing contracts reflective of inflationary pressures and will continue to focus on opportunities to re-negotiate or replace vendors at periodic renewals.

    Income Taxes

    We realized income tax expense of $2.2 million (effective rate of 19.4%) for the second quarter of 2022 comparable to the first quarter of 2022 and $2.1 million (effective rate of 18.9%) for the second quarter of 2021. For the first six months of 2022, we realized income tax expense of $4.4 million (effective rate of 19.6%) compared to $4.8 million (effective rate of 18.8%) for the same period of 2021. For the second quarter of 2022, we realized a favorable discrete tax item for $0.3 million related to state of Florida tax refunds. Absent discrete items, we expect our annual effective tax rate to approximate 20-21% in 2022. 

    Discussion of Financial Condition

    Earning Assets

    Average earning assets totaled $3.974 billion for the second quarter of 2022, an increase of $35.4 million, or 0.9%, over the first quarter of 2022, and an increase of $182.9 million, or 4.8%, 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 and further deployment of liquidity into the investment portfolio, which has increased $135 million in 2022.

    We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $691.9 million in the second quarter of 2022 compared to $873.1 million in the first quarter of 2022 and $789.1 million in the fourth quarter of 2021.

    Average loans held for investment (“HFI”) increased $121.1 million, or 6.2%, over the first quarter of 2022 and increased $136.4 million, or 7.0%, over the fourth quarter of 2021. Period end loans increased $228.1 million, or 11.5%, over the first quarter of 2022 and $282.2 million, or 14.6%, over the fourth quarter of 2022. The growth in 2022 has been broad based with increases realized in all loan categories, more significantly, residential mortgage, residential construction, and consumer (indirect auto) with strong growth in commercial mortgage in the second quarter. The increase in residential mortgage reflected a higher level of loan purchases (second quarter - $132 million, first quarter - $26 million) from CCHL driven by higher demand for portfolio/adjustable rate product. In addition, the increase in commercial mortgage reflected a loan pool purchase (7 loans for $15 million).

    Allowance for Credit Losses

    At June 30, 2022, the allowance for credit losses for HFI loans totaled $21.3 million compared to $20.8 million at March 31, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 9. The $0.5 million increase in the allowance for the second quarter was driven by growth in reserves for strong new loan origination volume that was partially offset by the release of reserves held for pandemic related losses that have not materialized to the extent projected. Further, net charge-offs increased $0.4 million to $1.1 million for the second quarter and reflected one large commercial charge-off for $0.8 million related to a work-out resolved during the quarter. At June 30, 2022, the allowance represented 0.96% of HFI loans and provided coverage of 678% of nonperforming loans compared to 1.05% and 761%, respectively, at March 31, 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 $3.2 million at June 30, 2022 compared to $2.8 million at March 31, 2022 and $4.3 million at December 31, 2021. At June 30, 2022, nonperforming assets as a percentage of total assets totaled 0.07% compared to 0.06% at March 31, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $3.1 million at June 30, 2022, a $0.4 million increase over March 31, 2022 and a $1.2 million decrease from December 31, 2021. Further, classified loans decreased $2.7 million from the first quarter of 2022 to $19.6 million.

    Funding (Deposits/Debt)

    Average total deposits were $3.765 billion for the second quarter of 2022, an increase of $51.3 million, or 1.4%, over the first quarter of 2022 and $216.2 million, or 6.1%, over the fourth quarter of 2021. Compared to the first quarter of 2022, the increase reflected higher noninterest bearing and savings balances, partially offset by a decline in seasonal public fund balances. Compared to the fourth quarter of 2021, strong growth occurred in our noninterest bearing deposits, NOW accounts, and savings account balances. Over the past few years, we have experienced strong core deposit growth, in addition to growth related to multiple government stimulus programs in response to the Covid-19 pandemic, such as those under the CARES Act and the American Rescue Plan Act. Given these increases, the potential exists for our deposit levels to be volatile for the remainder of 2022 due to the uncertain timing of the outflows of the stimulus related balances, in addition to the frequency and degree to which the Federal Open Market Committee (FOMC) raises the overnight funds rate. It is anticipated that liquidity levels will remain strong given our current level of overnight funds.

    Average borrowings decreased $0.7 million from the first quarter of 2022 primarily due to a decrease in short-term repurchase agreements and declined $15.3 million from the fourth quarter of 2021, reflecting lower warehouse line borrowing needs to support CCHL’s loans held for sale.

    Capital

    Shareowners’ equity was $371.7 million at June 30, 2022 compared to $372.1 million at March 31, 2022 and $383.2 million at December 31, 2021. For the first six months of 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $17.2 million, a $2.2 million increase in the fair value of the interest rate swap related to subordinated debt, net adjustments totaling $0.8 million related to transactions under our stock compensation plans, stock compensation accretion of $0.5 million, and a $0.3 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $5.4 million ($0.32 per share) and a $27.1 million increase in the unrealized loss on investment securities.

    At June 30, 2022, our total risk-based capital ratio was 16.07% compared to 16.98% at March 31, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 13.07%, 13.77%, and 13.86%, respectively, on these dates. Our leverage ratio was 8.77%, 8.78%, and 8.95%, 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 6.54% at June 30, 2022 compared to 6.61% and 6.95% at March 31, 2022 and December 31, 2021, respectively. The decline in our regulatory capital ratios was attributable to strong loan growth and higher asset levels. The decline in our tangible capital ratio from the first quarter of 2022 was driven by an $8.0 million increase in the unrealized loss on investment securities which totaled $31.7 million, or 5.3% of available for sale securities at June 30, 2022.

    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 $4.4 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 88 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 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; the magnitude and duration of the ongoing COVID-19 pandemic and its impact on the global economy and financial market conditions and our business; 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, 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)Jun 30, 2022Mar 31, 2022Dec 31, 2021Sep 30, 2021Jun 30, 2021
    Shareowners' Equity (GAAP) $371,675 $372,145 $383,166 $348,868 $335,880 
    Less: Goodwill and Other Intangibles (GAAP)  93,173  93,213  93,253  93,293  93,333 
    Tangible Shareowners' Equity (non-GAAP)A 278,502  278,932  289,913  255,575  242,547 
    Total Assets (GAAP)  4,354,297  4,310,045  4,263,849  4,048,733  4,011,459 
    Less: Goodwill and Other Intangibles (GAAP)  93,173  93,213  93,253  93,293  93,333 
    Tangible Assets (non-GAAP)B$4,261,124 $4,216,832 $4,170,596 $3,955,440 $3,918,126 
    Tangible Common Equity Ratio (non-GAAP)A/B 6.54% 6.61% 6.95% 6.46% 6.19%
    Actual Diluted Shares Outstanding (GAAP)C 16,981,614  16,962,362  16,935,389  16,911,715  16,901,375 
    Tangible Book Value per Diluted Share (non-GAAP)A/C$16.40 $16.44 $17.12 $15.11 $14.35 


    CAPITAL CITY BANK GROUP, INC.           
    EARNINGS HIGHLIGHTS           
    Unaudited           
                
      Three Months Ended Six Months Ended 
    (Dollars in thousands, except per share data) Jun 30, 2022 Mar 31, 2022 Jun 30, 2021 Jun 30, 2022 Jun 30, 2021 
    EARNINGS           
    Net Income Attributable to Common Shareowners$8,713$8,455$7,427 $17,168$16,933  
    Diluted Net Income Per Share$0.51$0.50$0.44 $1.01$1.00  
    PERFORMANCE           
    Return on Average Assets 0.81%0.80%0.75 %0.81%0.88 %
    Return on Average Equity 9.36 8.93 9.05  9.14 10.42  
    Net Interest Margin 2.87 2.55 2.89  2.71 2.87  
    Noninterest Income as % of Operating Revenue 46.78 51.11 50.47  48.89 52.73  
    Efficiency Ratio 75.96%77.55%80.18 %76.73%77.22 %
    CAPITAL ADEQUACY           
    Tier 1 Capital 15.13%15.98%15.44 %15.13%15.44 %
    Total Capital 16.07 16.98 16.48  16.07 16.48  
    Leverage 8.77 8.78 8.84  8.77 8.84  
    Common Equity Tier 1 13.07 13.77 13.14  13.07 13.14  
    Tangible Common Equity (1) 6.54 6.61 6.19  6.54 6.19  
    Equity to Assets 8.54%8.63%8.37 %8.54%8.37 %
    ASSET QUALITY           
    Allowance as % of Non-Performing Loans 677.57%760.83%433.93 %677.57%433.93 %
    Allowance as a % of Loans HFI 0.96 1.05 1.10  0.96 1.10  
    Net Charge-Offs as % of Average Loans HFI 0.22 0.16 (0.07) 0.19 (0.08) 
    Nonperforming Assets as % of Loans HFI and OREO 0.15 0.14 0.31  0.15 0.31  
    Nonperforming Assets as % of Total Assets 0.07%0.06%0.16 %0.07%0.16 %
    STOCK PERFORMANCE           
    High$28.55$28.88$27.39 $28.88$28.98  
    Low 24.43 25.96 24.55  24.43 21.42  
    Close$27.89$26.36$25.79 $27.89$25.79  
    Average Daily Trading Volume 25,342 24,019 28,958  24,681 29,620  
                
    (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)Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
    ASSETS          
    Cash and Due From Banks$91,209 $77,963 $65,313 $73,132 $78,894 
    Funds Sold and Interest Bearing Deposits 603,315  790,465  970,041  708,988  766,920 
    Total Cash and Cash Equivalents 694,524  868,428  1,035,354  782,120  845,814 
               
    Investment Securities Available for Sale 601,405  624,361  654,611  645,844  480,890 
    Investment Securities Held to Maturity 528,258  518,678  339,601  341,228  325,559 
    Other Equity Securities 900  855  861  -  - 
    Total Investment Securities 1,130,563  1,143,894  995,073  987,072  806,449 
               
    Loans Held for Sale 48,708  50,815  52,532  77,036  80,821 
               
    Loans Held for Investment ("HFI"):          
    Commercial, Financial, & Agricultural 247,902  230,213  223,086  218,929  292,953 
    Real Estate - Construction 225,664  174,293  174,394  177,443  149,884 
    Real Estate - Commercial 699,093  669,110  663,550  683,379  707,599 
    Real Estate - Residential 478,121  368,020  346,756  355,958  362,018 
    Real Estate - Home Equity 194,658  188,174  187,821  187,642  190,078 
    Consumer 359,906  347,785  321,511  309,983  298,464 
    Other Loans 6,854  6,692  13,265  6,792  6,439 
    Overdrafts 1,455  1,222  1,082  1,299  1,227 
    Total Loans Held for Investment 2,213,653  1,985,509  1,931,465  1,941,425  2,008,662 
    Allowance for Credit Losses (21,281) (20,756) (21,606) (21,500) (22,175)
    Loans Held for Investment, Net 2,192,372  1,964,753  1,909,859  1,919,925  1,986,487 
               
    Premises and Equipment, Net 82,932  82,518  83,412  84,750  85,745 
    Goodwill and Other Intangibles 93,173  93,213  93,253  93,293  93,333 
    Other Real Estate Owned 90  17  17  192  1,192 
    Other Assets 111,935  106,407  94,349  104,345  111,618 
    Total Other Assets 288,130  282,155  271,031  282,580  291,888 
    Total Assets$4,354,297 $4,310,045 $4,263,849 $4,048,733 $4,011,459 
    LIABILITIES          
    Deposits:          
    Noninterest Bearing Deposits$1,724,671 $1,704,329 $1,668,912 $1,592,345 $1,552,864 
    NOW Accounts 1,036,757  1,062,498  1,070,154  926,201  970,705 
    Money Market Accounts 289,337  288,877  274,611  286,065  280,805 
    Regular Savings Accounts 639,594  614,599  599,811  559,714  539,477 
    Certificates of Deposit 95,899  95,204  99,374  101,637  103,070 
    Total Deposits 3,786,258  3,765,507  3,712,862  3,465,962  3,446,921 
               
    Short-Term Borrowings 39,463  30,865  34,557  51,410  47,200 
    Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
    Other Long-Term Borrowings 612  806  884  1,610  1,720 
    Other Liabilities 93,319  77,323  67,735  113,720  105,534 
    Total Liabilities 3,972,539  3,927,388  3,868,925  3,685,589  3,654,262 
               
    Temporary Equity 10,083  10,512  11,758  14,276  21,317 
    SHAREOWNERS' EQUITY          
    Common Stock 170  169  169  169  169 
    Additional Paid-In Capital 35,738  35,188  34,423  33,876  33,560 
    Retained Earnings 376,532  370,531  364,788  359,550  345,574 
    Accumulated Other Comprehensive Loss, Net of Tax (40,765) (33,743) (16,214) (44,727) (43,423)
    Total Shareowners' Equity 371,675  372,145  383,166  348,868  335,880 
    Total Liabilities, Temporary Equity and Shareowners' Equity$4,354,297 $4,310,045 $4,263,849 $4,048,733 $4,011,459 
    OTHER BALANCE SHEET DATA          
    Earning Assets$3,996,238 $3,970,684 $3,949,111 $3,714,521 $3,662,852 
    Interest Bearing Liabilities 2,154,549  2,145,736  2,132,278  1,979,524  1,995,864 
    Book Value Per Diluted Share$21.89 $21.94 $22.63 $20.63 $19.87 
    Tangible Book Value Per Diluted Share(1) 16.40  16.44  17.12  15.11  14.35 
    Actual Basic Shares Outstanding 16,959  16,948  16,892  16,878  16,874 
    Actual Diluted Shares Outstanding 16,982  16,962  16,935  16,912  16,901 
    (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
    		 June 30,
    (Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2022  2021 
    INTEREST INCOME              
    Loans, including Fees$24,072 $22,133 $22,744 $25,885 $24,582 $46,205 $47,932 
    Investment Securities 3,840  2,896  2,505  2,350  2,054  6,736  3,937 
    Federal Funds Sold and Interest Bearing Deposits 1,408  409  300  285  200  1,817  413 
    Total Interest Income 29,320  25,438  25,549  28,520  26,836  54,758  52,282 
    INTEREST EXPENSE              
    Deposits 266  224  213  210  208  490  416 
    Short-Term Borrowings 343  192  307  317  324  535  736 
    Subordinated Notes Payable 370  317  306  307  308  687  615 
    Other Long-Term Borrowings 8  9  12  14  16  17  37 
    Total Interest Expense 987  742  838  848  856  1,729  1,804 
    Net Interest Income 28,333  24,696  24,711  27,672  25,980  53,029  50,478 
    Provision for Credit Losses 1,542  -  -  -  (571) 1,542  (1,553)
    Net Interest Income after Provision for Credit Losses 26,791  24,696  24,711  27,672  26,551  51,487  52,031 
    NONINTEREST INCOME              
    Deposit Fees 5,447  5,191  5,300  5,075  4,236  10,638  8,507 
    Bank Card Fees 4,034  3,763  3,872  3,786  3,998  7,797  7,616 
    Wealth Management Fees 4,403  6,070  3,706  3,623  3,274  10,473  6,364 
    Mortgage Banking Revenues 9,065  8,946  9,800  12,283  13,217  18,011  30,342 
    Other 1,954  1,848  1,994  1,807  1,748  3,802  3,470 
    Total Noninterest Income 24,903  25,818  24,672  26,574  26,473  50,721  56,299 
    NONINTEREST EXPENSE              
    Compensation 25,383  24,856  24,783  25,245  25,378  50,239  51,442 
    Occupancy, Net 6,075  6,093  5,960  6,032  5,973  12,168  11,940 
    Other Real Estate, Net (29) 25  26  (1,126) (270) (4) (388)
    Pension Settlement 169  209  572  500  2,000  378  2,000 
    Other 8,900  8,050  8,866  9,051  9,042  16,950  17,605 
    Total Noninterest Expense 40,498  39,233  40,207  39,702  42,123  79,731  82,599 
    OPERATING PROFIT 11,196  11,281  9,176  14,544  10,901  22,477  25,731 
    Income Tax Expense 2,177  2,235  2,040  2,949  2,059  4,412  4,846 
    Net Income 9,019  9,046  7,136  11,595  8,842  18,065  20,885 
    Pre-Tax Income Attributable to Noncontrolling Interest (306) (591) (764) (1,504) (1,415) (897) (3,952)
    NET INCOME ATTRIBUTABLE TO
    COMMON SHAREOWNERS    		$8,713 $8,455 $6,372 $10,091 $7,427 $17,168 $16,933 
    PER COMMON SHARE              
    Basic Net Income$0.51 $0.50 $0.38 $0.60 $0.44 $1.01 $1.00 
    Diluted Net Income 0.51  0.50  0.38  0.60  0.44  1.01  1.00 
    Cash Dividend$0.16 $0.16 $0.16 $0.16 $0.15 $0.32 $0.30 
    AVERAGE SHARES              
    Basic 16,949  16,931  16,880  16,875  16,858  16,940  16,848 
    Diluted 16,971  16,946  16,923  16,909  16,885  16,958  16,874 


    CAPITAL CITY BANK GROUP, INC.              
    ALLOWANCE FOR CREDIT LOSSES ("ACL")            
    AND CREDIT QUALITY              
    Unaudited              
                   
      2022
    		 2021
    		 June 30,
    (Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2022  2021 
    ACL - HELD FOR INVESTMENT LOANS              
    Balance at Beginning of Period$20,756 $21,606 $21,500 $22,175 $22,026 $21,606 $23,816 
    Provision for Credit Losses 1,670  (79) 200  (546) (184) 1,591  (2,496)
    Net Charge-Offs (Recoveries) 1,145  771  94  129  (333) 1,916  (855)
    Balance at End of Period$21,281 $20,756 $21,606 $21,500 $22,175 $21,281 $22,175 
    As a % of Loans HFI 0.96% 1.05% 1.12% 1.11% 1.10% 0.96% 1.10%
    As a % of Nonperforming Loans 677.57% 760.83% 499.93% 710.39% 433.93% 677.57% 433.93%
    ACL - UNFUNDED COMMITMENTS              
    Balance at Beginning of Period 2,976 $2,897 $3,117 $2,587 $2,974 $2,897 $1,644 
    Provision for Credit Losses (123) 79  (220) 530  (387) (44) 943 
    Balance at End of Period(1) 2,853  2,976  2,897  3,117  2,587  2,853  2,587 
    ACL - DEBT SECURITIES              
    Provision for Credit Losses$(5)$- $20 $16 $- $(5)$- 
    CHARGE-OFFS              
    Commercial, Financial and Agricultural$1,104 $73 $101 $37 $32 $1,177 $101 
    Real Estate - Construction -  -  -  -  -  -  - 
    Real Estate - Commercial -  266  -  405  -  266  - 
    Real Estate - Residential -  -  20  17  65  -  71 
    Real Estate - Home Equity -  33  9  15  74  33  79 
    Consumer 533  622  254  221  230  1,155  794 
    Overdrafts 660  780  678  1,093  440  1,440  932 
    Total Charge-Offs$2,297 $1,774 $1,062 $1,788 $841 $4,071 $1,977 
    RECOVERIES              
    Commercial, Financial and Agricultural$59 $165 $148 $66 $103 $224 $239 
    Real Estate - Construction -  8  -  10  -  8  - 
    Real Estate - Commercial 56  29  25  169  26  85  671 
    Real Estate - Residential 115  27  33  401  244  142  319 
    Real Estate - Home Equity 67  58  173  46  70  125  194 
    Consumer 453  183  214  334  332  636  643 
    Overdrafts 402  533  375  633  399  935  766 
    Total Recoveries$1,152 $1,003 $968 $1,659 $1,174 $2,155 $2,832 
    NET CHARGE-OFFS (RECOVERIES)$1,145 $771 $94 $129 $(333)$1,916 $(855)
    Net Charge-Offs as a % of Average Loans HFI(2) 0.22% 0.16% 0.02% 0.03% (0.07)% 0.19% (0.08)%
    CREDIT QUALITY              
    Nonaccruing Loans$3,141 $2,728 $4,322 $3,026 $5,110     
    Other Real Estate Owned 90  17  17  192  1,192     
    Total Nonperforming Assets ("NPAs")$3,231 $2,745 $4,339 $3,218 $6,302     
                   
    Past Due Loans 30-89 Days$3,554 $3,120 $3,600 $3,360 $3,745     
    Past Due Loans 90 Days or More -  -  -  -  -     
    Classified Loans 19,620  22,348  17,912  16,310  19,397     
    Performing Troubled Debt Restructurings$6,728 $7,304 $7,643 $7,919 $8,992     
                   
    Nonperforming Loans as a % of Loans HFI 0.14% 0.14% 0.22% 0.16% 0.25%    
    NPAs as a % of Loans HFI and Other Real Estate 0.15% 0.14% 0.22% 0.17% 0.31%    
    NPAs as a % of Total Assets 0.07% 0.06% 0.10% 0.08% 0.16%    
                   
    (1) Recorded in other liabilities              
    (2) Annualized              


    CAPITAL CITY BANK GROUP, INC.                                            
    AVERAGE BALANCE AND INTEREST RATES                                              
    Unaudited                                                  
                                                       
      Second Quarter 2022  First Quarter 2022  Fourth Quarter 2021  Third Quarter 2021  Second Quarter 2021   Jun 2022 YTD  Jun 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$52,860 $711 5.39%$43,004 $397 3.75%$62,809 $522 3.29%$67,753  497 2.91%$77,101 $566 2.94% $47,959 $1,108 4.66%$91,591 $1,536 3.38%
    Loans Held for Investment(1) 2,084,679  23,433 4.51  1,963,578  21,811 4.50  1,948,324  22,296 4.54  1,974,132  25,458 5.12  2,036,781  24,095 4.74   2,024,463  45,244 4.51  2,040,551  46,578 4.71 
                                                       
    Investment Securities                                                  
    Taxable Investment Securities 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  687,882  2,036 1.18   1,099,739  6,723 1.22  608,801  3,899 1.28 
    Tax-Exempt Investment Securities(1) 2,488  10 1.73  2,409  10 1.60  3,380  17 2.07  4,332  25 2.31  3,530  23 2.58   2,449  20 1.67  3,686  48 2.60 
                                                       
    Total Investment Securities 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  691,412  2,059 1.19   1,102,188  6,743 1.23  612,487  3,947 1.29 
                                                       
    Federal Funds Sold and Interest Bearing Deposits 691,925  1,408 0.82  873,097  409 0.19  789,100  300 0.15  741,944  285 0.15  818,616  200 0.10   782,011  1,817 0.47  816,638  414 0.10 
                                                       
    Total Earning Assets 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% 3,623,910 $26,920 2.98%  3,956,621 $54,912 2.80% 3,561,267 $52,475 2.97%
                                                       
    Cash and Due From Banks 79,730       74,253       73,752       72,773       74,076        77,007       71,541      
    Allowance for Loan Losses (20,984)      (21,655)      (22,127)      (22,817)      (22,794)       (21,318)      (23,457)     
    Other Assets 288,421       275,353       284,999       283,534       281,157        281,922       279,956      
                                                       
    Total Assets$4,321,388      $4,266,775      $4,127,937      $4,026,613      $3,956,349       $4,294,232      $3,889,307      
                                                       
    LIABILITIES:                                                  
    Interest Bearing Deposits                                                  
    NOW Accounts$1,033,190 $120 0.05%$1,079,906 $86 0.03%$963,778 $72 0.03%$945,788 $72 0.03%$966,649 $74 0.03% $1,056,419 $206 0.04%$976,031 $150 0.03%
    Money Market Accounts 286,210  36 0.05  285,406  33 0.05  289,335  34 0.05  282,860  34 0.05  272,138  33 0.05   285,810  69 0.05  270,990  66 0.05 
    Savings Accounts 628,472  77 0.05  599,359  72 0.05  573,563  71 0.05  551,383  68 0.05  529,844  64 0.05   613,996  149 0.05  511,152  124 0.05 
    Time Deposits 95,132  33 0.14  97,054  33 0.14  101,037  36 0.14  102,765  36 0.14  102,995  37 0.15   96,088  66 0.14  102,544  76 0.15 
    Total Interest Bearing Deposits 2,043,004  266 0.05% 2,061,725  224 0.04% 1,927,713  213 0.04% 1,882,796  210 0.04% 1,871,626  208 0.04%  2,052,313  490 0.05% 1,860,717  416 0.05%
                                                       
    Short-Term Borrowings 31,782  343 4.33% 32,353  192 2.40% 46,355  307 2.63% 49,773  317 2.53% 51,152  324 2.54%  32,066  535 3.36% 59,049  736 2.51%
    Subordinated Notes Payable 52,887  370 2.76  52,887  317 2.40  52,887  306 2.26  52,887  307 2.27  52,887  308 2.30   52,887  687 2.58  52,887  615 2.31 
    Other Long-Term Borrowings 722  8 4.54  833  9 4.49  1,414  12 3.50  1,652  14 3.37  1,762  16 3.38   777  17 4.51  2,246  37 3.26 
                                                       
    Total Interest Bearing Liabilities 2,128,395 $987 0.19% 2,147,798 $742 0.14% 2,028,369 $838 0.16% 1,987,108 $848 0.17% 1,977,427 $856 0.17%  2,138,043 $1,729 0.16% 1,974,899 $1,804 0.18%
                                                       
    Noninterest Bearing Deposits 1,722,325       1,652,337       1,621,432       1,564,892       1,515,726        1,687,524       1,453,121      
    Other Liabilities 87,207       72,166       114,657       112,707       107,801        79,728       109,417      
                                                       
    Total Liabilities 3,937,927       3,872,301       3,764,458       3,664,707       3,600,954        3,905,295       3,537,437      
    Temporary Equity 10,096       10,518       13,339       20,446       26,355        10,306       24,178      
                                                       
    SHAREOWNERS' EQUITY: 373,365       383,956       350,140       341,460       329,040        378,631       327,692      
                                                       
    Total Liabilities, Temporary Equity and Shareowners' Equity$4,321,388      $4,266,775      $4,127,937      $4,026,613      $3,956,349       $4,294,232      $3,889,307      
                                                       
    Interest Rate Spread  $28,409 2.78%  $24,774 2.49%  $24,790 2.52%  $27,750 2.91%  $26,064 2.81%   $53,183 2.64%  $50,671 2.79%
                                                       
    Interest Income and Rate Earned(1)   29,396 2.97    25,516 2.63    25,628 2.68    28,598 3.07    26,920 2.98     54,912 2.80    52,475 2.97 
    Interest Expense and Rate Paid(2)   987 0.10    742 0.08    838 0.09    848 0.09    856 0.09     1,729 0.09    1,804 0.10 
                                                       
    Net Interest Margin  $28,409 2.87%  $24,774 2.55%  $24,790 2.60%  $27,750 2.98%  $26,064 2.89%   $53,183 2.71%  $50,671 2.87%
                                                       
    (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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