CCBG Capital City Bank Group Inc

 Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $13.2 million, or $0.78 per diluted share, for the third quarter of 2023 compared to $14.6 million, or $0.85 per diluted share, for the second quarter of 2023, and $11.3 million, or $0.67 per diluted share, for the third quarter of 2022.

For the first nine months of 2023, net income attributable to common shareowners totaled $42.7 million, or $2.51 per diluted share, compared to net income of $28.5 million, or $1.68 per diluted share, for the same period of 2022.

QUARTER HIGHLIGHTS (3rd Quarter 2023 versus 2nd Quarter 2023)

Income Statement

• Tax-equivalent net interest income totaled $39.2 million compared to $40.1 million for the prior quarter and reflected higher deposit cost and lower overnight funds interest (seasonal low in public funds deposits) – total deposit cost increased 15 basis points to 58 basis points – net interest margin decreased three basis points to 4.02%
• Continued strong credit quality metrics – slightly higher loan loss provision expense of $0.2 million increased the allowance coverage ratio from 1.05% to 1.07% - net loan charge-offs were 17 basis points (annualized) of average loans
• Noninterest income decreased $2.7 million, or 11.8%, due to lower mortgage banking revenues of $1.0 million and a $1.4 million gain on the sale of mortgage servicing rights in second quarter of 2023
  • Capital City Home Loans realized a net loss of $0.04 per share for the quarter compared to break even for the prior quarter reflective of challenging residential mortgage secondary market conditions
• Noninterest expense decreased $0.9 million, or 2.1%, primarily due to a non-recurring consulting payment of $0.8 million in the prior quarter related to the outsourcing of our core processing system  

Balance Sheet

• Loan balances grew $15.0 million, or 0.6% (average), and $26.4 million, or 1.0% (end of period)
• Deposit balances (including repurchase agreements) declined by $115.3 million, or 3.1% (average), and $248.1 million, or 6.5% (end of period), primarily due to a seasonal low point for public fund balances
• Tangible book value per share increased $0.50, or 2.6%, in third quarter bringing the year-to-date increase to $2.09, or 11.8%
• Repurchased 36,411 shares of common stock in the third quarter of 2023 bringing the year-to-date total to 102,147 shares

“The solid results achieved this quarter continue what has been a year of strong financial performance by Capital City Bank Group,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “The diversity of our revenues, strong core deposit franchise and stable credit have been key drivers. Our associates continue to embody our client-centric culture by consistently striving to exceed expectations for our clients and serve as their trusted financial partners. As we look toward 2024, we remain focused on client acquisition and exploring opportunities to foster stronger relationships and further enhance the overall client experience.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the third quarter of 2023 totaled $39.2 million, compared to $40.1 million for the second quarter of 2023, and $33.4 million for the third quarter of 2022. Compared to the second quarter of 2023, the decrease reflected higher deposit interest expense and a lower level of interest income from overnight funds, partially offset by higher loan interest due to loan growth and higher interest rates. For the first nine months of 2023, tax-equivalent net interest income totaled $119.8 million compared to $86.6 million for the same period of 2022. The increases over both prior year periods were driven by strong loan growth and higher interest rates across a majority of our earning assets.

Our net interest margin for the third quarter of 2023 was 4.02%, a decrease of three basis points from the second quarter of 2023 and an increase of 71 basis points over the third quarter of 2022. For the month of September 2023, our net interest margin was 4.10%. For the first nine months of 2023, our net interest margin was 4.03%, an increase of 112 basis points over the same period of 2022. The increase compared to all prior periods reflected a combination of higher interest rates and loan growth, partially offset by a higher cost of deposits. For the third quarter of 2023, our cost of funds was 66 basis points, an increase of 15 basis points over the second quarter of 2023 and an increase of 46 basis points over the third quarter of 2022. Our total cost of deposits (including noninterest bearing accounts) was 58 basis points, 43 basis points, and 11 basis points, respectively, for the same periods.

Provision for Credit Losses

We recorded a provision for credit losses of $2.4 million for the third quarter of 2023 compared to $2.2 million for the second quarter of 2023 and $2.1 million for the third quarter of 2022. The increase in the provision compared to the second quarter of 2023 was primarily attributable to loan growth and an increase in net loan charge-offs. For the first nine months of 2023, we recorded a provision for credit losses of $7.8 million compared to $3.6 million for the same period of 2022. The higher level of provision in 2023 was primarily driven by loan growth and also reflected the favorable impact in 2022 of the release of reserves held for pandemic related losses. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the third quarter of 2023 totaled $20.2 million compared to $22.9 million for the second quarter of 2023 and $22.9 million for the third quarter of 2022. The $2.7 million decrease from the second quarter of 2023 reflected a decrease in other income of $1.5 million, mortgage banking revenues of $1.0 million, wealth management fees of $0.2 million and bank card fees of $0.1 million, partially offset by an increase in deposit fees of $0.1 million. The decrease in other income was attributable to a $1.4 million gain from the sale of mortgage servicing rights realized in the second quarter of 2023. The decrease in mortgage banking revenues was attributable to market driven lower gain on sale margins and a lower volume of mandatory delivery loan sales which provide a higher gain on sale percentage.

Compared to the third quarter of 2022, the $2.8 million decrease in noninterest income reflected decreases in mortgage banking revenues of $2.3 million, deposit fees of $0.5 million, and bank card fees of $0.2 million, partially offset by an increase in other income of $0.2 million. For the first nine months of 2023, noninterest income totaled $65.3 million compared to $73.7 million for the same period of 2022 with the $8.4 million decrease primarily attributable to lower mortgage banking revenues of $7.5 million, wealth management fees of $2.4 million, deposit fees of $0.6 million, and bank card fees of $0.4 million, partially offset by a $2.5 million increase in other income. Compared to both prior year periods, the decrease in mortgage banking revenues was driven by lower production volume in 2023 reflective of the rapid increase in interest rates, lower market driven gain on sale margins, and a lower level of mandatory delivery loan sales. The decrease in deposit fees from both prior year periods was primarily attributable to a higher earnings credit rate for commercial deposit accounts and lower service charge fees. For the nine-month period, the decrease in wealth management fees was attributable to lower insurance commissions which reflected the sale of large policies in 2022. Further, the increase in other income was primarily due to a $1.4 million gain from the sale of mortgage servicing rights and increases in miscellaneous income of $0.5 million, loan servicing fees of $0.2 million, and vendor volume rebates of $0.2 million.  

Noninterest expense for the third quarter of 2023 totaled $41.6 million compared to $42.5 million for the second quarter of 2023 and $39.8 million for the third quarter of 2022. Compared to the second quarter of 2023, the $0.9 million decrease was primarily due to a $0.8 million non-recurring expense in the second quarter of 2023 related to a consulting engagement to assist in negotiating a multi-year contract for the outsourcing of our core processing system.

Compared to the third quarter of 2022, the $1.8 million increase in noninterest expense reflected increases in other expense of $1.1 million and occupancy expense of $0.8 million, partially offset by a decrease in compensation expense of $0.1 million. The increase in other expense was largely driven by a $0.7 million increase in pension plan expense (non-service-related component) and the increase in occupancy reflected the addition of four new banking offices in mid-to-late 2022 and higher property/equipment insurance premiums. For the first nine months of 2023, noninterest expense totaled $124.6 million compared to $119.5 million for the same period of 2022 with the $5.1 million increase attributable to increases in other expense of $2.7 million, occupancy expense of $2.2 million, and compensation expense of $0.2 million. The increase in other expense was primarily due to a $1.6 million increase in pension plan expense (non-service related component), the aforementioned consulting engagement expense of $0.8 million, and increases in loan servicing expense of $0.8 million, FDIC insurance expense of $0.6 million, and miscellaneous expense of $0.6 million, partially offset by lower OREO expense of $1.8 million related to a gain from the sale of a banking office. The increase in occupancy expense reflected the addition of banking offices in 2022 and higher insurance premiums. The slight unfavorable variance in compensation expense reflected a $1.7 million increase in salary expense (primarily, the addition of staffing in our new markets and annual merit) that was partially offset by a $1.5 million decrease in associate benefit expense. The variance in associate benefit expense was primarily due to a $2.2 million decrease in pension plan expense (service cost) that was partially offset by increases in associate insurance expense of $0.5 million and stock-based compensation of $0.1 million.

Income Taxes

We realized income tax expense of $3.2 million (effective rate of 20.9%) for the third quarter of 2023 compared to $3.5 million (effective rate of 19.6%) for the second quarter of 2023 and $3.1 million (effective rate of 21.4%) for the third quarter of 2022. For the first nine months of 2023, we realized income tax expense of $10.9 million (effective rate of 20.7%) compared to $7.5 million (effective rate of 20.3%) for the same period of 2022. The increase in our effective tax rate for the third quarter of 2023 was primarily due to a lower level of pre-tax income from CCHL in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment. Further, the second quarter of 2023 effective rate reflected a higher level of tax benefit accrued from an investment in a solar tax credit equity fund. Absent discrete items or unexpected variance in the timing of the tax benefit accrued from our solar tax credit equity fund investment, we expect our annual effective tax rate to approximate 20-21% for 2023.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $3.877 billion for the third quarter of 2023, a decrease of $97.8 million, or 2.5%, from the second quarter of 2023, and a decrease of $155.8 million, or 3.9%, from the fourth quarter of 2022. The decrease from both prior periods was attributable to lower deposit balances (see below – Deposits). The mix of earning assets continues to improve as overnight funds are being utilized to fund loan growth.

Average loans held for investment (“HFI”) increased $15.0 million, or 0.6%, over the second quarter of 2023 and $233.3 million, or 9.6%, over the fourth quarter of 2022. Period end loans increased $26.4 million, or 1.0%, over the second quarter of 2023 and $168.2 million, or 6.7%, over the fourth quarter of 2022. Compared to both prior periods, the loan growth was primarily in the residential real estate category and was partially offset by lower indirect auto and construction loan balances.

Allowance for Credit Losses

At September 30, 2023, the allowance for credit losses for HFI loans totaled $28.9 million compared to $28.0 million at June 30, 2023 and $24.7 million at December 31, 2022. Activity within the allowance is provided on Page 9. The increase in the allowance over both prior periods was driven primarily by loan growth. Further, the increase from December 31, 2022 reflected a higher loss rate for the residential real estate portfolio due to slower prepayment speeds. At September 30, 2023, the allowance represented 1.07% of HFI loans compared to 1.05% at June 30, 2023, and 0.98% at December 31, 2022.  

Credit Quality

Credit quality metrics remained strong for the quarter. Nonperforming assets (nonaccrual loans and other real estate) totaled $4.7 million at September 30, 2023 compared to $6.6 million at June 30, 2023 and $2.7 million at December 31, 2022. At September 30, 2023, nonperforming assets as a percent of total assets equaled 0.11%, compared to 0.15% at June 30, 2023 and 0.06% at December 31, 2022. Nonaccrual loans totaled $4.7 million at September 30, 2023, a $1.9 million decrease from June 30, 2023 and a $2.4 million increase over December 31, 2022. Further, classified loans totaled $21.8 million at September 30, 2023, a $6.8 million increase over June 30, 2023 and a $2.5 million increase over December 31, 2022. The increase in the current period was primarily attributable to the downgrade of one hotel loan that is performing as agreed on scheduled payments.

Deposits

Average total deposits were $3.597 billion for the third quarter of 2023, a decrease of $122.7 million, or 3.3%, from the second quarter of 2023 and a decrease of $206.2 million, or 5.4%, from the fourth quarter of 2022. Compared to both prior periods, the decreases were primarily attributable to lower noninterest bearing, savings, and NOW balances, partially offset by higher money market balances. Compared to the second quarter of 2023, the decrease in NOW account balances was primarily due to the seasonal reduction in public fund balances held by our institutional and municipal clients.

At September 30, 2023, total deposits were $3.540 billion, a decrease of $248.4 million, or 6.6%, from June 30, 2023 and a decline of $398.9 million, or 10.1%, from December 31, 2022. Our public fund deposit balances declined $205 million and $245 million from June 30, 2023 and December 31, 2022, respectively, and reflected the seasonal decline in those balances which will begin to increase in the fourth quarter as municipal tax receipts are received. In addition, the decrease from June 30, 2023 reflected a short-term deposit of $103 million (in the NOW category) made late in June by a municipal client that was subsequently moved in mid-July. The remaining portion of the decrease reflected continued client spend of stimulus savings and clients seeking higher yielding investment products outside the Bank, a portion of which have moved to our wealth division. Additionally, compared to both prior periods, we realized a remix of deposit balances of $32 million and $99 million, respectively, as noninterest bearing accounts migrated into interest bearing accounts (primarily NOW and money market accounts).

Business deposit transaction accounts classified as repurchase agreements averaged $25.4 million for the third quarter of 2023, an increase of $7.5 million over the second quarter of 2023 and $16.9 million over the fourth quarter of 2022. At September 30, 2023, repurchase agreement balances were $22.9 million compared to $22.6 million at June 30, 2023 and $6.6 million at December 31, 2022.

Liquidity

The Bank maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $136.6 million in the third quarter of 2023 compared to $218.9 million in the second quarter of 2023 and $469.4 million in the fourth quarter of 2022. The declining overnight funds position reflected growth in average loans and lower average deposit balances.      At September 30, 2023, we had the ability to generate approximately $1.587 billion (excludes overnight funds position of $95 million) in additional liquidity through various sources including various federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and brokered deposits.

We also view our investment portfolio as a liquidity source and have the option to pledge securities in our portfolio as collateral for borrowings or deposits, and/or to sell selected securities.  Our portfolio consists of debt issued by the U.S. Treasury, U.S. governmental agencies, municipal governments, and corporate entities.  At September 30, 2023, the weighted-average maturity and duration of our portfolio were 2.90 years and 2.61 years, respectively, and the available-for-sale portfolio had a net unrealized tax-effected loss of $31.0 million.

Capital

Shareowners’ equity was $428.6 million at September 30, 2023 compared to $420.8 million at June 30, 2023 and $394.0 million at December 31, 2022. For the first nine months of 2023, shareowners’ equity was positively impacted by net income attributable to common shareowners of $42.7 million, a $2.4 million decrease in the unrealized loss on investment securities, the issuance of stock of $2.2 million, stock compensation accretion of $1.0 million, and a $0.4 million increase in the fair value of the interest rate swap related to subordinated debt. Shareowners’ equity was reduced by common stock dividends of $9.5 million ($0.56 per share), the repurchase of stock of $3.1 million (102,147 shares), and net adjustments totaling $1.5 million related to transactions under our stock compensation plans.

At September 30, 2023, our total risk-based capital ratio was 16.58% compared to 15.95% at June 30, 2023 and 15.52% at December 31, 2022. Our common equity tier 1 capital ratio was 13.56%, 13.02%, and 12.64%, respectively, on these dates. Our leverage ratio was 10.19%, 9.74%, and 9.06%, respectively, on these dates. At September 30, 2023, all 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 8.28% at September 30, 2023 compared to 7.61% and 6.79% at June 30, 2023 and December 31, 2022, respectively. If our unrealized held-to-maturity securities losses of $33.1 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 7.46%.

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 $4.1 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 63 banking offices and 100 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; adverse developments in the financial services industry generally, such as the recent bank failures and any related impacts on depositor behavior; the effects of changes in the level of checking or savings account deposits and the competition for deposits on our funding costs, net interest margin and ability to replace maturing deposits and advances, as necessary; the effects of actions taken by governmental agencies to stabilize the financial system and the effectiveness of such actions; changes in monetary and fiscal policies of the U.S. Government; inflation, interest rate, market and monetary fluctuations; the effects of security breaches and computer viruses that may affect our computer systems or fraud related to debit card products; the accuracy of our financial statement estimates and assumptions, including the estimates used for our allowance for credit losses, deferred tax asset valuation and pension plan; changes in our liquidity position; changes in accounting principles, policies, practices or guidelines; the frequency and magnitude of foreclosure of our loans; the effects of our lack of a diversified loan portfolio, including the risks of loan segments, geographic and industry concentrations; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; our ability to declare and pay dividends, the payment of which is subject to our capital requirements; changes in the securities 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, 2022, 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 MEASURESUnaudited

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill and other intangibles resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data)		Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022
Shareowners' Equity (GAAP)		$	428,610		$	420,779		$	411,240		$	394,016		$	373,165
Less: Goodwill and Other Intangibles (GAAP)			92,973			93,013			93,053			93,093			93,133
Tangible Shareowners' Equity (non-GAAP)	A		335,637			327,766			318,187			300,923			280,032
Total Assets (GAAP)			4,147,191			4,399,563			4,409,742			4,525,958			4,332,671
Less: Goodwill and Other Intangibles (GAAP)			92,973			93,013			93,053			93,093			93,133
Tangible Assets (non-GAAP)	B	$	4,054,218		$	4,306,550		$	4,316,689		$	4,432,865		$	4,239,538
Tangible Common Equity Ratio (non-GAAP)	A/B		8.28	%		7.61	%		7.37	%		6.79	%		6.61	%
Actual Diluted Shares Outstanding (GAAP)	C		16,997,886			17,025,023			17,049,913			17,039,401			16,998,177
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	19.75		$	19.25		$	18.66		$	17.66		$	16.47

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
		Three Months Ended						Nine Months Ended
(Dollars in thousands, except per share data)		Sep 30, 2023		Jun 30, 2023		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
EARNINGS
Net Income Attributable to Common Shareowners	$	13,202	$	14,551	$	11,315		42,707	$	28,483
Diluted Net Income Per Share	$	0.78	$	0.85	$	0.67		2.51	$	1.68
PERFORMANCE
Return on Average Assets (annualized)		1.24	%	1.35	%	1.03	%	1.32	%	0.88	%
Return on Average Equity (annualized)		12.25		13.94		11.83		13.70		10.05
Net Interest Margin		4.02		4.05		3.31		4.03		2.91
Noninterest Income as % of Operating Revenue		34.01		36.38		40.76		35.33		46.03
Efficiency Ratio		70.09	%	67.55	%	70.66	%	67.32	%	74.60	%
CAPITAL ADEQUACY
Tier 1 Capital		15.41	%	14.84	%	14.80	%	15.41	%	14.80	%
Total Capital		16.58		15.95		15.75		16.58		15.75
Leverage		10.19		9.74		8.91		10.19		8.91
Common Equity Tier 1		13.56		13.02		12.83		13.56		12.83
Tangible Common Equity (1)		8.28		7.61		6.61		8.28		6.61
Equity to Assets		10.33	%	9.56	%	8.61	%	10.33	%	8.61	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		614.71	%	422.23	%	934.53	%	614.71	%	934.53	%
Allowance as a % of Loans HFI		1.07		1.05		0.96		1.07		0.96
Net Charge-Offs as % of Average Loans HFI		0.17		0.07		0.12		0.16		0.17
Nonperforming Assets as % of Loans HFI and OREO		0.17		0.25		0.10		0.17		0.10
Nonperforming Assets as % of Total Assets		0.11	%	0.15	%	0.06	%	0.11	%	0.06	%
STOCK PERFORMANCE
High	$	33.44	$	34.16	$	33.93		36.86	$	33.93
Low		28.64		28.03		27.41		28.03		24.43
Close	$	29.83	$	30.64	$	31.11		29.83	$	31.11
Average Daily Trading Volume		26,774		33,412		30,546		33,936		26,677
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
	2023										2022
(Dollars in thousands)	Third Quarter				Second Quarter			First Quarter			Fourth Quarter			Third Quarter
ASSETS
Cash and Due From Banks	$	72,379		$	83,679		$	84,549		$	72,114		$	72,686
Funds Sold and Interest Bearing Deposits		95,119			285,129			303,403			528,536			497,679
Total Cash and Cash Equivalents		167,498			368,808			387,952			600,650			570,365
Investment Securities Available for Sale		334,052			386,220			402,943			413,294			416,745
Investment Securities Held to Maturity		632,076			641,398			651,755			660,744			676,178
Other Equity Securities		3,585			1,703			1,883			10			1,349
Total Investment Securities		969,713			1,029,321			1,056,581			1,074,048			1,094,272
Loans Held for Sale		53,093			67,908			55,118			54,635			50,304
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		221,704			227,219			236,263			247,362			246,304
Real Estate - Construction		197,526			226,404			253,903			234,519			237,718
Real Estate - Commercial		828,234			831,285			798,438			782,557			715,870
Real Estate - Residential		954,447			876,867			827,124			721,759			573,963
Real Estate - Home Equity		203,902			203,150			207,241			208,120			202,512
Consumer		285,122			295,646			305,324			324,450			347,949
Other Loans		1,401			5,425			7,660			5,346			20,822
Overdrafts		1,076			1,007			931			1,067			1,047
Total Loans Held for Investment		2,693,412			2,667,003			2,636,884			2,525,180			2,346,185
Allowance for Credit Losses		(28,854	)		(27,964	)		(26,507	)		(24,736	)		(22,510	)
Loans Held for Investment, Net		2,664,558			2,639,039			2,610,377			2,500,444			2,323,675
Premises and Equipment, Net		81,677			82,062			82,055			82,138			81,736
Goodwill and Other Intangibles		92,973			93,013			93,053			93,093			93,133
Other Real Estate Owned		1			1			13			431			13
Other Assets		117,678			119,411			124,593			120,519			119,173
Total Other Assets		292,329			294,487			299,714			296,181			294,055
Total Assets	$	4,147,191		$	4,399,563		$	4,409,742		$	4,525,958		$	4,332,671
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,472,165		$	1,520,134		$	1,601,388		$	1,653,620		$	1,737,046
NOW Accounts		1,092,996			1,269,839			1,242,721			1,290,494			990,021
Money Market Accounts		304,323			321,743			271,880			267,383			292,932
Savings Accounts		571,003			590,245			617,310			637,374			646,526
Certificates of Deposit		99,958			86,905			90,621			90,446			92,853
Total Deposits		3,540,445			3,788,866			3,823,920			3,939,317			3,759,378
Repurchase Agreements		22,910			22,619			4,429			6,583			6,943
Other Short-Term Borrowings		18,786			28,054			22,203			50,210			45,328
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		364			414			463			513			562
Other Liabilities		75,585			77,192			85,878			73,675			84,657
Total Liabilities		3,710,977			3,970,032			3,989,780			4,123,185			3,949,755
Temporary Equity		7,604			8,752			8,722			8,757			9,751
SHAREOWNERS' EQUITY
Common Stock		170			170			170			170			170
Additional Paid-In Capital		36,182			36,853			37,512			37,331			36,234
Retained Earnings		426,934			417,128			405,634			393,744			384,964
Accumulated Other Comprehensive Loss, Net of Tax		(34,676	)		(33,372	)		(32,076	)		(37,229	)		(48,203	)
Total Shareowners' Equity		428,610			420,779			411,240			394,016			373,165
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,147,191		$	4,399,563		$	4,409,742		$	4,525,958		$	4,332,671
OTHER BALANCE SHEET DATA
Earning Assets	$	3,811,337		$	4,049,361		$	4,051,987		$	4,182,399		$	3,988,440
Interest Bearing Liabilities		2,163,227			2,372,706			2,302,514			2,395,890			2,128,052
Book Value Per Diluted Share	$	25.22		$	24.72		$	24.12		$	23.12		$	21.95
Tangible Book Value Per Diluted Share(1)		19.75			19.25			18.66			17.66			16.47
Actual Basic Shares Outstanding		16,958			16,992			17,022			16,987			16,962
Actual Diluted Shares Outstanding		16,998			17,025			17,050			17,039			16,998
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 6.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
		2023							2022				Nine Months Ended September 30,
(Dollars in thousands, except per share data)		Third Quarter		Second Quarter			First Quarter		Fourth Quarter		Third Quarter		2023		2022
INTEREST INCOME
Loans, including Fees	$	39,212	$	37,477		$	34,880	$	31,916	$	27,761	$	111,569	$	73,966
Investment Securities		4,561		4,815			4,924		4,847		4,372		14,300		11,108
Federal Funds Sold and Interest Bearing Deposits		1,848		2,782			4,111		4,463		3,231		8,741		5,048
Total Interest Income		45,621		45,074			43,915		41,226		35,364		134,610		90,122
INTEREST EXPENSE
Deposits		5,214		4,008			2,488		1,902		1,052		11,710		1,542
Repurchase Agreements		190		115			9		7		5		314		6
Other Short-Term Borrowings		440		336			452		683		531		1,228		1,065
Subordinated Notes Payable		625		604			571		522		443		1,800		1,130
Other Long-Term Borrowings		4		5			6		8		6		15		23
Total Interest Expense		6,473		5,068			3,526		3,122		2,037		15,067		3,766
Net Interest Income		39,148		40,006			40,389		38,104		33,327		119,543		86,356
Provision for Credit Losses		2,443		2,219			3,130		3,521		2,099		7,792		3,641
Net Interest Income after Provision for Credit Losses		36,705		37,787			37,259		34,583		31,228		111,751		82,715
NONINTEREST INCOME
Deposit Fees		5,456		5,326			5,239		5,536		5,947		16,021		16,585
Bank Card Fees		3,684		3,795			3,726		3,744		3,860		11,205		11,657
Wealth Management Fees		3,984		4,149			3,928		3,649		3,937		12,061		14,410
Mortgage Banking Revenues		4,819		5,837			6,995		5,497		7,116		17,651		25,127
Other		2,237		3,766			2,360		2,546		2,074		8,363		5,876
Total Noninterest Income		20,180		22,873			22,248		20,972		22,934		65,301		73,655
NONINTEREST EXPENSE
Compensation		24,648		24,884			25,636		25,565		24,738		75,168		74,977
Occupancy, Net		6,980		6,820			6,762		6,253		6,153		20,562		18,321
Other		10,014		10,830			8,057		10,469		8,919		28,901		26,243
Total Noninterest Expense		41,642		42,534			40,455		42,287		39,810		124,631		119,541
OPERATING PROFIT		15,243		18,126			19,052		13,268		14,352		52,421		36,829
Income Tax Expense		3,190		3,544			4,133		2,599		3,074		10,867		7,486
Net Income		12,053		14,582			14,919		10,669		11,278		41,554		29,343
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest		1,149		(31	)		35		995		37		1,153		(860	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	13,202	$	14,551		$	14,954	$	11,664	$	11,315	$	42,707	$	28,483
PER COMMON SHARE
Basic Net Income	$	0.78	$	0.86		$	0.88	$	0.69	$	0.67	$	2.52	$	1.68
Diluted Net Income		0.78		0.85			0.88		0.68		0.67		2.51		1.68
Cash Dividend	$	0.20	$	0.18		$	0.18	$	0.17	$	0.17	$	0.56	$	0.49
AVERAGE SHARES
Basic		16,985		17,002			17,016		16,963		16,960		17,001		16,947
Diluted		17,025		17,035			17,045		17,016		16,996		17,031		16,973

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND CREDIT QUALITY
Unaudited
		2023									2022						Nine Months Ended September 30,
(Dollars in thousands, except per share data)		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2023			2022
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	27,964		$	26,507		$	24,736		$	22,510		$	21,281		$	24,736		$	21,606
Provision for Credit Losses		2,043			1,944			3,291			3,543			1,931			7,278			3,522
Net Charge-Offs (Recoveries)		1,153			487			1,520			1,317			702			3,160			2,618
Balance at End of Period	$	28,854		$	27,964		$	26,507		$	24,736		$	22,510		$	28,854		$	22,510
As a % of Loans HFI		1.07	%		1.05	%		1.01	%		0.98	%		0.96	%		1.07	%		0.96	%
As a % of Nonperforming Loans		614.71	%		422.23	%		577.63	%		1,076.89	%		934.53	%		614.71	%		934.53	%
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period		3,120		$	2,833		$	2,989		$	3,012		$	2,853		$	2,989		$	2,897
Provision for Credit Losses		382			287			(156	)		(23	)		159			513			115
Balance at End of Period(1)		3,502			3,120			2,833			2,989			3,012			3,502			3,012
ACL - DEBT SECURITIES
Provision for Credit Losses	$	18		$	(12	)	$	(5	)	$	1		$	9		$	1		$	4
CHARGE-OFFS
Commercial, Financial and Agricultural	$	76		$	54		$	164		$	129		$	2		$	294		$	1,179
Real Estate - Construction		-			-			-			-			-			-			-
Real Estate - Commercial		-			-			120			88			1			120			267
Real Estate - Home Equity		-			39			-			160			-			39			33
Consumer		1,340			993			1,732			976			770			4,065			1,925
Overdrafts		659			894			634			720			989			2,187			2,429
Total Charge-Offs	$	2,075		$	1,980		$	2,650		$	2,073		$	1,762		$	6,705		$	5,833
RECOVERIES
Commercial, Financial and Agricultural	$	28		$	71		$	95		$	25		$	58		$	194		$	282
Real Estate - Construction		-			1			1			-			2			2			10
Real Estate - Commercial		17			11			8			13			8			36			93
Real Estate - Residential		30			132			57			98			44			219			186
Real Estate - Home Equity		53			131			25			36			22			209			147
Consumer		418			514			571			175			260			1,503			896
Overdrafts		376			633			373			409			666			1,382			1,601
Total Recoveries	$	922		$	1,493		$	1,130		$	756		$	1,060		$	3,545		$	3,215
NET CHARGE-OFFS (RECOVERIES)	$	1,153		$	487		$	1,520		$	1,317		$	702		$	3,160		$	2,618
Net Charge-Offs as a % of Average Loans HFI(2)		0.17	%		0.07	%		0.24	%		0.21	%		0.12	%		0.16	%		0.17	%
CREDIT QUALITY
Nonaccruing Loans	$	4,694		$	6,623		$	4,589		$	2,297		$	2,409
Other Real Estate Owned		1			1			13			431			13
Total Nonperforming Assets ("NPAs")	$	4,695		$	6,624		$	4,602		$	2,728		$	2,422
Past Due Loans 30-89 Days	$	5,577		$	4,207		$	5,061		$	7,829		$	6,263
Past Due Loans 90 Days or More		-			-			-			-			-
Classified Loans		21,812			14,973			12,179			19,342			20,988
Nonperforming Loans as a % of Loans HFI		0.17	%		0.25	%		0.17	%		0.09	%		0.10	%
NPAs as a % of Loans HFI and Other Real Estate		0.17	%		0.25	%		0.17	%		0.11	%		0.10	%
NPAs as a % of Total Assets		0.11	%		0.15	%		0.10	%		0.06	%		0.06	%
(1) Recorded in other liabilities
(2) Annualized

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES
Unaudited
		Third Quarter 2023												Second Quarter 2023															First Quarter 2023															Fourth Quarter 2022															Third Quarter 2022																	Sep 2023 YTD															Sep 2022 YTD
(Dollars in thousands)		AverageBalance			Interest			AverageRate						AverageBalance					Interest				AverageRate						AverageBalance					Interest				AverageRate						AverageBalance					Interest				AverageRate						AverageBalance					Interest				AverageRate								AverageBalance					Interest				AverageRate						AverageBalance					Interest				AverageRate
ASSETS:
Loans Held for Sale	$	62,768		$	971			6.14		%		$		54,350			$		801				5.90		%		$		55,110			$		644				4.74		%		$		42,910					581				5.38		%		$		55,164			$		486				4.82		%				$		57,438			$		2,416				5.62		%		$		50,387			$		1,594				4.23		%
Loans Held for Investment(1)		2,672,653			38,323			5.69						2,657,693					36,758				5.55						2,582,395					34,331				5.39						2,439,379					31,418				5.11						2,264,075					27,354				4.76								2,637,911					109,412				5.55						2,105,211					72,598				4.61
Investment Securities
Taxable Investment Securities		1,002,547			4,549			1.80						1,041,202					4,804				1.84						1,061,372					4,912				1.86						1,078,265					4,835				1.78						1,117,789					4,359				1.55								1,034,825					14,265				1.84						1,105,822					11,082				1.34
Tax-Exempt Investment Securities(1)		2,456			17			2.66						2,656					16				2.47						2,840					17				2.36						2,827					17				2.36						2,939					17				2.30								2,649					50				2.49						2,614					37				1.90
Total Investment Securities		1,005,003			4,566			1.81						1,043,858					4,820				1.84						1,064,212					4,929				1.86						1,081,092					4,852				1.78						1,120,728					4,376				1.55								1,037,474					14,315				1.84						1,108,436					11,119				1.34
Federal Funds Sold and Interest Bearing Deposits		136,556			1,848			5.37						218,902					2,782				5.10						360,971					4,111				4.62						469,352					4,463				3.77						569,984					3,231				2.25								237,987					8,741				4.91						710,559					5,048				0.95
Total Earning Assets		3,876,980		$	45,708			4.68		%				3,974,803			$		45,161				4.56		%				4,062,688			$		44,015				4.39		%				4,032,733			$		41,314				4.07		%				4,009,951			$		35,447				3.51		%						3,970,810			$		134,884				4.54		%				3,974,593			$		90,359				3.04		%
Cash and Due From Banks		75,941												75,854															74,639															74,178															79,527																	75,483															77,856
Allowance for Credit Losses		(29,172	)											(27,893		)													(25,637		)													(22,596		)													(21,509		)															(27,581		)													(21,382		)
Other Assets		295,106												297,837															300,175															297,510															289,709																	297,688															284,546
Total Assets	$	4,218,855										$		4,320,601													$		4,411,865													$		4,381,825													$		4,357,678															$		4,316,400													$		4,315,613
LIABILITIES:
Noninterest Bearing Deposits	$	1,474,574										$		1,539,877													$		1,601,750													$		1,662,443													$		1,726,918															$		1,538,268													$		1,700,800
NOW Accounts		1,125,171		$	3,489			1.23		%				1,200,400			$		3,038				1.01		%				1,228,928			$		2,152				0.71		%				1,133,733			$		1,725				0.60		%				1,016,475			$		868				0.34		%						1,184,453			$		8,679				0.98		%				1,042,958			$		1,074				0.14		%
Money Market Accounts		322,623			1,294			1.59						288,466					747				1.04						267,573					208				0.31						273,328					63				0.09						288,758					71				0.10								293,089					2,249				1.03						286,804					140				0.07
Savings Accounts		579,245			200			0.14						602,848					120				0.08						629,388					76				0.05						641,153					80				0.05						643,640					80				0.05								603,643					396				0.09						623,986					229				0.05
Time Deposits		95,203			231			0.96						87,973					103				0.47						89,675					52				0.24						92,385					34				0.15						94,073					33				0.14								90,970					386				0.57						95,408					99				0.14
Total Interest Bearing Deposits		2,122,242			5,214			0.97						2,179,687					4,008				0.74						2,215,564					2,488				0.46						2,140,599					1,902				0.35						2,042,946					1,052				0.20								2,172,155					11,710				0.72						2,049,156					1,542				0.10
Total Deposits		3,596,816			5,214			0.58						3,719,564					4,008				0.43						3,817,314					2,488				0.26						3,803,041					1,902				0.20						3,769,864					1,052				0.11								3,710,423					11,710				0.42						3,749,956					1,542				0.05
Repurchase Agreements		25,356			190			2.98						17,888					115				2.58						9,343					9				0.37						8,464					7				0.34						11,665					5				0.18								17,588					314				2.39						7,971					6				0.11
Other Short-Term Borrowings		24,306			440			7.17						17,834					336				7.54						37,766					452				4.86						42,380					683				6.39						35,014					531				6.01								26,586					1,228				6.17						29,020					1,065				4.90
Subordinated Notes Payable		52,887			625			4.62						52,887					604				4.52						52,887					571				4.32						52,887					522				3.86						52,887					443				3.28								52,887					1,800				4.49						52,887					1,130				2.82
Other Long-Term Borrowings		387			4			4.73						431					5				4.80						480					6				4.80						530					8				4.80						580					6				4.74								433					15				4.78						710					23				4.58
Total Interest Bearing Liabilities		2,225,178		$	6,473			1.15		%				2,268,727			$		5,068				0.90		%				2,316,040			$		3,526				0.62		%				2,244,860			$		3,122				0.55		%				2,143,092			$		2,037				0.38		%						2,269,649			$		15,067				0.89		%				2,139,744			$		3,766				0.24		%
Other Liabilities		83,099												84,305															81,206															84,585															98,501																	82,877															86,055
Total Liabilities		3,782,851												3,892,909															3,998,996															3,991,888															3,968,511																	3,890,794															3,926,599
Temporary Equity		8,424												8,935															8,802															9,367															9,862																	8,719															10,156
SHAREOWNERS' EQUITY:		427,580												418,757															404,067															380,570															379,305																	416,887															378,858
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,218,855										$		4,320,601													$		4,411,865													$		4,381,825													$		4,357,678															$		4,316,400													$		4,315,613
Interest Rate Spread				$	39,235			3.52		%							$		40,093				3.66		%							$		40,489				3.77		%							$		38,192				3.52		%							$		33,410				3.13		%									$		119,817				3.65		%							$		86,593				2.80		%
Interest Income and Rate Earned(1)					45,708			4.68											45,161				4.56											44,015				4.39											41,314				4.07											35,447				3.51													134,884				4.54											90,359				3.04
Interest Expense and Rate Paid(2)					6,473			0.66											5,068				0.51											3,526				0.35											3,122				0.31											2,037				0.20													15,067				0.51											3,766				0.13
Net Interest Margin				$	39,235			4.02		%							$		40,093				4.05		%							$		40,489				4.04		%							$		38,192				3.76		%							$		33,410				3.31		%									$		119,817				4.03		%							$		86,593				2.91		%
(1) Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.
(2) Rate calculated based on average earning assets.

For Information Contact:Jep LarkinExecutive Vice President and Chief Financial Officer850.402. 8450