Capital City Bank Group, Inc. Reports First Quarter 2023 Results

TALLAHASSEE, Fla., April 24, 2023 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $15.0 million, or $0.88 per diluted share, for the first quarter of 2023 compared to $11.7 million, or $0.68 per diluted share, for the fourth quarter of 2022, and $8.5 million, or $0.50 per diluted share, for the first quarter of 2022.

QUARTER HIGHLIGHTS (1^st Quarter 2023 versus 4th Quarter 2022)

Strong growth in net interest income of 6% - net interest margin percentage grew 28 basis points to 4.04% - deposit interest expense was well controlled at 26 basis points (total deposits) and 46 basis points (interest bearing deposits)
Loan growth of $143 million, or 5.9% (average) and $112 million, or 4.4% (end of period)
Average quarterly deposit growth of $14 million, or 0.4%, and a decline of $115 million, or 2.9%, in period end balance, which reflected a normal seasonal reduction of $88 million in public fund balances
Continued strong credit quality metrics – allowance coverage ratio increased to 1.01%
Noninterest income increased $1.3 million, or 6.1%, due to higher mortgage banking revenues at Capital City Home Loans (“CCHL”)
Noninterest expense decreased $1.8 million, or 4.3%, and reflected no pension settlement expense for the quarter compared to $1.8 million for the prior quarter – expenses (excluding pension settlement expense) were favorably impacted by a $1.8 million gain from the sale of a banking office that was offset by higher payroll taxes (annual re-set), performance-based compensation, and the addition of two new offices during the first quarter
Tangible book value per share increased $1.00, or 5.7%, primarily due to strong earnings and a favorable valuation adjustment for available for sale securities

“The strength and flexibility of our balance sheet – particularly the diversity and granularity of our core deposit franchise – was evident during a volatile quarter for the industry,” said William G. Smith, Jr., Chairman, President, and CEO of Capital City Bank Group. “Continued margin expansion and loan growth were the primary drivers of our strong performance, which resulted in tangible book value per share growth of 5.7%. While there remains uncertainty around the possibility of a near-term recession or economic slowing, I feel good about our positioning and optimistic about our full-year performance.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the first quarter of 2023 totaled $40.5 million, compared to $38.2 million for the fourth quarter of 2022, and $24.8 million for the first quarter of 2022. Compared to both prior periods, the increase reflected strong loan growth and higher interest rates across a majority of our earning assets, partially offset by higher deposit costs.

Our net interest margin for the first quarter of 2023 was 4.04%, an increase of 28 basis points over the fourth quarter of 2022 and 149 basis points over the first quarter of 2022, both driven by higher interest rates and an overall improved earning asset mix. For the first quarter of 2023, our cost of funds was 35 basis points, an increase of four basis points over the fourth quarter of 2022 and 27 basis points over the first quarter of 2022. Our cost of interest-bearing deposits was 46 basis points, 35 basis points, and 4 basis points, respectively, for the same periods. Our total cost of deposits (including noninterest bearing accounts) was 26 basis points, 20 basis points, and 2 basis points, respectively, for the same periods.

Provision for Credit Losses

We recorded a provision for credit losses of $3.1 million for the first quarter of 2023 compared to $3.5 million for the fourth quarter of 2022 and no provision for the first quarter of 2022. The decrease in the provision compared to the fourth quarter of 2022 was primarily attributable to a lower level of loan growth. The credit loss provision for the first quarter of 2022 generally reflected lower required reserves needed post-pandemic. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the first quarter of 2023 totaled $22.2 million compared to $21.0 million for the fourth quarter of 2022 and $25.8 million for the first quarter of 2022. The $1.2 million increase over the fourth quarter of 2022 was primarily attributable to higher mortgage banking revenues at CCHL of $1.5 million partially offset by lower deposit fees $0.3 million. The increase in mortgage banking revenues reflected a higher level of rate locks and gain on sale margin. The decrease in deposit fees was partially attributable to two less processing days in the first quarter. Compared to the first quarter of 2022, the $3.6 million decrease reflected lower wealth management fees of $2.1 million and mortgage banking revenues of $1.9 million, partially offset by higher other income of $0.5 million. The decrease in wealth management fees was due to lower insurance commission revenues which reflected higher than normal revenues in the first quarter of 2022 related to the closing of several large insurance policies. The decline in mortgage banking revenues was attributable to a lower level of rate locks and gain on sale margin. Additional information on our mortgage banking operation is provided in our first quarter investor presentation. The increase in other income was primarily due to higher loan servicing income and miscellaneous income.

Noninterest expense for the first quarter of 2023 totaled $40.5 million compared to $42.3 million for the fourth quarter of 2022 and $39.2 million for the first quarter of 2022. Compared to the fourth quarter of 2022, the $1.8 million decrease reflected lower other expense of $2.4 million that was partially offset by an increase in occupancy expense of $0.5 million and compensation expense of $0.1 million. The reduction in other expense reflected lower other real estate expense of $1.6 million which was due to a $1.8 million gain from the sale of a banking office. Further, pension expense (non-service-related component) for the first quarter of 2023 totaled $0.2 million compared to $1.1 million for the fourth quarter of 2022 which included a $1.8 million pension settlement charge. The increase in occupancy expense reflected higher expenses related to three recently opened full-service offices and the re-location of one office. The slight increase in compensation expense reflected an increase in salary expense of $0.5 million due to higher payroll taxes (annual re-set) that was partially offset by a decrease in associate benefit expense of $0.4 million due to lower pension plan service cost. Compared to the first quarter of 2022, the $1.3 million increase reflected increases in compensation expense of $0.8 million and occupancy expense of $0.7 million that were partially off by a decrease in other expense of $0.2 million. The increase in compensation expense reflected an increase of $1.0 million in salary expense that was partially offset by a $0.2 million decrease in associate benefit expense. The addition of banking offices and staffing in new markets drove the variance in salary and occupancy expenses. The decrease in associate benefit expense was primarily due to a decrease in pension service cost of $0.7 million that was partially offset by an increase in stock-based compensation expense of $0.4 million.

Income Taxes

We realized income tax expense of $4.1 million (effective rate of 21.7%) for the first quarter of 2023 compared to $2.6 million (effective rate of 19.6%) for the fourth quarter of 2022 and $2.2 million (effective rate of 19.8%) for the first quarter of 2022. A discrete tax item of $0.4 million related our SERP plan favorably impacted the effective tax rate for the fourth quarter of 2022. Absent discrete items, we expect our annual effective tax rate to approximate 21%-22% in 2023. The increase in the effective tax rate for 2023 reflects 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.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.063 billion for the first quarter of 2023, an increase of $30.0 million, or 0.7%, over the fourth quarter of 2022, and an increase of $123.9 million, or 3.1%, over the first quarter of 2022. 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.

Average loans held for investment (“HFI”) increased $143.0 million, or 5.9%, over the fourth quarter of 2022 and $618.8 million, or 31.5%, over the first quarter of 2022. Period end loans increased $111.7 million, or 4.4%, over the fourth quarter of 2022 and $651.4 million, or 32.8%, over the first quarter of 2022. Compared to the fourth quarter of 2022, a majority of the increase was realized in the residential real estate category, and to a lesser extent, the construction and commercial real estate mortgage categories. Compared to the first quarter of 2022, loan growth was broad based, with increases realized in all categories except consumer loans.

Allowance for Credit Losses

At March 31, 2023, the allowance for credit losses for HFI loans totaled $26.5 million compared to $24.7 million at December 31, 2022 and $20.8 million at March 31, 2022. Activity within the allowance is provided on Page 9. The increase in the allowance was driven primarily by loan growth. At March 31, 2023, the allowance represented 1.01% of HFI loans compared to 0.98% at December 31, 2022, and 1.05% at March 31, 2022.

Credit Quality

Overall credit quality remains stable. Nonperforming assets (nonaccrual loans and other real estate) totaled $4.6 million at March 31, 2023 compared to $2.7 million at December 31, 2022 and $2.7 million at March 31, 2022. At March 31, 2023, the increase was primarily due to the addition of one large business loan relationship totaling $1.8 million to nonaccrual status – it is in the process of collection and is adequately secured and reserved for. At March 31, 2023, nonperforming assets as a percent of total assets equaled 0.10%, compared to 0.06% at December 31, 2022 and 0.06% at March 31, 2022. Nonaccrual loans totaled $4.6 million at March 31, 2023, a $2.3 million increase over December 31, 2022 and a $1.9 million increase over March 31, 2022. Further, classified loans totaled $12.2 million at March 31, 2023, a $7.2 million decrease from December 31, 2022 and a $10.2 million decrease from March 31, 2022.

Deposits

Average total deposits were $3.817 billion for the first quarter of 2023, an increase of $14.3 million, or 0.4%, over the fourth quarter of 2022 and $103.3 million, or 2.8%, over the first quarter of 2022. Compared to the fourth quarter of 2022, the increase reflected higher NOW account balances, primarily due to a seasonal increase in our public fund deposits that occurred late in the fourth quarter of 2022. Compared to the first quarter of 2022, we experienced strong growth in our NOW accounts, and to a lesser degree, our savings accounts.

Period end total deposits declined $115.4 million from the fourth quarter of 2022, and reflected lower balances in noninterest bearing accounts, NOW accounts, and savings accounts, partially offset by slight growth in money market accounts and certificates of deposit. The $52.2 million decline in noninterest bearing accounts was largely due to the migration of two large commercial clients to an interest-bearing NOW account, in addition to clients seeking a higher yielding investment account at Capital City Investments (approximately $30 million, predominantly higher balance clients). The $47.8 million decline in the NOW account balance was largely driven by an anticipated seasonal decline in public fund balances of $66 million, partially offset by the previously mentioned migration of two clients from noninterest bearing accounts. The $20.1 million decline in the savings account balance was primarily attributable to clients seeking higher yielding investment products outside the Bank. The $4.5 million increase in the money market account balance occurred also due to some migration from noninterest bearing accounts, in addition to growth in our new markets which offered a promotional rate. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment. Additional information on the profile of our deposit base is provided in a supplement (Exhibit 99.2) to this release.

Liquidity

The Bank maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $361.0 million in the first quarter of 2023 compared to $469.4 million in the fourth quarter of 2022. The declining overnight funds position reflected growth in average loans.

At March 31, 2023, we had the ability to generate approximately $1.428 billion (excludes overnight funds position of $303 million) in additional liquidity through various sources including various federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and through 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 March 31, 2023, the weighted-average maturity and duration of our portfolio were 3.34 years and 2.99 years, respectively, and the available-for-sale portfolio had a net unrealized pre-tax loss of $35.0 million.

Additional information on our liquidity and investment portfolio is included in a supplement (Exhibit 99.2) to this release.

Capital

Shareowners’ equity was $411.2 million at March 31, 2023 compared to $394.0 million at December 31, 2022 and $372.1 million at March 31, 2022. For the first three months of 2023, shareowners’ equity was positively impacted by net income attributable to common shareowners of $15.0 million, a $5.6 million decrease in the unrealized loss on investment securities, the issuance of stock of $1.8 million, and stock compensation accretion of $0.5 million. Shareowners’ equity was reduced by common stock dividends of $3.1 million ($0.18 per share), the repurchase of stock of $0.8 million (25,000 shares), net adjustments totaling $1.2 million related to transactions under our stock compensation plans, and a $0.6 million decrease in the fair value of the interest rate swap related to subordinated debt.

At March 31, 2023, our total risk-based capital ratio was 15.53% compared to 15.52% at December 31, 2022 and 16.98% at March 31, 2022. Our common equity tier 1 capital ratio was 12.68%, 12.64%, and 13.77%, respectively, on these dates. Our leverage ratio was 9.28%, 9.06%, and 8.78%, respectively, on these dates. At March 31, 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 7.37% at March 31, 2023 compared to 6.79% and 6.61% at December 31, 2022 and March 31, 2022, respectively. If our unrealized HTM securities losses of $29.5 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 6.69%.

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 58 banking offices and 101 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 impact 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 MEASURES
Unaudited

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)		Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022			Mar 31, 2022
Shareowners' Equity (GAAP)		$	411,240		$	394,016		$	373,165		$	371,675		$	372,145
Less: Goodwill and Other Intangibles (GAAP)			93,053			93,093			93,133			93,173			93,213
Tangible Shareowners' Equity (non-GAAP)	A		318,187			300,923			280,032			278,502			278,932
Total Assets (GAAP)			4,409,742			4,525,958			4,332,671			4,354,297			4,310,045
Less: Goodwill and Other Intangibles (GAAP)			93,053			93,093			93,133			93,173			93,213
Tangible Assets (non-GAAP)	B	$	4,316,689		$	4,432,865		$	4,239,538		$	4,261,124		$	4,216,832
Tangible Common Equity Ratio (non-GAAP)	A/B		7.37	%		6.79	%		6.61	%		6.54	%		6.61	%
Actual Diluted Shares Outstanding (GAAP)	C		17,049,913			17,039,401			16,998,177			16,981,614			16,962,362
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	18.66		$	17.66		$	16.47		$	16.40		$	16.44

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
*Unaudited*

		Three Months Ended
(Dollars in thousands, except per share data)		Mar 31, 2023		Dec 31, 2022		Mar 31, 2022
EARNINGS
Net Income Attributable to Common Shareowners	$	14,954	$	11,664	$	8,455
Diluted Net Income Per Share	$	0.88	$	0.68	$	0.50
PERFORMANCE
Return on Average Assets		1.37	%	1.06	%	0.80	%
Return on Average Equity		15.01		12.16		8.93
Net Interest Margin		4.04		3.76		2.55
Noninterest Income as % of Operating Revenue		35.52		35.50		51.11
Efficiency Ratio		64.48	%	71.47	%	77.55	%
CAPITAL ADEQUACY
Tier 1 Capital		14.51	%	14.53	%	15.98	%
Total Capital		15.53		15.52		16.98
Leverage		9.28		9.06		8.78
Common Equity Tier 1		12.68		12.64		13.77
Tangible Common Equity⁽¹⁾		7.37		6.79		6.61
Equity to Assets		9.33	%	8.71	%	8.63	%
ASSET QUALITY
Allowance as % of Non-Performing Loans		577.63	%	1,076.89	%	760.83	%
Allowance as a % of Loans HFI		1.01		0.98		1.05
Net Charge-Offs as % of Average Loans HFI		0.24		0.21		0.16
Nonperforming Assets as % of Loans HFI and OREO		0.17		0.11		0.14
Nonperforming Assets as % of Total Assets		0.10	%	0.06	%	0.06	%
STOCK PERFORMANCE
High	$	36.86	$	36.23	$	28.88
Low		28.18		31.14		25.96
Close	$	29.31	$	32.50	$	26.36
Average Daily Trading Volume		41,737		31,894		24,019

⁽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*

	2023				2022
(Dollars in thousands)	First Quarter				Fourth Quarter			Third Quarter			Second Quarter			First Quarter
ASSETS
Cash and Due From Banks	$	84,549		$	72,114		$	72,686		$	91,209		$	77,963
Funds Sold and Interest Bearing Deposits		303,403			528,536			497,679			603,315			790,465
Total Cash and Cash Equivalents		387,952			600,650			570,365			694,524			868,428

Investment Securities Available for Sale		402,943			413,294			416,745			601,405			624,361
Investment Securities Held to Maturity		651,755			660,744			676,178			528,258			518,678
Other Equity Securities		1,883			10			1,349			900			855
Total Investment Securities		1,056,581			1,074,048			1,094,272			1,130,563			1,143,894

Loans Held for Sale		55,118			54,635			50,304			48,708			50,815

Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		236,263			247,362			246,304			247,902			230,213
Real Estate - Construction		253,903			234,519			237,718			225,664			174,293
Real Estate - Commercial		798,438			782,557			715,870			699,093			669,110
Real Estate - Residential		827,124			721,759			573,963			478,121			368,020
Real Estate - Home Equity		207,241			208,120			202,512			194,658			188,174
Consumer		305,324			324,450			347,949			359,906			347,785
Other Loans		7,660			5,346			20,822			6,854			6,692
Overdrafts		931			1,067			1,047			1,455			1,222
Total Loans Held for Investment		2,636,884			2,525,180			2,346,185			2,213,653			1,985,509
Allowance for Credit Losses		(26,507	)		(24,736	)		(22,510	)		(21,281	)		(20,756	)
Loans Held for Investment, Net		2,610,377			2,500,444			2,323,675			2,192,372			1,964,753

Premises and Equipment, Net		82,055			82,138			81,736			82,932			82,518
Goodwill and Other Intangibles		93,053			93,093			93,133			93,173			93,213
Other Real Estate Owned		13			431			13			90			17
Other Assets		124,593			120,519			119,173			111,935			106,407
Total Other Assets		299,714			296,181			294,055			288,130			282,155
Total Assets	$	4,409,742		$	4,525,958		$	4,332,671		$	4,354,297		$	4,310,045
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,601,388		$	1,653,620		$	1,737,046		$	1,724,671		$	1,704,329
NOW Accounts		1,242,721			1,290,494			990,021			1,036,757			1,062,498
Money Market Accounts		271,880			267,383			292,932			289,337			288,877
Savings Accounts		617,310			637,374			646,526			639,594			614,599
Certificates of Deposit		90,621			90,446			92,853			95,899			95,204
Total Deposits		3,823,920			3,939,317			3,759,378			3,786,258			3,765,507

Short-Term Borrowings		26,632			56,793			52,271			39,463			30,865
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		463			513			562			612			806
Other Liabilities		85,878			73,675			84,657			93,319			77,323
Total Liabilities		3,989,780			4,123,185			3,949,755			3,972,539			3,927,388

Temporary Equity		8,722			8,757			9,751			10,083			10,512
SHAREOWNERS' EQUITY
Common Stock		170			170			170			170			169
Additional Paid-In Capital		37,512			37,331			36,234			35,738			35,188
Retained Earnings		405,634			393,744			384,964			376,532			370,531
Accumulated Other Comprehensive Loss, Net of Tax		(32,076	)		(37,229	)		(48,203	)		(40,765	)		(33,743	)
Total Shareowners' Equity		411,240			394,016			373,165			371,675			372,145
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,409,742		$	4,525,958		$	4,332,671		$	4,354,297		$	4,310,045
OTHER BALANCE SHEET DATA
Earning Assets	$	4,051,987		$	4,182,399		$	3,988,440		$	3,996,238		$	3,970,684
Interest Bearing Liabilities		2,302,514			2,395,890			2,128,052			2,154,549			2,145,736
Book Value Per Diluted Share	$	24.12		$	23.12		$	21.95		$	21.89		$	21.94
Tangible Book Value Per Diluted Share⁽¹⁾		18.66			17.66			16.47			16.40			16.44
Actual Basic Shares Outstanding		17,022			16,987			16,962			16,959			16,948
Actual Diluted Shares Outstanding		17,050			17,039			16,998			16,982			16,962
⁽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*

		2023		2022
(Dollars in thousands, except per share data)		First Quarter		Fourth Quarter		Third Quarter		Second Quarter			First Quarter
INTEREST INCOME
Loans, including Fees	$	34,880	$	31,916	$	27,761	$	24,072		$	22,133
Investment Securities		4,924		4,847		4,372		3,840			2,896
Federal Funds Sold and Interest Bearing Deposits		4,111		4,463		3,231		1,408			409
Total Interest Income		43,915		41,226		35,364		29,320			25,438
INTEREST EXPENSE
Deposits		2,488		1,902		1,052		266			224
Short-Term Borrowings		461		690		536		343			192
Subordinated Notes Payable		571		522		443		370			317
Other Long-Term Borrowings		6		8		6		8			9
Total Interest Expense		3,526		3,122		2,037		987			742
Net Interest Income		40,389		38,104		33,327		28,333			24,696
Provision for Credit Losses		3,130		3,521		2,099		1,542			-
Net Interest Income after Provision for Credit Losses		37,259		34,583		31,228		26,791			24,696
NONINTEREST INCOME
Deposit Fees		5,239		5,536		5,947		5,447			5,191
Bank Card Fees		3,726		3,744		3,860		4,034			3,763
Wealth Management Fees		3,928		3,649		3,937		4,403			6,070
Mortgage Banking Revenues		6,995		5,497		7,116		9,065			8,946
Other		2,360		2,546		2,074		1,954			1,848
Total Noninterest Income		22,248		20,972		22,934		24,903			25,818
NONINTEREST EXPENSE
Compensation		25,636		25,565		24,738		25,383			24,856
Occupancy, Net		6,762		6,253		6,153		6,075			6,093
Other		8,057		10,469		8,919		9,040			8,284
Total Noninterest Expense		40,455		42,287		39,810		40,498			39,233
OPERATING PROFIT		19,052		13,268		14,352		11,196			11,281
Income Tax Expense		4,133		2,599		3,074		2,177			2,235
Net Income		14,919		10,669		11,278		9,019			9,046
Pre-Tax Loss (Income) Attributable to Noncontrolling Interest		35		995		37		(306	)		(591	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	14,954	$	11,664	$	11,315	$	8,713		$	8,455
PER COMMON SHARE
Basic Net Income	$	0.88	$	0.69	$	0.67	$	0.51		$	0.50
Diluted Net Income		0.88		0.68		0.67		0.51			0.50
Cash Dividend	$	0.18	$	0.17	$	0.17	$	0.16		$	0.16
AVERAGE SHARES
Basic		17,016		16,963		16,960		16,949			16,931
Diluted		17,045		17,016		16,996		16,971			16,946

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND CREDIT QUALITY
*Unaudited*

		2023			2022
(Dollars in thousands, except per share data)		First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	24,736		$	22,510		$	21,281		$	20,756		$	21,606
Provision for Credit Losses		3,291			3,543			1,931			1,670			(79	)
Net Charge-Offs (Recoveries)		1,520			1,317			702			1,145			771
Balance at End of Period	$	26,507		$	24,736		$	22,510		$	21,281		$	20,756
As a % of Loans HFI		1.01	%		0.98	%		0.96	%		0.96	%		1.05	%
As a % of Nonperforming Loans		577.63	%		1,076.89	%		934.53	%		677.57	%		760.83	%
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period		2,989		$	3,012		$	2,853		$	2,976		$	2,897
Provision for Credit Losses		(156	)		(23	)		159			(123	)		79
Balance at End of Period⁽¹⁾		2,833			2,989			3,012			2,853			2,976
ACL - DEBT SECURITIES
Provision for Credit Losses	$	(5	)	$	1		$	9		$	(5	)	$	-
CHARGE-OFFS
Commercial, Financial and Agricultural	$	164		$	129		$	2		$	1,104		$	73
Real Estate - Commercial		120			88			1			-			266
Real Estate - Home Equity		-			160			-			-			33
Consumer		1,732			976			770			533			622
Overdrafts		634			720			989			660			780
Total Charge-Offs	$	2,650		$	2,073		$	1,762		$	2,297		$	1,774
RECOVERIES
Commercial, Financial and Agricultural	$	95		$	25		$	58		$	59		$	165
Real Estate - Construction		1			-			2			-			8
Real Estate - Commercial		8			13			8			56			29
Real Estate - Residential		57			98			44			115			27
Real Estate - Home Equity		25			36			22			67			58
Consumer		571			175			260			453			183
Overdrafts		373			409			666			402			533
Total Recoveries	$	1,130		$	756		$	1,060		$	1,152		$	1,003
NET CHARGE-OFFS (RECOVERIES)	$	1,520		$	1,317		$	702		$	1,145		$	771
Net Charge-Offs as a % of Average Loans HFI⁽²⁾		0.24	%		0.21	%		0.12	%		0.22	%		0.16	%
CREDIT QUALITY
Nonaccruing Loans	$	4,589		$	2,297		$	2,409		$	3,141		$	2,728
Other Real Estate Owned		13			431			13			90			17
Total Nonperforming Assets ("NPAs")	$	4,602		$	2,728		$	2,422		$	3,231		$	2,745

Past Due Loans 30-89 Days	$	5,061		$	7,829		$	6,263		$	3,554		$	3,120
Past Due Loans 90 Days or More		-			-			-			-			-
Classified Loans		12,179			19,342			20,988			19,620			22,348

Nonperforming Loans as a % of Loans HFI		0.17	%		0.09	%		0.10	%		0.14	%		0.14	%
NPAs as a % of Loans HFI and Other Real Estate		0.17	%		0.11	%		0.10	%		0.15	%		0.14	%
NPAs as a % of Total Assets		0.10	%		0.06	%		0.06	%		0.07	%		0.06	%

⁽¹⁾ Recorded in other liabilities
⁽²⁾ Annualized

CAPITAL CITY BANK GROUP, INC.
AVERAGE BALANCE AND INTEREST RATES
*Unaudited*

		First Quarter 2023							Fourth Quarter 2022							Third Quarter 2022							Second Quarter 2022							First Quarter 2022
(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
ASSETS:
Loans Held for Sale	$	55,110		$	644	4.74	%	$	42,910		$	581	5.38	%	$	55,164		$	486	4.82	%	$	52,860			711	4.44	%	$	43,004		$	397	3.19	%
Loans Held for Investment⁽¹⁾		2,582,395			34,331	5.39			2,439,379			31,418	5.11			2,264,075			27,354	4.76			2,084,679			23,433	4.53			1,963,578			21,811	4.52

Investment Securities
Taxable Investment Securities		1,061,372			4,912	1.86			1,078,265			4,835	1.78			1,117,789			4,359	1.55			1,142,269			3,834	1.34			1,056,736			2,889	1.10
Tax-Exempt Investment Securities⁽¹⁾		2,840			17	2.36			2,827			17	2.36			2,939			17	2.30			2,488			10	1.73			2,409			10	1.60

Total Investment Securities		1,064,212			4,929	1.86			1,081,092			4,852	1.78			1,120,728			4,376	1.55			1,144,757			3,844	1.34			1,059,145			2,899	1.10

Federal Funds Sold and Interest Bearing Deposits		360,971			4,111	4.62			469,352			4,463	3.77			569,984			3,231	2.25			691,925			1,408	0.82			873,097			409	0.19

Total Earning Assets		4,062,688		$	44,015	4.39	%		4,032,733		$	41,314	4.07	%		4,009,951		$	35,447	3.51	%		3,974,221		$	29,396	2.97	%		3,938,824		$	25,516	2.63	%

Cash and Due From Banks		74,639							74,178							79,527							79,730							74,253
Allowance for Credit Losses		(25,637	)						(22,596	)						(21,509	)						(20,984	)						(21,655	)
Other Assets		300,175							297,510							289,709							288,421							275,353

Total Assets	$	4,411,865						$	4,381,825						$	4,357,678						$	4,321,388						$	4,266,775

LIABILITIES:
Interest Bearing Deposits
NOW Accounts	$	1,228,928		$	2,152	0.71	%	$	1,133,733		$	1,725	0.60	%	$	1,016,475		$	868	0.34	%	$	1,033,190		$	120	0.05	%	$	1,079,906		$	86	0.03	%
Money Market Accounts		267,573			208	0.31			273,328			63	0.09			288,758			71	0.10			286,210			36	0.05			285,406			33	0.05
Savings Accounts		629,388			76	0.05			641,153			80	0.05			643,640			80	0.05			628,472			77	0.05			599,359			72	0.05
Time Deposits		89,675			52	0.24			92,385			34	0.15			94,073			33	0.14			95,132			33	0.14			97,054			33	0.14
Total Interest Bearing Deposits		2,215,564			2,488	0.46	%		2,140,599			1,902	0.35	%		2,042,946			1,052	0.20	%		2,043,004			266	0.05	%		2,061,725			224	0.04	%

Short-Term Borrowings		47,109			461	3.97	%		50,844			690	5.38	%		46,679			536	4.56	%		31,782			343	4.33	%		32,353			192	2.40	%
Subordinated Notes Payable		52,887			571	4.32			52,887			522	3.86			52,887			443	3.28			52,887			370	2.76			52,887			317	2.40
Other Long-Term Borrowings		480			6	4.80			530			8	4.80			580			6	4.74			722			8	4.54			833			9	4.49

Total Interest Bearing Liabilities		2,316,040		$	3,526	0.62	%		2,244,860		$	3,122	0.55	%		2,143,092		$	2,037	0.38	%		2,128,395		$	987	0.19	%		2,147,798		$	742	0.14	%

Noninterest Bearing Deposits		1,601,750							1,662,443							1,726,918							1,722,325							1,652,337
Other Liabilities		81,206							84,585							98,501							87,207							72,166

Total Liabilities		3,998,996							3,991,888							3,968,511							3,937,927							3,872,301
Temporary Equity		8,802							9,367							9,862							10,096							10,518

SHAREOWNERS' EQUITY:		404,067							380,570							379,305							373,365							383,956

Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,411,865						$	4,381,825						$	4,357,678						$	4,321,388						$	4,266,775

Interest Rate Spread				$	40,489	3.77	%				$	38,192	3.52	%				$	33,410	3.13	%				$	28,409	2.78	%				$	24,774	2.49	%

Interest Income and Rate Earned⁽¹⁾					44,015	4.39						41,314	4.07						35,447	3.51						29,396	2.97						25,516	2.63
Interest Expense and Rate Paid⁽²⁾					3,526	0.35						3,122	0.31						2,037	0.20						987	0.10						742	0.08

Net Interest Margin				$	40,489	4.04	%				$	38,192	3.76	%				$	33,410	3.31	%				$	28,409	2.87	%				$	24,774	2.55	%

⁽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.