Capital City Bank Group, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

INCOME TAXES	12 Months Ended
INCOME TAXES	Dec. 31, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	Note 13 INCOME TAXES The provision for income taxes reflected in the statements of comprehensive income is comprised of the following components: (Dollars in Thousands) 2020 2019 2018 Current: Federal $ 8,625 $ 8,481 $ (1,617) State 1,658 247 201 10,283 8,728 (1,416) Deferred: Federal (143) (680) 3,620 State 130 1,913 1,285 Change in Valuation Allowance (40) (8) (68) (53) 1,225 4,837 Total: Federal 8,482 7,801 2,003 State 1,788 2,160 1,486 Change in Valuation Allowance (40) (8) (68) Total $ 10,230 $ 9,953 $ 3,421 Income taxes provided were different than the tax expense computed by applying the statutory federal income tax rate of 21 % to pre-tax income as a result of the following: (Dollars in Thousands) 2020 2019 2018 Tax Expense at Federal Statutory Rate $ 11,106 $ 8,560 $ 6,225 Increases (Decreases) Resulting From: Tax-Exempt Interest Income (341) (425) (494) 2017 Provision to Return - Impact of Federal Tax Reform - - (3,590) State Taxes, Net of Federal Benefit 1,413 1,342 1,174 Other 601 294 348 Change in Valuation Allowance (40) (8) (68) Tax-Exempt Cash Surrender Value Life Insurance Benefit (173) (175) (174) Expense Due to Reduction of Florida Corporate Income Tax Rate - 365 - Noncontrolling Interest (2,336) - - Actual Tax Expense $ 10,230 $ 9,953 $ 3,421 In connection with filing its 2017 income tax returns, the Company recorded a permanent net income tax benefit of $ 3.6 million. This benefit was a result of deductions claimed on the Company's 2017 income tax returns partially offset by repricing of its current and deferred income tax position associated with the Tax Cuts and Jobs Act of 2017. Deferred income tax liabilities and assets result from differences between assets and liabilities measured for financial reporting purposes and for income tax return purposes. These assets and liabilities are measured using the enacted tax rates and laws that are currently in effect. The net deferred tax asset and the temporary differences comprising that balance at December 31, 2020 and 2019 are as follows: (Dollars in Thousands) 2020 2019 Deferred Tax Assets Attributable to: Allowance for Loan Losses $ 6,037 $ 3,525 Accrued Pension/SERP 16,052 9,863 State Net Operating Loss and Tax Credit Carry-Forwards 2,335 2,834 Other Real Estate Owned 1,066 957 Accrued SERP Liability 2,104 2,094 Lease Liability 2,581 637 Other 2,637 2,485 Total Deferred Tax Assets $ 32,812 $ 22,395 Deferred Tax Liabilities Attributable to: Depreciation on Premises and Equipment $ 4,408 $ 3,870 Deferred Loan Fees and Costs 2,824 2,445 Intangible Assets 3,290 3,290 Accrued Pension Liability 4,723 4,585 Right of Use Asset 2,411 441 Investments 469 469 Other 1,165 284 Total Deferred Tax Liabilities 19,290 15,384 Valuation Allowance 1,640 1,680 Net Deferred Tax Asset $ 11,882 $ 5,331 In the opinion of management, it is more likely than not that all of the deferred tax assets, with the exception of certain state net operating loss carry-forwards and certain state tax credit carry-forwards expected to expire prior to utilization, will be realized. Accordingly, a valuation allowance of $ 1.6 million is recorded at December 31, 2020. At December 31, 2020, the Company had state loss and tax credit carry-forwards of approximately $ 2.3 million, which expire at various dates from 2021 through 2040 . The Company had no unrecognized tax benefits at December 31, 2020, December 31, 2019, and December 31, 2018. It is the Company’s policy to recognize interest and penalties accrued relative to unrecognized tax benefits in their respective federal or state income taxes accounts. There were no penalties and interest related to income taxes recorded in the consolidated statements of income for the years ended December 31, 2020, 2019, and 2018. There were no amounts accrued in the consolidated statements of financial condition for penalties and interest as of December 31, 2020 and 2019. The Company and its subsidiaries file a consolidated U.S. federal income tax return, as well as file various returns in states where its banking offices are located. The Company is no longer subject to U.S. federal or state tax examinations for years before 2017.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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