NOTE 1 –
BUSINESS AND BASIS OF PRESENTATION
Nature of Operations
.
Capital City Bank Group, Inc. (“CCBG” or the “Company”) provides a full range of
banking and banking-
related services to individual and corporate clients through its subsidiary,
Capital City Bank, with banking offices located in Florida,
Georgia, and Alabama.
The Company is subject to competition from other financial institutions, is subject
to regulation by certain
government agencies and undergoes periodic examinations
by those regulatory authorities.
Basis of Presentation
.
The consolidated financial statements in this Quarterly Report on Form
10-Q include the accounts of CCBG
and its wholly owned subsidiary,
Capital City Bank (“CCB” or the “Bank”).
All material inter-company transactions and accounts
have been eliminated.
Certain previously reported amounts have been reclassified to conform to the current year’s
presentation.
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X.
Accordingly,
they do not include all of the information and notes required by generally accepted
accounting principles for complete financial
statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair
presentation have been included.
The Consolidated Statement of Financial Condition at December
31, 2021 has been derived from the audited consolidated financial
statements at that date, but does not include all of the information and notes
required by generally accepted accounting principles for
complete financial statements.
For further information, refer to the consolidated financial statements and
notes thereto included in the
Company’s annual report
on Form 10-K for the year ended December 31, 2021.
Acquisition.
April 30, 2021
, a newly formed subsidiary of CCBG, Capital City Strategic Wealth,
LLC (“CCSW”) acquired
substantially all of the assets of Strategic Wealth
Group, LLC and certain related businesses (“SWG”), including
advisory, service,
and insurance carrier agreements, and the assignment of all related revenues
thereof.
Under the terms of the purchase agreement,
SWG principles became officers of CCSW and will continue
the operation of their
five
offices in South Georgia offering wealth
management services and comprehensive risk management
and asset protection services for individuals and businesses.
CCBG paid
$
4.5
million in cash consideration and recorded goodwill of $
2.8
million and a customer relationship intangible asset of $
1.6
Accounting Standards Updates
Accounting Standards Update (“ASU”)
2022-02, “Financial Instruments – Credit Losses (Topic
326)
.
In March 2022, the Financial
Accounting Standards Board ("FASB")
issued ASU 2022-02, "Financial Instruments – Credit Losses (Topic
326), Troubled Debt
Restructurings and Vintage
Disclosures". ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings
("TDRs")
in ASC 310-40, "Receivables - Troubled Debt
Restructurings by Creditors" for entities that have adopted the current expected credit
loss model introduced by ASU 2016-13, “Financial Instruments –
Credit Losses (Topic 326):
Measurement of Credit Losses on
Financial Instruments”.
ASU 2022-02 also requires that public business entities disclose current
-period gross charge-offs by year of
origination for financing receivables and net investments in leases within the
scope of Subtopic 326-20, "Financial Instruments—
Credit Losses—Measured at Amortized Cost".
ASU 2022-02 is effective for the Company for fiscal years beginning
after December
15, 2022, including interim periods within those fiscal years, with early
adoption permitted. The Company is evaluating the effect
that
ASU 2022-02 will have on its consolidated financial statements and
related disclosures.