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

Annual report pursuant to Section 13 and 15(d)

LEASES

LEASES	12 Months Ended
LEASES	Dec. 31, 2022
Leases [Abstract]
Leases	Note 7 LEASES Operating leases in which the Company is the lessee are recorded as operating lease right of use (“ROU”) assets and operating liabilities, included in other assets and liabilities, respectively, on its Consolidated Statement of Financial Condition. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy expense in the Consolidated Statement of Income. The Company’s operating leases primarily relate to banking offices with remaining lease terms from one to forty-three years . The Company’s leases are not complex and do not contain residual value guarantees, variable lease payments, or significant assumptions or judgments made in applying the requirements of ASC Topic 842. Operating leases with an initial term of 12 months or less are not recorded on the Consolidated Statement of Financial Condition and the related lease expense is recognized on a straight-line basis over the lease term. At December 31, 2022, ROU assets and liabilities were $ 22.3 million and $ 22.7 million, respectively. At December 31, 2021, the operating lease ROU assets and liabilities were $ 11.5 million and $ 12.2 million, respectively. The Company does not have any finance leases or any significant lessor agreements. The table below summarizes our lease expense and other information at December 31, related to the Company’s operating leases: (Dollars in Thousands) 2022 2021 2020 Operating lease expense $ 1,719 $ 1,445 $ 1,018 Short-term lease expense 658 663 530 Total lease expense $ 2,377 $ 2,108 $ 1,548 Other information: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,937 $ 1,609 $ 1,174 Right-of-use assets obtained in exchange for new operating lease liabilities 12,475 784 11,101 Weighted-average remaining lease term — operating leases (in years) 19.5 25.3 25.4 Weighted-average discount rate — operating leases 3.1 % 2.0 % 2.1 % The table below summarizes the maturity of remaining lease liabilities: (Dollars in Thousands) December 31, 2022 2022 $ 2,482 2023 2,307 2024 2,089 2025 2,013 2026 1,939 2027 and thereafter 18,922 Total $ 29,752 Less: Interest (7,086) Present Value of Lease Liability $ 22,666 At December 31, 2022, the Company had three additional operating lease obligations for banking offices that have not yet commenced. The first lease has payments totaling $ 1.9 million based on the initial contract term of 15 years, the second has payments totaling $ 1.4 million based on the initial contract term of 10 years, and the third has payments totaling $ 0.1 million based on the initial contract term of 5 years. Payments for all three banking offices are expected to commence during the first quarter of 2023. A related party is the lessor in an operating lease with the Company. The Company’s minimum payment is $ 0.2 million annually through 2042, and will reprice at annual fair market rental value until 2052, for an aggregate remaining obligation of $ 2.4 million at December 31, 2022.