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

Quarterly report pursuant to Section 13 or 15(d)

BUSINESS AND BASIS OF PRESENTATION

BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
BUSINESS AND BASIS OF PRESENTATION	Jun. 30, 2023
Business and Basis of Presentation [Abstract]
Business and Basis of Presentation	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, 2022 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/A for the year ended December 31, 2022. Accounting Standards Updates Adoption of New Accounting Standard, On January 1, 2023, the Company adopted Accounting Standards Update (“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 in Accounting Standards Codification (“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.” Proposed Accounting Standards , ASU 2023-01, “Leases (Topic 842) : Common Control Arrangements.” ASU 2023-01 requires entities to amortize leasehold improvements associated with common control leases over the useful life to the common control group. ASU 2023-01 also provides certain practical expedients applicable to private companies and not-for-profit organizations. ASU 2023- 01 will be effective for the Company on January 1, 2024, though early adoption is permitted. The Company is evaluating the effect that ASU 2023-01 will have on its consolidated financial statements and related disclosures. ASU No. 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323) : Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. ASU 2023-02 will be effective for the Company on January 1, 2024, though early adoption is permitted. The Company is evaluating the effect that ASU 2023-02 will have on its consolidated financial statements and related disclosures. Restatement of Previously Issued Consolidated Financial Statements We have restated herein our unaudited consolidated financial statements for the three and six months ended June 30, 2023. We have also restated financial statements for the year ended December 31, 2022 and restated the impacted amounts within the accompanying notes to the consolidated financial statements. Restatement Background CCHL sold residential mortgage loans to CCB. CCHL recorded mortgage banking revenue and a mortgage servicing right. On an ongoing basis, CCHL recognized noninterest income for servicing these loans on behalf of CCB. As a result of this misstatement, assets are overstated by $ 1.6 million as of June 30, 2023 and net income is overstated by $ 1.6 million for the six months ended June 30, 2023. This represents 0.04 % of total assets as of June 30, 2023 and 5.83 % of net income for the six months ended June 30, 2023. As a result, diluted EPS decreases from $ 1.73 per share to $ 1.64 per share. Description of Misstatements Misstatements Associated with Mortgage Loan Sale Transactions a) Loan Origination Costs & Gain on Sale of Loan CCHL originated certain mortgage loans that were sold to the Bank for a premium. The gain recorded by CCHL and the corresponding loan purchase premium recorded by the Bank were not eliminated in consolidation. Additionally, the Company did not defer net loan origination costs on these loans. The impacts of the loan origination costs & gain on sale of loan misstatements on each period are presented in this note. b) Mortgage Servicing Right (“MSR”) Asset CCHL recorded an MSR asset and recognized a corresponding gain related to the aforementioned loans sold to and serviced for the Bank. As the MSR asset is recorded at amortized cost, CCHL also recorded amortization expense in each period in other non-interest expense. The MSR asset, gain, and amortization expense should have been eliminated in consolidation. The impacts of the MSR Asset misstatements on each period are presented in this note. c) Mortgage Servicing The Bank recorded servicing fee expense and CCHL recorded servicing income; these amounts should have been eliminated in consolidation. The impacts of the mortgage servicing misstatements on each period are presented in this note. d) Statement of Financial Condition Misclassification CCHL classifies all mortgage production as loans held for sale. The portion of this production that was designated to be sold to the Bank should have been designated as loans held for investment for the Consolidated Financial Statements. This reclassification includes the reversal of the related mark-to-market adjustment and the establishment of the Allowance for Credit Losses (“ACL”) on these loans. While previously the mark-to-market adjustment had been reversed and the ACL established at the time the loans were sold to CCB, this correction reflects those entries in the appropriate periods. The impacts of the restatement on each period are presented in this note. Description of Restatement Tables The following tables present the amounts previously reported and a reconciliation of the restatement amounts reported on the restated Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022, the restated Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022, the restated Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022, the restated Consolidated Statements of Changes in Shareowners’ Equity for the three and six months ended June 30, 2023 and 2022, and the restated Consolidated Statements of Cash Flows for the six months ended June 30, 2023. The amounts previously reported as of June 30, 2023 and for the three and six months ended June 30, 2023 were derived from our Quarterly Report on Form 10-Q for the period ended June 30, 2023, originally filed July 31, 2023. PART I. FINANCIAL INFORMATION Item 1. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) June 30, 2023 December 31, 2022 (Dollars in Thousands, Except Par Value) As Previously Reported As Restated As Previously Reported As Restated ASSETS Cash and Due From Banks $ 83,679 $ 83,679 $ 72,114 $ 72,114 Federal Funds Sold and Interest Bearing Deposits 285,129 285,129 528,536 528,536 Total Cash and Cash Equivalents 368,808 368,808 600,650 600,650 Investment Securities, Available for Sale, at fair value (amortized cost of $ 424,220 and $ 455,232 ) 386,220 386,220 413,294 413,294 Investment Securities, Held to Maturity (fair value of $ 595,219 and $ 612,701 ) 641,398 641,398 660,744 660,744 Equity Securities 1,703 1,703 10 10 Total Investment Securities 1,029,321 1,029,321 1,074,048 1,074,048 Loans Held For Sale, at fair value 67,908 44,659 54,635 26,909 Loans Held for Investment 2,667,003 2,683,512 2,525,180 2,547,685 Allowance for Credit Losses (27,964) (28,243) (24,736) (25,068) Loans Held for Investment, Net 2,639,039 2,655,269 2,500,444 2,522,617 Premises and Equipment, Net 82,062 82,062 82,138 82,138 Goodwill and Other Intangibles 93,013 93,013 93,093 93,093 Other Real Estate Owned 1 1 431 431 Other Assets 119,411 118,073 120,519 119,337 Total Assets $ 4,399,563 $ 4,391,206 $ 4,525,958 $ 4,519,223 LIABILITIES Deposits: Noninterest Bearing Deposits $ 1,520,134 $ 1,520,134 $ 1,653,620 $ 1,653,620 Interest Bearing Deposits 2,268,732 2,268,732 2,285,697 2,285,697 Total Deposits 3,788,866 3,788,866 3,939,317 3,939,317 Short-Term Borrowings 50,673 50,673 56,793 56,793 Subordinated Notes Payable 52,887 52,887 52,887 52,887 Other Long-Term Borrowings 414 414 513 513 Other Liabilities 77,192 77,192 73,675 73,675 Total Liabilities 3,970,032 3,970,032 4,123,185 4,123,185 Temporary Equity 8,752 8,752 8,757 8,757 SHAREOWNERS’ EQUITY Preferred Stock, $ 0.01 par value; 3,000,000 shares authorized; no shares issued and outstanding - - - - Common Stock, $ 0.01 par value; 90,000,000 shares authorized; 16,991,634 and 16,986,785 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 170 170 170 170 Additional Paid-In Capital 36,853 36,853 37,331 37,331 Retained Earnings 417,128 408,771 393,744 387,009 Accumulated Other Comprehensive Loss, net of tax (33,372) (33,372) (37,229) (37,229) Total Shareowners’ Equity 420,779 412,422 394,016 387,281 Total Liabilities, Temporary Equity, and Shareowners’ Equity $ 4,399,563 $ 4,391,206 $ 4,525,958 $ 4,519,223 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 (Dollars in Thousands, Except Per Share Data) As Previously Reported As Restated As Previously Reported As Restated INTEREST INCOME Loans, including Fees $ 37,477 $ 37,608 $ 24,072 $ 24,268 Investment Securities: Taxable Securities 4,803 4,803 3,833 3,833 Tax Exempt Securities 12 12 7 7 Federal Funds Sold and Interest Bearing Deposits 2,782 2,782 1,408 1,408 Total Interest Income 45,074 45,205 29,320 29,516 INTEREST EXPENSE Deposits 4,008 4,008 266 266 Short-Term Borrowings 451 451 343 343 Subordinated Notes Payable 604 604 370 370 Other Long-Term Borrowings 5 5 8 8 Total Interest Expense 5,068 5,068 987 987 NET INTEREST INCOME 40,006 40,137 28,333 28,529 Provision for Credit Losses 2,219 2,197 1,542 1,692 Net Interest Income After Provision for Credit Losses 37,787 37,940 26,791 26,837 NONINTEREST INCOME Deposit Fees 5,326 5,326 5,447 5,447 Bank Card Fees 3,795 3,795 4,034 4,034 Wealth Management Fees 4,149 4,149 4,403 4,403 Mortgage Banking Revenues 5,837 3,363 9,065 4,857 Other 3,766 3,334 1,954 1,823 Total Noninterest Income 22,873 19,967 24,903 20,564 NONINTEREST EXPENSE Compensation 24,884 23,438 25,383 23,222 Occupancy, Net 6,820 6,820 6,075 6,075 Other 10,830 10,027 9,040 8,853 Total Noninterest Expense 42,534 40,285 40,498 38,150 INCOME BEFORE INCOME TAXES 18,126 17,622 11,196 9,251 Income Tax Expense 3,544 3,417 2,177 1,685 NET INCOME $ 14,582 $ 14,205 $ 9,019 $ 7,566 Loss (Income) Attributable to Noncontrolling Interests (31) (31) (306) (306) NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 14,551 $ 14,174 $ 8,713 $ 7,260 BASIC NET INCOME PER SHARE $ 0.86 $ 0.83 $ 0.51 $ 0.43 DILUTED NET INCOME PER SHARE $ 0.85 $ 0.83 $ 0.51 $ 0.43 Average Basic Shares Outstanding 17,002 17,002 16,949 16,949 Average Diluted Shares Outstanding 17,035 17,035 16,971 16,971 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 (Dollars in Thousands, Except Per Share Data) As Previously Reported As Restated As Previously Reported As Restated INTEREST INCOME Loans, including Fees $ 72,357 $ 72,499 $ 46,205 $ 46,697 Taxable Securities 9,716 9,716 6,723 6,723 Tax Exempt Securities 23 23 13 13 Federal Funds Sold and Interest Bearing Deposits 6,893 6,893 1,817 1,817 Total Interest Income 88,989 89,131 54,758 55,250 INTEREST EXPENSE Deposits 6,496 6,496 490 490 Short-Term Borrowings 912 912 535 535 Subordinated Notes Payable 1,175 1,175 687 687 Other Long-Term Borrowings 11 11 17 17 Total Interest Expense 8,594 8,594 1,729 1,729 NET INTEREST INCOME 80,395 80,537 53,029 53,521 Provision for Credit Losses 5,349 5,296 1,542 1,724 Net Interest Income After Provision for Credit Losses 75,046 75,241 51,487 51,797 NONINTEREST INCOME Deposit Fees 10,565 10,565 10,638 10,638 Bank Card Fees 7,521 7,521 7,797 7,797 Wealth Management Fees 8,077 8,077 10,473 10,473 Mortgage Banking Revenues 12,832 6,234 18,011 8,912 Other 6,126 5,328 3,802 3,556 Total Noninterest Income 45,121 37,725 50,721 41,376 NONINTEREST EXPENSE Compensation 50,520 46,962 50,239 45,520 Occupancy, Net 13,582 13,582 12,168 12,168 Other 18,887 17,417 17,324 16,985 Total Noninterest Expense 82,989 77,961 79,731 74,673 INCOME BEFORE INCOME TAXES 37,178 35,005 22,477 18,500 Income Tax Expense 7,677 7,126 4,412 3,405 NET INCOME $ 29,501 27,879 18,065 15,095 Loss (Income) Attributable to Noncontrolling Interests 4 4 (897) (897) NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 29,505 $ 27,883 $ 17,168 $ 14,198 BASIC NET INCOME PER SHARE $ 1.73 $ 1.64 $ 1.01 $ 0.84 DILUTED NET INCOME PER SHARE $ 1.73 $ 1.64 $ 1.01 $ 0.84 Average Basic Shares Outstanding 17,009 17,009 16,940 16,940 Average Diluted Shares Outstanding 17,040 17,040 16,958 16,958 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended Three Months Ended June 30, 2023 June 30, 2022 (Dollars in Thousands) As Previously Reported As Restated As Previously Reported As Restated NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 14,551 $ 14,174 $ 8,713 $ 7,260 Other comprehensive income (loss), before tax: Investment Securities: Change in net unrealized gain (loss) on securities available for sale (2,887) (2,887) (10,718) (10,718) Amortization of unrealized losses on securities transferred from available for sale to held to maturity 876 876 4 4 Derivative: Change in net unrealized (loss) gain on effective cash flow derivative 585 585 1,161 1,161 Benefit Plans: Pension Settlement (217) (217) 169 169 Total Benefit Plans (217) (217) 169 169 Other comprehensive income (loss), before tax (1,643) (1,643) (9,384) (9,384) Deferred tax (benefit) expense related to other comprehensive income (347) (347) (2,362) (2,362) Other comprehensive income (loss), net of tax (1,296) (1,296) (7,022) (7,022) TOTAL COMPREHENSIVE INCOME (LOSS) $ 13,255 $ 12,878 $ 1,691 $ 238 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Six Months Ended Six Months Ended June 30, 2023 June 30, 2022 (Dollars in Thousands) As Previously Reported As Restated As Previously Reported As Restated NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 29,505 $ 27,883 $ 17,168 $ 14,198 Other comprehensive income (loss), before tax: Investment Securities: Change in net unrealized gain (loss) on securities available for sale 3,921 3,921 (36,167) (36,167) Amortization of unrealized losses on securities transferred from available for sale to held to maturity 1,741 1,741 9 9 Derivative: Change in net unrealized (loss) gain on effective cash flow derivative (217) (217) 2,997 2,997 Benefit Plans: Pension Settlement (217) (217) 378 378 Total Benefit Plans (217) (217) 378 378 Other comprehensive income (loss), before tax 5,228 5,228 (32,783) (32,783) Deferred tax expense (benefit) related to other comprehensive income 1,371 1,371 (8,232) (8,232) Other comprehensive income (loss), net of tax 3,857 3,857 (24,551) (24,551) TOTAL COMPREHENSIVE INCOME (LOSS) $ 33,362 $ 31,740 $ (7,383) $ (10,353) The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Unaudited) Three Months Ended June 30, 2023 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, April 1, 2023, as previously reported 17,021,748 $ 170 $ 37,512 $ 405,634 $ (32,076) $ 411,240 Net Income Attributable to Common Shareowners 14,551 14,551 Other Comprehensive Loss, Net of Tax (1,296) (1,296) Cash Dividends ($ 0.18 per share) (3,057) (3,057) Repurchase of Common Stock (40,495) (1,203) (1,203) Stock Based Compensation 228 228 Stock Compensation Plan Transactions, net 10,381 - 316 316 Balance, June 30, 2023, as previously reported 16,991,634 $ 170 $ 36,853 $ 417,128 $ (33,372) $ 420,779 As Restated Balance, April 1, 2023, as restated 17,021,748 $ 170 $ 37,512 $ 397,654 $ (32,076) $ 403,260 Net Income Attributable to Common Shareowners 14,174 14,174 Other Comprehensive Loss, Net of Tax (1,296) (1,296) Cash Dividends ($ 0.18 per share) (3,057) (3,057) Repurchase of Common Stock (40,495) (1,203) (1,203) Stock Based Compensation 228 228 Stock Compensation Plan Transactions, net 10,381 - 316 316 Balance, June 30, 2023, as restated 16,991,634 $ 170 $ 36,853 $ 408,771 $ (33,372) $ 412,422 Three Months Ended June 30, 2022 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, April 1, 2022, as previously reported 16,947,602 $ 169 $ 35,188 $ 370,531 $ (33,743) $ 372,145 Net Income Attributable to Common Shareowners 8,713 8,713 Other Comprehensive Loss, Net of Tax (7,022) (7,022) Cash Dividends ($ 0.16 per share) (2,712) (2,712) Stock Based Compensation 244 244 Stock Compensation Plan Transactions, net 11,678 1 306 307 Balance, June 30, 2022, as previously reported 16,959,280 $ 170 $ 35,738 $ 376,532 $ (40,765) $ 371,675 As Restated Balance, April 1, 2022, as restated 16,947,602 $ 169 $ 35,188 $ 369,014 $ (33,743) $ 370,628 Net Income Attributable to Common Shareowners 7,260 7,260 Other Comprehensive Loss, Net of Tax (7,022) (7,022) Cash Dividends ($ 0.16 per share) (2,712) (2,712) Stock Based Compensation 244 244 Stock Compensation Plan Transactions, net 11,678 1 306 307 Balance, June 30, 2022, as restated 16,959,280 $ 170 $ 35,738 $ 373,562 $ (40,765) $ 368,705 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Unaudited) Six Months Ended June 30, 2023 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, January 1, 2023, as previously reported 16,986,785 $ 170 $ 37,331 $ 393,744 $ (37,229) $ 394,016 Net Income Attributable to Common Shareowners 29,505 29,505 Other Comprehensive Loss, Net of Tax 3,857 3,857 Cash Dividends ($ 0.36 per share) (6,121) (6,121) Repurchase of Common Stock (65,736) (2,022) (2,022) Stock Based Compensation 764 764 Stock Compensation Plan Transactions, net 70,585 - 780 780 Balance, June 30, 2023, as previously reported 16,991,634 $ 170 $ 36,853 $ 417,128 $ (33,372) $ 420,779 As Restated Balance, January 1, 2023, as restated 16,986,785 $ 170 $ 37,331 $ 387,009 $ (37,229) $ 387,281 Net Income Attributable to Common Shareowners 27,883 27,883 Other Comprehensive Loss, Net of Tax 3,857 3,857 Cash Dividends ($ 0.36 per share) (6,121) (6,121) Repurchase of Common Stock (65,736) (2,022) (2,022) Stock Based Compensation 764 764 Stock Compensation Plan Transactions, net 70,585 - 780 780 Balance, June 30, 2023, as restated 16,991,634 $ 170 $ 36,853 $ 408,771 $ (33,372) $ 412,422 Six Months Ended June 30, 2022 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, January 1, 2022, as previously reported 16,892,060 $ 169 $ 34,423 $ 364,788 $ (16,214) $ 383,166 Net Income Attributable to Common Shareowners 17,168 17,168 Other Comprehensive Loss, Net of Tax (24,551) (24,551) Cash Dividends ($ 0.32 per share) (5,424) (5,424) Stock Based Compensation 489 489 Stock Compensation Plan Transactions, net 67,220 1 826 827 Balance, June 30, 2022, as previously reported 16,959,280 $ 170 $ 35,738 $ 376,532 $ (40,765) $ 371,675 As Restated Balance, January 1, 2022, as restated 16,892,060 $ 169 $ 34,423 $ 364,788 $ (16,214) $ 383,166 Net Income Attributable to Common Shareowners 14,198 14,198 Other Comprehensive Loss, Net of Tax (24,551) (24,551) Cash Dividends ($ 0.32 per share) (5,424) (5,424) Stock Based Compensation 489 489 Stock Compensation Plan Transactions, net 67,220 1 826 827 Balance, June 30, 2022, as restated 16,959,280 $ 170 $ 35,738 $ 373,562 $ (40,765) $ 368,705 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended Six Months Ended Jun 30, 2023 Jun 30, 2022 (Dollars in Thousands) As Previously Reported As Restated As Previously Reported As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net Income Attributable to Common Shareowners $ 29,505 $ 27,883 $ 17,168 $ 14,198 Adjustments to Reconcile Net Income to Provision for Credit Losses 5,349 5,296 1,542 1,724 Depreciation 3,927 3,927 3,802 3,802 Amortization of Premiums, Discounts, and Fees, net 2,260 2,117 5,545 5,053 Amortization of Intangible Assets 80 80 80 80 Pension Settlement Charge (291) (291) 378 378 Originations of Loans Held-for-Sale (209,775) (214,364) (573,239) (549,018) Proceeds From Sales of Loans Held-for-Sale 209,334 202,848 595,074 585,476 Mortgage Banking Revenues (12,832) (6,234) (18,011) (8,912) Net Additions for Capitalized Mortgage Servicing Rights (859) (253) 1,358 360 Stock Compensation 764 764 489 489 Net Tax Benefit From Stock-Based Compensation - - (19) (19) Deferred Income Taxes (Benefit) (2,298) (2,849) (8,879) (9,887) Net Change in Operating Leases (3) (3) (72) (72) Net (Gain) Loss on Sales and Write-Downs of Other Real Estate Owned (1,900) (1,900) (26) (26) Net Decrease (Increase) in Other Assets 4,492 4,593 845 3,516 Net (Decrease) Increase in Other Liabilities 3,815 3,815 22,040 22,040 Net Cash Provided (Used In) By Operating Activities 31,568 25,429 48,075 69,182 CASH FLOWS FROM INVESTING ACTIVITIES Securities Held to Maturity: Purchases - - (218,548) (218,548) Payments, Maturities, and Calls 18,992 18,992 28,111 28,111 Securities Available for Sale: Purchases (4,634) (4,634) (37,044) (37,044) Proceeds from Sale of Securities - - 3,365 3,365 Payments, Maturities, and Calls 32,490 32,490 47,413 47,413 Purchase of loans held for investment (201,000) (201,000) (174,779) (174,779) Net Increase in Loans Held for Investment 55,154 61,293 (109,806) (130,913) Proceeds From Sales of Other Real Estate Owned 3,772 3,772 30 30 Purchases of Premises and Equipment (3,851) (3,851) (3,322) (3,322) Noncontrolling interest contributions received - - 2,573 2,573 Net Cash Used In Investing Activities (99,077) (92,938) (462,007) (483,114) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposits (150,451) (150,451) 73,396 73,396 Net (Decrease) Increase in Other Short-Term Borrowings (6,120) (6,120) 4,784 4,784 Repayment of Other Long-Term Borrowings (99) (99) (150) (150) Dividends Paid (6,121) (6,121) (5,424) (5,424) Payments to Repurchase Common Stock (2,022) (2,022) - - Issuance of Common Stock Under Compensation Plans 480 480 496 496 Net Cash Provided By Financing Activities (164,333) (164,333) 73,102 73,102 NET DECREASE IN CASH AND CASH EQUIVALENTS (231,842) (231,842) (340,830) (340,830) Cash and Cash Equivalents at Beginning of Period 600,650 600,650 1,035,354 1,035,354 Cash and Cash Equivalents at End of Period $ 368,808 $ 368,808 $ 694,524 $ 694,524 Supplemental Cash Flow Disclosures: Interest Paid $ 8,720 $ 8,720 $ 1,617 $ 1,617 Income Taxes Paid $ 3,860 $ 3,860 $ 3,765 $ 3,765 Noncash Investing and Financing Activities: Loans and Premises Transferred to Other Real Estate Owned $ 1,442 $ 1,442 $ 77 $ 77 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Unaudited) As of June 30, 2023 (Dollars in Thousands, except per share data) As Previously Reported Restatement Impact As Restated ASSETS: Cash and Due From Banks $ 83,679 $ - $ 83,679 Federal Funds Sold and Interest Bearing Deposits 285,129 - 285,129 Total Cash and Cash Equivalents 368,808 - 368,808 Investment Securities, Available for Sale, at fair value (amortized cost of $ 424,220 ) 386,220 - 386,220 Investment Securities, Held to Maturity (fair value of $ 595,219 ) 641,398 - 641,398 Other Equity Securities 1,703 - 1,703 Total Investment Securities 1,029,321 - 1,029,321 Loans Held For Sale 67,908 (23,249) 44,659 Loans, Net of Unearned Income 2,667,003 16,509 2,683,512 Allowance for Loan Losses (27,964) (279) (28,243) Loans, Net 2,639,039 16,230 2,655,269 Premises and Equipment, Net 82,062 - 82,062 Goodwill 93,013 - 93,013 Other Real Estate Owned 1 - 1 Other Assets 119,411 (1,338) 118,073 Total Assets $ 4,399,563 $ (8,357) $ 4,391,206 LIABILITIES Deposits: Noninterest Bearing Deposits $ 1,520,134 $ - $ 1,520,134 Interest Bearing Deposits 2,268,732 - 2,268,732 Total Deposits 3,788,866 - 3,788,866 Short-Term Borrowings 50,673 - 50,673 Subordinated Notes Payable 52,887 - 52,887 Other Long-Term Borrowings 414 - 414 Other Liabilities 77,192 - 77,192 Total Liabilities 3,970,032 - 3,970,032 Temporary Equity 8,752 - 8,752 SHAREOWNERS' EQUITY Preferred Stock: $ 0.01 par value, 3,000,000 shares authorized no shares issued and outstanding - - - Common Stock, $ 0.01 par value, 90,000,000 shares authorized 16,991,634 shares issued and outstanding 170 - 170 Additional Paid-In Capital 36,853 - 36,853 Retained Earnings 417,128 (8,357) 408,771 Accumulated Other Comprehensive Loss, Net of Tax (33,372) - (33,372) Total Shareowners' Equity 420,779 (8,357) 412,422 Total Liabilities, Temporary Equity, and Shareowners' Equity $ 4,399,563 $ (8,357) $ 4,391,206 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited) For Three Months Ended June 30, 2023 (Dollars in thousands, except per share data) As Previously Reported Restatement Impact As Restated INTEREST INCOME Loans, Including Fees $ 37,477 $ 131 $ 37,608 Taxable Securities 4,803 - 4,803 Tax Exempt Securities 12 - 12 Funds Sold 2,782 - 2,782 Total Interest Income 45,074 131 45,205 INTEREST EXPENSE Deposits 4,008 - 4,008 Short-Term Borrowings 451 - 451 Subordinated Notes Payable 604 - 604 Other Long-Term Borrowings 5 - 5 Total Interest Expense 5,068 - 5,068 Net Interest Income 40,006 131 40,137 Provision for Loan Losses 2,219 (22) 2,197 Net Interest Income After Provision For Loan Losses 37,787 153 37,940 NONINTEREST INCOME Deposit Fees 5,326 - 5,326 Bank Card Fees 3,795 - 3,795 Wealth Management Fees 4,149 - 4,149 Mortgage Banking Fees 5,837 (2,474) 3,363 Other 3,766 (432) 3,334 Total Noninterest Income 22,873 (2,906) 19,967 NONINTEREST EXPENSE Compensation 24,884 (1,446) 23,438 Occupancy, Net 6,820 - 6,820 Other 10,830 (803) 10,027 Total Noninterest Expense 42,534 (2,249) 40,285 INCOME BEFORE INCOME TAXES 18,126 (504) 17,622 Income Tax Expense 3,544 (127) 3,417 NET INCOME 14,582 (377) 14,205 Pre-Tax Income Attributable to Noncontrolling Interests (31) - (31) NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 14,551 $ (377) $ 14,174 BASIC NET INCOME PER SHARE $ 0.86 $ (0.03) $ 0.83 DILUTED NET INCOME PER SHARE $ 0.85 $ (0.02) $ 0.83 AVERAGE SHARES: Basic 17,002 - 17,002 Diluted 17,035 - 17,035 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited) For Six Months Ended June 30, 2023 (Dollars in thousands, except per share data) As Previously Reported Restatement Impact As Restated INTEREST INCOME Loans, Including Fees $ 72,357 $ 142 $ 72,499 Taxable Securities 9,716 - 9,716 Tax Exempt Securities 23 - 23 Funds Sold 6,893 - 6,893 Total Interest Income 88,989 142 89,131 INTEREST EXPENSE Deposits 6,496 - 6,496 Short-Term Borrowings 912 - 912 Subordinated Notes Payable 1,175 - 1,175 Other Long-Term Borrowings 11 - 11 Total Interest Expense 8,594 - 8,594 Net Interest Income 80,395 142 80,537 Provision for Loan Losses 5,349 (53) 5,296 Net Interest Income After Provision For Loan Losses 75,046 195 75,241 NONINTEREST INCOME Deposit Fees 10,565 - 10,565 Bank Card Fees 7,521 - 7,521 Wealth Management Fees 8,077 - 8,077 Mortgage Banking Fees 12,832 (6,598) 6,234 Other 6,126 (798) 5,328 Total Noninterest Income 45,121 (7,396) 37,725 NONINTEREST EXPENSE Compensation 50,520 (3,558) 46,962 Occupancy, Net 13,582 - 13,582 Other 18,887 (1,470) 17,417 Total Noninterest Expense 82,989 (5,028) 77,961 INCOME BEFORE INCOME TAXES 37,178 (2,173) 35,005 Income Tax Expense 7,677 (551) 7,126 NET INCOME 29,501 (1,622) 27,879 Pre-Tax Income Attributable to Noncontrolling Interests 4 - 4 NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 29,505 $ (1,622) $ 27,883 BASIC NET INCOME PER SHARE $ 1.73 $ (0.09) $ 1.64 DILUTED NET INCOME PER SHARE $ 1.73 $ (0.09) $ 1.64 AVERAGE SHARES: Basic 17,009 - 17,009 Diluted 17,040 - 17,040 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) For Three Months Ended June 30, 2023 (Dollars in thousands, except per share data) As Previously Reported Restatement Impact As Restated NET INCOME $ 14,551 $ (377) $ 14,174 Other comprehensive income (loss), before tax: Investment Securities: Change in net unrealized (loss) gain on securities available for sale (2,887) - (2,887) Amortization of unrealized losses on securities transferred from available for sale to held to maturity 876 - 876 Derivative: Change in net unrealized gain on effective cash flow derivative 585 - 585 Benefit Plans: Current year acturial loss (217) - (217) Total Benefit Plans (217) - (217) Other comprehensive income (loss), before tax: (1,643) - (1,643) Deferred tax (benefit) expense related to other comprehensive income (347) - (347) Other comprehensive income (loss), net of tax (1,296) - (1,296) TOTAL COMPREHENSIVE INCOME $ 13,255 $ (377) $ 12,878 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) For Six Months Ended June 30, 2023 (Dollars in thousands, except per share data) As Previously Reported Restatement Impact As Restated NET INCOME $ 29,505 $ (1,622) $ 27,883 Other comprehensive income (loss), before tax: Investment Securities: Change in net unrealized (loss) gain on securities available for sale 3,921 - 3,921 Amortization of unrealized losses on securities transferred from available for sale to held to maturity 1,741 - 1,741 Derivative: Change in net unrealized gain on effective cash flow derivative (217) - (217) Benefit Plans: Current year acturial loss (217) - (217) Total Benefit Plans (217) - (217) Other comprehensive income (loss), before tax: 5,228 - 5,228 Deferred tax expense (benefit) related to other comprehensive income 1,371 - 1,371 Other comprehensive income (loss), net of tax 3,857 - 3,857 TOTAL COMPREHENSIVE INCOME $ 33,362 $ (1,622) $ 31,740 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREOWNERS' EQUITY (Unaudited) Three Months Ended June 30, 2023 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, April 1, 2023, as previously reported 17,021,748 $ 170 $ 37,512 $ 405,634 $ (32,076) $ 411,240 Net Income Attributable to Common Shareowners 14,551 14,551 Other Comprehensive Loss, Net of Tax (1,296) (1,296) Cash Dividends ($ 0.18 per share) (3,057) (3,057) Repurchase of Common Stock (40,495) (1,203) (1,203) Stock Based Compensation 228 228 Stock Compensation Plan Transactions, net 10,381 - 316 316 Balance, June 30, 2023, as previously reported 16,991,634 $ 170 $ 36,853 $ 417,128 $ (33,372) $ 420,779 Restatement Impacts Balance, April 1, 2023 - $ - $ - $ (7,980) $ - $ (7,980) Net Income Attributable to Common Shareowners (377) (377) Balance, June 30, 2023 - $ - $ - $ (8,357) $ - $ (8,357) As Restated Balance, April 1, 2023, as restated 17,021,748 $ 170 $ 37,512 $ 397,654 $ (32,076) $ 403,260 Net Income Attributable to Common Shareowners 14,174 14,174 Other Comprehensive Loss, Net of Tax (1,296) (1,296) Cash Dividends ($ 0.18 per share) (3,057) (3,057) Repurchase of Common Stock (40,495) (1,203) (1,203) Stock Based Compensation 228 228 Stock Compensation Plan Transactions, net 10,381 - 316 316 Balance, June 30, 2023, as restated 16,991,634 $ 170 $ 36,853 $ 408,771 $ (33,372) $ 412,422 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREOWNERS' EQUITY (Unaudited) Six Months Ended June 30, 2023 (Dollars in thousands, except per share data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss, Net of Taxes Total As Previously Reported Balance, January 1, 2023, as previously reported 16,986,785 $ 170 $ 37,331 $ 393,744 $ (37,229) $ 394,016 Net Income Attributable to Common Shareowners 29,505 29,505 Other Comprehensive Loss, Net of Tax 3,857 3,857 Cash Dividends ($ 0.36 per share) (6,121) (6,121) Repurchase of Common Stock (65,736) (2,022) (2,022) Stock Based Compensation 764 764 Stock Compensation Plan Transactions, net 70,585 - 780 780 Balance, June 30, 2023, as previously reported 16,991,634 $ 170 $ 36,853 $ 417,128 $ (33,372) $ 420,779 Restatement Impacts Balance, January 1, 2023 - $ - $ - $ (6,735) $ - $ (6,735) Net Income Attributable to Common Shareowners (1,622) (1,622) Balance, June 30, 2023 - $ - $ - $ (8,357) $ - $ (8,357) As Restated Balance, January 1, 2023, as restated 16,986,785 $ 170 $ 37,331 $ 387,009 $ (37,229) $ 387,281 Net Income Attributable to Common Shareowners 27,883 27,883 Other Comprehensive Loss, Net of Tax 3,857 3,857 Cash Dividends ($ 0.36 per share) (6,121) (6,121) Repurchase of Common Stock (65,736) (2,022) (2,022) Stock Based Compensation 764 764 Stock Compensation Plan Transactions, net 70,585 - 780 780 Balance, June 30, 2023, as restated 16,991,634 $ 170 $ 36,853 $ 408,771 $ (33,372) $ 412,422 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2023 (Dollars in Thousands) As Previously Reported Restatement Impact As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net Income Attributable to Common Shareowners $ 29,505 $ (1,622) $ 27,883 Adjustments to Reconcile Net Income to Provision for Credit Losses 5,349 (53) 5,296 Depreciation 3,927 - 3,927 Amortization of Premiums, Discounts, and Fees, net 2,260 (143) 2,117 Amortization of Intangible Assets 80 - 80 Pension Settlement Charge (291) - (291) Originations of Loans Held-for-Sale (209,775) (4,589) (214,364) Proceeds From Sales of Loans Held-for-Sale 209,334 (6,486) 202,848 Mortgage Banking Revenues (12,832) 6,598 (6,234) Net Additions for Capitalized Mortgage Servicing Rights (859) 606 (253) Stock Compensation 764 - 764 Deferred Income Taxes (Benefit) (2,298) (551) (2,849) Net Change in Operating Leases (3) - (3) Net (Gain) Loss on Sales and Write-Downs of Other Real Estate Owned (1,900) - (1,900) Net Decrease (Increase) in Other Assets 4,492 101 4,593 Net (Decrease) Increase in Other Liabilities 3,815 - 3,815 Net Cash Provided (Used In) By Operating Activities 31,568 (6,139) 25,429 CASH FLOWS FROM INVESTING ACTIVITIES Securities Held to Maturity: Payments, Maturities, and Calls 18,992 - 18,992 Securities Available for Sale: Purchases (4,634) - (4,634) Payments, Maturities, and Calls 32,490 - 32,490 Purchase of loans held for investment (201,000) - (201,000) Net Increase in Loans Held for Investment 55,154 6,139 61,293 Proceeds From Sales of Other Real Estate Owned 3,772 - 3,772 Purchases of Premises and Equipment (3,851) - (3,851) Net Cash Used In Investing Activities (99,077) 6,139 (92,938) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposits (150,451) - (150,451) Net (Decrease) Increase in Other Short-Term Borrowings (6,120) - (6,120) Repayment of Other Long-Term Borrowings (99) - (99) Dividends Paid (6,121) - (6,121) Payments to Repurchase Common Stock (2,022) - (2,022) Issuance of Common Stock Under Compensation Plans 480 - 480 Net Cash Provided By Financing Activities (164,333) - (164,333) NET DECREASE IN CASH AND CASH EQUIVALENTS (231,842) - (231,842) Cash and Cash Equivalents at Beginning of Period 600,650 - 600,650 Cash and Cash Equivalents at End of Period $ 368,808 $ - $ 368,808 Supplemental Cash Flow Disclosures: Interest Paid $ 8,720 $ - $ 8,720 Income Taxes Paid $ 3,860 $ - $ 3,860 Noncash Investing and Financing Activities: Loans and Premises Transferred to Other Real Estate Owned $ 1,442 $ - $ 1,442