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

Annual report pursuant to Section 13 and 15(d)

INVESTMENT SECURITIES

INVESTMENT SECURITIES	12 Months Ended
INVESTMENT SECURITIES	Dec. 31, 2023
Investment Securities [Abstract]
INVESTMENT SECURITIES	Note 2 INVESTMENT SECURITIES Investment Portfolio Composition . The following tables summarize the amortized cost and related fair value of investment securities AFS and securities HTM, the corresponding amounts of gross unrealized gains and losses, and allowance for credit losses. Available for Sale Amortized Unrealized Unrealized Allowance for Carrying (Dollars in Thousands) Cost Gains Losses Credit Losses Value December 31, 2023 U.S. Government Treasury $ 25,947 $ 1 $ 1,269 $ - $ 24,679 U.S. Government Agency 152,983 104 8,053 - 145,034 States and Political Subdivisions 43,951 1 4,861 (8) 39,083 Mortgage-Backed Securities (1) 73,015 2 9,714 - 63,303 Corporate Debt Securities 63,600 - 6,031 (17) 57,552 Other Securities (2) 8,251 - - - 8,251 Total $ 367,747 $ 108 $ 29,928 $ (25) $ 337,902 December 31, 2022 U.S. Government Treasury $ 23,977 $ 1 $ 1,928 $ - $ 22,050 U.S. Government Agency 198,888 27 12,863 - 186,052 States and Political Subdivisions 47,197 - 6,855 (13) 40,329 Mortgage-Backed Securities (1) 80,829 2 11,426 - 69,405 Corporate Debt Securities 97,119 19 8,874 (28) 88,236 Other Securities (2) 7,222 - - - 7,222 Total $ 455,232 $ 49 $ 41,946 $ (41) $ 413,294 Held to Maturity Amortized Unrealized Unrealized Fair (Dollars in Thousands) Cost Gains Losses Value December 31, 2023 U.S. Government Treasury $ 457,681 $ - $ 16,492 $ 441,189 Mortgage-Backed Securities 167,341 13 16,792 150,562 Total $ 625,022 $ 13 $ 33,284 $ 591,751 December 31, 2022 U.S. Government Treasury $ 457,374 $ - $ 25,641 $ 431,733 Mortgage-Backed Securities 203,370 8 22,410 180,968 Total $ 660,744 $ 8 $ 48,051 $ 612,701 (1) Comprised of residential mortgage-backed securities. (2) Includes Federal Home Loan Bank and Federal Reserve Bank recorded at cost of $ 3.2 million and $ 5.1 million, respectively, at December 31, 2023 and of $ 2.1 million and $ 5.1 million, respectively, at December 31, 2022. At December 31, 2023, and 2022, the investment portfolio had $ 3.5 million and $ 0.01 million, respectively, in equity securities. These securities do not have a readily determinable fair value and were not credit impaired. Securities with an amortized cost of $ 578.5 million and $ 656.1 million at December 31, 2023 and 2022, respectively, were pledged to secure public deposits and for other purposes. At December 31, 2023 and 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareowners’ equity. The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required to own capital stock in the FHLB based generally upon the balances of residential and commercial real estate loans, and FHLB advances. FHLB stock which is included in other securities is pledged to secure FHLB advances. No ready market exists for this stock, and it has no quoted fair value; however, redemption of this stock has historically been at par value. As a member of the Federal Reserve Bank of Atlanta, the Bank is required to maintain stock in the Federal Reserve Bank of Atlanta based on a specified ratio relative to the Bank’s capital. Federal Reserve Bank stock is carried at cost. During the third quarter of 2022, the Company transferred certain securities from the AFS to HTM classification. Transfers are made at fair value on the date of the transfer. The 33 securities had an amortized cost basis and fair value of $ 168.4 million and $ 159.0 million, respectively at the time of the transfer. The net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive loss in the accompanying Consolidated Statement of Financial Condition totaled $ 4.5 million and $ 7.9 million at December 31, 2023 and 2022, respectively. This amount will be amortized out of accumulated other comprehensive loss over the remaining life of the underlying securities as an adjustment of the yield on those securities. Investment Sales . During 2023, the Company sold $ 30.4 million of investment securities. There were no significant sales of investment securities during 2022 and 2021. Maturity Distribution . The following table shows the Company’s AFS and HTM investment securities maturity distribution based on contractual maturity at December 31, 2023. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations. Mortgage-backed securities and certain amortizing U.S. government agency securities are shown separately since they are not due at a certain maturity date. Equity securities do not have a contractual maturity date. Available for Sale Held to Maturity Amortized Fair Amortized Fair (Dollars in Thousands) Cost Value Cost Value Due in one year or less $ 28,545 $ 27,854 $ 90,119 $ 88,588 Due after one through five years 138,299 127,843 367,562 352,601 Due after five through ten years 39,090 33,420 - - Mortgage-Backed Securities 73,015 63,303 167,341 150,562 U.S. Government Agency 80,547 77,231 - - Other Securities 8,251 8,251 - - Total $ 367,747 $ 337,902 $ 625,022 $ 591,751 Unrealized Losses . The following table summarizes the investment securities with unrealized losses at December 31, aggregated by major security type and length of time in a continuous unrealized loss position: Less Than 12 Months Greater Than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in Thousands) Value Losses Value Losses Value Losses December 31, 2023 Available for Sale U.S. Government Treasury $ - $ - $ 19,751 $ 1,269 $ 19,751 $ 1,269 U.S. Government Agency 12,890 74 121,220 7,979 134,110 8,053 States and Political Subdivisions 1,149 31 37,785 4,830 38,934 4,861 Mortgage-Backed Securities 23 - 63,195 9,714 63,218 9,714 Corporate Debt Securities - - 57,568 6,031 57,568 6,031 Total 14,062 105 299,519 29,823 313,581 29,928 Held to Maturity U.S. Government Treasury 153,880 3,178 287,310 13,314 441,190 16,492 Mortgage-Backed Securities 786 14 148,282 16,778 149,068 16,792 Total $ 154,666 $ 3,192 $ 435,592 $ 30,092 $ 590,258 $ 33,284 December 31, 2022 Available for Sale U.S. Government Treasury $ 983 $ - $ 19,189 $ 1,928 $ 20,172 $ 1,928 U.S. Government Agency 63,112 2,572 113,004 10,291 176,116 12,863 States and Political Subdivisions 1,425 2 38,760 6,853 40,185 6,855 Mortgage-Backed Securities 6,594 959 60,458 10,467 67,052 11,426 Equity Securities 26,959 878 58,601 7,996 85,560 8,874 Total 99,073 4,411 290,012 37,535 389,085 41,946 Held to Maturity U.S. Government Treasury 177,552 11,018 254,181 14,623 431,733 25,641 Mortgage-Backed Securities 88,723 6,814 91,462 15,596 180,185 22,410 Total $ 266,275 $ 17,832 $ 345,643 $ 30,219 $ 611,918 $ 48,051 At December 31, 2023, there were 878 positions (combined AFS and HTM securities) with pre-tax unrealized losses totaling $ 63.2 million. At December 31, 2022 there were 928 positions (combined AFS and HTM securities) with pre-tax unrealized losses totaling $ 90.0 million. For 2023, 86 of these of these positions were U.S. Treasury bonds and carry the full faith and credit of the U.S. Government. 691 of these positions were U.S. government agency and mortgage-backed securities issued by U.S. government sponsored entities. We believe the long history of no credit losses on government securities indicates that the expectation of nonpayment of the amortized cost basis is zero . The remaining 101 positions (municipal securities and corporate bonds) have a credit component. At December 31, 2023, all collateralized mortgage obligation securities (“CMO”), MBS, Small Business Administration securities (“SBA”), U.S. Agency, and U.S. Treasury bonds held were AAA rated. At December 31, 2023, corporate debt securities had an allowance for credit losses of $ 17,000 and municipal securities had an allowance $ 8,000 . No ne of the securities held by the Company were past due or in nonaccrual status at December 31, 2023. Credit Quality Indicators The Company monitors the credit quality of its investment securities through various risk management procedures, including the monitoring of credit ratings. A large portion of the debt securities in the Company’s investment portfolio were issued by a U.S. government entity or agency and are either explicitly or implicitly guaranteed by the U.S. government. The Company believes the long history of no credit losses on these securities indicates that the expectation of nonpayment of the amortized cost basis is zero, even if the U.S. government were to technically default. Further, certain municipal securities held by the Company have been pre-refunded and secured by government guaranteed treasuries. Therefore, for the aforementioned securities, the Company does no t assess or record expected credit losses due to the zero loss assumption. The Company monitors the credit quality of its municipal and corporate securities portfolio via credit ratings which are updated on a quarterly basis. On a quarterly basis, municipal and corporate securities in an unrealized loss position are evaluated to determine if the loss is attributable to credit related factors and if an allowance for credit loss is needed.