Capital City Bank Group, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

MORTGAGE BANKING ACTIVITIES

MORTGAGE BANKING ACTIVITIES	3 Months Ended
MORTGAGE BANKING ACTIVITIES	Mar. 31, 2026
Mortgage Banking Activities [Abstract]
Mortgage Banking Activities	NOTE 4 – MORTGAGE BANKING ACTIVITIES The Company’s mortgage banking activities include mandatory delivery loan sales, forward sales contracts used to manage residential loan pipeline price risk, utilization of warehouse lines to fund secondary market residential loan closings, and residential mortgage servicing. Residential Mortgage Loan Production The Company originates, markets, and services conventional and government-sponsored residential mortgage loans. Generally, conforming fixed rate residential mortgage loans are held for sale in the secondary market and non-conforming and adjustable-rate residential mortgage loans may be held for investment. The volume of residential mortgage loans originated for sale and secondary market prices are the primary drivers of origination revenue. Residential mortgage loan commitments are generally outstanding for 30 to 90 days, which represents the typical period from commitment to originate a residential mortgage loan to when the closed loan is sold to an investor. Residential mortgage loan commitments are subject to both credit and price risk. Credit risk is managed through underwriting policies and procedures, including collateral requirements, which are generally accepted by the secondary loan markets. Price risk is primarily related to interest rate fluctuations and is partially managed through forward sales of residential mortgage-backed securities (primarily to-be announced securities, or TBAs) or mandatory delivery commitments with investors. The unpaid principal balance of residential mortgage loans held for sale, notional amounts of derivative contracts related to residential mortgage loan commitments, such as interest rate lock commitments (“IRLC’s”) and forward contract sales and their related fair values are set forth below. March 31, 2026 December 31, 2025 Unpaid Principal Unpaid Principal (Dollars in Thousands) Balance/Notional Fair Value Balance/Notional Fair Value Residential Mortgage Loans Held for Sale $ 24,429 25,088 $ 20,944 $ 21,695 Residential Mortgage Loan Commitments ("IRLCs") (1) 36,415 737 20,699 464 Forward Sales Contracts (2) 26,000 124 25,500 (84) (1) Recorded in other assets at fair value. (2) Recorded in other assets and other liabilities at fair value, respectively. At March 31, 2026 and December 31, 2025, the Company had no residential mortgage loans held for sale 30-89 days past due or on nonaccrual status. Mortgage banking revenue was as follows: Three Months Ended March 31, (Dollars in Thousands) 2026 2025 Net realized gains on sales of mortgage loans $ 2,950 $ 2,880 Net change in unrealized gain on mortgage loans held for sale (41) 234 Net change in the fair value of IRLC's 273 495 Net change in the fair value of forward sales contracts 209 (175) Pair-Offs on net settlement of forward sales contracts 76 (186) Mortgage servicing rights additions 26 20 Net origination fees 759 552 Total mortgage banking revenues $ 4,252 $ 3,820 Residential Mortgage Servicing The Company may retain the right to service residential mortgage loans sold. The unpaid principal balance of loans serviced for others is the primary driver of servicing revenue. The following represents a summary of mortgage servicing rights. (Dollars in Thousands) March 31, 2026 December 31, 2025 Number of residential mortgage loans serviced for others 461 456 Outstanding principal balance of residential mortgage loans serviced for others $ 121,396 $ 118,429 Weighted average interest rate 5.69% 5.69% Remaining contractual term (in months) 354 354 Conforming conventional loans serviced by the Company are sold to Federal National Mortgage Association (“FNMA”) on a non- recourse basis, whereby foreclosure losses are generally the responsibility of FNMA and not the Company. The government loans serviced by the Company are secured through the Government National Mortgage Association (“GNMA”), whereby the Company is insured against loss by the Federal Housing Administration or partially guaranteed against loss by the Veterans Administration. At March 31, 2026, the servicing portfolio balance consisted of the following loan types: FNMA ( 60.3 %), GNMA ( 4.3 %), and private investor ( 35.4 %). FNMA and private investor loans are structured as actual/actual payment remittance. At March 31, 2026 and December 31, 2025, the Company did no t have delinquent residential mortgage loans in GNMA pools serviced by the Company. The right to repurchase these loans and the corresponding liability has been recorded in other assets and other liabilities, respectively, in the Consolidated Statements of Financial Condition. The Company had no repurchases and $ 0.3 million repurchased for the three months ended March 31, 2026 and 2025, respectively, of GNMA delinquent or defaulted mortgage loans with the intention to modify their terms and include the loans in new GNMA pools. Activity in the capitalized mortgage servicing rights was as follows: Three Months Ended March 31, (Dollars in Thousands) 2026 2025 Beginning balance $ 924 $ 933 Additions due to loans sold with servicing retained 26 20 Deletions and amortization (47) (45) Ending balance $ 903 $ 908 The Company did no t record any permanent impairment losses on mortgage servicing rights for the three months ended March 31, 2026 or 2025. The key unobservable inputs used in determining the fair value of the Company’s mortgage servicing rights were as follows: March 31, 2026 December 31, 2025 Minimum Maximum Minimum Maximum Discount rates 9.50% 12.00% 9.50% 12.00% Annual prepayment speeds 9.11% 18.33% 8.50% 18.73% Cost of servicing (per loan) $ 85 $ 95 $ 85 $ 95 Changes in residential mortgage interest rates directly affect the prepayment speeds used in valuing the Company’s mortgage servicing rights. A separate third party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors. The weighted average annual prepayment speed was 12.40 % at March 31, 2026 and 13.05 % at December 31, 2025. Warehouse Line Borrowings The Company has the following warehouse lines of credit and master repurchase agreements with various financial institutions at March 31, 2026: Amounts (Dollars in Thousands) Outstanding $ 30 million master repurchase agreement without defined expiration. Interest is at the secured overnight financing rate (SOFR) rate plus 2.25% to 3.25% , with a floor rate of 3.25% to 4.25% . A cash pledge deposit of $ 0.1 million is required by the lender. $ 17,662 $ 25 million warehouse line of credit agreement expiring in June 2026 . Interest is at the SOFR rate plus 2.50% to 3.00% , with a floor rate of 3.00% to 3.50% . 11,053 Total Warehouse Borrowings $ 28,715 Warehouse line borrowings are classified as short-term borrowings. At December 31, 2025, warehouse line borrowings totaled $ 28.1 million. At March 31, 2026, the Company had residential mortgage loans held for sale pledged as collateral under the above warehouse lines of credit and master repurchase agreements. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquid assets, and maximum debt to net worth ratio, as defined in the agreements. The Company was in compliance with all significant debt covenants at March 31, 2026.