Capital City Bank Group, Inc. Reports Third Quarter 2022 Results

Capital City Bank Group

TALLAHASSEE, Fla., Oct. 25, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income attributable to common shareowners of $11.3 million, or $0.67 per diluted share, for the third quarter of 2022 compared to net income of $8.7 million, or $0.51 per diluted share, for the second quarter of 2022, and $10.1 million, or $0.60 per diluted share, for the third quarter of 2021.

For the first nine months of 2022, net income attributable to common shareowners totaled $28.5 million, or $1.68 per diluted share, compared to net income of $27.0 million, or $1.60 per diluted share, for the same period of 2021.

QUARTER HIGHLIGHTS (3rd Quarter 2022 versus 2nd Quarter 2022)

• Continued strong growth in net interest income of 18% - net interest margin percentage grew 44 bps to 3.31%

• Solid loan growth of 6.0% (end of period) and 8.6% (average)

• Continued strong credit quality metrics – higher credit loss provision driven primarily by loan growth

• Noninterest income decreased $2.0 million, or 7.9%, due to lower mortgage banking revenues at CCHL -- strong adjustable rate portfolio production by CCHL contributed to loan growth for the quarter

• Noninterest expense decreased $0.7 million, or 1.7%, primarily due to lower mortgage and wealth commissions, partially offset by higher performance-based compensation

• Tangible book value per share increased $0.07, or 0.4%

“We continued to see steady loan growth and margin expansion this quarter, which contributed to nice improvement in our operating leverage,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group. “I was particularly pleased to see tangible book value growth and stable deposit balances, both current headwinds for the industry. On a relative basis, our residential mortgage business has held up well given the higher rate environment and slowdown in secondary market loan sales, and we continued to use our balance sheet to book a steady flow of adjustable rate portfolio production, which has contributed to our earnings. Our credit metrics remain strong, and a large portion of our credit loss provision for the quarter was driven by loan growth. While the environment remains highly uncertain, I like our positioning, particularly, the value that our core deposit franchise should contribute in a higher rate environment. I also feel good about our credit risk management discipline. The team is excited to open two new full-service offices in Watersound, Florida and Marietta, Georgia in the fourth quarter and to ramp up our service to those communities. As we plan for 2023, we are focused on strategies that will further diversify and grow our revenue base, both product and geography, and improve our efficiency.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the third quarter of 2022 totaled $33.4 million, compared to $28.4 million for the second quarter of 2022, and $27.7 million for the third quarter of 2021. For the first nine months of 2022, tax-equivalent net interest income totaled $86.6 million compared to $78.4 million for the same period of 2021. Compared to the referenced prior periods, the increase primarily reflected strong loan growth, higher investment balances, and higher rates across a majority of our earning assets.

Our net interest margin for the third quarter of 2022 was 3.31%, an increase of 44 basis points over the second quarter of 2022 and 33 basis points over the third quarter of 2021, both driven by higher interest rates and an overall improved earning asset mix. For the month of September 2022, our net interest margin was 3.41%. Excluding the impact of overnight funds in excess of $200 million, our net interest margin for the third quarter of 2022 was 3.54%. Compared to the nine month period of 2021, the net interest margin remained flat at 2.91% as the favorable impact of higher interest rates and an improved earning asset mix offset the favorable impact in 2021 from a significant level of SBA PPP fee income.

Provision for Credit Losses

We recorded a provision for credit losses of $2.1 million for the third quarter of 2022 compared to $1.5 million in the second quarter of 2022 and no provision for the third quarter of 2021. For the first nine months of 2022, the provision was $3.6 million compared to a benefit of $1.6 million for the same period of 2021. The higher level of provision compared to all prior periods was primarily attributable to strong loan growth. The credit loss provision in 2021 was favorably impacted by strong loan recoveries. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the third quarter of 2022 totaled $22.9 million compared to $24.9 million for the second quarter of 2022 and $26.6 million for the third quarter of 2021. The $2.0 million decrease from the second quarter of 2022 was primarily attributable to lower mortgage banking revenues of $1.9 million. Compared to the third quarter of 2021, the $3.6 million decrease was attributable to lower mortgage banking revenues of $5.2 million, partially offset by higher deposit fees of $0.9 million, other income of $0.3 million, and wealth management fees of $0.3 million.

For the first nine months of 2022, noninterest income totaled $73.7 million compared to $82.9 million for the same period of 2021 and reflected lower mortgage banking revenues of $17.5 million, partially offset by higher deposit fees of $3.0 million and wealth management fees of $4.4 million (primarily insurance revenues of $3.5 million and retail brokerage fees of $0.9 million). Lower mortgage banking revenues for 2022 reflected a reduction in refinancing activity and, to a lesser degree, lower purchase mortgage originations primarily driven by higher interest rates. In addition, gain on sale margins have been pressured due to a lower level of governmental loan originations and mandatory delivery loan sales (both of which provide a higher gain on sale percentage). During 2022, strong best efforts origination volume has allowed us to book a steady flow of adjustable rate residential loans in our portfolio and has contributed to loan growth and earnings. In addition, continued stability in our construction/permanent loan program has partially offset the slowdown in secondary market originations. For 2022, Capital City Home Loans (CCHL) contributed $0.5 million ($0.03 per diluted share) to earnings versus $3.4 million ($0.21 per diluted share) in 2021, which has largely been offset by a $1.2 million ($0.07 per diluted share) contribution to earnings by Capital City Strategic Wealth (CCSW) and improvement in both deposit fees and retail brokerage fees, which reflects our continued commitment to revenue diversification.

Noninterest expense for the third quarter of 2022 totaled $39.8 million compared to $40.5 million for the second quarter of 2022 and $39.7 million for the third quarter of 2021. The $0.7 million decrease from the second quarter of 2022 was primarily attributable to lower variable/performance-based compensation expense at CCHL and CCSW totaling $1.5 million, partially offset by variable/performance-based compensation of $0.6 million and base salaries (primarily annual merit raises) of $0.2 million at the Bank. Compared to the third quarter of 2021, the $0.1 million increase reflected higher other real estate expense of $1.0 million, partially offset by lower compensation expense of $0.5 million and pension settlement expense of $0.4 million. The higher level of other real estate expense was attributable to a gain from the sale of a banking office in the third quarter of 2021. The decrease in compensation expense reflected lower variable/performance-based compensation at CCHL totaling $1.6 million, partially offset by higher variable/performance-based compensation of $0.7 million and base salaries of $0.3 million at the Bank.

For the first nine months of 2022, noninterest expense totaled $119.5 million compared to $122.3 million for the same period of 2021 and reflected lower compensation expense of $1.7 million, pension settlement expense of $2.0 million, and other expense of $0.8 million, partially offset by higher other real estate expense of $1.4 million and occupancy expense of $0.3 million. The reduction in compensation expense was primarily due to lower variable/performance-based compensation at CCHL totaling $7.0 million, partially offset by higher variable/performance-based compensation totaling $2.8 million, base salaries (merit and new market staffing additions) of $2.0 million, and associate insurance expense (utilized self-insurance reserves in 2021) of $0.6 million at the Bank. A lower level of lump sum retirement payments drove the decrease in pension settlement expense compared to both prior year periods. We expect additional pension settlement expense for the remainder of 2022 based on our current estimate of lump sum pension pay-outs to retirees. The net $0.8 million decrease in other expense reflected lower pension plan expense (non-service component) of $3.7 million that was partially offset by higher advertising and travel/entertainment expense totaling $1.0 million (return to pre-pandemic levels and market expansion), mortgage servicing right amortization of $0.6 million at CCHL, other losses of $0.5 million (debit card fraud), and other miscellaneous expenses related to training, hiring, and variable loan related costs. The sale of two banking offices in 2021 drove the increase in other real estate expense.

Income Taxes

We realized income tax expense of $3.1 million (effective rate of 21.4%) for the third quarter of 2022 compared to $2.2 million (effective rate of 19.4%) for the second quarter of 2022 and $2.9 million (effective rate of 20.3%) for the third quarter of 2021. For the first nine months of 2022, we realized income tax expense of $7.5 million (effective rate of 20.3%) compared to $7.8 million (effective rate of 19.4%) for the same period of 2021. Absent discrete items, we expect our annual effective tax rate to approximate 21%.

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $4.010 billion for the third quarter of 2022, an increase of $35.7 million, or 0.9%, over the second quarter of 2022, and an increase of $218.6 million, or 5.8%, over the fourth quarter of 2021. The increase over both prior periods was primarily driven by higher deposit balances (see below – Funding). The mix of earning assets continues to improve driven by strong loan growth.

We maintained an average net overnight funds (interest bearing deposits with banks plus FED funds sold less FED funds purchased) sold position of $570.0 million in the third quarter of 2022 compared to $691.9 million in the second quarter of 2022 and $789.1 million in the fourth quarter of 2021. The declining overnight funds position reflects growth in average loans.

Average loans held for investment (“HFI”) increased $179.4 million, or 8.6%, over the second quarter of 2022 and increased $315.8 million, or 16.2%, over the fourth quarter of 2021. Period end loans increased $132.5 million, or 6.0%, over the second quarter of 2022 and $414.7 million, or 21.5%, over the fourth quarter of 2021. The growth in 2022 has been broad based with increases realized in all loan categories, more significantly, residential mortgage, residential construction and commercial real estate. The slowdown in secondary market residential loan sales has allowed us to book a steady flow of CCHL’s adjustable rate production in our loan portfolio through 2022.

Allowance for Credit Losses

At September 30, 2022, the allowance for credit losses for HFI loans totaled $22.5 million compared to $21.3 million at June 30, 2022 and $21.6 million at December 31, 2021. Activity within the allowance is provided on Page 9. The $1.2 million increase in the allowance for the third quarter was driven by incremental reserves needed for loan growth and, to a lesser extent, a higher projected rate of unemployment and its potential effect on rates of default. Net charge-offs decreased $0.4 million to $0.7 million for the third quarter of 2022. At September 30, 2022, the allowance represented 0.96% of HFI loans and provided coverage of 964% of nonperforming loans compared to 0.96% and 678%, respectively, at June 30, 2022, and 1.12% and 500%, respectively, at December 31, 2021.

Credit Quality

Overall credit quality remains strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $2.4 million at September 30, 2022 compared to $3.2 million at June 30, 2022 and $4.3 million at December 31, 2021. At September 30, 2022, nonperforming assets as a percent of total assets equaled 0.06%, compared to 0.07% at June 30, 2022 and 0.10% at December 31, 2021. Nonaccrual loans totaled $2.4 million at September 30, 2022, a $0.7 million decrease from June 30, 2022 and a $1.9 million decrease from December 31, 2021. Further, classified loans increased $1.4 million over the second quarter of 2022 to $21.0 million.

Funding (Deposits/Debt)

Average total deposits were $3.770 billion for the third quarter of 2022, an increase of $4.5 million, or 0.1%, over the second quarter of 2022 and $220.7 million, or 6.2%, over the fourth quarter of 2021. Compared to the second quarter of 2022, the increase reflected higher noninterest bearing and savings balances. Compared to the fourth quarter of 2021, we have had strong growth in our noninterest bearing deposits, NOW accounts, and savings account balances. Over the past few years, we have experienced strong core deposit growth. We continue to closely monitor our cost of deposits and deposit mix as we manage through this rising rate environment. It is anticipated that liquidity levels will remain strong given our current level of overnight funds.

Average borrowings increased $14.9 million over the second quarter of 2022, primarily due to an increase in short-term repurchase agreements and CCHL’s warehouse line.

Capital

Shareowners’ equity was $373.2 million at September 30, 2022 compared to $371.7 million at June 30, 2022 and $383.2 million at December 31, 2021. For the first nine months of 2022, shareowners’ equity was positively impacted by net income attributable to common shareowners of $28.5 million, a $3.3 million increase in the fair value of the interest rate swap related to subordinated debt, stock compensation accretion of $0.9 million, net adjustments totaling $0.8 million related to transactions under our stock compensation plans, and a $0.4 million decrease in the accumulated other comprehensive loss for our pension plan. Shareowners’ equity was reduced by common stock dividends of $8.3 million ($0.49 per share) and a $35.6 million increase in the unrealized loss on investment securities.

At September 30, 2022, our total risk-based capital ratio was 15.75% compared to 16.07% at June 30, 2022 and 17.15% at December 31, 2021. Our common equity tier 1 capital ratio was 12.83%, 13.07%, and 13.86%, respectively, on these dates. Our leverage ratio was 8.91%, 8.77%, and 8.95%, respectively, on these dates. Further, our tangible common equity ratio was 6.61% at September 30, 2022 compared to 6.54% and 6.95% at June 30, 2022 and December 31, 2021, respectively. The decline in our regulatory capital ratios compared to 2021 was attributable to strong loan growth during 2022. At September 30, 2022, all of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $4.3 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 57 banking offices and 86 ATMs/ITMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause our future results to differ materially. The following factors, among others, could cause our actual results to differ: fluctuations in inflation, interest rates, or monetary policies; the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes; the effects of security breaches and computer viruses that may affect our computer systems; fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-diversified loan portfolio, including the risks of geographic and industry concentrations; natural disasters, widespread health emergencies, military conflict, terrorism or other geopolitical events; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; risks from the ongoing COVID-19 pandemic; and our ability to manage the risks involved in the foregoing. Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and our other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this Press Release speak only as of the date of the Press Release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURES

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill and other intangibles resulting from merger and acquisition activity. We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data)		Sep 30, 2022			Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021
Shareowners' Equity (GAAP)		$	373,165		$	371,675		$	372,145		$	383,166		$	348,868
Less: Goodwill and Other Intangibles (GAAP)			93,133			93,173			93,213			93,253			93,293
Tangible Shareowners' Equity (non-GAAP)	A		280,032			278,502			278,932			289,913			255,575
Total Assets (GAAP)			4,332,671			4,354,297			4,310,045			4,263,849			4,048,733
Less: Goodwill and Other Intangibles (GAAP)			93,133			93,173			93,213			93,253			93,293
Tangible Assets (non-GAAP)	B	$	4,239,538		$	4,261,124		$	4,216,832		$	4,170,596		$	3,955,440
Tangible Common Equity Ratio (non-GAAP)	A/B		6.61	%		6.54	%		6.61	%		6.95	%		6.46	%
Actual Diluted Shares Outstanding (GAAP)	C		16,998,177			16,981,614			16,962,362			16,935,389			16,911,715
Tangible Book Value per Diluted Share (non-GAAP)	A/C	$	16.47		$	16.40		$	16.44		$	17.12		$	15.11

CAPITAL CITY BANK GROUP, INC.
EARNINGS HIGHLIGHTS
Unaudited
		Three Months Ended						Nine Months Ended
(Dollars in thousands, except per share data)		Sep 30, 2022		Jun 30, 2022		Sep 30, 2021		Sep 30, 2022		Sep 30, 2021
EARNINGS
Net Income Attributable to Common Shareowners	$	11,315	$	8,713	$	10,091	$	28,483	$	27,024
Diluted Net Income Per Share	$	0.67	$	0.51	$	0.60	$	1.68	$	1.60
PERFORMANCE
Return on Average Assets		1.03	%	0.81	%	0.99	%	0.88	%	0.92		%
Return on Average Equity		11.83		9.36		11.72		10.05		10.87
Net Interest Margin		3.31		2.87		2.98		2.91		2.91
Noninterest Income as % of Operating Revenue		40.76		46.78		48.99		46.03		51.47
Efficiency Ratio		70.66	%	75.96	%	73.09	%	74.60	%	75.83		%
CAPITAL ADEQUACY
Tier 1 Capital		14.80	%	15.13	%	15.69	%	14.80	%	15.69		%
Total Capital		15.75		16.07		16.70		15.75		16.70
Leverage		8.91		8.77		9.05		8.91		9.05
Common Equity Tier 1		12.83		13.07		13.45		12.83		13.45
Tangible Common Equity (1)		6.61		6.54		6.46		6.61		6.46
Equity to Assets		8.61	%	8.54	%	8.62	%	8.61	%	8.62		%
ASSET QUALITY
Allowance as % of Non-Performing Loans		934.53	%	677.57	%	710.39	%	934.53	%	710.39		%
Allowance as a % of Loans HFI		0.96		0.96		1.11		0.96		1.11
Net Charge-Offs as % of Average Loans HFI		0.12		0.22		0.03		0.17		(0.05	)
Nonperforming Assets as % of Loans HFI and OREO		0.10		0.15		0.17		0.10		0.17
Nonperforming Assets as % of Total Assets		0.06	%	0.07	%	0.08	%	0.06	%	0.08		%
STOCK PERFORMANCE
High	$	33.93	$	28.55	$	26.10	$	33.93	$	28.98
Low		27.41		24.43		22.02		24.43		21.42
Close	$	31.11	$	27.89	$	24.74	$	31.11	$	24.74
Average Daily Trading Volume		30,546		25,342		30,515		26,677		29,925
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
Unaudited
	2022										2021
(Dollars in thousands)	Third Quarter				Second Quarter			First Quarter			Fourth Quarter			Third Quarter
ASSETS
Cash and Due From Banks	$	72,686		$	91,209		$	77,963		$	65,313		$	73,132
Funds Sold and Interest Bearing Deposits		497,679			603,315			790,465			970,041			708,988
Total Cash and Cash Equivalents		570,365			694,524			868,428			1,035,354			782,120
Investment Securities Available for Sale		416,745			601,405			624,361			654,611			645,844
Investment Securities Held to Maturity		676,178			528,258			518,678			339,601			341,228
Other Equity Securities		1,349			900			855			861			-
Total Investment Securities		1,094,272			1,130,563			1,143,894			995,073			987,072
Loans Held for Sale		50,304			48,708			50,815			52,532			77,036
Loans Held for Investment ("HFI"):
Commercial, Financial, & Agricultural		246,304			247,902			230,213			223,086			218,929
Real Estate - Construction		237,718			225,664			174,293			174,394			177,443
Real Estate - Commercial		715,870			699,093			669,110			663,550			683,379
Real Estate - Residential		573,963			478,121			368,020			346,756			355,958
Real Estate - Home Equity		202,512			194,658			188,174			187,821			187,642
Consumer		347,949			359,906			347,785			321,511			309,983
Other Loans		20,822			6,854			6,692			13,265			6,792
Overdrafts		1,047			1,455			1,222			1,082			1,299
Total Loans Held for Investment		2,346,185			2,213,653			1,985,509			1,931,465			1,941,425
Allowance for Credit Losses		(22,510	)		(21,281	)		(20,756	)		(21,606	)		(21,500	)
Loans Held for Investment, Net		2,323,675			2,192,372			1,964,753			1,909,859			1,919,925
Premises and Equipment, Net		81,736			82,932			82,518			83,412			84,750
Goodwill and Other Intangibles		93,133			93,173			93,213			93,253			93,293
Other Real Estate Owned		13			90			17			17			192
Other Assets		119,173			111,935			106,407			94,349			104,345
Total Other Assets		294,055			288,130			282,155			271,031			282,580
Total Assets	$	4,332,671		$	4,354,297		$	4,310,045		$	4,263,849		$	4,048,733
LIABILITIES
Deposits:
Noninterest Bearing Deposits	$	1,737,046		$	1,724,671		$	1,704,329		$	1,668,912		$	1,592,345
NOW Accounts		990,021			1,036,757			1,062,498			1,070,154			926,201
Money Market Accounts		292,932			289,337			288,877			274,611			286,065
Regular Savings Accounts		646,526			639,594			614,599			599,811			559,714
Certificates of Deposit		92,853			95,899			95,204			99,374			101,637
Total Deposits		3,759,378			3,786,258			3,765,507			3,712,862			3,465,962
Short-Term Borrowings		52,271			39,463			30,865			34,557			51,410
Subordinated Notes Payable		52,887			52,887			52,887			52,887			52,887
Other Long-Term Borrowings		562			612			806			884			1,610
Other Liabilities		84,657			93,319			77,323			67,735			113,720
Total Liabilities		3,949,755			3,972,539			3,927,388			3,868,925			3,685,589
Temporary Equity		9,751			10,083			10,512			11,758			14,276
SHAREOWNERS' EQUITY
Common Stock		170			170			169			169			169
Additional Paid-In Capital		36,234			35,738			35,188			34,423			33,876
Retained Earnings		384,964			376,532			370,531			364,788			359,550
Accumulated Other Comprehensive Loss, Net of Tax		(48,203	)		(40,765	)		(33,743	)		(16,214	)		(44,727	)
Total Shareowners' Equity		373,165			371,675			372,145			383,166			348,868
Total Liabilities, Temporary Equity and Shareowners' Equity	$	4,332,671		$	4,354,297		$	4,310,045		$	4,263,849		$	4,048,733
OTHER BALANCE SHEET DATA
Earning Assets	$	3,988,440		$	3,996,238		$	3,970,684		$	3,949,111		$	3,714,521
Interest Bearing Liabilities		2,128,052			2,154,549			2,145,736			2,132,278			1,979,524
Book Value Per Diluted Share	$	21.95		$	21.89		$	21.94		$	22.63		$	20.63
Tangible Book Value Per Diluted Share(1)		16.47			16.40			16.44			17.12			15.11
Actual Basic Shares Outstanding		16,962			16,959			16,948			16,892			16,878
Actual Diluted Shares Outstanding		16,998			16,982			16,962			16,935			16,912
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 4.

CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited
		2022									2021						September 30,
(Dollars in thousands, except per share data)		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2022			2021
INTEREST INCOME
Loans, including Fees	$	27,761		$	24,072		$	22,133		$	22,744		$	25,885		$	73,966		$	73,817
Investment Securities		4,372			3,840			2,896			2,505			2,350			11,108			6,287
Federal Funds Sold and Interest Bearing Deposits		3,231			1,408			409			300			285			5,048			698
Total Interest Income		35,364			29,320			25,438			25,549			28,520			90,122			80,802
INTEREST EXPENSE
Deposits		1,052			266			224			213			210			1,542			626
Short-Term Borrowings		536			343			192			307			317			1,071			1,053
Subordinated Notes Payable		443			370			317			306			307			1,130			922
Other Long-Term Borrowings		6			8			9			12			14			23			51
Total Interest Expense		2,037			987			742			838			848			3,766			2,652
Net Interest Income		33,327			28,333			24,696			24,711			27,672			86,356			78,150
Provision for Credit Losses		2,099			1,542			-			-			-			3,641			(1,553	)
Net Interest Income after Provision for Credit Losses		31,228			26,791			24,696			24,711			27,672			82,715			79,703
NONINTEREST INCOME
Deposit Fees		5,947			5,447			5,191			5,300			5,075			16,585			13,582
Bank Card Fees		3,860			4,034			3,763			3,872			3,786			11,657			11,402
Wealth Management Fees		3,937			4,403			6,070			3,706			3,623			14,410			9,987
Mortgage Banking Revenues		7,116			9,065			8,946			9,800			12,283			25,127			42,625
Other		2,074			1,954			1,848			1,994			1,807			5,876			5,277
Total Noninterest Income		22,934			24,903			25,818			24,672			26,574			73,655			82,873
NONINTEREST EXPENSE
Compensation		24,738			25,383			24,856			24,783			25,245			74,977			76,687
Occupancy, Net		6,153			6,075			6,093			5,960			6,032			18,321			17,972
Other Real Estate, Net		(92	)		(29	)		25			26			(1,126	)		(96	)		(1,514	)
Pension Settlement		102			169			209			572			500			480			2,500
Other		8,909			8,900			8,050			8,866			9,051			25,859			26,656
Total Noninterest Expense		39,810			40,498			39,233			40,207			39,702			119,541			122,301
OPERATING PROFIT		14,352			11,196			11,281			9,176			14,544			36,829			40,275
Income Tax Expense		3,074			2,177			2,235			2,040			2,949			7,486			7,795
Net Income		11,278			9,019			9,046			7,136			11,595			29,343			32,480
Pre-Tax Income Attributable to Noncontrolling Interest		37			(306	)		(591	)		(764	)		(1,504	)		(860	)		(5,456	)
NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS	$	11,315		$	8,713		$	8,455		$	6,372		$	10,091		$	28,483		$	27,024
PER COMMON SHARE
Basic Net Income	$	0.67		$	0.51		$	0.50		$	0.38		$	0.60		$	1.68		$	1.60
Diluted Net Income		0.67			0.51			0.50			0.38			0.60			1.68			1.60
Cash Dividend	$	0.17		$	0.16		$	0.16		$	0.16		$	0.16		$	0.49		$	0.46
AVERAGE SHARES
Basic		16,960			16,949			16,931			16,880			16,875			16,947			16,857
Diluted		16,996			16,971			16,946			16,923			16,909			16,973			16,886

CAPITAL CITY BANK GROUP, INC.
ALLOWANCE FOR CREDIT LOSSES ("ACL")
AND CREDIT QUALITY
Unaudited
		2022									2021						September 30,
(Dollars in thousands, except per share data)		Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2022			2021
ACL - HELD FOR INVESTMENT LOANS
Balance at Beginning of Period	$	21,281		$	20,756		$	21,606		$	21,500		$	22,175		$	21,606		$	23,816
Provision for Credit Losses		1,931			1,670			(79	)		200			(546	)		3,522			(3,042	)
Net Charge-Offs (Recoveries)		702			1,145			771			94			129			2,618			(726	)
Balance at End of Period	$	22,510		$	21,281		$	20,756		$	21,606		$	21,500		$	22,510		$	21,500
As a % of Loans HFI		0.96	%		0.96	%		1.05	%		1.12	%		1.11	%		0.96	%		1.11	%
As a % of Nonperforming Loans		934.53	%		677.57	%		760.83	%		499.93	%		710.39	%		934.53	%		710.39	%
ACL - UNFUNDED COMMITMENTS
Balance at Beginning of Period		2,853		$	2,976		$	2,897		$	3,117		$	2,587		$	2,897		$	1,644	...