Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2021 Results

1/25, 1:00 PM (Source: GlobeNewswire)

TALLAHASSEE, Fla., Jan. 25, 2022 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ: CCBG) today reported net income of $6.4 million, or $0.38 per diluted share, for the fourth quarter of 2021 compared to net income of $10.1 million, or $0.60 per diluted share, for the third quarter of 2021, and $7.7 million, or $0.46 per diluted share, for the fourth quarter of 2020.

For the full year of 2021, net income totaled $33.4 million, or $1.98 per diluted share, compared to net income of $31.6 million, or $1.88 per diluted share, for 2020.

Fourth Quarter 2021 HIGHLIGHTS

  • Operating revenues (excluding mortgage revenues and SBA PPP loan income) improved 1.9%
  • Capital City Home Loans (“CCHL”) contributed $0.03 per share versus $0.06 per share in the prior quarter reflective of a typical seasonal slowdown
  • Noninterest expense increased $0.5 million, or 1.3%, on higher other real estate expense related to a third quarter gain of $1.0 million on the sale of a banking office
  • Average loans, excluding PPP loans, grew $8 million and average investment securities increased $82 million
  • Noninterest expense included a pension settlement charge of $0.6 million or $0.03 per share
  • Strong credit quality metrics resulted in no loan loss provision and an allowance coverage ratio of 1.12%
  • Average Deposits grew $101 million, or 2.9%, primarily due to a seasonal increase in public fund inflows
  • Capital growth of $34.3 million ($2.03 per share), or 9.8%, primarily attributable to a favorable adjustment for year-end pension plan re-measurement

Full Year 2021 HIGHLIGHTS

  • 2021 net income totaled $33.4 million, a record year
  • Operating revenues (excluding mortgage revenues and SBA PPP loan income) improved 1.4%
  • CCHL contributed $0.23 per share versus $0.52 per share in 2020
  • Average loans, excluding PPP loans, grew $76 million and average investment securities increased $203 million
  • Negative loan loss provision of $1.6 million
  • Noninterest expense included pension settlement charges totaling $3.1 million or $0.15 per share
  • Average Deposits grew $563 million, or 19.8%, reflective of government stimulus related inflows
  • Capital growth of $62.3 million ($3.69 per share), or 19.4%

“Capital City reported record earnings in 2021,” said William G. Smith, Jr., Chairman, President and CEO of Capital City Bank Group.  “SBA PPP loan income, pristine credit quality and growth in our fee-based businesses drove earnings, more than offsetting the adverse impacts of a normalizing mortgage market, pension settlement charges and a lower interest rate environment. We are well positioned for rising interest rates given our asset sensitive balance sheet and the favorable impact higher interest rates have on our pension related other comprehensive loss.  Year over year, the favorable pension equity adjustment added $2.01 per share to book value.  As I look toward 2022, I am excited about the prospects of our recent addition of Capital City Strategic Wealth (a financial planning/advisory service), which gained traction in the latter half of 2021, and our market expansion in the western panhandle of Florida and the northern arc of Atlanta.  While challenges remain, we are identifying opportunities and executing on strategies we believe are sustainable and add long-term value for our shareowners. I am optimistic about the future and appreciate your continued support.”

Discussion of Operating Results

Net Interest Income/Net Interest Margin

Tax-equivalent net interest income for the fourth quarter of 2021 totaled $24.8 million compared to $27.8 million for the third quarter of 2021 and $25.1 million for the fourth quarter of 2020. For the full year 2021 tax-equivalent net interest income totaled $103.2 million compared to $101.8 million for 2020. Compared to the third quarter of 2021 and the fourth quarter of 2020, the decrease was primarily due to lower SBA PPP loan income. Compared to the full year 2020, the increase was primarily attributable to higher SBA PPP loan income and higher average loan balances, partially offset by unfavorable rate repricing due to a generally lower rate environment.

Our net interest margin for the fourth quarter of 2021 was 2.60%, a decrease of 38 basis points over the third quarter of 2021 and a decrease of 40 basis points from the fourth quarter of 2020. Compared to both prior periods, the decrease was attributable to a decline in SBA PPP loan income, in conjunction with growth in earning assets (driven by deposit inflows), which negatively impacts our margin percentage. For the full year 2021, the net interest margin declined 47 basis points compared to 2020, primarily driven by growth in earning assets. Our net interest margin for the fourth quarter of 2021, excluding the impact of overnight funds in excess of $200 million, was 3.10%.

Provision for Credit Loss

We did not record a provision for credit losses for the fourth quarter of 2021. This compares to provision expense of $1.3 million for the fourth quarter of 2020.   For the full year 2021, we recorded a negative provision of $1.6 million compared to provision expense of $9.6 million for 2020. The lower provision in 2021 was attributable to improvements in forecasted economic conditions, favorable loan migration and net loan recoveries totaling $0.6 million. We discuss the allowance for credit losses further below.

Noninterest Income and Noninterest Expense

Noninterest income for the fourth quarter of 2021 totaled $24.7 million compared to $26.6 million for the third quarter of 2021 and $30.5 million for the fourth quarter of 2020.   For the full year 2021, noninterest income totaled $107.5 million compared to $111.2 million for 2020. The decrease from all prior periods was primarily attributable to lower mortgage banking revenues that were partially offset by strong gains in deposit fees, bank card fees, and wealth management fees.   The decline in mortgage banking revenues for the fourth quarter of 2021 reflected a normal seasonal decline in loan purchase activity. Year over year, the decline in mortgage banking revenues was driven generally by lower refinancing activity, a shift in production mix (lower government versus conventional product), and lower market driven gain on sale margins.   Additional detail on our mortgage banking operation (CCHL) is provided on Page 11.   The increase in deposit fees reflected the conversion, in the third quarter of 2021, of the remaining free checking accounts to a monthly maintenance fee account type. The increase in wealth management fees was primarily attributable to higher retail brokerage transaction volume and advisory accounts added from the acquisition of Capital City Strategic Wealth on May 1, 2021. To a lesser extent, higher trust fees contributed to the increase in wealth management fees driven by higher assets under management. The increase in bank card fees generally reflected an increase in card-not-present debit card transactions and increased consumer spending.

Noninterest expense for the fourth quarter of 2021 totaled $40.2 million compared to $39.7 million for the third quarter of 2021 and $41.3 million for the fourth quarter of 2020. The increase over the third quarter of 2021 was primarily attributable to higher other real estate expense of $1.2 million, partially offset by lower compensation expense of $0.5 million. The increase in other real estate expense reflected a gain on the sale of a banking office in the third quarter of 2021. The decrease in compensation was attributable to lower commission expense at CCHL. Compared to the fourth quarter of 2020, the decrease was primarily due to lower commission expense at CCHL.

For the full year 2021, noninterest expense totaled $162.5 million compared to $150.0 million for 2021. The $12.5 million increase was attributable to the addition of expenses at CCHL (March 1, 2020 acquisition) of $2.3 million and higher expenses at the core bank totaling $10.2 million. The increase in expenses at the core bank were primarily due to higher compensation expense of $3.7 million (merit raises, pension/service cost expense, and realized loan cost), pension settlement expense of $3.1 million, and an increase in other expense of $5.0 million, partially offset by lower other real estate expense of $1.6 million. The increase in other expense was primarily attributable to higher expense of $2.1 million for the non-service cost component of our pension plan attributable to the utilization of a lower discount rate for plan liabilities. Higher processing fees of $0.7 million (debit card volume), professional fees of $0.6 million, occupancy expense of $0.5 million, and FDIC insurance of $0.5 million (higher asset size) also contributed to the increase in other expense.

Income Taxes

We realized income tax expense of $2.0 million (effective rate of 22%) for the fourth quarter of 2021 compared to $2.9 million (effective rate of 20%) for the third quarter of 2021 and $2.8 million (effective rate of 22%) for the fourth quarter of 2020. For the full year 2021, we realized income tax expense of $9.8 million (effective rate of 20%) compared to $10.2 million (effective rate of 19%) for the same period of 2020.   Tax expense for the fourth quarter of 2021 and 2020 was unfavorably impacted by discrete tax expense of $0.1 million and $0.3 million, respectively. Absent discrete items, we expect our annual effective tax rate to approximate 19%-20% in 2022. 

Discussion of Financial Condition

Earning Assets

Average earning assets totaled $3.791 billion for the fourth quarter of 2021, an increase of $98.2 million, or 2.7%, over the third quarter of 2021, and an increase of $453.9 million, or 13.6%, over the fourth quarter of 2020. The increase over both prior periods was primarily driven by higher deposit balances. Deposit balances increased as a result of strong core deposit growth, SBA PPP loan proceeds deposited in client accounts, and various other stimulus programs.

We maintained an average net overnight funds (deposits with banks plus FED funds sold less FED funds purchased) sold position of $789.1 million in the fourth quarter of 2021 compared to an average net overnight funds sold position of $741.9 million in the third quarter of 2021 and $705.1 million in the fourth quarter of 2020. The increase compared to both prior periods was driven by strong core deposit growth, in addition to pandemic related stimulus programs (see below – Funding).

Average loans held for investment (“HFI”) decreased $25.8 million, or 1.3%, from the third quarter of 2021 and decreased $45.1 million, or 2.3%, from the fourth quarter of 2020. Excluding SBA PPP loans, average loans HFI increased $7.8 million compared to the third quarter of 2021, and increased $133.1 million compared to the fourth quarter of 2020. Compared to the third quarter of 2021 the increase in average loans (excluding PPP loans) reflected growth in construction and indirect loans, partially offset by declines in the remaining loan products. Compared to the fourth quarter of 2020, we realized growth in construction, residential, commercial real estate and indirect loans. At December 31, 2021, remaining SBA PPP loan balances and fees totaled less than $0.2 million.

Allowance for Credit Losses

At December 31, 2021, the allowance for credit losses for HFI loans totaled $21.6 million compared to $21.5 million at September 30, 2021 and $23.8 million at December 31, 2020. Activity within the allowance is provided on Page 9.   At December 31, 2021, the allowance represented 1.12% of HFI loans and provided coverage of 546% of nonperforming loans compared to 1.11% and 710%, respectively, at September 30, 2021, and 1.19% and 406%, respectively, at December 31, 2020.   At December 31, 2021, excluding SBA PPP loans (100% government guaranteed), the allowance represented 1.12% of HFI loans compared to 1.30% at December 31, 2020.

Credit Quality

Overall credit quality continues to remain strong. Nonperforming assets (nonaccrual loans and other real estate) totaled $4.3 million at December 31, 2021 compared to $3.2 million at September 30, 2021 and $6.7 million at December 31, 2020. At December 31, 2021, nonperforming assets as a percentage of total assets was stable at 0.10%. Nonaccrual loans totaled $4.3 million at December 31, 2021, a $1.3 million increase over September 30, 2021 and a $1.5 million decrease from December 31, 2020.

Funding (Deposits/Debt)

Average total deposits were $3.549 billion for the fourth quarter of 2021, an increase of $101.5 million, or 2.9%, over the third quarter of 2021 and $483.0 million, or 15.8%, over the fourth quarter of 2020. Compared to both prior periods, growth in average total deposits was experienced in all products except certificates of deposit, with the strongest growth occurring in our noninterest bearing deposits and savings account balances. Over the past 18 months, multiple government stimulus programs have been implemented, including those under the CARES Act and the American Rescue Plan Act, which are responsible for a large part of the growth in average deposits. Given these increases, the potential exists for our deposit levels to be volatile into 2022 due to the uncertain timing of the outflows of the stimulus related balances and the economic recovery. It is anticipated that current liquidity levels will remain robust due to our strong overnight funds sold position. The Bank continues to strategically consider ways to safely deploy a portion of this liquidity.

Average short-term borrowings decreased $3.4 million from the third quarter of 2021 and declined $48.9 million from the fourth quarter of 2020, both of which reflected a seasonal fluctuation in warehouse line borrowing needs to support CCHL’s loans held for sale.

Capital

Shareowners’ equity was $383.2 million at December 31, 2021 compared to $348.9 million at September 30, 2021 and $320.8 million at December 31, 2020. For the full year 2021, shareowners’ equity was positively impacted by net income of $33.4 million, a $34.1 million decrease in the accumulated other comprehensive loss for our pension plan, a $1.1 million increase in fair value of the interest rate swap related to subordinated debt, net adjustments totaling $1.4 million related to transactions under our stock compensation plans, stock compensation accretion of $0.8 million, and reclassification of $9.3 million from temporary equity to decrease the redemption value of the non-controlling interest in CCHL. Shareowners’ equity was reduced by common stock dividends of $10.5 million ($0.62 per share) and a $7.3 million decrease in the unrealized gain on investment securities.

At December 31, 2021, our total risk-based capital ratio was 17.15% compared to 16.70% at September 30, 2021 and 17.30% at December 31, 2020. Our common equity tier 1 capital ratio was 13.86%, 13.45%, and 13.71%, respectively, on these dates. Our leverage ratio was 8.95%, 9.05%, and 9.33%, respectively, on these dates. All of our regulatory capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards. Further, our tangible common equity ratio was 6.95% at December 31, 2021 compared to 6.46% and 6.25% at September 30, 2021 and December 31, 2020, respectively.   Our tangible capital ratio was favorably impacted at December 31, 2021 by the aforementioned annual adjustment to the other comprehensive loss for our pension plan. The favorable adjustment was primarily attributable to the utilization of higher discount rates to re-measure the present value of the projected benefit obligation and a strong return on plan assets for 2021.

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 life insurance. 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: the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and our business, results of operations and financial condition, including the impact of our participation in government programs related to COVID-19; the accuracy of our financial statement estimates and assumptions; legislative or regulatory changes; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect our computer systems or 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; 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, 2020, 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)Dec 31, 2021Sep 30, 2021Jun 30, 2021Mar 31, 2021Dec 31, 2020
Shareowners' Equity (GAAP) $383,166 $348,868 $335,880 $324,426 $320,837 
Less: Goodwill and Other Intangibles (GAAP)  93,253  93,293  93,333  89,095  89,095 
Tangible Shareowners' Equity (non-GAAP)A 289,913  255,575  242,547  235,331  231,742 
Total Assets (GAAP)  4,263,849  4,048,733  4,011,459  3,929,884  3,798,071 
Less: Goodwill and Other Intangibles (GAAP)  93,253  93,293  93,333  89,095  89,095 
Tangible Assets (non-GAAP)B$4,170,596 $3,955,440 $3,918,126 $3,840,789 $3,708,976 
Tangible Common Equity Ratio (non-GAAP)A/B 6.95%  6.46%  6.19%  6.13%  6.25% 
Actual Diluted Shares Outstanding (GAAP)C 16,935,389  16,911,715  16,901,375  16,875,719  16,844,997 
Tangible Book Value per Diluted Share (non-GAAP)A/C$17.12 $15.11 $14.35 $13.94 $13.76 
                 


CAPITAL CITY BANK GROUP, INC.           
EARNINGS HIGHLIGHTS           
Unaudited           
            
  Three Months Ended Twelve Months Ended 
(Dollars in thousands, except per share data) Dec 31, 2021 Sep 30, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 
EARNINGS           
Net Income Attributable to Common Shareowners$6,372$10,091$7,746$33,396 $31,576 
Diluted Net Income Per Share$0.38$0.60$0.46$1.98 $1.88 
PERFORMANCE           
Return on Average Assets 0.61%0.99%0.84%0.84 %0.93%
Return on Average Equity 7.22 11.72 8.97 9.92  9.36 
Net Interest Margin 2.60 2.98 3.00 2.83  3.30 
Noninterest Income as % of Operating Revenue 49.96 48.99 55.00 51.11  52.32 
Efficiency Ratio 81.29%73.09%74.36%77.11 %70.43%
CAPITAL ADEQUACY           
Tier 1 Capital 16.14%15.69%16.19%16.14 %16.19%
Total Capital 17.15 16.70 17.30 17.15  17.30 
Leverage 8.95 9.05 9.33 8.95  9.33 
Common Equity Tier 1 13.86 13.45 13.71 13.86  13.71 
Tangible Common Equity (1) 6.95 6.46 6.25 6.95  6.25 
Equity to Assets 8.99%8.62%8.45%8.99 %8.45%
ASSET QUALITY           
Allowance as % of Non-Performing Loans 499.93%710.39%405.66%499.93 %405.66%
Allowance as a % of Loans HFI 1.12 1.11 1.19 1.12  1.19 
Net Charge-Offs as % of Average Loans HFI 0.02 0.03 0.09 (0.03) 0.12 
Nonperforming Assets as % of Loans HFI and OREO 0.22 0.17 0.33 0.22  0.33 
Nonperforming Assets as % of Total Assets 0.10%0.08%0.18%0.10 %0.18%
STOCK PERFORMANCE           
High$29.00$26.10$26.35$29.00 $30.62 
Low 24.77 22.02 18.14 21.42  15.61 
Close$26.40$24.74$24.58$26.40 $24.58 
Average Daily Trading Volume 29,900 30,515 22,271 29,919  35,125 
            
(1) Tangible common equity ratio is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5. 
            


CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION      
Unaudited          
           
 2021  2020 
(Dollars in thousands)Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
ASSETS          
Cash and Due From Banks$65,313 $73,132 $78,894 $73,973 $67,919 
Funds Sold and Interest Bearing Deposits 970,041  708,988  766,920  851,910  860,630 
Total Cash and Cash Equivalents 1,035,354  782,120  845,814  925,883  928,549 
           
Investment Securities Available for Sale 654,611  645,844  480,890  406,245  324,870 
Investment Securities Held to Maturity 339,601  341,228  325,559  199,109  169,939 
Other Equity Securities 861  -  -  -  - 
Total Investment Securities 995,073  987,072  806,449  605,354  494,809 
           
Loans Held for Sale 52,532  77,036  80,821  82,081  114,039 
           
Loans Held for Investment ("HFI"):          
Commercial, Financial, & Agricultural 223,086  218,929  292,953  413,819  393,930 
Real Estate - Construction 174,394  177,443  149,884  138,104  135,831 
Real Estate - Commercial 663,550  683,379  707,599  669,158  648,393 
Real Estate - Residential 346,756  355,958  362,018  358,849  342,664 
Real Estate - Home Equity 187,821  187,642  190,078  202,099  205,479 
Consumer 321,511  309,983  298,464  267,666  269,520 
Other Loans 13,265  6,792  6,439  7,082  9,879 
Overdrafts 1,082  1,299  1,227  950  730 
Total Loans Held for Investment 1,931,465  1,941,425  2,008,662  2,057,727  2,006,426 
Allowance for Credit Losses (21,606) (21,500) (22,175) (22,026) (23,816)
Loans Held for Investment, Net 1,909,859  1,919,925  1,986,487  2,035,701  1,982,610 
           
Premises and Equipment, Net 83,412  84,750  85,745  86,370  86,791 
Goodwill and Other Intangibles 93,253  93,293  93,333  89,095  89,095 
Other Real Estate Owned 17  192  1,192  110  808 
Other Assets 94,349  104,345  111,618  105,290  101,370 
Total Other Assets 271,031  282,580  291,888  280,865  278,064 
Total Assets$4,263,849 $4,048,733 $4,011,459 $3,929,884 $3,798,071 
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits$1,668,912 $1,592,345 $1,552,864 $1,473,891 $1,328,809 
NOW Accounts 1,070,154  926,201  970,705  993,571  1,046,408 
Money Market Accounts 274,611  286,065  280,805  269,041  266,649 
Regular Savings Accounts 599,811  559,714  539,477  518,373  474,100 
Certificates of Deposit 99,374  101,637  103,070  103,232  101,594 
Total Deposits 3,712,862  3,465,962  3,446,921  3,358,108  3,217,560 
           
Short-Term Borrowings 34,557  51,410  47,200  55,687  79,654 
Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
Other Long-Term Borrowings 884  1,610  1,720  1,829  3,057 
Other Liabilities 67,735  113,720  105,534  109,487  102,076 
Total Liabilities 3,868,925  3,685,589  3,654,262  3,577,998  3,455,234 
           
Temporary Equity 11,758  14,276  21,317  27,460  22,000 
SHAREOWNERS' EQUITY          
Common Stock 169  169  169  169  168 
Additional Paid-In Capital 34,423  33,876  33,560  32,804  32,283 
Retained Earnings 364,788  359,550  345,574  335,324  332,528 
Accumulated Other Comprehensive Loss, Net of Tax (16,214) (44,727) (43,423) (43,871) (44,142)
Total Shareowners' Equity 383,166  348,868  335,880  324,426  320,837 
Total Liabilities, Temporary Equity and Shareowners' Equity$4,263,849 $4,048,733 $4,011,459 $3,929,884 $3,798,071 
OTHER BALANCE SHEET DATA          
Earning Assets$3,949,111 $3,714,521 $3,662,852 $3,597,071 $3,475,904 
Interest Bearing Liabilities 2,132,278  1,979,524  1,995,864  1,994,620  2,024,349 
Book Value Per Diluted Share$22.63 $20.63 $19.87 $19.22 $19.05 
Tangible Book Value Per Diluted Share(1) 17.12  15.11  14.35  13.94  13.76 
Actual Basic Shares Outstanding 16,892  16,878  16,874  16,852  16,791 
Actual Diluted Shares Outstanding 16,935  16,912  16,901  16,876  16,845 
(1) Tangible book value per diluted share is a non-GAAP financial measure. For additional information, including a reconciliation to GAAP, refer to Page 5.


               
CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF OPERATIONS           
Unaudited              
               
  2021  2020  December 31,
(Dollars in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter 2021  2020 
INTEREST INCOME              
Interest and Fees on Loans$22,744 $25,885 $24,582 $23,350 $23,878 $96,561 $94,752 
Investment Securities 2,505  2,350  2,054  1,883  2,096  8,792  10,274 
Funds Sold 300  285  200  213  180  998  1,171 
Total Interest Income 25,549  28,520  26,836  25,446  26,154  106,351  106,197 
INTEREST EXPENSE              
Deposits 213  210  208  208  201  839  1,548 
Short-Term Borrowings 307  317  324  412  639  1,360  1,690 
Subordinated Notes Payable 306  307  308  307  311  1,228  1,472 
Other Long-Term Borrowings 12  14  16  21  30  63  161 
Total Interest Expense 838  848  856  948  1,181  3,490  4,871 
Net Interest Income 24,711  27,672  25,980  24,498  24,973  102,861  101,326 
Provision for Credit Losses -  -  (571) (982) 1,342  (1,553) 9,645 
Net Interest Income after Provision for Credit Losses 24,711  27,672  26,551  25,480  23,631  104,414  91,681 
NONINTEREST INCOME              
Deposit Fees 5,300  5,075  4,236  4,271  4,713  18,882  17,800 
Bank Card Fees 3,872  3,786  3,998  3,618  3,462  15,274  13,044 
Wealth Management Fees 3,706  3,623  3,274  3,090  3,069  13,693  11,035 
Mortgage Banking Revenues 9,800  12,283  13,217  17,125  17,711  52,425  63,344 
Other 1,994  1,807  1,748  1,722  1,568  7,271  5,942 
Total Noninterest Income 24,672  26,574  26,473  29,826  30,523  107,545  111,165 
NONINTEREST EXPENSE              
Compensation 24,783  25,245  25,378  26,064  26,722  101,470  96,280 
Occupancy, Net 5,960  6,032  5,973  5,967  5,976  23,932  22,659 
Other Real Estate, Net 26  (1,126) (270) (118) 567  (1,488) 104 
Pension Settlement 572  500  2,000  -  -  3,072  - 
Other 8,866  9,051  9,042  8,563  8,083  35,522  30,919 
Total Noninterest Expense 40,207  39,702  42,123  40,476  41,348  162,508  149,962 
OPERATING PROFIT 9,176  14,544  10,901  14,830  12,806  49,451  52,884 
Income Tax Expense 2,040  2,949  2,059  2,787  2,833  9,835  10,230 
Net Income 7,136  11,595  8,842  12,043  9,973  39,616  42,654 
Pre-Tax Income Attributable to Noncontrolling Interest (764) (1,504) (1,415) (2,537) (2,227) (6,220) (11,078)
NET INCOME ATTRIBUTABLE TO
COMMON SHAREOWNERS
$6,372 $10,091 $7,427 $9,506 $7,746 $33,396 $31,576 
PER COMMON SHARE              
Basic Net Income$0.38 $0.60 $0.44 $0.56 $0.46 $1.98 $1.88 
Diluted Net Income 0.38  0.60  0.44  0.56  0.46  1.98  1.88 
Cash Dividend$0.16 $0.16 $0.15 $0.15 $0.15 $0.62 $0.57 
AVERAGE SHARES              
Basic 16,880  16,875  16,858  16,838  16,763  16,863  16,785 
Diluted 16,923  16,909  16,885  16,862  16,817  16,893  16,822 


CAPITAL CITY BANK GROUP, INC.              
ALLOWANCE FOR CREDIT LOSSES ("ACL")            
AND RISK ELEMENT ASSETS              
Unaudited              
               
  2021  2020  December 31,
(Dollars in thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter 2021  2020 
ACL - HELD FOR INVESTMENT LOANS              
Balance at Beginning of Period$21,500 $22,175 $22,026 $23,816 $23,137 $23,816 $13,905 
Impact of Adopting ASC 326 (CECL) -  -  -  -  -  -  3,269 
Provision for Credit Losses 200  (546) (184) (2,312) 1,165  (2,842) 9,035 
Net Charge-Offs (Recoveries) 94  129  (333) (522) 486  (632) 2,393 
Balance at End of Period$21,606 $21,500 $22,175 $22,026 $23,816 $21,606 $23,816 
As a % of Loans HFI 1.12% 1.11% 1.10% 1.07% 1.19% 1.12% 1.19%
As a % of Nonperforming Loans 499.93  710.39% 433.93% 410.78% 405.66% 499.93% 405.66%
ACL - DEBT SECURITIES              
Provision for Credit Losses$20 $16 $- $- $- $36 $- 
ACL - UNFUNDED COMMITMENTS              
Balance at Beginning of Period 3,117 $2,587 $2,974 $1,644 $1,467 $1,644 $157 
Impact of Adopting ASC 326 (CECL) -  -  -  -  -  -  876 
Provision for Credit Losses (220) 530  (387) 1,330  177  1,253  611 
Balance at End of Period(1) 2,897  3,117  2,587  2,974  1,644  2,897  1,644 
CHARGE-OFFS              
Commercial, Financial and Agricultural$101 $37 $32 $69 $104 $239 $789 
Real Estate - Construction -  -  -  -  -  -  - 
Real Estate - Commercial -  405  -  -  -  405  28 
Real Estate - Residential 20  17  65  6  38  108  150 
Real Estate - Home Equity 9  15  74  5  10  103  151 
Consumer 254  221  230  564  668  1,269  2,785 
Overdrafts 678  1,093  440  492  564  2,703  2,257 
Total Charge-Offs$1,062 $1,788 $841 $1,136 $1,384 $4,827 $6,160 
RECOVERIES              
Commercial, Financial and Agricultural$148 $66 $103 $136 $64 $453 $252 
Real Estate - Construction -  10  -  -  50  10  50 
Real Estate - Commercial 25  169  26  645  27  865  318 
Real Estate - Residential 33  401  244  75  153  753  279 
Real Estate - Home Equity 173  46  70  124  40  413  178 
Consumer 214  334  332  311  306  1,191  1,219 
Overdrafts 375  633  399  367  258  1,774  1,471 
Total Recoveries$968 $1,659 $1,174 $1,658 $898 $5,459 $3,767 
NET CHARGE-OFFS (RECOVERIES)$94 $129 $(333)$(522)$486 $(632)$2,393 
Net Charge-Offs as a % of Average Loans HFI(2) 0.02% 0.03% (0.07)% (0.10)% 0.09% (0.03)% 0.12%
RISK ELEMENT ASSETS              
Nonaccruing Loans$4,322 $3,026 $5,110 $5,362 $5,871     
Other Real Estate Owned 17  192  1,192  110  808     
Total Nonperforming Assets ("NPAs")$4,339 $3,218 $6,302 $5,472 $6,679     
               
Past Due Loans 30-89 Days$3,600 $3,360 $3,745 $2,622 $4,594     
Past Due Loans 90 Days or More -  -  -  -  -     
Classified Loans 17,912  16,310  19,397  20,608  17,631     
Performing Troubled Debt Restructurings$7,643 $7,919 $8,992 $13,597 $13,887     
               
Nonperforming Loans as a % of Loans HFI 0.22% 0.16% 0.25% 0.26% 0.29%    
NPAs as a % of Loans HFI and Other Real Estate 0.22% 0.17% 0.31% 0.27% 0.33%    
NPAs as a % of Total Assets 0.10% 0.08% 0.16% 0.14% 0.18%    
               
(1) Recorded in other liabilities              
(2) Annualized              


CAPITAL CITY BANK GROUP, INC.                                      
AVERAGE BALANCE AND INTEREST RATES                                       
Unaudited                                                  
                                                   
  Fourth Quarter 2021  Third Quarter 2021  Second Quarter 2021  First Quarter 2021  Fourth Quarter 2020   Dec 2021 YTD  Dec 2020 YTD 
(Dollars in thousands) Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
   Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
 
ASSETS:                                                  
Loans Held for Sale$62,809 $522 3.29%$67,753 $497 2.91%$77,101 $566 2.94%$106,242  970 3.70%$121,052 $878 3.85% $78,328 $2,555 3.24%$81,125 $2,895 3.57%
Loans Held for Investment(1) 1,948,324  22,296 4.54  1,974,132  25,458 5.12  2,036,781  24,095 4.74  2,044,363  22,483 4.46  1,993,470  23,103 4.55   2,000,563  94,332 4.76  1,957,576  92,261 4.71 
                                                   
Investment Securities                                                  
Taxable Investment Securities 987,700  2,493 1.00  904,962  2,333 1.03  687,882  2,036 1.18  528,842  1,863 1.41  513,277  2,072 1.61   778,953  8,725 1.12  574,199  10,176 1.77 
Tax-Exempt Investment Securities(1) 3,380  17 2.07  4,332  25 2.31  3,530  23 2.58  3,844  25 2.61  4,485  30 2.71   3,772  90 2.39  5,123  124 2.42 
                                                   
Total Investment Securities 991,080  2,510 1.01  909,294  2,358 1.03  691,412  2,059 1.19  532,686  1,888 1.42  517,762  2,102 1.62   782,725  8,815 1.12  579,322  10,300 1.78 
                                                   
Funds Sold 789,100  300 0.15  741,944  285 0.15  818,616  200 0.10  814,638  213 0.11  705,125  180 0.10   790,870  998 0.13  465,652  1,171 0.25 
                                                   
Total Earning Assets 3,791,313 $25,628 2.68% 3,693,123 $28,598 3.07% 3,623,910 $26,920 2.98% 3,497,929 $25,554 2.96% 3,337,409 $26,263 3.14%  3,652,486 $106,700 2.92% 3,083,675 $106,627 3.46%
                                                   
Cash and Due From Banks 73,752       72,773       74,076       68,978       73,968        72,409       68,386      
Allowance for Loan Losses (22,127)      (22,817)      (22,794)      (24,128)      (23,725)       (22,960)      (20,690)     
Other Assets 284,999       283,534       281,157       278,742       264,784        282,129       259,700      
                                                   
Total Assets$4,127,937      $4,026,613      $3,956,349      $3,821,521      $3,652,436       $3,984,064      $3,391,071      
                                                   
LIABILITIES:                                                  
Interest Bearing Deposits                                                  
NOW Accounts$963,778 $72 0.03%$945,788 $72 0.03%$966,649 $74 0.03%$985,517 $76 0.03%$879,564 $66 0.03% $965,320 $294 0.03%$826,280 $930 0.11%
Money Market Accounts 289,335  34 0.05  282,860  34 0.05  272,138  33 0.05  269,829  33 0.05  261,543  34 0.05   278,606  134 0.05  235,931  223 0.09 
Savings Accounts 573,563  71 0.05  551,383  68 0.05  529,844  64 0.05  492,252  60 0.05  466,116  57 0.05   537,023  263 0.05  423,529  207 0.05 
Time Deposits 101,037  36 0.14  102,765  36 0.14  102,995  37 0.15  102,089  39 0.15  102,809  44 0.17   102,220  148 0.14  104,393  188 0.18 
Total Interest Bearing Deposits 1,927,713  213 0.04% 1,882,796  210 0.04% 1,871,626  208 0.04% 1,849,687  208 0.05% 1,710,032  201 0.05%  1,883,169  839 0.04% 1,590,133  1,548 0.10%
                                                   
Short-Term Borrowings 46,355  307 2.63% 49,773  317 2.53% 51,152  324 2.54% 67,033  412 2.49% 95,280  639 2.67%  53,511  1,360 2.54% 69,119  1,690 2.44%
Subordinated Notes Payable 52,887  306 2.26  52,887  307 2.27  52,887  308 2.30  52,887  307 2.32  52,887  311 2.30   52,887  1,228 2.29  52,887  1,472 2.74 
Other Long-Term Borrowings 1,414  12 3.50  1,652  14 3.37  1,762  16 3.38  2,736  21 3.18  3,700  30 3.18   1,887  63 3.33  5,304  161 3.03 
                                                   
Total Interest Bearing Liabilities 2,028,369 $838 0.16% 1,987,108 $848 0.17% 1,977,427 $856 0.17% 1,972,343 $948 0.19% 1,861,899 $1,181 0.25%  1,991,454 $3,490 0.18% 1,717,443 $4,871 0.28%
                                                   
Noninterest Bearing Deposits 1,621,432       1,564,892       1,515,726       1,389,821       1,356,104        1,523,717       1,254,214      
Other Liabilities 114,657       112,707       107,801       111,050       74,605        111,567       72,400      
                                                   
Total Liabilities 3,764,458       3,664,707       3,600,954       3,473,214       3,292,608        3,626,738       3,044,057      
Temporary Equity 13,339       20,446       26,355       21,977       16,154        20,505       9,701      
                                                   
SHAREOWNERS' EQUITY: 350,140       341,460       329,040       326,330       343,674        336,821       337,313      
                                                   
Total Liabilities, Temporary Equity and Shareowners' Equity$4,127,937      $4,026,613      $3,956,349      $3,821,521      $3,652,436       $3,984,064      $3,391,071      
                                                   
Interest Rate Spread  $24,790 2.52%  $27,750 2.91%  $26,064 2.81%  $24,606 2.77%  $25,082 2.88%   $103,210 2.75%  $101,756 3.18%
                                                   
Interest Income and Rate Earned(1)   25,628 2.68    28,598 3.07    26,920 2.98    25,554 2.96    26,263 3.14     106,700 2.92    106,627 3.46 
Interest Expense and Rate Paid(2)   838 0.09    848 0.09    856 0.09    948 0.11    1,181 0.14     3,490 0.10    4,871 0.16 
                                                   
Net Interest Margin  $24,790 2.60%  $27,750 2.98%  $26,064 2.89%  $24,606 2.85%  $25,082 3.00%   $103,210 2.83%  $101,756 3.30%
                                                   
(1) Interest and average rates are calculated on a tax-equivalent basis using a 21% Federal tax rate.                                 
(2) Rate calculated based on average earning assets.                                  


CAPITAL CITY HOME LOANS           
MORTGAGE BANKING ACTIVITY           
Unaudited           
            
  Three Months Ended Twelve Months Ended
(Dollars in thousands) Dec 31, 2021 Sep 30, 2021 Dec 31, 2020Dec 31, 2021Dec 31, 2020
Net Interest Income$35 $(30)$43  $(129)$184 
            
Mortgage Banking Fees 9,800  12,293  17,409   52,055  61,455 
Other 470  455  363   1,776  950 
Total Noninterest Income 10,270  12,748  17,772   53,831  62,405 
            
Salaries 6,643  7,600  10,398   33,057  31,774 
Other Associate Benefits 202  215  200   848  645 
Total Compensation 6,845  7,815  10,598   33,905  32,419 
            
Occupancy, Net 743  849  920   3,307  2,764 
Other 1,312  1,292  1,751   5,064  4,798 
Total Noninterest Expense 8,900  9,956  13,269   42,276  39,981 
            
Operating Profit$1,405 $2,762 $4,546  $11,426 $22,608 
            
Key Performance Metrics           
Total Loans Closed$294,237 $360,167 $520,039  $1,523,858 $1,659,719 
Total Loans Closed - Mix           
Purchase 76% 71% 61%  71% 60%
Refinance 24% 29% 39%  29% 40%

For Information Contact:
J. Kimbrough Davis
Executive Vice President and Chief Financial Officer
850.402.7820


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