[Executive Summary & Quarter Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Quarter%20Highlights) [Quarter Highlights (Q3 2025 vs Q2 2025)](index=1&type=section&id=Quarter%20Highlights) Capital City Bank Group reported strong Q3 2025 results, with increased net income, robust ROA and ROE, and revenue growth | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income Attributable to Common Shareowners | $16.0 million | $15.0 million | $13.1 million | | Diluted EPS | $0.93 | $0.88 | $0.77 | | Return on Average Assets (ROA) | 1.47% | - | - | | Return on Average Equity (ROE) | 11.67% | - | - | | Tangible Book Value per Diluted Share Increase | $1.01 (4.0%) | - | - | - Revenue growth was driven by continued **net interest margin expansion** and **higher noninterest income**[3](index=3&type=chunk) | Metric (Q3 2025 vs Q2 2025) | Value | Change | | :-------------------------------- | :---- | :----- | | Tax-equivalent Net Interest Income | $43.6 million | Up $0.4 million | | Net Interest Margin | 4.34% | Up 4 basis points | | Cost of Funds | 78 basis points | Down 4 basis points | | Provision for Credit Losses | $1.9 million | Up $1.3 million | | Net Loan Charge-offs (annualized) | 18 basis points | - | | Allowance Coverage Ratio | 1.17% | Up from 1.13% | | Noninterest Income | Up $2.3 million | Up 11.6% | | Noninterest Expense | Up $0.4 million | Up 0.9% | | Loan Balances (average) | Down $46.4 million | Down 1.7% | | Deposit Balances (average) | Down $68.4 million | Down 1.9% | | Noninterest Bearing Deposits (% of total deposits) | 36.4% | - | [Discussion of Operating Results](index=2&type=section&id=Discussion%20of%20Operating%20Results) [Net Interest Income/Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%2FNet%20Interest%20Margin) Net interest income and margin grew, driven by increased investment securities income and lower interest expense | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Tax-equivalent Net Interest Income | $43.6M | $43.2M | $40.3M | $128.4M | $118.0M | | Net Interest Margin | 4.34% | 4.30% | 4.12% | 4.28% | 4.05% | | Cost of Funds | 78 bps | 82 bps | 93 bps | - | - | | Cost of Deposits | 80 bps | 81 bps | 92 bps | - | - | - The increase in net interest income was primarily due to a **$3.0 million increase in investment securities income (YoY)** and a **$0.4 million decrease in interest expense (QoQ)**, driven by new investment purchases at higher yields and gradual decreases in deposit rates[5](index=5&type=chunk) - Net interest margin improved by **4 basis points QoQ** and **22 basis points YoY**, reaching **4.34%** in Q3 2025, reflecting a higher yield in the investment portfolio and lower deposit costs[7](index=7&type=chunk) [Provision for Credit Losses](index=2&type=section&id=Provision%20for%20Credit%20Losses) Provision for credit losses increased significantly in Q3 2025, but year-to-date provision remained comparable | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------ | :------- | :------- | | Provision for Credit Losses | $1.9 million | $0.6 million | $1.2 million | $3.3 million | $3.3 million | [Noninterest Income and Noninterest Expense](index=3&type=section&id=Noninterest%20Income%20and%20Noninterest%20Expense) Noninterest income grew substantially in Q3 2025, driven by an insurance subsidiary sale; noninterest expense slightly increased | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------- | :------ | :------ | :------ | :------- | :------- | | Noninterest Income | $22.3 million | $20.0 million | $19.5 million | $62.3 million | $57.2 million | | Noninterest Expense | $42.9 million | $42.5 million | $42.9 million | $124.2 million | $123.5 million | - The **$2.3 million (11.6%) QoQ increase in noninterest income** was primarily driven by a **$1.2 million increase in other income** (including a **$0.7 million gain from the sale of an insurance subsidiary**), **$0.6 million in mortgage banking revenues**, and **$0.6 million in deposit fees**[10](index=10&type=chunk) - The **$0.4 million (0.9%) QoQ increase in noninterest expense** was due to an **$0.8 million increase in other expense** (higher miscellaneous and professional fees), partially offset by a **$0.4 million decrease in compensation expense**[13](index=13&type=chunk) [Income Taxes](index=3&type=section&id=Income%20Taxes) Income tax expense and effective tax rate increased due to reduced tax benefits; a 24% annual rate is expected for 2025 | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------ | :------ | :------ | :------ | :------- | :------- | | Income Tax Expense | $5.1 million | $5.0 million | $3.0 million | $15.3 million | $9.7 million | | Effective Tax Rate | 24.4% | 24.9% | 19.1% | 24.2% | 20.1% | - The increase in the effective tax rate compared to prior year periods was driven by a **lower level of tax benefit accrued from a solar tax credit equity fund**[15](index=15&type=chunk) - The company expects its annual effective tax rate to approximate **24% for 2025**, absent discrete items or new tax credit investments[15](index=15&type=chunk) [Discussion of Financial Condition](index=4&type=section&id=Discussion%20of%20Financial%20Condition) [Earning Assets](index=4&type=section&id=Earning%20Assets) Average earning assets slightly decreased QoQ, mainly from lower loans HFI and investment securities, partially offset by overnight funds | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------- | :---------------- | :---------------- | :---------------- | | Total Earning Assets | $3.982 billion | $4.032 billion | $3.922 billion | | Change QoQ | Down $50.5 million (1.3%) | - | - | | Change vs Q4 2024 | Up $59.6 million (1.5%) | - | - | - The QoQ change in earning asset mix reflected a **$46.4 million decrease in loans HFI** and a **$14.1 million decrease in investment securities**, partially offset by a **$7.4 million increase in overnight funds sold** and a **$2.6 million increase in loans HFS**[16](index=16&type=chunk) [Loans Held for Investment (HFI)](index=4&type=section&id=Loans%20Held%20for%20Investment%20%28HFI%29) Loans HFI decreased on average and end-of-period, with declines in construction and consumer loans, partially offset by home equity growth | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------------- | :---------------- | :---------------- | :---------------- | | Average Loans HFI | Down $46.4 million (1.8%) | - | - | | Average Loans HFI vs Q4 2024 | Down $71.2 million (2.7%) | - | - | | EOP Loans HFI (Sep 30, 2025) | $2.582 billion | Down $49.5 million (1.9%) QoQ | Down $69.5 million (2.6%) vs Dec 31, 2024 | - The QoQ decline in average loans HFI was primarily in **construction loans ($22.4 million)**, **consumer loans ($10.4 million)**, and **commercial real estate loans ($8.7 million)**, partially offset by a **$2.0 million increase in home equity loans**[17](index=17&type=chunk) [Allowance for Credit Losses](index=4&type=section&id=Allowance%20for%20Credit%20Losses) Allowance for credit losses for loans HFI slightly increased due to qualitative adjustments; net charge-offs rose QoQ but fell YTD | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Allowance for Credit Losses (HFI) | $30.2 million | $29.9 million | $29.3 million | | Allowance as % of Loans HFI | 1.17% | 1.13% | 1.10% | | Net Loan Charge-offs (Q3 2025) | 18 bps of average loans | 9 bps (Q2 2025) | - | | Net Loan Charge-offs (YTD 2025) | 12 bps | - | 20 bps (YTD 2024) | - The slight increase in the allowance was primarily attributable to **qualitative factor adjustments** that were partially offset by lower loan balances[19](index=19&type=chunk) [Credit Quality](index=4&type=section&id=Credit%20Quality) Nonperforming assets and nonaccrual loans significantly increased in Q3 2025, mainly from home equity loans, while classified loans decreased QoQ | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Nonperforming Assets (NPAs) | $10.0 million | $6.6 million | $6.7 million | | NPAs as % of Total Assets | 0.23% | 0.15% | 0.15% | | Nonaccrual Loans | $8.2 million | $6.4 million | $6.3 million | | Classified Loans | $26.5 million | $28.6 million | $19.9 million | - The increase in nonaccrual loans was primarily attributable to **two home equity loans totaling $1.8 million**[20](index=20&type=chunk) [Deposits](index=4&type=section&id=Deposits) Total deposits decreased due to seasonal public fund reductions, partially offset by core deposit growth | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------- | :---------------- | :---------------- | :---------------- | | Average Total Deposits | $3.612 billion | Down $68.4 million (1.86%) QoQ | Up $11.9 million (0.33%) vs Q4 2024 | | EOP Total Deposits (Sep 30, 2025) | $3.615 billion | Down $89.9 million (2.4%) QoQ | Down $57.1 million (1.6%) vs Dec 31, 2024 | | Public Funds (EOP) | $497.9 million | $596.6 million (Jun 30, 2025) | $660.9 million (Dec 31, 2024) | - The decrease in deposits compared to both prior periods was due to a **decline in public fund deposits**, partially offset by **growth in core deposits**[22](index=22&type=chunk) [Liquidity](index=5&type=section&id=Liquidity) The company maintained strong liquidity with increased average net overnight funds sold and substantial additional capacity from various sources | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------------- | :---------------- | :---------------- | :---------------- | | Average Net Overnight Funds Sold | $356.2 million | $348.8 million | $298.3 million | | Additional Liquidity Capacity | ~$1.625 billion | - | - | | Investment Portfolio Weighted-Average Maturity | 2.66 years | - | - | | Investment Portfolio Duration | 2.15 years | - | - | | Available-for-Sale Portfolio Net Unrealized After-Tax Loss | $11.2 million | - | - | - The company had the ability to generate approximately **$1.625 billion in additional liquidity** through various sources including federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and brokered deposits[25](index=25&type=chunk) [Capital](index=5&type=section&id=Capital) Shareowners' equity and all regulatory capital ratios significantly improved, exceeding 'well-capitalized' thresholds, driven by net income and reduced AOCI | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Shareowners' Equity | $540.6 million | $526.4 million | $495.3 million | | Total Risk-Based Capital Ratio | 20.59% | 19.60% | 18.64% | | Common Equity Tier 1 Capital Ratio | 17.73% | 16.81% | 15.54% | | Leverage Ratio | 11.64% | 11.14% | 11.05% | | Tangible Common Equity Ratio | 10.66% | 10.09% | 9.51% | - Shareowners' equity was positively impacted by **net income attributable to shareowners of $47.9 million** and a **net $7.7 million decrease in the accumulated other comprehensive loss** for the first nine months of 2025[27](index=27&type=chunk) - All regulatory capital ratios exceeded the thresholds to be designated as **'well-capitalized'** under the Basel III capital standards at September 30, 2025[28](index=28&type=chunk) [About Capital City Bank Group, Inc.](index=6&type=section&id=About%20Capital%20City%20Bank%20Group%2C%20Inc.) [Company Overview](index=6&type=section&id=Company%20Overview) Capital City Bank Group, Inc. is a Florida-headquartered publicly traded financial holding company offering comprehensive banking services across three states - Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida, with approximately **$4.3 billion in assets**[30](index=30&type=chunk) - The company provides a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services[30](index=30&type=chunk) - Its bank subsidiary, Capital City Bank, founded in 1895, operates **62 banking offices** and **108 ATMs/ITMs** in Florida, Georgia, and Alabama[30](index=30&type=chunk) [FORWARD-LOOKING STATEMENTS](index=6&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Disclaimer on Future Results](index=6&type=section&id=Disclaimer%20on%20Future%20Results) Forward-looking statements are subject to uncertainties and risks, which could cause actual results to differ materially due to economic, regulatory, and operational factors - Forward-looking statements are based on current plans and expectations that are subject to uncertainties and risks, which could cause future results to differ materially[31](index=31&type=chunk) - Key factors that could cause actual results to differ include changes in trade, monetary, and fiscal policies, inflation, interest rate fluctuations, economic conditions, legal and regulatory developments, and technological changes[31](index=31&type=chunk) - The company assumes no obligation to update forward-looking statements or the reasons why actual results could differ, except as required by law[31](index=31&type=chunk) [USE OF NON-GAAP FINANCIAL MEASURES](index=7&type=section&id=USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) [Non-GAAP Reconciliation](index=7&type=section&id=Non-GAAP%20Reconciliation) Non-GAAP measures like tangible common equity and book value per share are presented to compare capital adequacy by excluding goodwill and intangibles - The company presents **tangible common equity ratio** and **tangible book value per diluted share**, which remove the effect of goodwill and other intangibles resulting from merger and acquisition activity[33](index=33&type=chunk) - These non-GAAP measures are considered useful to investors for comparing capital adequacy to other companies in the industry[33](index=33&type=chunk) | (Dollars in Thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Shareowners' Equity (GAAP) | $540,635 | $526,423 | $495,317 | $476,499 | | Less: Goodwill and Other Intangibles (GAAP) | 89,095 | 92,693 | 92,773 | 92,813 | | Tangible Shareowners' Equity (non-GAAP) | 451,540 | 433,730 | 402,544 | 383,686 | | Total Assets (GAAP) | 4,323,774 | 4,391,753 | 4,461,233 | 4,225,316 | | Less: Goodwill and Other Intangibles (GAAP) | 89,095 | 92,693 | 92,773 | 92,813 | | Tangible Assets (non-GAAP) | $4,234,679 | $4,299,060 | $4,232,159 | $4,132,503 | | Tangible Common Equity Ratio (non-GAAP) | 10.66% | 10.09% | 9.51% | 9.28% | | Actual Diluted Shares Outstanding (GAAP) | 17,115,336 | 17,097,986 | 17,018,122 | 16,980,686 | | Tangible Book Value per Diluted Share (non-GAAP) | $26.38 | $25.37 | $23.65 | $22.60 | [EARNINGS HIGHLIGHTS](index=8&type=section&id=EARNINGS%20HIGHLIGHTS) [Earnings Highlights Table](index=8&type=section&id=Earnings%20Highlights%20Table) This table summarizes key earnings, performance, capital adequacy, asset quality, and stock metrics for Q3 and YTD 2025, with comparative data | (Dollars in thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 (YTD) | Sep 30, 2024 (YTD) | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------------- | :----------------- | | **EARNINGS** | | | | | | | Net Income Attributable to Common Shareowners | $15,950 | $15,044 | $13,118 | $47,852 | $39,825 | | Diluted Net Income Per Share | $0.93 | $0.88 | $0.77 | $2.80 | $2.35 | | **PERFORMANCE** | | | | | | | Return on Average Assets (annualized) | 1.47 % | 1.38 % | 1.24 % | 1.47 % | 1.26 % | | Return on Average Equity (annualized) | 11.67 | 11.44 | 10.87 | 12.12 | 11.39 | | Net Interest Margin | 4.34 | 4.30 | 4.12 | 4.28 | 4.05 | | Noninterest Income as % of Operating Revenue | 33.89 | 31.67 | 32.67 | 32.67 | 32.69 | | Efficiency Ratio | 65.09 % | 67.26 % | 71.81 % | 65.11 % | 70.49 % | | **CAPITAL ADEQUACY** | | | | | | | Tier 1 Capital | 19.33 % | 18.38 % | 16.77 % | 19.33 % | 16.77 % | | Total Capital | 20.59 | 19.60 | 17.97 | 20.59 | 17.97 | | Leverage | 11.64 | 11.14 | 10.89 | 11.64 | 10.89 | | Common Equity Tier 1 | 17.73 | 16.81 | 14.88 | 17.73 | 14.88 | | Tangible Common Equity (1) | 10.66 | 10.09 | 9.28 | 10.66 | 9.28 | | Equity to Assets | 12.50 % | 11.99 % | 11.28 % | 12.50 % | 11.28 % | | **ASSET QUALITY** | | | | | | | Allowance as % of Non-Performing Loans | 368.54 % | 463.01 % | 452.64 % | 368.54 % | 452.64 % | | Allowance as a % of Loans HFI | 1.17 | 1.13 | 1.11 | 1.17 | 1.11 | | Net Charge-Offs as % of Average Loans HFI | 0.18 | 0.09 | 0.19 | 0.12 | 0.20 | | Nonperforming Assets as % of Loans HFI and OREO | 0.39 | 0.25 | 0.27 | 0.39 | 0.27 | | Nonperforming Assets as % of Total Assets | 0.23 % | 0.15 % | 0.17 % | 0.23 % | 0.17 % | | **STOCK PERFORMANCE** | | | | | | | Close | $41.79 | $39.35 | $35.29 | $41.79 | $35.29 | | Average Daily Trading Volume | 42,187 | 27,397 | 37,151 | 31,559 | 32,720 | [CONSOLIDATED STATEMENT OF FINANCIAL CONDITION](index=9&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20CONDITION) [Balance Sheet Data](index=9&type=section&id=Balance%20Sheet%20Data) This table presents the consolidated statement of financial condition, detailing assets, liabilities, and equity, showing decreased assets and deposits, and increased shareowners' equity | (Dollars in thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | **ASSETS** | | | | | | | Total Cash and Cash Equivalents | $465,899 | $473,402 | $524,563 | $391,854 | $345,210 | | Total Investment Securities | 984,137 | 999,298 | 980,715 | 972,899 | 904,643 | | Loans Held for Investment, Net | 2,551,805 | 2,601,628 | 2,631,036 | 2,622,299 | 2,653,260 | | Total Assets | $4,323,774 | $4,391,753 | $4,461,233 | $4,324,932 | $4,225,316 | | **LIABILITIES** | | | | | | | Total Deposits | 3,614,912 | 3,704,853 | 3,783,890 | 3,671,977 | 3,579,077 | | Total Liabilities | 3,783,139 | 3,865,330 | 3,948,658 | 3,829,615 | 3,742,000 | | **SHAREOWNERS' EQUITY** | | | | | | | Total Shareowners' Equity | 540,635 | 526,423 | 512,575 | 495,317 | 476,499 | | Book Value Per Diluted Share | $31.59 | $30.79 | $30.02 | $29.11 | $28.06 | | Tangible Book Value Per Diluted Share | 26.38 | 25.37 | 24.59 | 23.65 | 22.60 | [CONSOLIDATED STATEMENT OF OPERATIONS](index=10&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20OPERATIONS) [Income Statement Data](index=10&type=section&id=Income%20Statement%20Data) This table details the consolidated statement of operations, including interest income/expense, net interest income, noninterest income/expense, and net income for Q3 and YTD 2025 | (Dollars in thousands, except per share data) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | :------- | :------- | | **INTEREST INCOME** | | | | | | | | | Total Interest Income | $51,431 | $51,459 | $49,782 | $49,743 | $49,328 | $152,672 | $144,914 | | **INTEREST EXPENSE** | | | | | | | | | Total Interest Expense | 7,874 | 8,275 | 8,235 | 8,640 | 9,117 | 24,384 | 27,079 | | Net Interest Income | 43,557 | 43,184 | 41,547 | 41,103 | 40,211 | 128,288 | 117,835 | | Provision for Credit Losses | 1,881 | 620 | 768 | 701 | 1,206 | 3,269 | 3,330 | | Net Interest Income after Provision for Credit Losses | 41,676 | 42,564 | 40,779 | 40,402 | 39,005 | 125,019 | 114,505 | | **NONINTEREST INCOME** | | | | | | | | | Total Noninterest Income | 22,331 | 20,014 | 19,907 | 18,760 | 19,513 | 62,252 | 57,216 | | **NONINTEREST EXPENSE** | | | | | | | | | Total Noninterest Expense | 42,916 | 42,538 | 38,701 | 41,782 | 42,921 | 124,155 | 123,533 | | OPERATING PROFIT | 21,091 | 20,040 | 21,985 | 17,380 | 15,597 | 63,116 | 48,188 | | Income Tax Expense | 5,141 | 4,996 | 5,127 | 4,219 | 2,980 | 15,264 | 9,705 | | Net Income | 15,950 | 15,044 | 16,858 | 13,161 | 12,617 | 47,852 | 38,483 | | NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $15,950 | $15,044 | $16,858 | $13,090 | $13,118 | $47,852 | $39,825 | | **PER COMMON SHARE** | | | | | | | | | Diluted Net Income | 0.93 | 0.88 | 0.99 | 0.77 | 0.77 | 2.80 | 2.35 | | Cash Dividend | $0.26 | $0.24 | $0.24 | $0.23 | $0.23 | $0.74 | $0.65 | [ALLOWANCE FOR CREDIT LOSSES ("ACL") AND CREDIT QUALITY](index=11&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES%20%28%22ACL%22%29%20AND%20CREDIT%20QUALITY) [ACL and Credit Quality Data](index=11&type=section&id=ACL%20and%20Credit%20Quality%20Data) This table details the Allowance for Credit Losses (ACL) for HFI loans, unfunded commitments, and debt securities, including charge-offs, recoveries, and key credit quality indicators | (Dollars in thousands, except per share data) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | :------- | :------- | | **ACL - HELD FOR INVESTMENT LOANS** | | | | | | | | | Balance at End of Period | $30,202 | $29,862 | $29,734 | $29,251 | $29,836 | $30,202 | $29,836 | | As a % of Loans HFI | 1.17% | 1.13% | 1.12% | 1.10% | 1.11% | 1.17% | 1.11% | | As a % of Nonperforming Loans | 368.54% | 463.01% | 692.10% | 464.14% | 452.64% | 368.54% | 452.64% | | **ACL - UNFUNDED COMMITMENTS** | | | | | | | | | Balance at End of Period | 2,095 | 1,738 | 1,832 | 2,155 | 2,522 | 2,095 | 2,522 | | **CHARGE-OFFS** | | | | | | | | | Total Charge-Offs | $1,968 | $1,498 | $1,611 | $2,504 | $2,283 | $5,077 | $6,878 | | Total Recoveries | $758 | $908 | $1,011 | $834 | $1,021 | $2,677 | $2,883 | | NET CHARGE-OFFS (RECOVERIES) | $1,210 | $590 | $600 | $1,670 | $1,262 | $2,400 | $3,995 | | Net Charge-Offs as a % of Average Loans HFI | 0.18% | 0.09% | 0.09% | 0.25% | 0.19% | 0.12% | 0.20% | | **CREDIT QUALITY** | | | | | | | | | Nonaccruing Loans | $8,195 | $6,449 | $4,296 | $6,302 | $6,592 | | | | Total Nonperforming Assets ("NPAs") | $10,026 | $6,581 | $4,428 | $6,669 | $7,242 | | | | NPAs as a % of Total Assets | 0.23% | 0.15% | 0.10% | 0.15% | 0.17% | | | [AVERAGE BALANCE AND INTEREST RATES](index=12&type=section&id=AVERAGE%20BALANCE%20AND%20INTEREST%20RATES) [Average Balance and Interest Rates Data](index=12&type=section&id=Average%20Balance%20and%20Interest%20Rates%20Data) This table details average balances, interest income/expense, and rates for earning assets and interest-bearing liabilities for Q3 2025 and comparative periods | (Dollars in thousands) | Q3 2025 Average Balance | Q3 2025 Average Interest | Q3 2025 Rate | Q2 2025 Average Balance | Q2 2025 Average Interest | Q2 2025 Rate | Q3 2024 Average Balance | Q3 2024 Average Interest | Q3 2024 Rate | | :------------------------------------------ | :---------------------- | :----------------------- | :----------- | :---------------------- | :----------------------- | :----------- | :---------------------- | :----------------------- | :----------- | | **ASSETS:** | | | | | | | | | | | Loans Held for Investment (1) | 2,606,213 | 39,894 | 6.07% | 2,652,572 | 40,436 | 6.11% | 2,693,533 | 40,985 | 6.09% | | Total Investment Securities | 993,880 | 7,193 | 2.88% | 1,007,981 | 6,683 | 2.65% | 908,456 | 4,158 | 1.82% | | Federal Funds Sold and Interest Bearing Deposits | 356,161 | 3,964 | 4.42% | 348,787 | 3,909 | 4.49% | 256,855 | 3,514 | 5.44% | | Total Earning Assets | $3,981,530 | $51,476 | 5.12% | $4,032,008 | $51,503 | 5.12% | $3,883,414 | $49,377 | 5.06% | | **LIABILITIES:** | | | | | | | | | | | Total Interest Bearing Deposits | 2,297,771 | 7,265 | 1.25% | 2,338,403 | 7,405 | 1.27% | 2,239,729 | 8,223 | 1.46% | | Total Interest Bearing Liabilities | $2,375,753 | $7,874 | 1.32% | $2,424,236 | $8,275 | 1.37% | $2,323,210 | $9,117 | 1.56% | | Interest Rate Spread | | $43,602 | 3.81% | | $43,228 | 3.75% | | $40,260 | 3.49% | | Net Interest Margin | | $43,602 | 4.34% | | $43,228 | 4.30% | | $40,260 | 4.12% |

Core Insights - Capital City Bank (CCBG) reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.87 per share, and showing an increase from $0.78 per share a year ago, resulting in an earnings surprise of +6.90% [1] - The bank's revenues for the quarter ended September 2025 were $65.89 million, surpassing the Zacks Consensus Estimate by 4.09%, and up from $59.72 million year-over-year [2] - The stock has gained approximately 11.8% since the beginning of the year, compared to the S&P 500's gain of 14.5% [3] Earnings Outlook - The earnings outlook for Capital City Bank is mixed, with the current consensus EPS estimate for the upcoming quarter at $0.82 on revenues of $62.7 million, and for the current fiscal year at $3.43 on revenues of $250.6 million [7] - The company has consistently surpassed consensus EPS estimates over the last four quarters [2] Industry Context - The Zacks Industry Rank for Banks - Southeast is currently in the top 27% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Capital City Bank's stock performance [5][6]

Core Viewpoint - Capital City Bank Group, Inc. reported strong financial results for the third quarter of 2025, with net income of $16.0 million, reflecting growth in net interest income and noninterest income, alongside an increase in tangible book value per share [1][2]. Income Statement - Net income attributable to common shareowners for Q3 2025 was $16.0 million, or $0.93 per diluted share, compared to $15.0 million, or $0.88 per diluted share in Q2 2025, and $13.1 million, or $0.77 per diluted share in Q3 2024 [1][32]. - Noninterest income for Q3 2025 totaled $22.3 million, an increase of $2.3 million, or 11.6%, from Q2 2025, driven by higher other income, mortgage banking revenues, and deposit fees [7][8]. Balance Sheet - Average earning assets for Q3 2025 were $3.982 billion, a decrease of $50.5 million, or 1.3%, from Q2 2025, but an increase of $59.6 million, or 1.5%, from Q4 2024 [15]. - Total deposits at September 30, 2025, were $3.615 billion, a decrease of $89.9 million, or 2.4%, from June 30, 2025, primarily due to a decline in public fund deposits [21]. Net Interest Income/Net Interest Margin - Tax-equivalent net interest income for Q3 2025 was $43.6 million, up from $43.2 million in Q2 2025 and $40.3 million in Q3 2024 [3][11]. - The net interest margin for Q3 2025 was 4.34%, an increase of four basis points from Q2 2025 and 22 basis points from Q3 2024 [5][11]. Provision for Credit Losses - The provision for credit losses was $1.9 million for Q3 2025, compared to $0.6 million in Q2 2025 and $1.2 million in Q3 2024 [6][11]. Credit Quality - Nonperforming assets totaled $10.0 million at September 30, 2025, compared to $6.6 million at June 30, 2025, and $6.7 million at December 31, 2024 [19]. - The allowance for credit losses for loans held for investment was $30.2 million at September 30, 2025, representing 1.17% of loans held for investment [18][33]. Capital Adequacy - Shareowners' equity was $540.6 million at September 30, 2025, an increase from $526.4 million at June 30, 2025, and $495.3 million at December 31, 2024 [25][26]. - The total risk-based capital ratio was 20.59% at September 30, 2025, compared to 19.60% at June 30, 2025 [26][33].

Core Viewpoint - Capital City Bank Group, Inc. is set to release its third quarter 2025 financial results on October 21, 2025, before market opening, providing investors access to the earnings results via its Investor Relations website [1] Company Overview - Capital City Bank Group, Inc. is one of the largest publicly traded financial holding companies in Florida, with approximately $4.3 billion in assets [2] - The company offers a comprehensive range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services [2] - Founded in 1895, Capital City Bank operates 62 banking offices and 107 ATMs/ITMs across Florida, Georgia, and Alabama [2]

Core Insights - The primary focus for income investors is generating consistent cash flow from liquid investments, which can come from dividends, bond interest, and other investment interests [1][2] Company Overview - Capital City Bank (CCBG), headquartered in Tallahassee, has experienced a price change of 15.99% this year and currently pays a dividend of $0.26 per share, resulting in a dividend yield of 2.45% [3] - The company's dividend yield surpasses the Banks - Southeast industry's yield of 2.29% and the S&P 500's yield of 1.54% [3] Dividend Growth - CCBG's current annualized dividend of $1.04 reflects an 18.2% increase from the previous year [4] - Over the past five years, the company has raised its dividend five times, averaging an annual increase of 12.29% [4] - The future growth of dividends will depend on earnings growth and the payout ratio, which is currently at 28% [4] Earnings Expectations - The Zacks Consensus Estimate for CCBG's earnings in 2025 is projected at $3.43 per share, indicating a year-over-year growth rate of 9.94% [5] Investment Considerations - CCBG is viewed as an attractive dividend investment and a compelling opportunity, holding a Zacks Rank of 2 (Buy) [6]

Group 1 - Crude Value Insights provides an investing service and community focused on oil and natural gas, emphasizing cash flow and companies that generate it [1] - The service offers a model account with over 50 stocks, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Group 2 - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas market [2]

Core Viewpoint - Capital City Bank Group, Inc. (NASDAQ: CCBG) has experienced a significant stock price increase of 15% since a hold rating was adopted in June 2025 [1]. Group 1 - The stock price surge is primarily attributed to market factors and investor sentiment [1].

Company Overview - Capital City Bank (CCBG) is headquartered in Tallahassee and has experienced a price change of 17.08% this year [3] - The company currently pays a dividend of $0.24 per share, resulting in a dividend yield of 2.42%, which is higher than the Banks - Southeast industry's yield of 2.23% and the S&P 500's yield of 1.51% [3] Dividend Performance - The current annualized dividend of CCBG is $1.04, reflecting an 18.2% increase from the previous year [4] - Over the past 5 years, CCBG has increased its dividend 5 times, achieving an average annual increase of 12.29% [4] - The company's current payout ratio is 28%, indicating that it paid out 28% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for CCBG's earnings per share for 2025 is $3.43, representing a year-over-year growth rate of 9.94% [5] - The company is positioned as an attractive dividend play and a compelling investment opportunity, supported by a Zacks Rank of 2 (Buy) [6]

Core Insights - Capital City Bank has been recognized as one of the "Best Companies to Work For in Florida," ranking 11th in the "Large Companies" category for 2025, a significant improvement from 19th in 2024 and 24th in 2023, marking the 14th consecutive year of inclusion in this list [1][2] Company Performance - The CEO of Capital City Bank Group, Bill Smith, attributes the recognition to the dedication and passion of the associates, emphasizing the importance of creating a workplace where employees feel valued and inspired [2] - In addition to the Florida Trend recognition, Capital City Bank was ranked 13th out of 100 on Forbes' America's Best Banks list and included in Forbes' World's Best Banks list, showcasing its strong performance and workplace culture [2] Evaluation Process - The "Best Companies To Work For In Florida" program evaluates companies based on workplace policies, practices, and employee satisfaction through surveys, with a requirement of at least 15 employees and one year of operation in Florida [3][4]

PART I – Financial Information [Item 1. Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) CCBG's unaudited consolidated financial statements and detailed notes for the period ended June 30, 2025 [Consolidated Statements of Financial Condition](index=5&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets and shareowners' equity increased from December 2024 to June 2025, driven by cash, investments, and deposits Consolidated Statements of Financial Condition (Dollars in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Total Cash and Cash Equivalents | $473,402 | $391,854 | | Total Investment Securities | $999,298 | $972,899 | | Loans Held for Investment, Net | $2,601,628 | $2,622,299 | | Total Assets | $4,391,753 | $4,324,932 | | Total Deposits | $3,704,853 | $3,671,977 | | Total Liabilities | $3,865,330 | $3,829,615 | | Total Shareowners' Equity | $526,423 | $495,317 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net income to common shareowners increased for Q2 and H1 2025, driven by higher net interest and noninterest income Consolidated Statements of Income (Dollars in Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Interest Income | $51,459 | $48,766 | $101,241 | $95,586 | | Total Interest Expense | $8,275 | $9,497 | $16,510 | $17,962 | | NET INTEREST INCOME | $43,184 | $39,269 | $84,731 | $77,624 | | Provision for Credit Losses | $620 | $1,204 | $1,388 | $2,124 | | Total Noninterest Income | $20,014 | $19,606 | $39,921 | $37,703 | | Total Noninterest Expense | $42,538 | $40,441 | $81,239 | $80,612 | | NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $15,044 | $14,150 | $31,902 | $26,707 | | BASIC NET INCOME PER SHARE | $0.88 | $0.84 | $1.87 | $1.58 | | DILUTED NET INCOME PER SHARE | $0.88 | $0.83 | $1.87 | $1.57 | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Total comprehensive income significantly increased for both periods ended June 30, 2025, due to AFS unrealized loss changes Consolidated Statements of Comprehensive Income (Loss) (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $15,044 | $14,150 | $31,902 | $26,707 | | Change in net unrealized loss on securities available for sale | $2,737 | $769 | $7,744 | $(406) | | Other comprehensive income, net of tax | $1,947 | $1,404 | $5,546 | $1,470 | | TOTAL COMPREHENSIVE INCOME | $16,991 | $15,554 | $37,448 | $28,177 | [Consolidated Statements of Changes in Shareowners' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareowners'%20Equity) Shareowners' equity increased from January 1 to June 30, 2025, driven by net income and positive AOCI, offset by dividends Consolidated Statements of Changes in Shareowners' Equity (Dollars in Thousands) | Metric | Balance, January 1, 2025 | Balance, June 30, 2025 | | :----------------------------------- | :----------------------- | :--------------------- | | Common Stock | $170 | $171 | | Additional Paid-In Capital | $37,684 | $39,527 | | Retained Earnings | $463,949 | $487,665 | | Accumulated Other Comprehensive (Loss) Income, Net of Taxes | $(6,486) | $(940) | | Total Shareowners' Equity | $495,317 | $526,423 | | Net Income Attributable to Common Shareowners | $31,902 | | | Other Comprehensive Income, net of tax | $5,546 | | | Cash Dividends ($0.4800 per share) | $(8,186) | | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents significantly increased for H1 2025, driven by operating and financing activities Consolidated Statements of Cash Flows (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided By Operating Activities | $54,491 | $39,584 | | Net Cash Provided by Investing Activities | $5,816 | $107,367 | | Net Cash Provided By (Used In) Financing Activities | $21,241 | $(111,039) | | NET INCREASE IN CASH AND CASH EQUIVALENTS | $81,548 | $35,912 | | Cash and Cash Equivalents at End of Period | $473,402 | $347,979 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes provide crucial context on accounting policies, financial instruments, and operations [NOTE 1 – BUSINESS AND BASIS OF PRESENTATION](index=10&type=section&id=NOTE%201%20%E2%80%93%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) CCBG operates as a financial holding company providing banking services across three states, with interim financials prepared under GAAP - CCBG provides a full range of banking and banking-related services through its wholly owned subsidiary, Capital City Bank, with offices in Florida, Georgia, and Alabama[27](index=27&type=chunk) - The company is currently evaluating the impact of ASU 2023-06 (Disclosure Improvements), ASU 2023-09 (Income Tax Disclosures effective Jan 1, 2025), and ASU 2023-03 (Expense Disaggregation Disclosures effective Jan 1, 2026) on its future consolidated statements[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [NOTE 2 – INVESTMENT SECURITIES](index=11&type=section&id=NOTE%202%20%E2%80%93%20INVESTMENT%20SECURITIES) Investment portfolio shows increased AFS fair value and decreased HTM, with significant unrealized losses in government-backed securities Investment Portfolio Composition (Dollars in Thousands) | Category | June 30, 2025 (Fair Value) | December 31, 2024 (Fair Value) | | :--------------------------------- | :------------------------- | :----------------------------- | | Available for Sale (AFS) | $533,457 | $403,345 | | Held to Maturity (HTM) | $448,911 | $544,460 | | Total Investment Securities | $999,298 | $972,899 | Unrealized Losses on Investment Securities (Dollars in Thousands) | Category | June 30, 2025 (Total Unrealized Losses) | December 31, 2024 (Total Unrealized Losses) | | :--------------------------------- | :-------------------------------------- | :------------------------------------------ | | Available for Sale (AFS) | $19,094 | $25,685 | | Held to Maturity (HTM) | $13,924 | $22,711 | | Total Unrealized Losses | $33,018 | $48,396 | - At June 30, 2025, **788 positions** (combined AFS and HTM) had unrealized pre-tax losses totaling **$33.0 million**, with the majority being U.S. Treasury and government agency securities, for which the company believes the expectation of nonpayment is effectively zero[45](index=45&type=chunk) [NOTE 3 – LOANS HELD FOR INVESTMENT AND ALLOWANCE FOR CREDIT LOSSES](index=14&type=section&id=NOTE%203%20%E2%80%93%20LOANS%20HELD%20FOR%20INVESTMENT%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Loan portfolio composition shifted, ACL increased due to qualitative factors, and nonaccrual/classified loans rose, especially in real estate Loan Portfolio Composition (Dollars in Thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Commercial, Financial and Agricultural | $180,008 | $189,208 | | Real Estate – Construction | $174,115 | $219,994 | | Real Estate – Commercial Mortgage | $802,504 | $779,095 | | Real Estate – Residential | $1,047,920 | $1,042,504 | | Real Estate – Home Equity | $228,201 | $220,064 | | Consumer | $198,742 | $200,685 | | Loans Held For Investment, Net of Unearned Income | $2,631,490 | $2,651,550 | Allowance for Credit Losses (ACL) Activity (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Beginning Balance | $29,251 | $29,941 | | Provision for Credit Losses | $1,801 | $2,011 | | Net (Charge-Offs) Recoveries | $(1,190) | $(2,733) | | Ending Balance | $29,862 | $29,219 | Nonaccrual Loans (Dollars in Thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Commercial, Financial and Agricultural | $319 | $37 | | Real Estate – Commercial Mortgage | $1,404 | $566 | | Real Estate – Residential | $1,545 | $3,127 | | Real Estate – Home Equity | $2,591 | $1,782 | | Consumer | $590 | $790 | | Total Nonaccrual Loans | $6,449 | $6,302 | - The increase in the allowance for loans HFI over December 31, 2024, was primarily attributable to qualitative factor adjustments, partially offset by lower loan balances[54](index=54&type=chunk) [NOTE 4 – MORTGAGE BANKING ACTIVITIES](index=21&type=section&id=NOTE%204%20%E2%80%93%20MORTGAGE%20BANKING%20ACTIVITIES) Mortgage banking revenues increased for H1 2025 due to higher gain on sale margins, despite fewer loans held for sale, with debt covenants met Mortgage Banking Revenues (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net realized gains on sales of mortgage loans | $3,605 | $3,159 | $6,485 | $4,835 | | Net origination fees | $807 | $807 | $1,359 | $1,372 | | Total mortgage banking revenues | $4,190 | $4,381 | $8,010 | $7,259 | Residential Mortgage Loans Held for Sale (Dollars in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Unpaid Principal Balance | $18,391 | $28,117 | | Fair Value | $19,181 | $28,672 | - The company's warehouse line borrowings totaled **$12.7 million** at June 30, 2025, an increase from **$1.9 million** at December 31, 2024, and the company was in compliance with all significant debt covenants[100](index=100&type=chunk) [NOTE 5 – DERIVATIVES](index=23&type=section&id=NOTE%205%20%E2%80%93%20DERIVATIVES) The company uses **$30 million** notional interest rate swaps as cash flow hedges, with fair value decreasing and a net loss in AOCI for H1 2025 - Interest rate swaps with a notional amount of **$30 million** were designated as a cash flow hedge for subordinated debt, with the company paying a fixed rate of **2.50%** and receiving a variable rate based on three-month CME Term SOFR[102](index=102&type=chunk) Cash Flow Hedges (Interest Rate Swaps) (Dollars in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Notional Amount | $30,000 | $30,000 | | Fair Value | $4,130 | $5,319 | Change in Net Gains (Losses) on Cash Flow Derivatives (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Change in Gain (Loss) Recognized in AOCI | $(888) | $289 | | Amount of Gain (Loss) Reclassified from AOCI to Income | $596 | $751 | [NOTE 6 – LEASES](index=24&type=section&id=NOTE%206%20%E2%80%93%20LEASES) Operating lease ROU assets and liabilities increased from December 2024 to June 2025, with total lease expense rising and a **15.8-year** average term Operating Lease ROU Assets and Liabilities (Dollars in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Operating lease ROU assets | $27,600 | $24,900 | | Operating lease liabilities | $28,200 | $25,500 | Total Lease Expense (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Operating lease expense | $1,761 | $1,668 | | Short-term lease expense | $551 | $389 | | Total lease expense | $2,312 | $2,057 | - At June 30, 2025, the weighted average remaining lease term for operating leases was **15.8 years**, with a weighted average discount rate of **3.7%** and the present value of lease liabilities totaling **$28.187 million**[112](index=112&type=chunk)[113](index=113&type=chunk) [NOTE 7 - EMPLOYEE BENEFIT PLANS](index=25&type=section&id=NOTE%207%20-%20EMPLOYEE%20BENEFIT%20PLANS) The qualified pension plan reported a net periodic benefit cost of **$(283) thousand** for H1 2025, while SERP plans showed an increased cost Net Periodic Benefit Cost - Qualified Pension Plan (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Service Cost | $1,720 | $1,857 | | Interest Cost | $3,353 | $3,048 | | Expected Return on Plan Assets | $(4,529) | $(4,058) | | Net Loss Amortization | $(827) | $82 | | Net Periodic Benefit Cost | $(283) | $929 | Net Periodic Benefit Cost - SERP and SERP II (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Service Cost | $23 | $18 | | Interest Cost | $264 | $227 | | Prior Service Cost Amortization | $51 | $- | | Net Loss Amortization | $(58) | $(140) | | Net Periodic Benefit Cost | $280 | $105 | [NOTE 8 - COMMITMENTS AND CONTINGENCIES](index=26&type=section&id=NOTE%208%20-%20COMMITMENTS%20AND%20CONTINGENCIES) Off-balance sheet lending commitments increased slightly, while the ACL for these commitments decreased, alongside a venture capital fund commitment Off-Balance Sheet Obligations (Dollars in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Commitments to Extend Credit | $672,254 | $663,414 | | Standby Letters of Credit | $7,402 | $7,287 | | Total | $679,656 | $670,701 | Allowance for Credit Losses for Off-Balance Sheet Commitments (Dollars in Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Beginning Balance | $2,155 | $3,191 | | Provision for Credit Losses | $(417) | $(52) | | Ending Balance | $1,738 | $3,139 | - The company has an outstanding commitment of up to **$1.0 million** in a bank tech venture capital fund, with **$0.3 million** remaining to be funded at June 30, 2025[124](index=124&type=chunk) [NOTE 9 – FAIR VALUE MEASUREMENTS](index=27&type=section&id=NOTE%209%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) Fair value measurements are categorized into Level 1, 2, and 3, with most recurring assets in Level 2 and non-recurring assets primarily in Level 3 - Fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 quoted prices), Level 3 (unobservable inputs reflecting entity's own assumptions)[134](index=134&type=chunk) Assets Measured at Fair Value on a Recurring Basis (Dollars in Thousands) | Asset Type | Level 1 (June 30, 2025) | Level 2 (June 30, 2025) | Level 3 (June 30, 2025) | Total Fair Value (June 30, 2025) | | :--------------------------------- | :---------------------- | :---------------------- | :---------------------- | :------------------------------- | | U.S. Government Treasury (AFS) | $222,321 | $- | $- | $222,321 | | U.S. Government Agency (AFS) | $- | $163,068 | $- | $163,068 | | Loans Held for Sale | $- | $19,181 | $- | $19,181 | | Interest Rate Swap Derivative | $- | $4,130 | $- | $4,130 | | Residential Mortgage Loan Commitments ("IRLCs") | $- | $- | $652 | $652 | - Collateral-dependent loans, other real estate owned, and mortgage servicing rights are measured at fair value on a non-recurring basis, primarily using Level 3 inputs due to the judgment and estimation involved in their valuation[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=31&type=section&id=NOTE%2010%20%E2%80%93%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Accumulated other comprehensive loss significantly improved from January 1 to June 30, 2025, driven by AFS securities and partially offset by interest rate swaps Accumulated Other Comprehensive Income (Loss) (Dollars in Thousands) | Component | Balance as of January 1, 2025 | Other comprehensive income (loss) during the period | Balance as of June 30, 2025 | | :--------------------------------- | :---------------------------- | :------------------------------------------------ | :-------------------------- | | Securities Available for Sale | $(20,179) | $6,434 | $(13,745) | | Interest Rate Swap | $3,971 | $(888) | $3,083 | | Retirement Plans | $9,722 | $- | $9,722 | | Accumulated Other Comprehensive (Loss) Income | $(6,486) | $5,546 | $(940) | [NOTE 11 - SEGMENT REPORTING](index=31&type=section&id=NOTE%2011%20-%20SEGMENT%20REPORTING) The company operates as a single commercial banking segment across three states, with CODM evaluating performance based on consolidated financial metrics - The company operates a single reportable business segment, commercial banking, within Florida, Georgia, and Alabama[152](index=152&type=chunk) - The Chief Operating Decision Maker (CODM) evaluates consolidated net income, revenue streams, significant expenses, and budget-to-actual results to assess performance and allocate resources[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses CCBG's financial condition, operating results, market risk, liquidity, and critical accounting policies for Q2 2025 [BUSINESS OVERVIEW](index=32&type=section&id=BUSINESS%20OVERVIEW) CCBG is a financial holding company providing banking and financial services across the Southeast, with profitability driven by net interest income - CCBG is a financial holding company headquartered in Tallahassee, Florida, operating through its wholly owned subsidiary, Capital City Bank, with **62 full-service offices** and **107 ATMs/ITMs** in Florida, Georgia, and Alabama[158](index=158&type=chunk) - The company offers a broad array of products and services including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage, and financial advisory services[158](index=158&type=chunk) - Profitability is largely dependent on net interest income (interest and fees on earning assets minus interest paid on liabilities), provision for credit losses, operating expenses, and noninterest income[159](index=159&type=chunk) [NON-GAAP FINANCIAL MEASURES (UNAUDITED)](index=33&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES%20(UNAUDITED)) The company presents non-GAAP measures like tangible common equity ratio to provide clearer capital adequacy comparisons by excluding intangibles - The company uses non-GAAP financial measures, including tangible common equity ratio and tangible book value per diluted share, to remove the effect of goodwill and other intangibles from merger and acquisition activity[162](index=162&type=chunk) Non-GAAP Financial Measures (Dollars in Thousands, except per share data) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------- | :---------------- | | Shareowners' Equity (GAAP) | $526,423 | $512,575 | $495,317 | | Less: Goodwill and Other Intangibles (GAAP) | $92,693 | $92,733 | $92,773 | | Tangible Shareowners' Equity (non-GAAP) | $433,730 | $419,842 | $402,544 | | Total Assets (GAAP) | $4,391,753 | $4,461,233 | $4,324,932 | | Less: Goodwill and Other Intangibles (GAAP) | $92,693 | $92,733 | $92,773 | | Tangible Assets (non-GAAP) | $4,299,060 | $4,368,500 | $4,232,159 | | Tangible Common Equity Ratio (non-GAAP) | 10.09% | 9.61% | 9.51% | | Tangible Book Value per Diluted Share (non-GAAP) | $25.37 | $24.59 | $23.65 | [SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)](index=34&type=section&id=SELECTED%20QUARTERLY%20FINANCIAL%20DATA%20(UNAUDITED)) Quarterly data shows increased net income and net interest income for Q2 2025, with improved net interest margin and stable asset quality Summary of Operations (Dollars in Thousands, Except Per Share Data) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Interest Income | $43,184 | $41,547 | $41,103 | $40,211 | $39,269 | | Net Income Attributable to CCBG | $15,044 | $16,858 | $13,090 | $13,118 | $14,150 | | Diluted Net Income Per Share | $0.88 | $0.99 | $0.77 | $0.77 | $0.83 | | Net Interest Margin (FTE) | 4.30% | 4.22% | 4.17% | 4.12% | 4.02% | | Return on Average Assets (annualized) | 1.38% | 1.58% | 1.22% | 1.24% | 1.33% | | Tangible Common Equity (non-GAAP) | 10.09% | 9.61% | 9.51% | 9.28% | 8.91% | | Nonperforming Assets ("NPAs") | $6,581 | $4,428 | $6,669 | $7,242 | $6,165 | | NPAs to Total Assets | 0.15% | 0.10% | 0.15% | 0.17% | 0.15% | [FINANCIAL OVERVIEW](index=35&type=section&id=FINANCIAL%20OVERVIEW) The financial overview details increased net income for H1 2025, growth in earning assets, and shifts in loan portfolio and asset quality [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Net income increased for H1 2025 due to higher net interest and noninterest income, despite a modest rise in noninterest expense Net Income Attributable to Common Shareowners (Dollars in Millions, Except Per Share Data) | Period | Net Income | Diluted EPS | | :--------------------------------- | :--------- | :---------- | | Q2 2025 | $15.0 | $0.88 | | Q1 2025 | $16.9 | $0.99 | | Q2 2024 | $14.2 | $0.83 | | First Six Months 2025 | $31.9 | $1.87 | | First Six Months 2024 | $26.7 | $1.57 | - Tax-equivalent net interest income for the first six months of 2025 totaled **$84.8 million**, up from **$77.8 million** in 2024, driven by a **$4.2 million** increase in investment securities income, a **$1.9 million** increase in overnight funds income, and a **$1.4 million** decrease in deposit interest expense[168](index=168&type=chunk)[183](index=183&type=chunk) - Noninterest income for the first six months of 2025 totaled **$39.9 million**, up from **$37.7 million** in 2024, primarily due to a **$1.8 million** increase in wealth management fees and a **$0.7 million** increase in mortgage banking revenues[170](index=170&type=chunk)[187](index=187&type=chunk) - Noninterest expense for the first six months of 2025 totaled **$81.2 million**, a **$0.6 million** increase from **$80.6 million** in 2024, mainly due to a **$3.9 million** increase in compensation expense, partially offset by a **$3.2 million** decrease in other expense[171](index=171&type=chunk)[198](index=198&type=chunk) [Financial Condition](index=35&type=section&id=Financial%20Condition) Financial condition at June 30, 2025, shows increased earning assets, decreased loans HFI, higher nonperforming assets, increased deposits, and strong capital ratios - Average earning assets totaled **$4.032 billion** for Q2 2025, a **1.0%** increase over Q1 2025 and a **2.8%** increase over Q4 2024, driven by higher average deposit balances[172](index=172&type=chunk)[206](index=206&type=chunk) - Average loans held for investment (HFI) decreased by **0.5%** from Q1 2025 and **0.9%** from Q4 2024, with construction and consumer loans seeing the largest declines[173](index=173&type=chunk)[211](index=211&type=chunk) - Nonperforming assets totaled **$6.6 million** at June 30, 2025 (**0.15%** of total assets), up from **$4.4 million** at March 31, 2025, and classified loans increased by **$9.4 million** over Q1 2025, primarily due to downgrades in residential and commercial real estate loans[175](index=175&type=chunk)[214](index=214&type=chunk) - Average total deposits increased by **0.4%** over Q1 2025 and **2.2%** over Q4 2024, reaching **$3.681 billion** for Q2 2025, with total deposits at June 30, 2025, at **$3.705 billion**, a **0.9%** increase over December 31, 2024[176](index=176&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - At June 30, 2025, the company was 'well-capitalized' with a total risk-based capital ratio of **19.60%** and a tangible common equity ratio of **10.09%**, both exceeding prior periods[177](index=177&type=chunk)[247](index=247&type=chunk) [MARKET RISK AND INTEREST RATE SENSITIVITY](index=43&type=section&id=MARKET%20RISK%20AND%20INTEREST%20RATE%20SENSITIVITY) The company manages interest rate risk via ALCO, with rising rates positively impacting NII, but falling rates potentially exceeding policy limits - The company's interest rate risk management policy aims to minimize structural interest rate risk, with ALCO administering limits on net interest income (NII) at risk and economic value of equity (EVE) at risk[225](index=225&type=chunk)[226](index=226&type=chunk) Estimated Changes in Net Interest Income (12-month shock) | Percentage Change (12-month shock) | +400 bp | +300 bp | +200 bp | +100 bp | -100 bp | -200 bp | -300 bp | -400 bp | | :--------------------------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Policy Limit | -15.0% | -12.5% | -10.0% | -7.5% | -7.5% | -10.0% | -12.5% | -15.0% | | June 30, 2025 | 19.2% | 14.4% | 9.6% | 5.0% | -5.3% | -11.1% | -17.5% | -23.3% | - NII at Risk analysis indicates that rising rate environments will positively impact net interest margin, while declining rates will have a negative impact, with instantaneous parallel rate shock results for 12-month and 24-month periods outside of policy in the rates down **200 bps**, **300 bps**, and **400 bps** scenarios[231](index=231&type=chunk) Estimated Changes in Economic Value of Equity (EVE) | Changes in Interest Rates | +400 bp | +300 bp | +200 bp | +100 bp | -100 bp | -200 bp | -300 bp | -400 bp | | :------------------------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Policy Limit | -30.0% | -25.0% | -20.0% | -15.0% | -15.0% | -20.0% | -25.0% | -30.0% | | June 30, 2025 | 29.4% | 23.9% | 17.1% | 9.2% | -11.5% | -23.9% | -34.8% | -40.8% | | EVE Ratio (policy minimum 5.0%) | 31.6% | 29.7% | 27.6% | 25.4% | 19.9% | 16.8% | 14.2% | 12.8% | [LIQUIDITY AND CAPITAL RESOURCES](index=45&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains strong liquidity and robust capital ratios, exceeding 'well-capitalized' thresholds, with shareowners' equity increasing - At June 30, 2025, the company had the ability to generate approximately **$1.603 billion** in additional liquidity through various sources, excluding overnight funds[237](index=237&type=chunk) - Shareowners' equity was **$526.4 million** at June 30, 2025, positively impacted by **$31.9 million** in net income and a **$5.5 million** decrease in accumulated other comprehensive loss[246](index=246&type=chunk) Regulatory Capital Ratios | Capital Ratio | June 30, 2025 | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------- | :---------------- | | Total Risk-Based Capital Ratio | 19.60% | 19.20% | 18.64% | | Common Equity Tier 1 Capital Ratio | 16.81% | 16.08% | 15.54% | | Leverage Ratio | 11.14% | 11.17% | 11.05% | | Tangible Common Equity (non-GAAP) | 10.09% | 9.61% | 9.51% | - All regulatory capital ratios exceeded the thresholds to be designated as 'well-capitalized' under Basel III capital standards at June 30, 2025[245](index=245&type=chunk)[247](index=247&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=46&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Off-balance sheet arrangements include **$672.3 million** in credit commitments and **$7.4 million** in standby letters of credit, with a **$1.7 million** ACL - At June 30, 2025, the company had **$672.3 million** in commitments to extend credit and **$7.4 million** in standby letters of credit[250](index=250&type=chunk) - An allowance for credit losses of **$1.7 million** was recorded for non-cancellable off-balance sheet credit commitments at June 30, 2025[252](index=252&type=chunk) [CRITICAL ACCOUNTING POLICIES](index=46&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Critical accounting policies include allowance for credit losses, goodwill, pension assumptions, and income taxes, requiring significant judgment - The most critical accounting policies and estimates are the allowance for credit losses, goodwill, pension assumptions, and income taxes, which require subjective and complex judgment[255](index=255&type=chunk) [TABLE I AVERAGE BALANCES & INTEREST RATES (UNAUDITED)](index=48&type=section&id=TABLE%20I%20AVERAGE%20BALANCES%20%26%20INTEREST%20RATES%20(UNAUDITED)) This table details average balances and interest rates, showing an improved net interest margin of **4.26%** for H1 2025 Average Balances & Interest Rates (Six Months Ended June 30, Dollars in Thousands) | Metric | 2025 Average Balances | 2025 Interest | 2025 Average Rate | 2024 Average Balances | 2024 Interest | 2024 Average Rate | | :--------------------------------- | :-------------------- | :------------ | :---------------- | :-------------------- | :------------ | :---------------- | | Total Earning Assets | $4,013,066 | $101,329 | 5.09% | $3,892,447 | $95,731 | 4.94% | | Total Interest Bearing Liabilities | $2,431,575 | $16,510 | 1.37% | $2,348,098 | $17,962 | 1.54% | | Net Interest Income | | $84,819 | | | $77,769 | | | Net Interest Margin | | | 4.26% | | | 4.01% | [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) This section refers to the MD&A's market risk discussion, confirming no new material changes since December 31, 2024 - The company incorporates the 'Market Risk and Interest Rate Sensitivity' section from the MD&A by reference, stating no additional disclosures are needed to assess changes in market risk since December 31, 2024[259](index=259&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and no material changes to internal controls over financial reporting as of June 30, 2025 - As of June 30, 2025, the company's disclosure controls and procedures were evaluated and deemed effective by management, including the CEO and CFO[260](index=260&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect these controls[261](index=261&type=chunk) PART II – Other Information [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Management believes ongoing legal proceedings will not materially impact the company's financial results or position - The company is a party to lawsuits and claims in the normal course of business, but management does not expect any known pending litigation to have a material effect on consolidated results, financial position, or cash flows[262](index=262&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the comprehensive risk factors in the 2024 Form 10-K, noting the list is not exhaustive - Readers should carefully consider the risk factors discussed in Part I, Item 1A of the 2024 Form 10-K, as updated in subsequent quarterly reports, noting that the list of factors is not exhaustive[263](index=263&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - There were no unregistered sales of equity securities and no use of proceeds to report[264](index=264&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - There were no defaults upon senior securities[267](index=267&type=chunk) [Item 4. Mine Safety Disclosure](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This disclosure item is not applicable to the company's operations - Mine Safety Disclosure is not applicable to the company[267](index=267&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading plans during Q2 2025 - During the three months ended June 30, 2025, no directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements[265](index=265&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance and certifications - The exhibits include Amended and Restated Articles of Incorporation and Bylaws, certifications from the CEO and CFO (pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350), and XBRL taxonomy extension documents[268](index=268&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report is duly signed by Jeptha E. Larkin, EVP and CFO, on behalf of Capital City Bank Group, Inc - The report is signed by Jeptha E. Larkin, Executive Vice President and Chief Financial Officer, on behalf of Capital City Bank Group, Inc., as duly authorized[270](index=270&type=chunk)