CAPITAL CITY BANK GROUP INC
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
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FY2025 · Filed Feb 27, 2026
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Item 8. Financial Statements and Supplementary Data
2025 Report of Independent Registered Public Accounting Firm (PCAOB ID
)
GROUP,
INC.
CONSOLIDATED FINANCIAL
STATEMENTS
PAGE
Consolidated Statements of Changes in Shareowners’ Equity
Shareowners, Board of Directors, and Audit Committee
Tallahassee, Florida
Opinion on the Consolidated Financial Statements
We have audited
the accompanying consolidated statements of financial condition of Capital City Bank
Group, Inc. (Company) as
of December 31, 2025 and 2024, the related consolidated statements of
income, comprehensive income, changes in shareowners’
equity, and cash flows
for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively
referred to as the “consolidated financial statements”). In our opinion,
the financial statements referred to above present fairly,
in
all material respects, the financial position of the Company as of December 31, 2025
and 2024, and the results of its operations
and its cash flows for each of the years in the three-year period ended December
31, 2025, in conformity with accounting
principles generally accepted in the United States of America.
We also have audited,
in accordance with the standards of the Public Company Accounting Oversight Board (United
States)
(PCAOB), the Company’s
internal control over financial reporting as of December 31, 2025, based on criteria
established in
Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway
Commission and our report dated February 27, 2026, expressed an unqualified
opinion.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s consolidated
financial statements based on our audits.
We are a public
accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted
our audits in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform,
an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over
financial reporting. Accordingly,
we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement
of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such
procedures include examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial
statements. We believe
that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below arises from the current-period
audit of the financial statements that were
communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
The Company’s
loans held
portfolio totaled
$2.55 billion
as of
2025, and
the allowance
for credit
losses on
loans held
was $31.0
million. As
more fully
described in
Notes 1
and 3
to the
Company’s
consolidated
financial statements,
the Company
estimates its exposure
to expected
credit losses as
of the
statement of
financial condition
date
for existing financial instruments held at amortized cost.
The determination
of the
ACL requires
management to
exercise significant
judgment
and consider
numerous subjective
factors,
determining
factors
utilized
to
adjust
historical
loss
rates,
loan
credit
risk
grading
and
identifying
loans
requiring individual
evaluation, among others.
As disclosed by
management, different
assumptions and conditions
could result
in
a materially different amount for the estimate of the ACL.
We
the
process
for
establishing
the
factors
at
December
31,
as
a
critical
audit
matter.
Auditing
the
qualitative factors involved a high degree of subjectivity in evaluating
management’s estimates.
The primary procedures we performed as of December 31, 2025 to address
this critical audit matter included:
Obtained
an
understanding
of
the
Company’s
process
for
establishing
the
ACL,
the
factor
adjustments of the ACL.
Tested the design
and operating effectiveness of controls over the establishment of qualitative
adjustments.
Evaluated
the qualitative
adjustments to
the ACL,
including assessing
the basis
for adjustments
and the
reasonableness
of the significant assumptions.
Evaluated
the
overall
reasonableness
of
used
by
considering
trends
within
peer
groups.
Evaluated credit quality trends in delinquencies, non-accruals, charge
-offs, and loan risk ratings.
/s/
Forvis Mazars, LLP
We have served as the Company’s
auditor since 2021.
Little Rock, Arkansas
February 27, 2026
GROUP,
INC.
OF FINANCIAL CONDITION
As of December 31,
ASSETS
Cash and Due From Banks
$
62,189
$
70,543
467,782
321,311
Total Cash and Cash Equivalents
529,971
391,854
Investment Securities, Available
for Sale, at fair value (amortized cost of $
656,546
and $
429,033
)
643,922
403,345
Investment Securities, Held to Maturity (fair value of $
369,320
and $
544,460
)
377,446
567,155
2,069
2,399
972,899
Loans Held For Sale, at fair value
21,695
28,672
Loans, Held for Investment
(31,001)
(29,251)
Loans Held for Investment, Net
2,515,117
2,622,299
Premises and Equipment, Net
79,457
81,952
89,095
92,773
1,936
125,057
134,116
$
$
Deposits:
$
1,251,886
$
1,306,254
Interest Bearing Deposits
2,410,426
2,365,723
50,092
28,304
42,582
52,887
Other Long-Term
77,248
75,653
Total Liabilities
3,832,914
3,829,615
Preferred Stock, $
0.01
3,000,000
no
shares issued and outstanding
Common Stock, $
0.01
90,000,000
and
shares issued and outstanding at December 31, 2025 and 2024, respectively
Additional Paid-In Capital
41,650
37,684
Retained Earnings
508,443
463,949
Accumulated Other Comprehensive Income (Loss), Net of Tax
2,587
(6,486)
Total Shareowners’
Equity
552,851
495,317
Total Liabilities and Shareowners’
Equity
$
$
GROUP,
INC.
OF INCOME
For the Years
Ended December 31,
Data)
INTEREST INCOME
Loans, including Fees
$
161,194
$
164,933
$
152,250
Taxable
27,399
17,074
18,652
Tax Exempt
15,751
12,627
10,126
Total Interest Income
204,387
194,657
181,068
INTEREST EXPENSE
29,597
32,162
17,582
1,183
1,080
2,051
1,924
2,449
2,427
Other Long-Term
Total Interest Expense
32,739
35,719
22,080
NET INTEREST INCOME
171,648
158,938
158,988
5,264
4,031
9,714
Net Interest Income After Provision for Credit Losses
166,384
154,907
149,274
NONINTEREST INCOME
22,069
21,346
21,325
14,705
14,707
14,918
Fees
20,667
19,113
16,337
16,959
14,343
10,400
Other
7,955
6,467
8,630
Income
82,355
75,976
71,610
NONINTEREST EXPENSE
Compensation
107,178
100,721
93,787
Occupancy, Net
27,953
27,982
27,660
Other
31,891
36,612
35,576
Expense
167,022
165,315
157,023
INCOME BEFORE INCOME TAXES
81,717
65,568
63,861
Income Tax Expense
20,160
13,924
13,040
NET INCOME
$
61,557
$
51,644
$
50,821
Loss Attributable to Noncontrolling Interests
1,271
1,437
NET INCOME ATTRIBUTABLE
TO COMMON SHAREOWNERS
$
61,557
$
52,915
$
52,258
BASIC NET INCOME PER SHARE
$
3.61
$
3.12
$
3.08
DILUTED NET INCOME PER SHARE
$
3.60
$
3.12
$
3.07
Average Basic Common
Shares Outstanding
17,055
16,943
16,987
Average Diluted
Common Shares Outstanding
17,102
16,969
17,023
GROUP,
INC.
OF COMPREHENSIVE INCOME
For the Years
Ended December 31,
NET INCOME ATTRIBUTABLE
TO COMMON SHAREOWNERS
$
61,557
$
52,915
$
52,258
Other comprehensive income, before
tax:
Change in net unrealized loss on securities available-for-sale
13,039
4,199
12,076
Amortization of unrealized losses on securities transferred from
available-for-sale to held-to-maturity
1,172
3,134
3,479
Derivative:
Change in net unrealized gain on effective cash flow
derivative
(1,532)
(878)
Amortization of discontinued cash flow derivative gain
(203)
Benefit Plans:
Reclassification adjustment for amortization of prior service cost
(239)
Reclassification adjustment for amortization of net gain
(1,771)
(116)
Defined benefit plan settlement gain
(1,552)
(291)
Current year actuarial gain
2,845
13,948
4,905
Total Benefit Plans
(376)
13,593
4,882
Other comprehensive income, before
tax:
12,100
20,928
19,559
Deferred tax expense related to other comprehensive income
(3,027)
(5,268)
(4,476)
Other comprehensive income, net of tax
9,073
15,660
15,083
TOTAL COMPREHENSIVE
INCOME
$
70,630
$
68,575
$
67,341
GROUP,
INC.
OF CHANGES IN SHAREOWNERS' EQUITY
Accumulated
Other
Comprehensive
(Loss) Gain,
Net of Taxes
(Dollars in Thousands, Except Share Data)
Shares
Outstanding
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Total
Balance, January 1, 2023
16,986,785
37,331
387,009
(37,229)
387,281
52,258
52,258
Reclassification to Temporary Equity
(1)
(87)
(87)
15,083
15,083
0.76
1,237
1,237
85,975
1,468
1,468
Repurchase of Common Stock
(122,538)
(3,710)
(3,710)
Balance, December 31, 2023
16,950,222
36,326
426,275
440,625
52,915
52,915
Reclassification to Temporary Equity
(1)
(751)
(751)
Reclassification from Temporary Equity
(2)
15,660
15,660
0.88
1,802
1,802
106,831
1,886
1,886
Repurchase of Common Stock
(82,540)
(2,330)
(2,330)
Balance, December 31, 2024
37,684
463,949
(6,486)
495,317
61,557
61,557
9,073
9,073
1.00
2,324
2,324
109,873
1,642
1,643
Balance, December 31, 2025
41,650
508,443
2,587
552,851
(1)
Adjustments to redemption value for non-controlling interest in CCHL
(2)
Adjustment reflects the difference between the fair value and the book value of the non-controlling interest in CCHL
reclassified from Temporary Equity to Other Liabilities
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CAPITAL CITY BANK GROUP,
INC.
OF CASH FLOWS
For the Years Ended
CASH FLOWS FROM OPERATING ACTIVITIES
$
61,557
$
52,915
$
52,258
Adjustments to Reconcile Net Income to Cash From Operating Activities:
5,264
4,031
9,714
Depreciation
7,409
7,671
7,918
Amortization of Premiums, Discounts, and Fees, net
4,300
4,192
4,221
Amortization of Intangible Assets
Gain on Securities Transactions
Gain on Sale of Subsidiary
(773)
Pension Settlement Gain
(1,552)
(291)
Originations of Loans Held for Sale
(441,019)
(485,901)
(406,803)
Proceeds From Sales of Loans Held for Sale
461,891
494,825
404,332
(16,959)
(14,343)
(10,400)
Net Additions (Deletions) for Capitalized Mortgage Servicing Rights
(102)
Stock Compensation
2,324
1,802
1,237
Net Tax Benefit from Stock Compensation
(154)
(5)
(48)
Deferred Income Taxes
1,589
(1,032)
(483)
Net Change in Operating Leases
Net Gain on Sales and Write-Downs of Other Real Estate Owned
(4,486)
(979)
(2,053)
Net Decrease (Increase) in Other Assets
7,482
(12,024)
(1,029)
Net Increase (Decrease) in Other Liabilities
12,150
(4,452)
Net Cash Provided By Operating Activities
87,614
63,573
54,782
CASH FLOWS FROM INVESTING ACTIVITIES
Securities Held to Maturity:
(94,089)
(64,031)
(1,483)
Payments, Maturities, and Calls
283,296
121,638
36,600
Securities Available for Sale:
(307,446)
(126,783)
(8,379)
Proceeds from the Sale of Securities
30,420
Payments, Maturities, and Calls
78,962
63,843
62,861
(120)
(9,164)
(13,566)
Net Decrease in Equity Securities
1,327
10,215
10,127
Purchases of Loans Held for Investment
(1,183)
(848)
(2,488)
Net Decrease (Increase) in Loans Held for Investment
34,675
39,258
(226,896)
Proceeds from Sales of Loans
66,857
41,320
47,314
Net Cash Received for Divestitures
2,375
Proceeds From Sales of Other Real Estate Owned
7,342
1,592
3,995
Purchases of Premises and Equipment, net
(7,589)
(8,688)
(7,046)
Net Cash Provided By (Used In) Investing Activities
64,407
68,352
(68,541)
CASH FLOWS FROM FINANCING ACTIVITIES
Net Decrease in Deposits
(9,665)
(29,845)
(237,495)
Net Increase (Decrease) in Short-Term Borrowings
21,788
(7,236)
(21,452)
Principal Payments of Subordinated Notes
(10,305)
Repayment of Other Long-Term Borrowings
(116)
(199)
Net Increase in Other Long-Term Borrowings
Dividends Paid
Payments to Repurchase Common Stock
(2,330)
(3,710)
Issuance of Common Stock Under Compensation Plans
1,341
1,501
Net Cash (Used in) Provided By Financing Activities
(13,904)
(52,138)
(274,824)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
138,117
79,787
(288,583)
Cash and Cash Equivalents at Beginning of Year
391,854
312,067
600,650
Cash and Cash Equivalents at End of Year
$
529,971
$
391,854
$
312,067
Supplemental Cash Flow Disclosures:
Interest Paid
$
32,281
$
35,017
$
21,775
Federal Income Taxes Paid
$
12,650
$
3,864
$
8,350
State and Local Income Taxes Paid:
Florida
$
1,035
$
2,227
$
All Other
$
$
$
Supplemental Noncash Items:
Loans Transferred from Held for Investment to Held for Sale, net
$
59,600
$
36,362
$
35,745
Loans and Premises Transferred to Other Real Estate Owned
$
4,424
$
$
1,512
Transfer of Temporary Equity to Other Liabilities
$
$
6,472
$
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
Note 1
SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Capital City Bank Group, Inc. (“CCBG”) provides a full range of banking
and banking-related services to individual and
corporate clients through its wholly-owned subsidiary,
Capital City Bank (“CCB” or the “Bank” and together with CCBG, the
“Company”), with banking offices located in Florida,
Georgia, and Alabama.
The Company is subject to competition from other
financial institutions, is subject to regulation by certain government agencies
and undergoes periodic examinations by those
regulatory authorities.
Basis of Presentation
The consolidated financial statements include the accounts of CCBG and
CCB.
CCB has three primary subsidiaries, which are
wholly owned, Capital City Trust Company,
Capital City Investments and Capital City Home Loans, LLC (“CCHL”).
Prior to
January 1, 2025, the Company maintained a
% membership interest in CCHL that was a consolidated entity in the Company’s
financial statements.
The Company, which operates
a single reportable business segment that is comprised of commercial banking
within the states of
Florida, Georgia, and Alabama, follows accounting principles generally
accepted in the United States of America and reporting
practices applicable to the banking industry.
The principles which materially affect the financial position, results of
operations
and cash flows are summarized below.
See Note 24 – Segment Reporting for additional information.
The Company determines whether it has a controlling financial interest in an
entity by first evaluating whether the entity is a
voting interest entity or a variable interest entity under accounting principles
generally accepted in the United States of America.
Voting
interest entities are entities in which the total equity investment at risk is sufficient
to enable the entity to finance itself
independently and provide the equity holders with the obligation to absorb losses, the
right to receive residual returns and the
right to make decisions about the entity’s
activities.
The Company consolidates voting interest entities in which it has all, or at
least a majority of, the voting interest.
As defined in applicable accounting standards, variable interest entities (“VIEs”) are
entities that lack one or more of the characteristics of a voting interest entity.
A controlling financial interest in an entity is
present when an enterprise has a variable interest, or a combination of variable
interests, that will absorb a majority of the entity’s
expected losses, receive a majority of the entity’s
expected residual returns, or both.
The enterprise with a controlling financial
interest, known as the primary beneficiary,
consolidates the VIE.
Two of CCBG’s
wholly owned subsidiaries, CCBG Capital
Trust I (established November 1, 2004) and
CCBG Capital Trust II (established May 24, 2005) are VIEs for
which the Company
is not the primary beneficiary.
Accordingly, the
accounts of these entities are not included in the Company’s
consolidated
financial statements.
Certain previously reported amounts have been reclassified to conform
to the current year’s presentation. All material inter-
company transactions and accounts have been eliminated in consolidation.
The Company has evaluated subsequent events for
potential recognition and/or disclosure through the date the consolidated
financial statements included in this Annual Report on
Form 10-K were filed with the United States Securities and Exchange
Commission.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of financial statements and
the reported amounts of revenues and
expenses during the reporting period.
Actual results could vary from these estimates.
Material estimates that are particularly
susceptible to significant changes in the near-term
relate to the determination of the allowance for credit losses, pension expense,
income taxes, loss contingencies, valuation of other real estate owned, and
valuation of goodwill and their respective analysis of
impairment.
Significant Accounting Principles
Cash and cash equivalents include cash and due from banks, interest-bearing
deposits in other banks, and federal funds
sold. Generally,
federal funds are purchased and sold for one-day periods and all other cash
equivalents have a maturity of 90
days or less.
The Company maintains certain cash balances that are restricted under
warehouse lines of credit and master repurchase
agreements.
The restricted cash balance at December 31, 2025 and 2024 was $
0.1
Investment securities are classified as held-to-maturity (“HTM”) and
carried at amortized cost when the Company has the positive
intent and ability to hold them until maturity.
Investment securities not classified as HTM are classified as available-for-sale
(“AFS”) and carried at fair value.
The Company does not have trading investment securities. Investment securities classified
as
equity securities that do not have readily determinable fair values,
are measured at cost and remeasured to fair value when
impaired or upon observable transaction prices.
The Company determines the appropriate classification of securities at the time
of purchase.
For reporting and risk management purposes, the Company further segment
s
investment securities by the issuer of
the security which correlates to its risk profile: U.S. government treasury,
U.S. government agency, state and
political
subdivisions, mortgage-backed securities,
and corporate debt securities.
Certain equity securities with limited marketability,
such
as stock in the Federal Reserve Bank and the Federal Home Loan Bank,
are classified as AFS and carried at cost.
Interest income includes amortization and accretion of purchase premiums
and discounts.
Realized gains and losses are derived
from the amortized cost of the security sold.
Gains and losses on the sale of securities are recorded on the trade date and are
determined using the specific identification method.
Securities transferred from AFS to HTM are recorded at amortized cost plus
or minus any unrealized gain or loss at the time of transfer.
Any existing unrecognized gain or loss continues to be reported
in
accumulated other comprehensive loss (net of tax) and amortized as an adjustment
to interest income over the remaining life of
the security.
Any existing allowance for credit loss is reversed at the time of transfer.
Subsequent to transfer, the allowance for
credit losses on the transferred security is evaluated in accordance with the
accounting policy for HTM securities.
any allowance amounts reversed or established as part of the transfer
are presented on a gross basis in the Consolidated Statement
of Income.
The accrual of interest is generally suspended on securities more than
90 days past due with respect to principal or interest.
When
a security is placed on nonaccrual status, all previously accrued and uncollected interest
is reversed against current income and
thus not included in the estimate of credit losses.
Credit losses and changes thereto, are established as an allowance for
credit loss through a provision for credit loss expense.
Losses are charged against the allowance when management
believes the uncollectability of a security is confirmed or when
either of the criteria regarding intent or requirement to sell is met.
Certain debt securities in the Company’s
investment portfolio were issued by a U.S. government entity or agency and are either
explicitly or implicitly guaranteed by the U.S. government.
The Company considers the long history of no credit losses on these
securities indicates that the expectation of nonpayment of the amortized
cost basis is zero, even if the U.S. government were to
technically default.
Further, certain municipal securities held by
the Company have been pre-refunded and secured by
government guaranteed treasuries.
Therefore, for the aforementioned securities, the Company does not
assess or record expected
credit losses due to the zero loss assumption.
Impairment - Available
-for-Sale Securities
.
Unrealized gains on AFS securities are excluded from earnings and
reported, net of tax, in other comprehensive income.
For AFS
securities that are in an unrealized loss position, the Company first assesses whether it intends
to sell, or whether it is more likely
than not it will be required to sell the security before recovery of
its amortized cost basis.
If either of the criteria regarding intent
or requirement to sell is met, the security’s
amortized cost basis is written down to fair value through income.
For AFS securities
that do not meet the aforementioned criteria or have a zero loss assumption,
the Company evaluates whether the decline in fair
value has resulted from credit losses or other factors.
In making this assessment, management considers the extent to which fair
value is less than amortized cost, any changes to the rating of the security
by a rating agency, and adverse
conditions specifically
related to the security,
among other factors.
If the assessment indicates that a credit loss exists, the present value of cash flows to
be collected from the security are compared to the amortized cost basis of the security.
If the present value of cash flows
expected to be collected is less than the amortized cost basis, a credit
loss exists and an allowance for credit losses is recorded
through a provision for credit loss expense, limited by the amount that fair
value is less than the amortized cost basis.
Any
impairment that is not credit related is recognized in other comprehensive
income.
Allowance for Credit Losses - Held-to-Maturity
Securities.
Management measures expected credit losses on each individual HTM debt
security that has not been deemed to have a zero
assumption.
Each security that is not deemed to have zero credit losses is individually measured
based on net realizable value, or
the difference between the discounted value
of the expected cash flows, based on the original effective rate, and
the recorded
amortized basis of the security.
To the extent a shortfall is related
to credit loss, an allowance for credit loss is recorded through a
provision for credit loss expense. See Note 2 – Investment Securities for
additional information.
Loans held for investment (“HFI”) are stated at amortized cost which includes
the principal amount outstanding, net premiums
and discounts, and net deferred loan fees and costs.
Accrued interest receivable on loans is reported in other assets and is not
included in the amortized cost basis of loans.
Interest income is accrued on the effective yield method based on outstanding
principal balances and includes loan late fees.
Fees charged to originate loans and direct loan origination
costs are deferred and
amortized over the life of the loan as a yield adjustment.
The Company defines loans as past due when one full payment is past due or
a contractual maturity is over 30 days late.
The
accrual of interest is generally suspended on loans more than 90 days past
due with respect to principal or interest.
When a loan is
placed on nonaccrual status, all previously accrued and uncollected
interest is reversed against current income and thus a policy
election has been made to not include accrued interest in the estimate of credit
losses.
Interest income on nonaccrual loans is
recognized when the ultimate collectability is no longer considered doubtful.
Loans are returned to accrual status when the
principal and interest amounts contractually due are brought current
or when future payments are reasonably assured.
Loan charge-offs on commercial and
investor real estate loans are recorded when the facts and circumstances of the
individual
loan confirm the loan is not fully collectible and the loss is reasonably quantifiable.
Factors considered in making these
determinations are the borrower’s and any guarantor’s
ability and willingness to pay,
the status of the account in bankruptcy court
(if applicable), and collateral value.
Charge-off decisions for consumer loans
are dictated by the Federal Financial Institutions
Examination Council’s Uniform
Retail Credit Classification and Account Management Policy which establishes
standards for the
classification and treatment of consumer loans, which generally require
charge-off after 120 days of delinquency.
The Company has adopted comprehensive lending policies, underwriting
standards and loan review procedures designed to
maximize loan income within an acceptable level of risk.
Reporting systems are used to monitor loan originations, loan ratings,
concentrations, loan delinquencies, nonperforming and potential problem
loans, and other credit quality metrics.
The ongoing
review of loan portfolio quality and trends by Management and the Credit
Risk Oversight Committee support the process for
estimating the allowance for credit losses. See Note 3 – Loans Held for Investment
and Allowance for Credit Losses for
additional information.
The allowance for credit losses is a valuation account that is deducted from
the loans’ amortized cost basis to present the net
amount expected to be collected on the loans.
The allowance for credit losses is adjusted by a credit loss provision which is
reported in earnings and reduced by the charge-off
of loan amounts, net of recoveries.
Loans are charged off against the
allowance when management believes the uncollectability of a loan
balance is confirmed.
Expected recoveries do not exceed the
aggregate of amounts previously charged-off
and expected to be charged-off.
Expected credit loss inherent in non-cancellable
off-balance sheet credit exposures is provided for through the credit
loss provision but recorded separately in other liabilities.
Management estimates the allowance balance using relevant available
information, from internal and external sources, relating to
past events, current conditions, and reasonable and supportable forecasts.
Historical loan default and loss experience provides the
basis for the estimation of expected credit losses.
Adjustments to historical loss information incorporate management’s
view of
current conditions and forecasts.
The methodology for estimating the amount of credit losses reported in
the allowance for credit losses has two basic components:
first, an asset-specific component involving loans that do not share risk
characteristics and the measurement of expected credit
losses for such individual loans; and second, a pooled component for
expected credit losses for pools of loans that share similar
risk characteristics.
Loans That Do Not Share Risk Characteristics (Individually
Analyzed)
Loans that do not share similar risk characteristics are evaluated on an individual
basis.
Loans deemed to be collateral dependent
have differing risk characteristics and are individually
analyzed to estimate the expected credit loss.
A loan is collateral
dependent when the borrower is experiencing financial difficulty
and repayment of the loan is dependent on the liquidation and
sale of the underlying collateral.
For collateral dependent loans where foreclosure is probable, the expected
credit loss is
measured based on the difference between the fair
value of the collateral (less selling cost) and the amortized cost basis of the
asset.
For collateral dependent loans where foreclosure is not probable,
the Company has elected the practical expedient allowed
by Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic
326-20 to measure the
expected credit loss under the same approach as those loans where foreclosure
is probable.
For loans with balances greater than
$250,000,
the fair value of the collateral is obtained through independent appraisal of
the underlying collateral.
For loans with
balances less than $250,000, the Company has made a policy election to
measure expected loss for these individual loans utilizing
loss rates for similar loan types.
Loans That Share Similar Risk Characteristics (Pooled
Loans)
The general steps in determining expected credit losses for the pooled
loan component of the allowance are as follows:
Segment loans into pools according to similar risk characteristics
Develop historical loss rates for each loan pool segment
Incorporate the impact of forecasts
Incorporate the impact of other qualitative factors
Calculate and review pool specific allowance for credit loss estimate
A discounted cash flow methodology is utilized to calculate expected
cash flows for the life of each individual loan.
The
discounted present value of expected cash flow is then compared
to the loan’s amortized cost basis to determine
the credit loss
estimate.
Individual loan results are aggregated at the pool level in determining
total reserves for each loan pool.
The primary inputs used to calculate expected cash flows include historical
loss rates which reflect probability of default (“PD”)
and loss given default (“LGD”), and prepayment rates.
The historical look-back period is a key factor in the calculation of the PD
rate and is based on management’s assessment
of current and forecasted conditions and may vary by loan pool.
Loans subject to
the Company’s risk rating process are
further sub-segmented by risk rating in the calculation of PD rates.
LGD rates generally
reflect the historical average net loss rate by loan pool.
Expected cash flows are further adjusted to incorporate the impact of loan
prepayments which will vary by loan segment and interest rate conditions.
In general, prepayment rates are based on observed
prepayment rates occurring in the loan portfolio and consideration of forecasted
interest rates.
In developing loss rates, adjustments are made to incorporate the impact
of forecasted conditions.
Certain assumptions are also
applied, including the length of the forecast and reversion periods.
The forecast period is the period within which management is
able to make a reasonable and supportable assessment of future conditions.
The reversion period is the period beyond which
management believes it can develop a reasonable and supportable forecast
and bridges the gap between the forecast period and
the use of historical default and loss rates.
The remainder period reflects the remaining life of the loan.
The length of the forecast
and reversion periods are periodically evaluated and based on management’s
assessment of current and forecasted conditions and
may vary by loan pool.
For purposes of developing a reasonable and supportable assessment
of future conditions, management
utilizes established industry and economic data points and sources,
including the Federal Open Market Committee forecast, with
the forecasted unemployment rate being a significant factor.
PD rates for the forecast period will be adjusted accordingly based
on management’s assessment of
future conditions.
PD rates for the remainder period will reflect the historical mean PD rate.
Reversion period PD rates reflect the difference between
forecast and remainder period PD rates calculated using a straight-line
adjustment over the reversion period.
Loss rates are further adjusted to account for other risk factors that impact loan
defaults and losses.
These adjustments are based
on management’s assessment of
trends and conditions that impact credit risk and resulting credit losses, more
specifically internal
and external factors that are independent of and not reflected in the quantitative
loss rate calculations.
Risk factors management
considers in this assessment include trends in underwriting standards,
nature/volume/terms of loan originations, past due loans,
loan review systems, collateral valuations, concentrations, legal/regulatory/political
conditions, and the unforeseen impact of
natural disasters.
Allowance for Credit Losses on Off-Balance
Sheet Credit Exposures
The Company estimates expected credit losses over the contractual period
in which it is exposed to credit risk through a
contractual obligation to extend credit, unless that obligation is unconditionally
cancellable by the Company.
The allowance for
credit losses on off-balance sheet credit exposures is adjusted as a provision
for credit loss expense and is recorded in other
liabilities.
The estimate includes consideration of the likelihood that funding
will occur and an estimate of expected credit losses
on commitments expected to be funded over its estimated life and applies the
same estimated loss rate as determined for current
outstanding loan balances by segment.
Off-balance sheet credit exposures are identified and classified in the same categories as
the allowance for credit losses with similar risk characteristics that have
been previously mentioned. See Note 21 – Commitments
and Contingencies for additional information.
Mortgage Banking Activities
Mortgage Loans Held for Sale and Revenue Recognition
Mortgage loans held for sale (“HFS”) are carried at fair value under the fair value
option with changes in fair value recorded in
mortgage banking revenues on the Consolidated Statements of
Income. The fair value of mortgage loans held for sale committed
to investors is calculated using observable market information such
as the investor commitment, assignment of trade or other
mandatory delivery commitment prices. The Company bases loans
committed to Federal National Mortgage Association
(“FNMA”), Government National Mortgage Association (“GNMA”),
and Federal Home Loan Mortgage Corporation (“Agency”)
investors based on the Agency’s quoted
mortgage backed security (“MBS”) prices. The fair value of mortgage loans held for
sale
not committed to investors is based on quoted best execution secondary
market prices. If no such quoted price exists, the fair
value is determined using quoted prices for a similar asset or assets, such as MBS prices,
adjusted for the specific attributes of that
loan, which would be used by other market participants.
Gains and losses from the sale of mortgage loans held for sale are recognized based
upon the difference between the sales
proceeds and carrying value of the related loans upon sale and are recorded
in mortgage banking revenues on the Consolidated
Statements of Income. Sales proceeds reflect the cash received from investors
through the sale of the loan and servicing release
premium. If the related mortgage loan is sold with servicing retained, the
MSR addition is recorded in mortgage banking revenues
on the Consolidated Statements of Income.
Mortgage banking revenues also includes the unrealized gains and losses associated
with the changes in the fair value of mortgage loans held for sale, and the
realized and unrealized gains and losses from derivative
instruments.
Mortgage loans held for sale are considered sold when the Company surrenders
control over the financial assets. Control is
considered to have been surrendered when the transferred assets have been
isolated from the Company, beyond
the reach of the
Company and its creditors; the purchaser obtains the right (free of conditions
that constrain it from taking advantage of that right)
to pledge or exchange the transferred assets; and the Company does not
maintain effective control over the transferred assets
through either an agreement that both entitles and obligates the Company
to repurchase or redeem the transferred assets before
their maturity or the ability to unilaterally cause the holder to return specific
assets. The Company typically considers the above
criteria to have been met upon acceptance and receipt of sales proceeds
from the purchaser.
GNMA optional repurchase programs allow financial institutions to buy
back individual delinquent mortgage loans that meet
certain criteria from the securitized loan pool for which the institution provides servicing.
At the servicer’s option and without
GNMA’s
prior authorization, the servicer may repurchase such a delinquent
loan for an amount equal to 100 percent of the
remaining principal balance of the loan.
Under FASB ASC Topic
860, “Transfers and Servicing,” this buy-back
option is
considered a conditional option until the delinquency criteria are met,
at which time the option becomes unconditional.
When the
Company is deemed to have regained effective control
over these loans under the unconditional buy-back option, the loans can
no
longer be reported as sold and must be brought back onto the Consolidated
regardless of
whether there is intent to exercise the buy-back option.
These loans are reported in other assets with the offsetting liability
being
reported in other liabilities.
Derivative Instruments (IRLC/Forward Commitments)
The Company holds and issues derivative financial instruments such as interest
rate lock commitments (“IRLCs”) and other
forward sale commitments. IRLCs are subject to price risk primarily
related to fluctuations in market interest rates. To
hedge the
interest rate risk on certain IRLCs, the Company uses forward sale commitments,
such as to-be-announced securities (“TBAs”) or
mandatory delivery commitments with investors. Management
expects these forward sale commitments to experience changes in
fair value opposite to the changes in fair value of the IRLCs thereby reducing
earnings volatility. Forward
sale commitments are
also used to hedge the interest rate risk on mortgage loans held for sale that
are not committed to investors and still subject to
price risk. If the mandatory delivery commitments are not fulfilled, the
Company pays a pair-off fee. Best effort
forward sale
commitments are also executed with investors, whereby certain loans
are locked with a borrower and simultaneously committed
to an investor at a fixed price. If the best effort IRLC does not fund,
there is no obligation to fulfill the investor commitment.
The Company considers various factors and strategies in determining
what portion of the IRLCs and uncommitted mortgage loans
held for sale to economically hedge.
All derivative instruments are recognized as other assets or other liabilities on
the
Consolidated Statements of Financial Condition at their fair value.
Changes in the fair value of the derivative instruments are
recognized in mortgage banking revenues on the Consolidated Statements
of Income in the period in which they occur.
Gains and
losses resulting from the pairing-out of forward sale commitments are
recognized in mortgage banking revenues on the
Consolidated Statements of Income. The Company accounts for
all derivative instruments as free-standing derivative instruments
and does not designate any for hedge accounting.
Mortgage Servicing Rights (“MSRs”) and Revenue Recognition
The Company sells residential mortgage loans in the secondary market and
may retain the right to service the loans sold. Upon
sale, an MSR asset is capitalized, which represents the then current fair value of
future net cash flows expected to be realized for
performing servicing activities.
As the Company has not elected to subsequently measure any class of
servicing assets under the
fair value measurement method, the Company follows the amortization
method.
MSRs are amortized to noninterest income
(other income) in proportion to and over the period of estimated net servicing
income and are assessed for impairment at each
reporting date.
MSRs are carried at the lower of the initial capitalized amount, net of accumulated amortization,
or estimated fair
value, and included in other assets, net, on the Consolidated Statements of
Financial Condition.
The Company periodically evaluates its MSRs asset for impairment.
Impairment is assessed based on fair value at each reporting
date using estimated prepayment speeds of the underlying mortgage
loans serviced and stratifications based on the risk
characteristics of the underlying loans (predominantly loan type and note
interest rate).
As mortgage interest rates fall,
prepayment speeds are usually faster and the value of the MSRs asset generally
decreases, requiring additional valuation reserve.
Conversely, as mortgage
interest rates rise, prepayment speeds are usually slower and the value of
the MSRs asset generally
increases, requiring less valuation reserve.
A valuation allowance is established, through a charge to earnings,
to the extent the
amortized cost of the MSRs exceeds the estimated fair value by stratification.
If it is later determined that all or a portion of the
temporary impairment no longer exists for a stratification, the valuation
is reduced through a recovery to earnings.
An other-than-
temporary impairment (i.e., recoverability is considered remote when
considering interest rates and loan pay off activity) is
recognized as a write-down of the MSRs asset and the related valuation allowance
(to the extent a valuation allowance is
available) and then against earnings.
A direct write-down permanently reduces the carrying value of the MSRs asset and
valuation allowance, precluding subsequent recoveries. See Note 4 –
Mortgage Banking Activities for additional information.
Derivative/Hedging Activities
At the inception of a derivative contract, the Company designates the derivative
as one of three types based on the Company’s
intentions and belief as to the likely effectiveness as a hedge. These
three types are (1) a hedge of the fair value of a recognized
asset or liability or of an unrecognized firm commitment (“fair value
hedge”), (2) a hedge of a forecasted transaction or the
variability of cash flows to be received or paid related to a recognized
asset or liability (“cash flow hedge”), or (3) an instrument
with no hedging designation (“standalone derivative”). For a fair value hedge,
the gain or loss on the derivative, as well as the
offsetting loss or gain on the hedged item, are recognized
in current earnings as fair values change. For a cash flow hedge, the
gain or loss on the derivative is reported in other comprehensive income
and is reclassified into earnings in the same periods
during which the hedged transaction affects earnings.
For both types of hedges, changes in the fair value of derivatives that are
not highly effective in hedging the changes in fair value
or expected cash flows of the hedged item are recognized immediately in
current earnings. Net cash settlements on derivatives that qualify for
hedge accounting are recorded in interest income or interest
expense, based on the item being hedged. Net cash settlements on derivatives
that do not qualify for hedge accounting are
reported in non-interest income. Cash flows on hedges are classified in the cash flow
statement the same as the cash flows of the
items being hedged.
The Company formally documents the relationship between derivatives
and hedged items, as well as the risk-management
objective and the strategy for undertaking hedge transactions at the inception
of the hedging relationship. This documentation
includes linking fair value or cash flow hedges to specific assets and liabilities on
the Consolidated Statement of Financial
Condition or to specific firm commitments or forecasted transactions. The
Company also formally assesses, both at the hedge’s
inception and on an ongoing basis, whether the derivative instruments that are
used are highly effective in offsetting changes in
fair values or cash flows of the hedged items. The Company discontinues
hedge accounting when it determines that the derivative
is no longer effective in offsetting changes in the
fair value or cash flows of the hedged item, the derivative is settled or
terminates, a hedged forecasted transaction is no longer probable, a hedged
firm commitment is no longer firm, or treatment of the
derivative as a hedge is no longer appropriate or intended. When hedge
accounting is discontinued, subsequent changes in fair
value of the derivative are recorded as non-interest income. When
a fair value hedge is discontinued, the hedged asset or liability
is no longer adjusted for changes in fair value,
and the existing basis adjustment is amortized or accreted over the remaining life
of the asset or liability.
When a cash flow hedge is discontinued but the hedged cash flows or forecasted
transactions are still
expected to occur, gains or losses that were accumulated
in other comprehensive income are amortized into earnings over the
same periods, in which the hedged transactions will affect
earnings. See Note 5 – Derivatives for additional information.
Long-Lived Assets
Premises and equipment is stated at cost less accumulated depreciation,
computed on the straight-line method over the estimated
useful lives for each type of asset with premises being depreciated over
a range of
to
years, and equipment being
depreciated over a range of
to
years.
Additions, renovations and leasehold improvements to premises are capitalized and
depreciated over the lesser of the useful life or the remaining lease term.
Repairs and maintenance are charged to noninterest
expense as incurred.
Long-lived assets are evaluated for impairment if circumstances suggest that their
carrying value may not be recoverable, by
comparing the carrying value to estimated undiscounted cash flows.
If the asset is deemed impaired, an impairment charge is
recorded equal to the carrying value less the fair value. See Note 6 – Premises and
Equipment for additional information.
Leases
The Company has entered into various operating leases, primarily for
banking offices.
Generally, these leases have initial
lease
terms from one to ten years.
Many of the leases have one or more lease renewal options.
The exercise of lease renewal options is
at the Company’s sole discretion.
The Company does not consider exercise of any lease renewal options reasonably
certain.
Certain leases contain early termination options.
No renewal options or early termination options have been included in the
calculation of the operating right-of-use assets or operating lease liabilities.
Certain lease agreements provide for periodic
adjustments to rental payments for inflation.
At the commencement date of the lease, the Company recognizes a lease liability
at
the present value of the lease payments not yet paid, discounted using
the discount rate for the lease or the Company’s
incremental borrowing rate.
As the majority of the Company’s
leases do not provide an implicit rate, the Company uses its
incremental borrowing rate at the commencement date in determining
the present value of lease payments.
The incremental
borrowing rate is based on the term of the lease.
At the commencement date, the Company also recognizes a right-of-use asset
measured at (i) the initial measurement of the lease liability; (ii) any lease payments
made to the lessor at or before the
commencement date less any lease incentives received; and (iii) any initial direct
costs incurred by the lessee.
Leases with an
initial term of 12 months or less are not recorded on the Consolidated Statement
of Financial Condition.
For these short-term
leases, lease expense is recognized on a straight-line basis over the lease term.
The Company has no leases classified as finance
leases. See Note 7 – Leases for additional information.
Bank Owned Life Insurance
The Company, through
its subsidiary bank, has purchased life insurance policies on certain key officers.
Bank owned life
insurance is recorded at the amount that can be realized under the insurance contract
at the statement of financial condition date,
which is the cash surrender value adjusted for other charges or
other amounts due that are probable at settlement.
Goodwill represents the excess of the cost of businesses acquired over the fair
value of the net assets acquired.
In accordance
with FASB ASC Topic
350, the Company determined it has one goodwill reporting unit.
Goodwill is tested for impairment
annually during the fourth quarter or on an interim basis if an event occurs
or circumstances change that would more likely than
not reduce the fair value of the reporting unit below its carrying value.
Other intangible assets relate to customer intangibles
purchased as part of a business acquisition.
Intangible assets are tested for impairment at least annually or whenever changes in
circumstances indicate the carrying amount of the assets may not
be recoverable from future undiscounted cash flows.
See Note 8
– Goodwill and Other Intangibles for additional information
.
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are
initially recorded at the lower of cost or fair value
less estimated selling costs, establishing a new cost basis.
Subsequent to foreclosure, valuations are periodically performed by
management,
and the assets are carried at the lower of carrying amount or fair value less cost to sell.
The valuation of foreclosed
assets is subjective in nature and may be adjusted in the future because of changes in economic
conditions.
Revenue and
expenses from operations and changes in value are included in noninterest
expense. See Note 9 – Other Real Estate for additional
information.
Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary
course of business are recorded as liabilities when
the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.
See Note 21 – Commitments and
Contingencies for additional information.
Noncontrolling Interest
Prior to January 1, 2025, the Company maintained a
% membership interest in CCHL that was a consolidated entity in the
Company’s financial statements.
To the extent
the Company’s interest in a consolidated
entity represents less than 100% of the
entity’s equity,
the Company recognizes noncontrolling interests in subsidiaries.
In the case of the CCHL acquisition, the
noncontrolling interest represents equity which is redeemable or convertible
for cash at the option of the equity holder and is
classified within temporary equity in the mezzanine section of the Consolidated
The
subsidiary’s
net income or loss and related dividends are allocated to CCBG and the noncontrolling
interest holder based on their
relative ownership percentages.
The noncontrolling interest carrying value is adjusted on a quarterly basis to the
higher of the
carrying value or current redemption value, at the Statement of Financial
Condition date, through a corresponding adjustment to
retained earnings.
The redemption value is calculated quarterly and is based on the higher of a predetermined
book value or pre-
tax earnings multiple.
To the extent the redemption value
exceeds the fair value of the noncontrolling interest, the Company’s
earnings per share attributable to common shareowners is adjusted by
that amount.
The Company uses an independent valuation
expert to assist in estimating the fair value of the noncontrolling interest using:
- the discounted cash flow methodology under
the income approach, and (2) the guideline public company methodology
under the market approach.
The estimated fair value is
derived from equally weighting the result of each of the two methodologies.
The estimation of the fair value includes significant
assumptions concerning: (1) projected loan volumes; (2) projected
pre-tax profit margins; (3) tax rates and (4) discount rates.
Concurrent with the agreement to assign the minority membership interest (49%)
in CCHL, temporary equity was reclassified to
other liabilities and recorded at the fair value of the minority interest of $
6.5
Income tax expense is the total of the current year income tax due or refundable
and the change in deferred tax assets and
liabilities (excluding deferred tax assets and liabilities related to business
combinations or components of other comprehensive
income).
Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences
between carrying
amounts and tax bases of assets and liabilities, computed using enacted tax
rates.
A valuation allowance, if needed, reduces
deferred tax assets to the expected amount most likely to be realized.
Realization of deferred tax assets is dependent upon the
generation of a sufficient level of future taxable income and recoverable
taxes paid in prior years.
The income tax effects related
to settlements of share-based payment awards are reported in earnings as an
increase or decrease in income tax expense. See Note
13 – Income Taxes
for additional information.
The Company files a consolidated federal income tax return and a separate
federal tax return for CCHL. Each subsidiary files a
separate state income tax return.
Earnings Per Common Share
Basic earnings per common share is based on net income divided by the weighted
-average number of common shares outstanding
during the period excluding non-vested stock.
Diluted earnings per common share include the dilutive effect of
stock options and
non-vested stock awards granted using the treasury stock method.
A reconciliation of the weighted-average shares used in
calculating basic earnings per common share and the weighted average
common shares used in calculating diluted earnings per
common share for the reported periods is provided in Note 16 — Earnings
Per Share.
Comprehensive Income
Comprehensive income includes all changes in shareowners’ equity
during a period, except those resulting from transactions with
Besides net income, other components of the Company’s
comprehensive income include the after tax effect of
changes in the net unrealized gain/loss on securities AFS, unrealized gain/loss
on cash flow derivatives, and changes in the funded
status of defined benefit and supplemental executive retirement plans.
Comprehensive income is reported in the accompanying
Consolidated Statements of Comprehensive Income and Changes in Shareowners’
Equity.
Compensation cost is recognized for share-based awards issued to employees,
based on the fair value of these awards at the date
of grant.
Compensation cost is recognized over the requisite service period, generally
defined as the vesting period.
The market
price of the Company’s common
stock at the date of the grant is used for restricted stock awards.
For stock purchase plan awards,
a Black-Scholes model is utilized to estimate the fair value of the award.
The impact of forfeitures of share-based awards on
compensation expense is recognized as forfeitures occur.
See Note 14 – Stock-based Compensation for additional information.
Revenue Recognition
FASB ASC Topic
606, Revenue from Contracts with Customers (“ASC 606”), establishes
principles for reporting information
about the nature, amount, timing and uncertainty of revenue and cash
flows arising from the entity’s contracts
to provide goods or
services to customers. The core principle requires an entity to recognize revenue
to depict the transfer of goods or services to
customers in an amount that reflects the consideration that it expects to be
entitled to receive in exchange for those goods or
services recognized as performance obligations are satisfied.
The majority of the Company’s revenue
-generating transactions are not subject to ASC 606, including revenue generated
from
financial instruments, such as our loans, letters of credit, and investment
securities, and revenue related to the sale of residential
mortgages in the secondary market, as these activities are subject to other
GAAP discussed elsewhere within our disclosures.
The
Company recognizes revenue from these activities as it is earned based
on contractual terms, as transactions occur,
or as services
are provided and collectability is reasonably assured.
Descriptions of the major revenue-generating activities that are within the
scope of ASC 606, which are presented in the accompanying Consolidated
Statements of Income as components of non-interest
income are as follows:
Deposit Fees - these represent general service fees for monthly account
maintenance and activity- or transaction-based fees and
consist of transaction-based revenue, time-based revenue (service period),
item-based revenue or some other individual attribute-
based revenue.
Revenue is recognized when the Company’s performance
obligation is completed, which is generally monthly for
account maintenance services or when a transaction has been completed.
Payment for such performance obligations are generally
received at the time the performance obligations are satisfied.
- trust fees and retail brokerage fees – trust fees represent monthly fees due from wealth
management clients
as consideration for managing the client’s
assets. Trust services include custody of assets, investment
management, fees for trust
services and similar fiduciary activities. Revenue is recognized when
the Company’s performance obligation
is completed each
month or quarter, which is the time that payment
is received. Also, retail brokerage fees are received from a third-party broker-
dealer, for which the Company acts as an agent,
as part of a revenue-sharing agreement for fees earned from
customers that are
referred to the third party.
These fees are for transactional and advisory services and are paid by the third party on
a monthly
basis and recognized ratably throughout the quarter as the Company’s
performance obligation is satisfied.
Bank Card Fees – bank card related fees primarily includes interchange
income from client use of consumer and business debit
cards.
Interchange income is a fee paid by a merchant bank to the card-issuing bank through
the interchange network.
Interchange fees are set by the credit card associations and are based on cardholder
purchase volumes.
The Company records
interchange income as transactions occur.
Gains and Losses from the Sale of Bank Owned Property – the performance
obligation in the sale of other real estate owned
typically will be the delivery of control over the property to the buyer.
If the Company is not providing the financing of the sale,
the transaction price is typically identified in the purchase and sale agreement.
However, if the Company provides seller
financing, the Company must determine a transaction price, depending
on if the sale contract is at market terms and taking into
account the credit risk inherent in the arrangement.
Insurance Commissions – insurance commissions recorded by the
Company are received from various insurance carriers based on
contractual agreements to sell policies to customers on behalf of
the carriers. The performance obligation for the Company is to
sell life and health insurance policies to customers.
This performance obligation is met when a new policy is sold (effective
date)
or when an existing policy renews. New policies and renewals generally have a one
-year term. In the agreements with the
insurance carriers, a commission rate is agreed upon. The commission
is recognized at the time of the sale of the policy (effective
date) or when a policy renews, which is the time that payment is received.
Insurance commissions are recorded within other
noninterest income.
Other non-interest income primarily includes items such as mortgage
banking fees (gains from the sale of residential mortgage
loans held for sale), bank-owned life insurance, and safe deposit box fees,
none of which are subject to the requirements of ASC
The Company has made no significant judgments in applying the revenue
guidance prescribed in ASC 606 that affects the
determination of the amount and timing of revenue from the above-described
contracts with clients.
Recently Adopted Accounting Pronouncements
ASU No. 2023-09, “Income Taxes
(Topic
740): Improvements to Income Tax
Disclosures.”
ASU 2023-09 is intended to enhance
transparency and decision usefulness of income tax disclosures. The ASU addresses
investor requests for more transparency about
income tax information through improvements to income tax disclosures,
primarily related to the rate reconciliation and income
taxes paid information. Retrospective application in all prior periods is permitted.
ASU 2023-09 will be effective for the company
on January 1, 2025.
The adoption of the standard did not have a material impact on its consolidated financial
statements. Refer to
Note 13 – Income Taxes.
Issued But Not Yet
Effective Accounting Standards
ASU No. 2023-06, “Disclosure Improvements:
Codification Amendments in Response to the SEC’s
Disclosure Update and
Simplification Initiative.”
ASU 2023-06 is intended to clarify or improve disclosure and presentation
requirements of a variety of
topics, which will allow users to more easily compare entities subject to the
SEC’s existing disclosures with those entities
that
were not previously subject to the requirements and align the requirements in
the FASB accounting standard
codification with the
SEC’s regulations. ASU 2023
-06 is to be applied prospectively,
and early adoption is prohibited. For reporting entities subject to
the SEC’s existing disclosure requirements,
the effective dates of ASU 2023-06 will be the date on which the SEC’s
removal of
that related disclosure requirement from Regulation S-X or Regulation
S-K becomes effective. If by June 30, 2027, the SEC has
not removed the applicable requirement from Regulation S-X or Regulation
S-K, the pending content of the related amendment
will be removed from the Codification and will not become effective
for any entities. The Company is currently evaluating the
provisions of the amendments and the impact on its future consolidated
ASU No. 2023-03, “Income Statement — Reporting Comprehensive
Income — Expense Disaggregation
Disclosures (Subtopic
220-40): Disaggregation of Income Statement
Expenses.”
ASU 2024-03 introduces new requirements to disclose additional
information about certain types of expenses, including employee compensation,
depreciation, intangible asset amortization, and
selling expenses. ASU 2024-03 is effective for the Company as of January
1, 2026. The Company is currently evaluating the
impact of the incremental disclosures that will be required under the
standard.
ASU 2025-06, “Intangibles - Goodwill and Other -Internal-Use Software
(Subtopic 350-40): Targeted
Improvements to the
Accounting for Internal-Use Software.”
The ASU updates accounting for internal-use software by shifting
from a stage-based
model to a principles-based approach aligned with modern development.
Key provisions include new capitalization criteria based
on authorization, funding commitment, and probable completion,
removal of development stages, integrated website guidance,
and enhanced disclosures. ASU 2025-06 is effective for
the Company as of January 1, 2027. The Company is currently evaluating
the provisions of the amendments and the impact on its future consolidated
statements and disclosures.
ASU 2025-08, “Financial Instruments—Credit Losses
(Topic
326): Purchased Loans.”
The ASU updates the accounting for
purchased loans under ASC 326. The amendments expand the population
of loans subject to the “gross-up” accounting model by
eliminating the former distinction between purchased credit
-deteriorated (“PCD”) and non-PCD loans. Under the new guidance,
entities will apply a single model for purchased loans by recognizing an
allowance for credit losses and adjusting the amortized
cost basis for the associated noncredit discount at acquisition. ASU 2025
-08 is effective for the Company as of January 1, 2027.
The Company is currently evaluating the provisions of the amendments
and the impact on its future consolidated statements and
disclosures.
ASU 2025-11,
“Interim Reporting (Topic
270): Narrow-Scope Improvements.”
The ASU aims to clarify and enhance interim
financial reporting by defining its scope, consolidating GAAP disclosures
in Topic 270,
adding a principle for material post-year-
end event disclosure, and refining statement format guidance to improve
consistency for all preparers. These changes do not alter
the fundamental requirements of interim reporting but seek to streamline
and standardize the process.
ASU 2025-11 is effective
for interim reporting periods beginning after December 15, 2027.
The Company is currently evaluating the provisions of the
amendments and the impact on its future consolidated statements.
ASU 2025-12, “Codification Improvements/”
The ASU was issued to make technical corrections, clarify ambiguous
guidance,
and generally streamline the Accounting Standards Codification across
various topics, affecting most reporting entities, with key
changes including clarifications for diluted EPS during losses, lease receivable
disclosures, beneficial interest calculations, and
treasury stock accounting, aiming for better usability without significantly
altering core accounting outcomes.
The Company is
currently evaluating the provisions of the amendments and the impact
on its future consolidated statements.
ASU 2025-12 is
effective for the Company as of January 1, 2027.
The Company is currently evaluating the provisions of the amendments and the
impact on its future consolidated statements.
Note 2
INVESTMENT SECURITIES
Investment Portfolio Composition
.
The following tables summarize the amortized cost and related fair value of investment
securities AFS and securities HTM, the corresponding amounts of
gross unrealized gains and losses, and allowance for credit
losses.
Sale
Allowance for
Fair
Cost
Gains
Losses
Credit Losses
Value
$
331,495
$
1,940
$
$
$
333,264
174,527
2,484
172,114
36,918
2,045
34,911
(1)
59,699
7,697
52,004
45,810
2,236
(42)
43,532
(2)
8,097
8,097
Total
$
656,546
$
2,051
$
14,633
$
(42)
$
643,922
$
106,710
$
$
$
$
105,801
148,666
5,578
143,127
43,212
3,827
(3)
39,382
(1)
66,379
10,902
55,477
55,970
4,444
(64)
51,462
(2)
8,096
8,096
Total
$
429,033
$
$
25,685
$
(67)
$
403,345
Fair
Cost
Gains
Losses
Value
$
129,782
$
$
$
129,268
247,664
8,542
240,052
Total
$
377,446
$
$
9,056
$
369,320
$
368,005
$
$
6,476
$
361,529
199,150
16,235
182,931
Total
$
567,155
$
$
22,711
$
544,460
(1)
Comprised of residential mortgage-backed
(2)
Includes Federal Home Loan Bank and Federal Reserve Bank recorded
at cost of $
3.0
5.1
million, respectively,
at December 31, 2025 and 2024.
At December 31, 2025, and 2024, the investment portfolio had $
2.1
2.4
million, respectively, in
equity securities.
These securities do not have a readily determinable fair value and were not
credit impaired.
Securities with an amortized cost of $
461.3
489.5
million at December 31, 2025 and 2024, respectively,
were
pledged to secure public deposits and for other purposes.
At December 31, 2025 and 2024, there were
no
holdings of securities of any one issuer, other than
the U.S. Government and its
agencies, in an amount greater than 10% of shareowners’ equity.
The Bank, as a member of the Federal Home Loan Bank of Atlanta (“FHLB”), is required
to own capital stock in the FHLB based
generally upon the balances of residential and commercial real estate loans, and
FHLB advances.
FHLB stock which is included
in other securities is pledged to secure FHLB advances.
No ready market exists for this stock, and it has no quoted fair value;
however, redemption of this stock has historically
been at par value.
As a member of the Federal Reserve Bank of Atlanta, the
Bank is required to maintain stock in the Federal Reserve Bank of Atlanta based
on a specified ratio relative to the Bank’s capital.
Federal Reserve Bank stock is carried at cost.
Investment Sales
. During 2023, the Company sold $
30.4
million of investment securities. There were
no
significant sales of
investment securities during 2025 and 202
Maturity Distribution
.
The following table shows the Company’s
AFS and HTM investment securities maturity distribution
based on contractual maturity at December 31, 2025.
Expected maturities may differ from contractual maturities because
borrowers may have the right to call or prepay obligations.
Mortgage-backed securities and certain amortizing U.S. government
agency securities are shown separately since they are not due at a certain maturity
date.
Equity securities do not have a
contractual maturity date.
Sale
Fair
Fair
Cost
Value
Cost
Value
Due in one year or less
$
102,643
$
102,057
$
129,782
$
129,268
Due after one through five years
335,400
335,032
Due after five through ten years
25,188
23,042
59,699
52,004
247,664
240,052
125,519
123,690
8,097
8,097
Total
$
656,546
$
643,922
$
377,446
$
369,320
Unrealized Losses
. The following table summarizes the investment securities with unrealized
losses at December 31, aggregated
by major security type and length of time in a continuous unrealized loss position:
Less Than 12 Months
Greater Than 12 Months
Total
Fair
Fair
Fair
Value
Losses
Value
Losses
Value
Losses
Sale
$
31,319
$
$
8,902
$
$
40,221
$
62,809
91,760
2,302
154,569
2,484
3,030
30,705
1,921
33,735
2,045
51,932
7,697
51,932
7,697
42,333
2,236
42,333
2,236
Total
97,158
225,632
14,305
322,790
14,633
129,268
129,268
33,589
106,262
8,444
139,851
8,542
Total
$
33,589
$
$
235,530
$
8,958
$
269,119
$
9,056
Sale
$
81,363
$
$
14,510
$
$
95,873
$
33,155
100,844
5,394
133,999
5,578
2,728
36,654
3,663
39,382
3,827
55,409
10,902
55,463
10,902
3,093
48,369
4,195
51,462
4,444
Total
120,393
255,786
24,770
376,179
25,685
361,529
6,476
361,529
6,476
58,230
1,000
119,353
15,235
177,583
16,235
Total
$
58,230
$
1,000
$
480,882
$
21,711
$
539,112
$
22,711
At December 31, 2025, there were
positions (combined AFS and HTM securities) with pre-tax unrealized
losses totaling
$
23.7
At December 31, 2024 there were
positions (combined AFS and HTM securities) with pre-tax unrealized
losses totaling $
48.4
For 2025,
of these of these positions were U.S. Treasury bonds
and carry the full faith and credit
of the U.S. Government.
of these positions were U.S. government agency and mortgage-backed
securities issued by U.S.
government sponsored entities.
long history of
no
credit losses on government securities indicates that the
expectation of nonpayment of the amortized cost basis is
zero
.
The remaining
positions (municipal securities and corporate
bonds) have a credit component.
At December 31, 2025, all collateralized mortgage obligation securities (“CMO”), MBS,
Small
Business Administration securities (“SBA”), U.S. Agency,
and U.S. Treasury bonds held were AA1 or above rated.
At December
31, 2025, corporate debt securities had an allowance for credit losses of $
thousand.
No
ne of the securities held by the
Company were past due or in nonaccrual status at December 31, 2025.
Credit Quality Indicators
The Company monitors the credit quality of its investment securities through
various risk management procedures, including the
monitoring of credit ratings.
A large portion of the debt securities in the Company’s
investment portfolio were issued by a U.S.
government entity or agency and are either explicitly or implicitly guaranteed
by the U.S. government.
The Company believes
the long history of no credit losses on these securities indicates that the
expectation of nonpayment of the amortized cost basis is
zero, even if the U.S. government were to technically default.
Further, certain municipal securities held
by the Company have
been pre-refunded and secured by government guaranteed
treasuries.
Therefore, for the aforementioned securities, the Company
does
no
t assess or record expected credit losses due to the zero loss assumption.
The Company monitors the credit quality of its
municipal and corporate securities portfolio via credit ratings which are
updated on a quarterly basis.
On a quarterly basis,
municipal and corporate securities in an unrealized loss position are
evaluated to determine if the loss is attributable to credit
related factors and if an allowance for credit loss is needed.
Note 3
LOANS HELD FOR INVESTMENT AND ALLOWANCE
FOR CREDIT LOSSES
Loan Portfolio Composition
.
The composition of the HFI loan portfolio at December 31 was as follows:
$
180,341
$
189,208
146,920
219,994
768,731
779,095
(1)
240,897
220,064
(2)
183,539
200,685
Loans Held for Investment, Net of Unearned Income
$
$
(1)
Includes loans in process with outstanding balances
of $
5.6
13.6
million for 2025 and 2024, respectively.
(2)
Includes overdraft balances of $
1.2
million at December 31, 2025 and 2024.
Net deferred costs, which include premiums on purchased loans, included
in loans were $
8.6
million at December 31, 2025 and
$
8.3
Accrued interest receivable on loans which is excluded from amortized
cost totaled $
9.8
million at December 31, 2025 and $
10.3
million at December 31, 2024, and is reported separately in Other Assets.
The Company has pledged a floating lien on certain 1-4 family residential
mortgage loans, commercial real estate mortgage loans,
and home equity loans to support available borrowing capacity at the FHLB and
has pledged a blanket floating lien on all
consumer loans, commercial loans, and construction loans to support available
borrowing capacity at the Federal Reserve Bank of
Atlanta.
Loan Purchases and Sales
. During the year ended December 31, 2025, the Company sold loans classified as held
totaling $
4.7
million, resulting in a net loss of $
0.2
million. The Company retained no continuing interest in the loans sold.
.
The methodology for estimating the amount of credit losses reported in
the allowance for credit
losses (“ACL”) has two basic components: first, an asset-specific component
involving loans that do not share risk characteristics
and the measurement of expected credit losses for such individual loans;
and second, a pooled component for expected credit
losses for pools of loans that share similar risk characteristics.
This methodology is discussed further in Note 1 – Significant
Accounting Policies.
The following table details the activity in the allowance for credit losses by portfolio
segment for the years ended December 31.
Allocation of a portion of the allowance to one category of loans does not preclude
its availability to absorb losses in other
categories.
,
Financial,
Agricultural
Mortgage
Residential
Home Equity
Total
$
1,514
$
2,384
$
5,867
$
14,568
$
1,952
$
2,966
$
29,251
(703)
3,327
5,335
(782)
(4)
(136)
(44)
(5,954)
(6,920)
2,686
3,335
(451)
(3,268)
(3,585)
$
1,751
$
1,681
$
6,859
$
15,317
$
2,368
$
3,025
$
31,001
$
1,482
$
2,502
$
5,782
$
15,056
$
1,818
$
3,301
$
29,941
1,165
(74)
(173)
(603)
4,531
4,975
(1,512)
(47)
(3)
(61)
(132)
(7,627)
(9,382)
2,761
3,717
(1,133)
(44)
(4,866)
(5,665)
$
1,514
$
2,384
$
5,867
$
14,568
$
1,952
$
2,966
$
29,251
$
1,506
$
2,654
$
4,815
$
10,741
$
1,864
$
3,488
$
25,068
(154)
1,035
4,141
(233)
4,596
9,595
(511)
(120)
(79)
(39)
(8,543)
(9,292)
3,760
4,570
(234)
(68)
(4,783)
(4,722)
$
1,482
$
2,502
$
5,782
$
15,056
$
1,818
$
3,301
$
29,941
The $
1.8
million increase in the allowance for credit losses in 2025 reflected a credit loss provision
of $
5.3
million and net loan
charge-offs of $
3.6
The $
0.7
million decrease in the allowance for credit losses in 2024 reflected a
credit loss provision
of $
5.0
million and net loan charge-offs of $
5.7
The increase in the allowance in 2025 was primarily attributable to
qualitative factor adjustments that were partially offset by
lower loan balances.
The decrease in the allowance in 2024 was
primarily due to lower new loan volume and loan balances and favorable
loan grade migration.
Four unemployment rate forecast
scenarios continue to be utilized to estimate probability of default and
are weighted based on management’s
estimate of
probability.
See Note 1 – Significant accounting policies for more on the calculation of the provision
for credit losses.
See Note
21 – Commitments and Contingencies for information on the provision
for credit losses related to off-balance sheet commitments.
Loan Portfolio Aging.
A loan is defined as a past due loan when one full payment is past due or a contractual maturity
is over 30
days past due (“DPD”).
The following table presents the aging of the amortized cost basis in accruing
past due loans by class of loans at December 31,
30-59
60-89
90 +
Total
Total
Total
DPD
DPD
DPD
Past Due
Current
Loans
Loans
$
$
$
$
$
178,354
$
1,278
$
180,341
146,625
146,920
1,386
1,386
764,785
2,560
768,731
1,930
2,737
1,020,810
2,143
239,061
1,769
240,897
1,561
1,823
180,871
183,539
Total
$
4,653
$
2,364
$
$
7,017
$
2,530,506
$
8,595
$
$
$
$
$
$
188,781
$
$
189,208
219,994
219,994
777,710
779,095
1,038,694
3,127
218,160
1,782
220,064
2,154
2,297
197,598
200,685
Total
$
3,520
$
$
$
4,311
$
2,640,937
$
6,302
$
.
Loans are generally placed on nonaccrual status if principal or interest payments
become 90 days past due
and/or management deems the collectability of the principal and/or
interest to be doubtful.
Loans are returned to accrual status
when the principal and interest amounts contractually due are brought
current or when future payments are reasonably assured.
The Company did not recognize a significant amount of interest income
on nonaccrual loans for the years ended December 31,
and 2024.
The following table presents the amortized cost basis of loans in nonaccrual
status and loans past due over 90 days and still on
accrual by class of loans.
90 + Days
90 + Days
With No
With
Still
With No
With
Still
ACL
ACL
Accruing
ACL
ACL
Accruing
$
1,038
$
$
$
$
$
1,807
1,275
2,046
1,081
1,382
1,273
Total
$
4,448
$
4,147
$
$
2,982
$
3,320
$
Collateral Dependent Loans
.
The following table presents the amortized cost basis of collateral dependent loans
at December 31:
Non Real Estate
Non Real Estate
Secured
Secured
Secured
Secured
$
$
1,087
$
$
2,450
1,275
2,476
1,561
Total
$
5,286
$
1,087
$
3,554
$
A loan is collateral dependent when the borrower is experiencing financial
difficulty and repayment of the loan is dependent on
the sale or operation of the underlying collateral.
The Bank’s collateral dependent
loan portfolio is comprised primarily of real estate secured loans, collateralized
by either
residential or commercial collateral types.
The loans are carried at fair value based on current values determined by either
independent appraisals or internal evaluations, adjusted for selling costs or
other amounts to be deducted when estimating
expected net sales proceeds.
Residential Real Estate Loans In Process of Foreclosure
.
At December 31, 2025 and 2024, the Company had $
0.2
million and
$
0.5
million, respectively, in 1-4 family
residential real estate loans for which formal foreclosure proceedings were
in process.
Modifications to Borrowers Experiencing
Financial Difficulty
.
Occasionally, the Company
may modify loans to borrowers who
are experiencing financial difficulty.
Loan modifications to borrowers in financial difficulty are loans
in which the Company has
granted an economic concession to the borrower that it would not otherwise consider.
In these instances, as part of a work-out
alternative, the Company will make concessions including the extension
of the loan term, a principal moratorium, a reduction in
the interest rate, or a combination thereof.
The impact of the modifications and defaults are factored into the allowance for credit
losses on a loan-by-loan basis.
Thus, specific reserves are established based upon the results of either a discounted
cash flow
analysis or the underlying collateral value, if the loan is deemed to be collateral
dependent.
A modified loan classification can be
removed if the borrower’s financial condition improves
such that the borrower is no longer in financial difficulty,
the loan has not
had any forgiveness of principal or interest, and the loan
is subsequently refinanced or restructured at market terms and qualifies
as a new loan.
The financial effects of the loan modifications made to borrowers during
the 12 months ended December 31, 2025 and 2024 were
not significant.
During the year ended December 31, 2025, the Company modified
three
commercial mortgage loans to borrowers experiencing
financial difficulty.
One
loan for $
2.5
million at the modification date was provided a
-month interest only extension in
exchange for additional collateral and had a $
2.1
million balance at December 31, 2025.
Two
loans totaling $
1.4
million were
provided a
-month interest only forbearance period, and the outstanding balances
at the modification date remained unchanged at
All
three
loans were current with no payment delay at December 31, 2025.
During the year ended December 31, 2024, the Company modified
one
commercial mortgage loan due to the borrower
experiencing financial difficulty.
The balance of the loan at December 31, 2024 was $
0.3
million. The Company reduced the
interest rate on the loan by
% in addition to extending the term of the loan from
to
years.
The loan was on non-accrual
status at December 31, 2024 and did not have a payment delay as of December 31,
Credit Risk Management
.
The Company has adopted comprehensive lending policies, underwriting standards
and loan review
procedures designed to maximize loan income within an acceptable
level of risk.
Management and the Board of Directors of the
Company review and approve these policies and procedures on
a regular basis (at least annually).
Reporting systems are used to monitor loan originations, loan quality,
concentrations of credit, loan delinquencies and
nonperforming loans and potential problem loans.
Management and the Credit Risk Oversight Committee periodically review
our lines of business to monitor asset quality trends and the appropriateness
of credit policies.
In addition, total borrower
exposure limits are established, and concentration risk is monitored.
As part of this process, the overall composition of the loan
portfolio is reviewed to gauge diversification of risk, client concentrations,
industry group, loan type, geographic area, or other
relevant classifications of loans.
Specific segments of the loan portfolio are monitored and reported to
the Board on a quarterly
basis and have strategic plans in place to supplement board-approved
credit policies governing exposure limits and underwriting
standards.
Detailed below are the types of loans within the Company’s
loan portfolio and risk characteristics unique to each.
Commercial, Financial, and Agricultural – Loans in this category
are primarily made based on identified cash flows of the
borrower with consideration given to underlying collateral and
personal or other guarantees.
Lending policy establishes debt
service coverage ratio limits that require a borrower’s cash flow to
be sufficient to cover principal and interest payments on all
new and existing debt.
The majority of these loans are secured by the assets being financed or other
business assets such as
accounts receivable, inventory,
or equipment.
Collateral values are determined based upon third-party appraisals and evaluations.
Loan to value ratios at origination are governed by established policy guidelines.
Real Estate Construction – Loans in this category consist of short-term
construction loans, revolving and non-revolving credit
lines and construction/permanent loans made to individuals and investors
to finance the acquisition, development, construction or
rehabilitation of real property.
These loans are primarily made based on identified cash flows of the
borrower or project and
generally secured by the property being financed, including 1-4
family residential properties and commercial properties that are
either owner-occupied or investment in nature.
These properties may include either vacant or improved property.
loans are generally based upon estimates of costs and value associated with
the completed project.
Collateral values are
determined based upon third-party appraisals and evaluations.
Loan to value ratios at origination are governed by established
policy guidelines.
The disbursement of funds for construction loans is made in relation to the progress
of the project and as such
these loans are closely monitored by on-site inspections.
Real Estate Commercial Mortgage – Loans in this category consist of commercial
mortgage loans secured by property that is
either owner-occupied or investment in nature.
These loans are primarily made based on identified cash flows of the borrower
or
project with consideration given to underlying real estate collateral and
personal guarantees.
Lending policy establishes debt
service coverage ratios and loan to value ratios specific to the property type.
Collateral values are determined based upon third-
party appraisals and evaluations.
Real Estate Residential – Residential mortgage loans held in the Company’s
loan portfolio are made to borrowers that
demonstrate the ability to make scheduled payments with full consideration
to underwriting factors such as current income,
employment status, current assets, other financial resources, credit history,
and the value of the collateral.
Collateral consists of
mortgage liens on 1-4 family residential properties.
Collateral values are determined based upon third party appraisals and
evaluations.
The Company does not originate sub-prime loans.
Real Estate Home Equity – Home equity loans and lines are made to qualified
individuals for legitimate purposes generally
secured by senior or junior mortgage liens on owner-occupied
1-4 family homes or vacation homes.
Borrower qualifications
include favorable credit history combined with supportive income and debt
ratio requirements and combined loan to value ratios
within established policy guidelines.
Collateral values are determined based upon third-party appraisals and evaluations.
Consumer Loans – This loan category includes personal installment loans,
direct and indirect automobile financing, and overdraft
lines of credit.
The majority of the consumer loan category consists of indirect and direct automobile
loans.
Lending policy
establishes maximum debt to income ratios, minimum credit scores, and
includes guidelines for verification of applicants’ income
and receipt of credit reports.
Credit Quality Indicators
.
As part of the ongoing monitoring of the Company’s
loan portfolio quality, management
categorizes
loans into risk categories based on relevant information about the
ability of borrowers to service their debt such as: current
financial information, historical payment performance, credit documentation,
and current economic and market trends, among
other factors.
Risk ratings are assigned to each loan and revised as needed through established monitoring
procedures for
individual loan relationships over a predetermined amount
and review of smaller balance homogenous loan pools.
The Company
uses the definitions noted below for categorizing and managing its criticized
loans.
Loans categorized as “Pass” do not meet the
criteria set forth below and are not considered criticized.
Special Mention – Loans in this category are presently protected from loss, but
weaknesses are apparent which, if not corrected,
could cause future problems.
Loans in this category may not meet required underwriting criteria and
have no mitigating
factors.
More than the ordinary amount of attention is warranted for these loans.
Substandard – Loans in this category exhibit well-defined weaknesses that would
typically bring normal repayment into jeopardy.
These loans are no longer adequately protected due to well-defined
weaknesses that affect the repayment capacity of the
borrower.
The possibility of loss is much more evident and above average supervision is required
for these loans.
Doubtful – Loans in this category have all the weaknesses inherent in a loan categorized
as Substandard, with the characteristic
that the weaknesses make collection or liquidation in full, on the basis of currently
existing facts, conditions, and values, highly
questionable and improbable.
Performing/Nonperforming – Loans within certain homogenous
loan pools (home equity and consumer) are not individually
reviewed but are monitored for credit quality via the aging status of the loan and
by payment activity.
The performing or
nonperforming status is updated on an on-going basis dependent upon
improvement and deterioration in credit quality.
The following tables summarize gross loans held for investment at December
31, 2025
and December 31, 2024
and current period
gross write-offs for each of the 12-month periods ended
December 31, 2025 and December 31, 2024
by years of origination and
internally assigned credit risk ratings (refer to Credit Risk Management section
for detail on risk rating system).
Term Loans by Origination Year
Revolving
Prior
Loans
Total
Commercial, Financial,
Agricultural:
Pass
$
37,680
$
23,425
$
22,907
$
23,068
$
10,922
$
8,740
$
48,354
$
175,096
2,740
3,593
1,114
1,652
Total
$
38,002
$
23,692
$
25,742
$
23,376
$
10,942
$
8,956
$
49,631
$
180,341
$
$
$
$
$
$
$
$
Real Estate - Construction:
Pass
$
76,850
$
39,024
$
3,298
$
14,996
$
$
$
9,295
$
143,703
2,127
2,499
Total
$
76,850
$
39,024
$
4,388
$
17,123
$
$
$
9,295
$
146,920
$
$
$
$
$
$
$
$
Real Estate - Commercial
Mortgage:
Pass
$
93,723
$
76,348
$
101,262
$
174,959
$
92,388
$
152,307
$
22,555
$
713,542
9,830
4,477
5,725
20,547
3,922
4,074
49,295
1,402
1,229
1,847
5,894
Total
$
104,303
$
82,227
$
107,085
$
195,924
$
97,539
$
158,228
$
23,425
$
768,731
$
$
$
$
$
$
$
$
Real Estate - Residential:
Pass
$
142,278
$
130,895
$
269,844
$
316,402
$
59,950
$
87,545
$
10,521
$
1,017,435
2,255
1,201
1,310
2,341
6,000
Total
$
142,278
$
131,453
$
270,273
$
317,719
$
62,214
$
90,693
$
11,060
$
$
$
$
$
$
$
$
$
Real Estate - Home
Equity:
$
$
$
$
$
$
$
237,678
$
239,201
1,696
1,696
Total
$
239,374
240,897
$
$
$
$
$
$
$
$
Consumer:
$
63,443
$
21,866
$
27,919
$
31,464
$
21,524
$
5,164
$
11,315
$
182,695
Total
$
63,629
$
22,057
$
28,068
$
31,679
$
21,596
$
5,195
$
11,315
$
183,539
$
2,789
$
$
1,003
$
1,036
$
$
$
$
5,954
Term Loans by Origination Year
Revolving
Prior
Loans
Total
Commercial, Financial,
Agricultural:
Pass
$
35,596
$
36,435
$
37,506
$
18,433
$
4,610
$
9,743
$
41,720
$
184,043
3,979
4,760
Total
$
36,031
$
40,414
$
37,960
$
18,454
$
4,668
$
9,814
$
41,867
$
189,208
$
$
$
$
$
$
$
$
1,512
Real Estate - Construction:
Pass
$
105,148
$
73,615
$
29,821
$
$
$
$
8,288
$
217,110
1,555
1,329
2,884
Total
$
106,703
$
73,615
$
31,150
$
$
$
$
8,288
$
219,994
$
$
$
$
$
$
$
$
Real Estate - Commercial
Mortgage:
Pass
$
77,561
$
110,183
$
207,574
$
109,863
$
87,369
$
122,272
$
26,324
$
741,146
2,913
17,031
2,253
4,402
27,300
2,463
3,403
2,508
1,305
10,649
Total
$
77,732
$
115,559
$
228,008
$
110,732
$
92,130
$
127,979
$
26,955
$
779,095
$
$
$
$
$
$
$
$
Real Estate - Residential:
Pass
$
165,050
$
316,521
$
358,851
$
71,423
$
31,169
$
76,921
$
11,872
$
1,031,807
1,104
2,892
1,450
1,446
1,295
2,918
7,805
Total
$
165,050
$
317,314
$
360,301
$
73,973
$
32,932
$
80,373
$
12,561
$
$
$
$
$
$
$
$
$
Real Estate - Home
Equity:
$
$
$
$
$
$
$
215,981
$
218,282
1,782
1,782
Total
$
217,763
220,064
$
$
$
$
$
$
$
$
Consumer:
$
32,293
$
44,995
$
55,942
$
42,002
$
10,899
$
4,116
$
9,648
$
199,895
Total
$
32,303
$
45,169
$
56,263
$
42,158
$
10,957
$
4,187
$
9,648
$
200,685
$
2,562
$
1,605
$
2,088
$
$
$
$
$
7,627
Note 4
MORTGAGE BANKING ACTIVITIES
The Company’s mortgage
banking activities include mandatory delivery loan sales, forward sales contracts used to
manage
residential loan pipeline price risk, utilization of warehouse lines to fund
secondary market residential loan closings, and
residential mortgage servicing.
Residential Mortgage Loan Production
The Company originates, markets, and services conventional and
government-sponsored residential mortgage loans.
Generally,
conforming fixed rate residential mortgage loans are held for sale in the
secondary market and non-conforming and adjustable-
rate residential mortgage loans may be held for investment.
The volume of residential mortgage loans originated for sale and
secondary market prices are the primary drivers of origination revenue.
Residential mortgage loan commitments are generally outstanding for 30
to 90 days, which represents the typical period from
commitment to originate a residential mortgage loan to when the closed
loan is sold to an investor.
Residential mortgage loan
commitments are subject to both credit and price risk.
Credit risk is managed through underwriting policies and procedures,
including collateral requirements, which are generally accepted by
the secondary loan markets.
Price risk is primarily related to
interest rate fluctuations and is partially managed through forward sales of
residential mortgage-backed securities (primarily
TBAs) or mandatory delivery commitments with investors.
The unpaid principal balance of residential mortgage loans held for sale,
notional amounts of derivative contracts related to
residential mortgage loan commitments and forward contract sales and their
related fair values are set forth below.
Unpaid Principal
Unpaid Principal
Balance/Notional
Balance/Notional
Residential Mortgage Loans Held for Sale
$
20,944
$
21,695
$
28,117
$
28,672
Residential Mortgage Loan Commitments
(1)
20,699
15,000
(2)
25,500
(84)
16,000
$
22,075
$
29,016
(1)
Recorded in other assets at fair value
(2)
Recorded in other liabilities and other assets at fair value
at December 31, 2025 and 2024, respectively
At December 31, 2025 and 2024, the Company had
no
residential mortgage loans held for sale 30-89 days past due or on
nonaccrual status.
Mortgage banking revenues for the year ended December 31, were
Net realized gain on sales of mortgage loans
$
13,605
$
11,492
$
5,297
Net change in unrealized gain on mortgage loans held for sale
(384)
(252)
Net change in the fair value of mortgage loan commitments
(275)
(296)
Net change in the fair value of forward sales contracts
(180)
(395)
Pair-Offs on net settlement of forward
sales contracts
(473)
Mortgage servicing rights additions
Net origination fees
3,298
2,571
5,028
Total mortgage banking
revenues
$
16,959
$
14,343
$
10,400
Residential Mortgage Servicing
The Company may retain the right to service residential mortgage loans
sold.
The unpaid principal balance of loans serviced for
others is the primary driver of servicing revenue.
The following represents a summary of mortgage servicing rights.
Number of residential mortgage loans serviced for others
Outstanding principal balance of residential mortgage loans serviced
for others
$
118,429
$
135,416
Weighted average
interest rate
5.69%
5.86%
Remaining contractual term (in months)
Conforming conventional loans serviced by the Company are sold to the
FNMA on a non-recourse basis, whereby foreclosure
losses are generally the responsibility of FNMA and not the Company.
The government loans serviced by the Company are
secured through the GNMA, whereby the Company is insured against loss by
the Federal Housing Administration or partially
guaranteed against loss by the Veterans
Administration.
At December 31, 2025, the servicing portfolio balance consisted of the
following loan types: FNMA (
61.2
%), GNMA (
4.4
%), and private investor (
34.4
%).
FNMA and private investor loans are
structured as actual/actual payment remittance.
At December 31, 2025 and 2024, the Company did
no
t have delinquent residential mortgage loans currently in GNMA pools
serviced by the Company.
The right to repurchase these loans and the corresponding liability has been recorded in other assets
and other liabilities, respectively,
in the Consolidated Statements of Financial Condition.
The Company had
no
repurchases for
the 12 months ended December 31, 2025 and 2024, of GNMA delinquent
or defaulted mortgage loans with the intention to
modify their terms and include the loans in new GNMA pools.
Activity in the capitalized mortgage servicing rights for the year ended
December 31 was as follows:
Beginning balance
$
$
$
2,599
Additions due to loans sold with servicing retained
Deletions and amortization
(176)
(201)
(232)
Sale of Servicing Rights
(1)
(2,187)
Ending balance
$
$
$
(1)
In 2023, the Company sold an MSR portfolio with an unpaid principal balance of
$
million for a sales price of $
4.0
million,
recognizing a $
1.38
million gain on sale, recorded
in other noninterest income on the Consolidated
Statement of Income.
The Company did
no
t record any permanent impairment losses on mortgage servicing rights for the
years ended December 31,
and 2024.
The key unobservable inputs used in determining the fair value of the Company’s
mortgage servicing rights at December 31, were
Minimum
Maximum
Minimum
Maximum
Discount rates
9.50%
12.00%
9.50%
12.00%
Annual prepayment speeds
8.50%
18.73%
9.14%
18.88%
Cost of servicing (per loan)
$
$
Changes in residential mortgage interest rates directly affect
the prepayment speeds used in valuing the Company’s
mortgage
servicing rights.
A separate third-party model is used to estimate prepayment speeds based on interest rates, housing
turnover
rates, estimated loan curtailment, anticipated defaults, and other relevant
factors.
The weighted average annual prepayment speed
was
13.05
% at December 31, 2025 and
13.44
% at December 31, 2024.
Warehouse
Line Borrowings
The Company has the following warehouse lines of credit and master repurchase
agreements with various financial institutions at
December 31, 2025:
Amounts
Outstanding
$
million master repurchase agreement without defined expiration.
Interest is at the SOFR rate plus
2.25%
to plus
3.25%
, with a floor rate of
3.25%
to
4.25%
.
A cash pledge deposit of $
0.1
million is
required by the lender.
$
13,104
$
million warehouse line of credit agreement expiring in
June 2026
.
Interest is at the SOFR plus
2.50%
to
3.00%
.
14,970
$
28,074
Warehouse
line borrowings are classified as short-term borrowings.
At December 31, 2024, warehouse line borrowings totaled
$
1.9
At December 31, 2025, the Company had mortgage loans held for sale pledged as collateral
under the above
warehouse lines of credit and master repurchase agreements.
The above agreements also contain covenants which include certain
financial requirements, including maintenance of minimum tangible
net worth, minimum liquid assets and maximum debt to net
worth ratio, as defined in the agreements.
The Company was in compliance with all significant debt covenants at December
31,
The Company intends to renew the warehouse lines of credit and master repurchase
agreements when they mature.
The Company extended a $
million warehouse line of credit to CCHL.
Balances and transactions under this line of credit were
eliminated in the Company’s
consolidated financial statements and thus not included in the total short-term
borrowings noted on
the Consolidated Statement of Financial Condition.
The line of credit was discontinued in December 2025.
The balance of this
line of credit at December 31, 2024 was $
32.8
Note 5
DERIVATIVES
The Company enters into derivative financial instruments to manage exposures
that arise from business activities that result in the
receipt or payment of future known and uncertain cash amounts, the value of
which are determined by interest rates.
The
Company’s derivative financial
instruments are used to manage differences in the amount, timing,
and duration of the Company’s
known or expected cash receipts and its known or expected cash payments
principally related to the Company’s
subordinated
debt.
Cash Flow Hedges of Interest Rate Risk
At December 31, 2024, the Company maintained interest rate swaps with
notional amounts totaling $
million designated as a
cash flow hedge for subordinated debt.
Under the swap arrangement, the Company paid a fixed interest rate of
2.50
% and
received
a variable interest rate based on three-month CME Term
SOFR (secured overnight financing rate).
In October 2025, the
Company terminated the swaps and derecognized the derivative assets. The
unrealized gain of $
2.7
million is deferred in
accumulated other comprehensive income and will be amortized on
a straight-line basis into interest expense through the
remaining term of the original cash flow hedge. The Company estimates there will
be approximately $
0.8
million reclassified as a
decrease to interest expense within the next 12 months.
For derivatives designated and that qualify as cash flow hedges of interest rate
risk, the gain or loss on the derivative is recorded
in accumulated other comprehensive loss (“AOCI”) and subsequently
reclassified into interest expense in the same period(s)
during which the hedged transaction affects earnings. Amounts
reported in accumulated other comprehensive loss related to
derivatives will be reclassified to interest expense as interest payments are
made on the Company’s variable-rate
subordinated
debt.
The following table reflects the cash flow hedges included in the Consolidated
Statement of Financial
Notional
Fair
Weighted Average
Condition Location
Amount
Value
Maturity (Years)
Interest rate swaps related to subordinated debt:
$
30,000
$
5,319
5.5
The following table presents the net gains (losses) recorded in AOCI and the
Consolidated Statement of Income related to the
cash flow derivative instruments (interest rate swaps related to subordinated debt).
Amount of Gain
Amount of Gain
(Loss) Recognized
(Loss) Reclassified
Category
in AOCI
from AOCI to Income
$
2,676
$
1,102
$
3,971
$
1,459
December 31, 2023
$
3,969
$
1,395
At December 31, 2024, the Company had a collateral liability of $
5.5
Note 6
PREMISES AND EQUIPMENT
The composition of the Company’s
premises and equipment at December 31 was as follows:
Land
$
21,391
$
22,251
Buildings
106,104
111,313
Fixtures and Equipment
58,921
64,528
Total Premises and Equipment
186,416
198,092
Accumulated Depreciation
(106,959)
(116,140)
Premises and Equipment, Net
$
79,457
$
81,952
Depreciation expense for the above premises and equipment was approximately
$
7.4
. million, $
7.7
7.9
million in
2025, 2024, and 2023, respectively
.
Note 7
LEASES
Operating leases in which the Company is the lessee are recorded as operating
lease right of use (“ROU”) assets and operating
liabilities, included in
other assets
and
liabilities
, respectively,
on its Consolidated Statement of Financial Condition.
Operating lease ROU assets represent the Company’s
right to use an underlying asset during the lease term and operating lease
liabilities represent the Company’s
obligation to make lease payments arising from the lease.
ROU assets and operating lease
liabilities are recognized at lease commencement based on the present value of
the remaining lease payments using a discount rate
that represents the Company’s incremental
borrowing rate at the lease commencement date.
Operating lease expense, which is
comprised of amortization of the ROU asset and the implicit interest accreted
on the operating lease liability,
is recognized on a
straight-line basis over the lease term and is recorded in occupancy expense in
the Consolidated Statement of Income.
The Company’s operating
leases primarily relate to banking offices with remaining lease terms
from
one
to
forty-two years
.
The
Company’s leases are not complex
and do not contain residual value guarantees, variable lease payments, or
significant
assumptions or judgments made in applying the requirements of ASC Topic
Operating leases with an initial term of 12
months or less are not recorded on the Consolidated Statement of Financial Condition
and the related lease expense is recognized
on a straight-line basis over the lease term.
At December 31, 2025, the operating lease ROU assets and liabilities were $
26.3
26.9
At December 31, 2024, the operating lease ROU assets and liabilities were $
24.9
million
and $
25.5
million, respectively. The
Company recognized $
0.1
0.7
million of rental income during the 12 months
ended December 31, 2025 and 2024,
respectively, for a lease that terminated
in February 2025. The Company does not have any
finance leases.
The table below summarizes our lease expense and other information at
December 31, related to the Company’s
operating leases:
Operating lease expense
$
3,604
$
3,347
$
2,919
Short-term lease expense
Total lease expense
$
4,461
$
4,185
$
3,541
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
3,574
$
3,147
$
2,847
Right-of-use assets obtained in exchange for new operating lease liabilities
4,069
6,748
Weighted-average
remaining lease term — operating leases (in years)
15.7
16.4
16.9
Weighted-average
discount rate — operating leases
3.7
%
3.6
%
3.5
%
The table below summarizes the maturity of remaining lease liabilities:
$
3,601
3,397
3,111
2,880
2,848
2031 and thereafter
18,445
Total
$
34,282
Less: Interest
(7,350)
Present Value
of Lease Liability
$
26,932
A related party is the lessor in an operating lease with the Company.
The terms of this lease agreement are further described in
Note 19 – Related Party Transactions.
In December 2024, the Company entered into a sale leaseback agreement related
to the sale of an office location.
This agreement
contained a
two-year
operating lease which resulted in the recognition of a right-of-use asset and lease liability.
Further, the sale
resulted in a gain on sale of $
0.7
million included in other noninterest income.
Note 8
GOODWILL AND OTHER INTANGIBLES
At December 31, 2025 and 2024, the Company had goodwill of $
89.1
and $
91.8
Goodwill is tested for
impairment on an annual basis, or more often if impairment indicators exist.
Testing allows for a qualitative assessment
of
goodwill impairment indicators.
If the assessment indicates that impairment has more than likely occurred,
the Company must
compare the estimated fair value of the reporting unit to its carrying amount.
If the carrying amount of the reporting unit exceeds
its estimated fair value, an impairment charge is recorded
equal to the excess.
On April 30, 2021, CCSW acquired substantially all of the assets of Strategic Wealth
Group, LLC (“SWG”), including advisory,
service, and insurance carrier agreements, and the assignment of all related revenues
thereof. Under the terms of the purchase
agreement, SWG principles became officers of CCSW and will
continue the operation of their
five
offices in South Georgia
offering wealth management services and comprehensive
risk management and asset protection services for individuals and
businesses.
CCBG paid $
4.5
million in cash consideration and recorded goodwill of $
2.8
million and a customer relationship
intangible asset (
10 year
life) of $
1.6
In September 2025, CCSW was sold resulting in $
2.8
0.9
million
reduction in goodwill and customer relationship
intangible asset
, respectively.
Amortization expense related to the customer
relationship intangible totaled $
0.1
0.2
million in 2025 and 2024, respectively.
The intangible asset balance as of
December 31, 2024 was $
1.0
The Company evaluates goodwill for impairment as defined by ASC Topic
- During the fourth quarter of 2025, the Company
performed its annual goodwill impairment testing and determined
that
no
goodwill impairment existed at December 31, 2025 and
no
goodwill impairment existed at December 31, 2024.
Note 9
OTHER REAL ESTATE
OWNED
The following table presents other real estate owned activity at December 31,
$
$
$
Additions
4,424
1,512
Write-Downs
(28)
(16)
Sales
(2,827)
(613)
(1,926)
$
1,936
$
$
Net expenses applicable to other real estate owned for the three years ended December
31, were as follows:
Gains from the Sale of Properties
$
(4,514)
$
(980)
$
(2,072)
Losses from the Sale of Properties
Rental Income from Properties
(5)
Property Carrying Costs
Total
$
(4,309)
$
(868)
$
(1,969)
Note 10
DEPOSITS
The composition of the Company’s
interest bearing deposits at December 31 was as follows:
$
1,322,114
$
1,285,281
390,888
404,396
Savings Deposits
503,485
506,766
193,939
169,280
Total Interest Bearing
$
2,410,426
$
2,365,723
At December 31, 2025 and 2024, $
1.2
million in overdrawn deposit accounts were reclassified as loans.
The amount of time deposits that meet or exceed the FDIC insurance limit of $250,000
totaled $
76.0
56.8
million at
December 31, 2025 and 2024, respectively.
At December 31, the scheduled maturities of time deposits were as follows:
$
174,907
11,610
3,170
1,563
2,689
Total
$
193,939
Interest expense on deposits for the three years ended December 31 was as follows:
$
15,441
$
16,835
$
12,375
8,594
9,957
3,670
Savings Deposits
Time Deposits < $250,000
3,183
3,579
Time Deposits > $250,000
1,713
1,068
Total Interest Expense
$
29,597
$
32,162
$
17,582
Note 11
SHORT-TERM BORROWINGS
Short-term borrowings included the following:
Federal Funds
Purchased
Sold Under
Repurchase
Agreements
(1)
Other
(2)
$
$
22,018
$
28,074
43,681
28,074
23,728
12,947
4.58
%
2.58
%
4.40
%
%
2.44
%
5.31
%
$
$
26,240
$
2,064
29,339
10,003
26,970
4,881
5.55
%
3.11
%
4.94
%
%
2.72
%
3.00
%
$
$
26,957
$
8,384
32,426
42,345
19,917
24,134
7.03
%
2.57
%
6.37
%
%
2.81
%
9.51
%
(1)
Balances are fully collateralized by government treasury or agency securities held in the Company's investment portfolio.
(2)
Comprised of warehouse lines of credit totaling $
28.1
1.9
million at December 31, 2025 and 2024, respectively.
Note 12
LONG-TERM BORROWINGS
Federal Home Loan Bank Advances.
The Company had one FHLB long-term advance for $
0.1
This outstanding balance was reclassified to Short-Term
Borrowings in 2024,
matured in 2025, and had a rate of 4.80%.
FHLB
advances are collateralized by a floating lien on certain 1-4 family residential
mortgage loans, commercial real estate mortgage
loans, and home equity mortgage loans.
Interest on the FHLB advances is paid on a monthly basis.
Long-term Notes Payable
.
During 2024, the Company entered into
two
notes payable totaling $
0.8
million with the third-party
vendor for its retail brokerage platform.
The notes mature in 2031 and accrue interest at the minimum federal rate per
annum
published by the Internal Revenue Service.
The notes are forgivable in annual installments commencing
one year
after the
issuance date.
For the year ended December 31, 2025, $
0.1
million of the balance was forgiven, and the carrying amount of
the
notes payable was $
0.7
million at December 31, 2025.
Junior Subordinated Deferrable Interest
Notes.
The Company has issued
two
junior subordinated deferrable interest notes to
wholly owned Delaware statutory trusts.
The first note for $
30.9
million was issued to CCBG Capital Trust I.
The second note
for $
32.0
million was issued to CCBG Capital Trust II. The
two
trusts are considered variable interest entities for which the
Company is not the primary beneficiary.
Accordingly, the accounts of
the trusts are not included in the Company’s consolidated
financial statements. See Note 1 - Significant Accounting Policies for additional
information about the Company’s consolidation
policy.
Details of the Company’s transaction with
the two trusts are provided below.
In November 2004, CCBG Capital Trust I
issued $
30.0
million of trust preferred securities which represent interest in the assets
of the trust.
The interest payments are due quarterly and adjust quarterly to a variable rate of
3-month CME Term SOFR
plus a
margin of
1.90
%.
The trust preferred securities will mature on
December 31, 2034
, and are redeemable upon approval of the
Federal Reserve in whole or in part at the option of the Company at any
time after December 31, 2009 and in whole at any time
upon occurrence of certain events affecting their tax or regulatory
capital treatment. Distributions on the trust preferred securities
are payable quarterly on March 31, June 30, September 30, and December 31 of
each year.
CCBG Capital Trust I also issued
$
0.9
million of common equity securities to CCBG.
The proceeds of the offering of trust preferred securities and
common equity
securities were used to purchase a $
30.9
million junior subordinated deferrable interest note issued by the Company,
which has
terms similar to the trust preferred securities.
On April 12, 2016, the Company retired $
10.0
million in face value of trust
preferred securities that were auctioned as part of a liquidation of a pooled collateralized
debt obligation fund.
During the second
quarter of 2025, the Company made a principal payment of $
5.1
million on this note.
The trust preferred securities were
originally issued through CCBG Capital Trust I.
In May 2005, CCBG Capital Trust II issued
$
31.0
million of trust preferred securities which represent interest in the assets of the
trust.
The interest payments are due quarterly and adjusted quarterly to a variable rate
of
3-month CME Term SOFR
plus a
margin of
1.80
%.
The trust preferred securities will mature on
June 15, 2035
, and are redeemable upon approval of the Federal
Reserve in whole or in part at the option of the Company and in whole at any time upon
occurrence of certain events affecting
their tax or regulatory capital treatment.
Distributions on the trust preferred securities are payable quarterly on March 15,
June
15, September 15, and December 15 of each year.
CCBG Capital Trust II also issued $
0.9
million of common equity securities to
CCBG.
The proceeds of the offering of trust preferred securities and common
equity securities were used to purchase a $
32.0
million junior subordinated deferrable interest note issued by the Company,
which has terms substantially similar to the trust
preferred securities.
During the second quarter of 2025, the Company made a principal payment
of $
5.1
million on this note.
The Company has the right to defer payments of interest on the two notes at any time
or from time to time for a period of up to
twenty consecutive quarterly interest payment periods.
Under the terms of each note, in the event that under certain
circumstances there is an event of default under the note or the Company has elected
to defer interest on the note, the Company
may not, with certain exceptions, declare or pay any dividends or distributions
on its capital stock or purchase or acquire any of
its capital stock.
At December 31, 2025, the Company has paid all interest payments
in full.
The Company has entered into agreements to guarantee the payments of distributions
on the trust preferred securities and
payments of redemption of the trust preferred securities.
Under these agreements, the Company also agrees, on a subordinated
basis, to pay expenses and liabilities of the two trusts other than those arising under the
trust preferred securities.
The obligations
of the Company under the two junior subordinated notes, the trust agreements establishing
the two trusts, the guarantee and
agreement as to expenses and liabilities, in aggregate, constitute a full and unconditional
guarantee by the Company of the two
trusts’ obligations under the two trust preferred security issuances.
Despite the fact that the accounts of CCBG Capital Trust
I and CCBG Capital Trust II are not included
in the Company’s
consolidated financial statements, the $
15.0
26.0
million, respectively, in
trust preferred securities issued by these
subsidiary trusts are included in the Tier 1 Capital of
Capital City Bank Group, Inc. as allowed by Federal Reserve guidelines.
Note 13
INCOME TAXES
The provision for income taxes reflected in the Consolidated Statements of Comprehensive
Income is comprised of the following
components:
Current:
Federal
$
16,482
$
13,388
$
11,630
State
2,089
1,568
1,893
18,571
14,956
13,523
Deferred:
Federal
1,077
(877)
(391)
State
(116)
(351)
Change in Valuation
(161)
(39)
1,589
(1,032)
(483)
Total:
Federal
17,559
12,511
11,239
State
2,762
1,452
1,542
Change in Valuation
(161)
(39)
Total
$
20,160
$
13,924
$
13,040
Income taxes provided were different than the tax expense
computed by applying the statutory federal income tax rate of
% to
pre-tax income as a result of the following:
Tax Expense at Federal
Statutory Rate
$
17,161
21.0
%
$
13,769
21.0
%
$
13,411
21.0
%
State Taxes, Net of Federal
Benefit
(1)
2,021
2.5
1,040
1.6
1,401
2.2
Federal Tax Credits: Renewable
Energy
(2)
0.2
(2,093)
(3.2)
(1,938)
(3.0)
Nontaxable or Nondeductible Items:
Tax Exempt Interest
Income, Net of Interest Expense
Disallowance
(120)
(0.1)
(161)
(0.3)
(259)
(0.4)
Tax-Exempt Cash Surrender
Value
Life Insurance
Benefit
(211)
(0.3)
(201)
(0.3)
(187)
(0.3)
Other
1,309
1.6
1,025
1.6
0.7
Changes in Unrecognized Tax
Benefits
0.1
0.1
0.1
Other Adjustments:
Noncontrolling Interest
0.5
0.5
Other Items, Net
(220)
(0.3)
0.2
(242)
(0.4)
Actual Tax Expense
$
20,160
24.7
%
$
13,924
21.2
%
$
13,040
20.4
%
(1)
Comprised primarily of Florida State Taxes
(2)
Tax credits from renewable
energy tax equity investments accounted for under the
deferral method, which results in tax benefits
in earlier periods and tax expense in later periods as the investment yield is recognized.
Deferred income tax liabilities and assets result from differences between
assets and liabilities measured for financial reporting
purposes and for income tax return purposes.
These assets and liabilities are measured using the enacted tax rates and laws that
are currently in effect.
The net deferred tax asset and the temporary differences comprising
that balance at December 31, 2025 and 2024 are as follows:
Deferred Tax Assets Attributable
to:
$
7,550
$
7,168
State Net Operating Loss and Tax
Credit Carry-Forwards
1,730
1,976
1,236
Accrued SERP Liability
2,363
2,548
Lease Liability
6,826
5,639
Net Unrealized Losses on Investment Securities
3,217
6,779
Investment in Partnership
4,404
Other
6,451
2,808
Total Deferred
Tax Assets
$
30,169
$
32,286
Deferred Tax Liabilities
Attributable to:
Depreciation on Premises and Equipment
$
3,982
$
3,538
Deferred Loan Fees and Costs
5,070
3,543
Intangible Assets
2,689
3,378
Accrued Pension/SERP
3,206
3,302
Accrued Pension Liability
1,754
1,217
Right of Use Asset
6,662
5,510
Investments
Other
1,569
1,784
Total Deferred
Tax Liabilities
25,401
22,741
1,730
1,891
Net Deferred Tax Asset
$
3,038
$
7,654
In the opinion of management, it is more likely than not that all of the deferred tax
assets, with the exception of certain state net
operating loss carry-forwards and certain state tax credit carry-forwards expected
to expire prior to utilization, will be realized.
Accordingly, a valuation
allowance of $
1.7
1.9
million is recorded at December 31, 2025 and December 31, 2024,
respectively.
At December 31, 2025, the Company had state loss and tax credit carry-forwards of
approximately $
1.7
million,
which expire at various dates from
6 through
.
The following table presents a reconciliation of the beginning and ending amount
of unrecognized tax benefits:.
Balance at January 1,
$
$
$
Additions Based on Tax
Positions Related to Current Year
$
$
$
Of this total, $
0.3
million represents the amount of unrecognized tax benefits that, if recognized, would favorably
affect the
effective tax rate in future periods. The Company does not
expect the total amount of unrecognized tax benefits to significantly
increase or decrease in the next 12 months.
It is the Company’s policy to recognize
interest and penalties accrued relative to unrecognized tax benefits in their respective
federal or state income taxes accounts.
There were
no
penalties and interest related to income taxes recorded in the Consolidated
Statements of Income for the years ended December 31, 2025, 2024,
and 2023.
There were
no
amounts accrued in the
Consolidated Statements of Financial Condition for penalties and interest
as of December 31, 2025 and 2024.
The Company files a consolidated U.S. federal income tax return and a
separate U.S. federal income tax return for CCHL. Each
subsidiary files various returns in states where its banking offices are
located.
The Company is generally no longer subject to
U.S. federal or state tax examinations for years before 2022.
Note 14
STOCK-BASED COMPENSATION
At December 31, 2025, the Company had three stock-based compensation
plans, consisting of the 2021 Associate Incentive Plan
(“AIP”), the 2021 Associate Stock Purchase Plan (“ASPP”), and
the 2021 Director Stock Purchase Plan (“DSPP”).
These plans,
which were approved by the shareowners in April 2021, replaced substantially
similar plans approved by the shareowners in
Total compensation
expense associated with these plans for the years ended December 31, 2025, 2024 and
2023 was $
3.2
2.7
2.1
AIP.
The AIP allows key associates and directors to earn various forms of equity-based
incentive compensation.
Under the AIP,
700,000
shares reserved for issuance.
On an annual basis, the Company, pursuant
to the terms and conditions of the
AIP,
will create an annual incentive plan (“Plan”), under which all participants are
eligible to earn performance shares.
Awards
to
associates under the 2021 Plan were tied to internally established goals.
At base level targets, the grant-date fair value of the
shares eligible to be awarded in 2025 was approximately $
1.3
For 2025, a total of
34,852
shares were eligible for
issuance, but additional shares could be earned if performance exceeded
established goals.
55,049
shares were earned
for 2025 that were issued in January 2026.
For the years ended December 31, 2025, 2024 and 2023, Directors earned
8,230
,
10,870
and
8,840
shares, respectively, under the
Plan. The Company recognized expense of $
2.5
1.8
1.1
million for the years ended December 31, 2025, 2024 and 2023, respectively
,
related to the AIP.
Executive Long-Term
Incentive Plan (“LTIP”)
.
The Company has established a Performance Share Unit Plan under the
provisions of the AIP that allows William G. Smith,
Jr., the Chairman and Chief
Executive Officer of CCBG, Inc,
Thomas A.
Barron, the President of CCBG, Inc., and Bethany Corum, the President
of CCB, to earn shares based on the compound annual
growth rate in diluted earnings per share over a three-year period.
The Company recognized expense of $
0.5
0.7
0.9
million for the years ended December 31, 2025, 2024 and 2023, respectively.
Shares issued under the plan were
15,092
,
17,334
, and
4,909
13,436
shares were
earned in 2025
that were issued in January 2026.
After deducting the shares earned, but not issued, in 2025 under the AIP and
LTIP,
337,894
shares remain eligible for issuance
under the 2021 AIP.
DSPP.
The Company’s DSPP allows the directors
to purchase the Company’s common
stock at a price equal to
% of the
closing price on the date of purchase.
Stock purchases under the DSPP are limited to the amount of the directors’ annual retainer
and meeting fees.
Under the DSPP,
300,000
shares reserved for issuance.
The Company recognized $
0.1
million in
expense under the DSPP for each of the years ended December 31, 2025,
and 2023.
The Company issued shares under the
DSPP totaling
12,147
,
14,969
and
13,090
At December 31,
2025, there were
225,455
shares eligible for issuance under the DSPP.
ASPP.
Under the Company’s ASPP,
substantially all associates may purchase the Company’s
common stock through payroll
deductions at a price equal to
% of the lower of the fair market value at the beginning or end of each six-month offering
period.
Stock purchases under the ASPP are limited to
% of an associate’s eligible compensation,
up to a maximum of $
25,000
(fair market value on each enrollment date) in any plan year.
Under the ASPP,
400,000
shares of common stock
reserved for issuance.
The Company recognized $
0.1
0.2
0.1
million in expense under the ASPP for each
of the years ended December 31, 2025, 2024 and 2023, respectively.
The Company issued shares under the ASPP totaling
22,703
,
37,019
and
17,651
At December 31, 2025,
269,400
shares remained eligible for issuance under the ASPP.
Based on the Black-Scholes option pricing model, the weighted average
estimated fair value of each of the purchase rights
granted under the ASPP was $
5.98
for 2025.
For 2024 and 2023, the weighted average fair value purchase right granted was
$
4.74
and $
5.32
, respectively.
In calculating compensation, the fair value of each stock purchase right was estimated
on the date
of grant using the following weighted average assumptions:
Dividend yield
2.6
%
3.0
%
2.3
%
Expected volatility
19.0
%
21.1
%
22.5
%
Risk-free interest rate
3.9
%
4.8
%
5.1
%
Expected life (in years)
0.5
0.5
0.5
Note 15
EMPLOYEE BENEFIT PLANS
Pension Plan
The Company sponsors a noncontributory pension plan covering
a portion of its associates.
On December 30, 2019, the plan was
amended to remove plan eligibility for new associates hired after December 31,
- There were no amendments to the Plan in
2020 or 2021. The Plan was also amended in December 2022, effective
January 1, 2020, increasing the required minimum
distribution age to
, per the SECURE Act 1.0. During 2023 and effective January 1, 2023, the Plan
was amended increasing the
required minimum distribution age to
, per the SECURE Act 2.0. Benefits under this plan generally are based on the associate’s
total years of service and average of the
five
highest years of compensation during the
ten years
immediately preceding their
departure.
The Company’s general funding policy
is to contribute amounts sufficient to meet minimum funding requirements as
set by law and to ensure deductibility for federal income tax purposes.
The following table details on a consolidated basis the changes in benefit
obligation, changes in plan assets, the funded status of
the plan, components of pension expense, amounts recognized in the
Company’s Consolidated Statements of
Financial Condition,
and major assumptions used to determine these amounts.
Change in Projected Benefit Obligation:
Benefit Obligation at Beginning of Year
$
123,019
$
120,287
$
108,151
3,441
3,715
3,488
6,706
6,097
5,831
Actuarial Loss (Gain)
2,813
(1,974)
6,936
Benefits Paid
(2,320)
(4,829)
(3,843)
Expenses Paid
(368)
(277)
(276)
Settlements
(12,600)
Projected Benefit Obligation at End of Year
$
120,691
$
123,019
$
120,287
Change in Plan Assets:
of Plan Assets at Beginning of Year
$
140,477
$
125,295
$
104,276
Actual Return on Plan Assets
16,956
20,288
19,138
Employer Contributions
6,000
Benefits Paid
(2,320)
(4,829)
(3,843)
Expenses Paid
(368)
(277)
(276)
Settlements
(12,600)
of Plan Assets at End of Year
$
142,145
$
140,477
$
125,295
Funded Status of Plan and Prepaid Asset Recognized at End of Year:
$
21,454
$
17,458
$
5,008
Accumulated Benefit Obligation at End of Year
$
103,427
$
105,201
$
102,642
Components of Net Periodic Benefit (Income) Costs:
$
3,441
$
3,715
$
3,488
6,706
6,097
5,831
Expected Return on Plan Assets
(9,058)
(8,117)
(6,805)
Amortization of Prior Service Costs
Net (Gain) Loss Amortization
(1,654)
Net Gain Settlements
(1,552)
Net Periodic Benefit (Income) Cost
$
(2,117)
$
1,860
$
3,453
Assumptions Used to Determine Benefit Obligation:
5.67%
5.82%
5.29%
(1)
4.67%
4.75%
5.10%
Measurement Date
Assumptions Used to Determine Benefit Cost:
5.82%
5.29%
5.63%
Expected Return on Plan Assets
6.75%
6.75%
6.75%
(1)
4.67%
4.75%
5.10%
Amortization Amounts from Accumulated Other Comprehensive Income:
Net Actuarial Gain
$
(5,085)
$
(14,145)
$
(5,397)
Prior Service Cost
(5)
Net Gain (Loss)
3,206
(165)
(934)
Deferred Tax Expense
3,628
1,606
Other Comprehensive Income, net of tax
$
(1,403)
$
(10,682)
$
(4,730)
Amounts Recognized in Accumulated Other Comprehensive (Income)
Loss:
Net Actuarial (Gain) Loss
$
(14,867)
$
(12,988)
$
1,322
Deferred Tax Expense
(Benefit)
3,769
3,293
(335)
Accumulated Other Comprehensive (Income) Loss, net of tax
$
(11,098)
$
(9,695)
$
(1)
The Company utilized an age-graded approach that varies the rate based
on the age of the participants.
During 2025, lump sum payments made under the Company’s
defined benefit pension plan triggered settlement accounting,
which resulted in a $
1.6
million settlement gain in accordance with applicable accounting guidance
for defined benefit plans.
The
Company recorded
no
settlement gains or losses during 2024 and 2023.
The service cost component of net periodic benefit cost is reflected in compensation
expense in the accompanying Consolidated
Statements of Income.
The other components of net periodic cost are included in “other” within the noninterest
expense category
in the Consolidated Statements of Income.
See Note 1 – Significant Accounting Policies for additional information.
The Company expects to recognize $
1.9
million of the net actuarial gain reflected in accumulated other comprehensive
income at
December 31, 2025 as a component of net periodic benefit cost during 202
Plan Assets.
The Company’s pension
plan asset allocation at December 31, 2025 and 2024, and the target
asset allocation at
December 31, 2025 are as follows:
Target
Percentage of Plan
Allocation
Assets at December 31
(1)
%
%
%
Debt Securities
%
%
%
(2)
%
%
%
Total
%
%
%
(1)
Represents asset allocation at December 31 which
may differ from the average target
allocation for the year due to the year-
end cash contribution to the plan.
(2)
Cash levels will be maintained in the Plan sufficient to fund expected distributions.
The Company’s pension plan assets are overseen
by the CCBG Retirement Committee.
Capital City Trust Company acts as the
investment manager for the plan.
The investment strategy is to maximize return on investments while minimizing risk.
The
Company believes the best way to accomplish this goal is to take a conservative
approach to its investment strategy by investing
in mutual funds that include various high-grade equity securities and investment
-grade debt issuances with varying investment
strategies.
The target asset allocation will periodically be adjusted based
on market conditions.
For the majority of 2025, the
target asset allocation was within the following investment
allocation ranges: equity securities ranging from
% and
%, debt
securities ranging from
% and
%, and cash and cash equivalents ranging from
% and
%.
In December 2025, the target
asset allocation was changed to the following:
% equity securities and
% fixed income.
Cash levels will be maintained in the
Plan sufficient to fund expected distributions.
The overall expected long-term rate of return on assets is a weighted-average
expectation for the return on plan assets.
The Company considers historical performance data and economic/financial
data to
arrive at expected long-term rates of return for each asset category.
The major categories of assets in the Company’s
pension plan at December 31 are presented in the following table.
Assets are
segregated by the level of the valuation inputs within the fair value hierarchy
established by ASC Topic 820
utilized to measure
fair value (see Note 22 – Fair Value
Measurements).
Level 1:
U.S. Treasury Securities
$
10,352
$
17,039
Mutual Funds
121,288
111,426
4,417
9,010
Level 2:
Corporate Notes/Bonds
6,088
3,002
Total Fair Value
of Plan Assets
$
142,145
$
140,477
Expected Benefit Payments.
At December 31, expected benefit payments related to the defined benefit pension
plan were as
follows:
$
11,363
10,680
9,693
9,474
9,225
2031 through 2035
47,772
Total
$
98,207
Contributions.
The following table details the amounts contributed to the pension plan in 2025
and 2024, and the expected
amount to be contributed in 2026.
Expected
Contribution
(1)
Actual Contributions
$
$
$
5,000
(1)
For 2026, the Company will have the option to make a cash contribution
to the plan or utilize pre-funding balances.
Supplemental Executive Retirement Plan
The Company has a Supplemental Executive Retirement Plan (“SERP”) and
a Supplemental Executive Retirement Plan II
(“SERP II”) covering selected executive officers.
Benefits under this plan generally are based on the same service and
compensation as used for the pension plan, except the benefits are calculated without
regard to the limits set by the Internal
Revenue Code on compensation and benefits.
The net benefit payable from the SERP is the difference between
this gross benefit
and the benefit payable by the pension plan.
The SERP II was adopted by the Company’s Board
on May 21, 2020 and covers
certain executive officers that were not covered by
the SERP.
The following table details on a consolidated basis the changes in benefit
obligation, the funded status of the plan, components of
pension expense, amounts recognized in the Company’s
Consolidated Statements of Financial Condition, and major assumptions
used to determine these amounts.
Change in Projected Benefit Obligation:
Benefit Obligation at Beginning of Year
$
10,132
$
9,204
$
10,948
Actuarial Loss
2,240
Plan Amendments
Net Settlements
(2,464)
Projected Benefit Obligation at End of Year
$
12,943
$
10,132
$
9,204
Funded Status of Plan and Accrued Liability Recognized at End of Year:
$
12,943
$
10,132
$
9,204
Accumulated Benefit Obligation at End of Year
$
11,935
$
9,580
$
8,943
Components of Net Periodic Benefit Costs:
$
$
$
Amortization of Prior Service Cost
Net Gain Amortization
(117)
(281)
(531)
Net Gain Settlements
(291)
Net Periodic Benefit Cost
$
$
$
(152)
Assumptions Used to Determine Benefit Obligation:
5.24%
5.57%
5.11%
(1)
4.67%
4.75%
5.10%
Measurement Date
Assumptions Used to Determine Benefit Cost:
5.57%
5.11%
5.45%
(1)
4.67%
4.75%
5.10%
Amortization Amounts from Accumulated Other Comprehensive Loss:
Net Actuarial Loss
$
2,240
$
$
Prior Service (Cost) Benefit
(102)
(151)
Net Gain
Settlement Gain
Deferred Tax Benefit
(571)
(183)
(222)
Other Comprehensive Loss, net of tax
$
1,684
$
$
Amounts Recognized in Accumulated Other Comprehensive Loss (Income):
Net Actuarial Loss (Gain)
$
2,083
$
(275)
$
(753)
Prior Service Cost
Deferred Tax (Benefit)
Expense
(563)
Accumulated Other Comprehensive Loss (Income), net of tax
$
1,657
$
(27)
$
(562)
(1)
The Company utilized an age-graded approach that varies the rate based
on the age of the participants.
The Company expects to recognize approximately $
1.1
million of the net actuarial loss reflected in accumulated other
comprehensive loss at December 31, 2025 as a component of net periodic
benefit cost during 2026.
In June 2023, lump sum retirement distributions to two plan participants
required the application of settlement accounting.
The
amount of the settlement gain was $
0.3
Expected Benefit Payments
. As of December 31, expected benefit payments related to the SERP were as follows:
$
11,208
2031 through 2035
1,826
Total
$
14,225
401(k) Plan
The Company has a 401(k) Plan which enables CCB and CCBG associates to defer
a portion of their salary on a pre-tax
basis.
The plan covers substantially all associates of the Company who meet
minimum age requirements.
The plan is designed to
enable participants to contribute any amount, up to the maximum annual limit allowed
by the IRS, of their compensation withheld
in any plan year placed in the 401(k) Plan trust account.
Matching contributions of
% from the Company are made on
participant’s contributions
for up to
% of eligible compensation for eligible associates.
Further, in addition to the
% match, all
associates hired after December 31, 2019, will receive
% of their eligible compensation as a nonelective contribution on each
payroll period.
For 2025, the Company made total 401(k) contributions of $
2.6
For 2024 and 2023, the Company made
total 401(k) contributions of $
1.9
1.7
The participant may choose to invest their contributions
into thirty-two investment options available to 401(k) participants, including
the Company’s common stock.
50,000
shares of CCBG common stock have been reserved for issuance.
Shares issued to participants have historically been purchased in
the open market.
Effective January 1, 2025, the Company amended
its 401(k) Plan to merge and include associates of the CCHL 401(k) Plan,
at
which time the CCHL 401(k) Plan was terminated.
The CCHL 401(k) Plan was previously available to all associates employed
by CCHL.
Prior to the termination, the plan allowed participants to contribute any amount, up
to the maximum annual limit
allowed by the IRS, of their compensation withheld in any plan year placed
in the 401(k) Plan trust account.
A discretionary
matching contribution was determined annually by CCHL.
For 2024
and 2023, matching contributions were made by CCHL up
to
% of eligible participant’s compensation
totaling $
0.4
million for each respective year.
Other Plans
The Company has an Amended and Restated Dividend Reinvestment Plan (the
“DRIP”). The DRIP is an “Open Market Only”
plan, which means that shares that participants receive under the DRIP will only
be purchased by the plan agent in the open
market. The Company did
no
t issue any new shares under the DRIP in 2025, 2024 and 2023.
Note 16
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings
per share:
(Dollars and Per Share Data in Thousands)
Numerator:
$
61,557
$
52,915
$
52,258
Denominator:
Denominator for Basic Earnings Per Share Weighted
-Average Shares
17,055
16,943
16,987
Effects of Dilutive Securities Stock Compensation
Plans
Denominator for Diluted Earnings Per Share Adjusted Weighted
-Average
Shares and Assumed Conversions
17,102
16,969
17,023
Basic Earnings Per Share
$
3.61
$
3.12
$
3.08
Diluted Earnings Per Share
$
3.60
$
3.12
$
3.07
Note 17
REGULATORY
MATTERS
Regulatory Capital Requirements
.
The Company (on a consolidated basis) and the Bank are subject to various regulatory
capital
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate certain
mandatory and possible additional discretionary actions by regulators that,
if undertaken, could have a direct material effect on
the Company and Bank’s financial statements.
Under
capital
adequacy guidelines
and the
regulatory framework
for
prompt
corrective action
,
the Company and the Bank must meet specific capital guidelines that involve quantitative
measures of their
assets, liabilities and certain off-balance sheet items as calculated under
regulatory accounting practices.
The capital amounts and
classification are also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.
Prompt corrective action provisions are not applicable to bank holding
companies.
A detailed description of these regulatory
capital requirements is provided in the section captioned “Regulatory
Considerations – Capital Regulations” section on page 14.
Management believes, at December 31, 2025 and 2024, that
the Company and the Bank meet all capital adequacy requirements to
which they are subject.
At December 31, 2025, the most recent notification from the Federal Deposit Insurance
Corporation
categorized the Bank as well capitalized under the regulatory framework for prompt
corrective action.
To be categorized as well
capitalized, an institution must maintain minimum common equity
Tier 1, total risk-based, Tier
1 risk based and Tier 1 leverage
ratios as set forth in the following tables.
There are no conditions or events since the notification that management believes have
changed the Bank’s category.
The Company and Bank’s actual capital
amounts and ratios at December 31, 2025 and 2024 are
presented in the following table.
To Be Well
Capitalized Under
Required
Prompt
For Capital
Corrective
Actual
Adequacy Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common Equity Tier 1:
CCBG
$
464,340
18.56%
$
112,675
4.50%
CCB
431,958
17.27%
112,634
4.50%
$
162,694
6.50%
Tier 1 Capital:
CCBG
505,340
20.20%
150,233
6.00%
CCB
431,958
17.27%
150,179
6.00%
200,238
8.00%
Total Capital:
CCBG
536,638
21.45%
200,311
8.00%
CCB
463,246
18.52%
200,238
8.00%
250,298
10.00%
Tier 1 Leverage:
CCBG
505,340
11.77%
171,789
4.00%
CCB
431,958
10.06%
171,733
4.00%
214,667
5.00%
Common Equity Tier 1:
CCBG
$
412,445
15.54%
$
119,437
4.50%
CCB
405,313
15.24%
119,708
4.50%
$
172,912
6.50%
Tier 1 Capital:
CCBG
463,445
17.46%
159,249
6.00%
CCB
405,313
15.24%
159,611
6.00%
212,814
8.00%
Total Capital:
CCBG
494,851
18.64%
212,332
8.00%
CCB
436,719
16.42%
212,814
8.00%
266,018
10.00%
Tier 1 Leverage:
CCBG
463,445
11.05%
167,764
4.00%
CCB
405,313
9.67%
167,627
4.00%
209,533
5.00%
Not applicable to bank holding companies.
Dividend Restrictions
.
In the ordinary course of business, the Company is dependent upon dividends
from its banking subsidiary
to provide funds for the payment of dividends to shareowners and to provide
for other cash requirements.
Banking regulations
may limit the amount of dividends that may be paid.
Approval by regulatory authorities is required if the effect of dividends
declared would cause the regulatory capital of the Company’s
banking subsidiary to fall below specified minimum levels.
Approval is also required if dividends declared exceed the net profits of
the banking subsidiary for that year combined with the
retained net profits for the preceding two years.
In 2026, the bank subsidiary may declare dividends without regulatory approval
of $
49.2
million plus an additional amount equal to net profits of the Company’s
subsidiary bank for 2026 up to the date of any
such dividend declaration.
Note 18
ACCUMULATED OTHER
COMPREHENSIVE LOSS
FASB Topic
ASC 220, “Comprehensive Income” requires that certain transactions
and other economic events that bypass the
Consolidated Statements of Income be displayed as other comprehensive
income.
Total comprehensive income
is reported in
the Consolidated Statements of Comprehensive Income (net of
tax) and Changes in Shareowners’ Equity (net of tax).
The following table shows the amounts allocated to accumulated other
comprehensive loss.
Accumulated
Other
Available
Interest Rate
Retirement
Comprehensive
for Sale
Swap
Plans
Loss
Balance as of January 1, 2025
$
(20,179)
$
3,971
$
9,722
$
(6,486)
Other comprehensive income (loss) during the period
10,649
(1,295)
(281)
9,073
Balance as of December 31, 2025
$
(9,530)
$
2,676
$
9,441
$
2,587
Balance as of January 1, 2024
$
(25,691)
$
3,970
$
(425)
$
Other comprehensive income during the period
5,512
10,147
15,660
Balance as of December 31, 2024
$
(20,179)
$
3,971
$
9,722
$
(6,486)
Balance as of January 1, 2023
$
(37,349)
$
4,625
$
(4,505)
$
(37,229)
Other comprehensive income (loss) during the period
11,658
(655)
4,080
15,083
Balance as of December 31, 2023
$
(25,691)
$
3,970
$
(425)
$
Note 19
RELATED PARTY
TRANSACTIONS
At December 31, 2025 and 2024, certain officers and directors were indebted
to the Bank in the aggregate amount of $
5.3
million
and $
4.8
During 2025 and 2024, $
1.7
0.7
million in new loans were made, respectively,
and
repayments totaled $
1.2
2.2
These loans were all current at December 31, 2025 and 2024.
Deposits from certain directors, executive officers, and
their related interests totaled $
40.9
42.7
million at December
31, 2025 and 2024, respectively.
The Company leases land from a partnership (Smith Interests General
Partnership L.L.P.)
in which William G. Smith, Jr.
has an
interest.
The Company made lease payments totaling $
0.1
million in 2025, $
0.1
million in 2024, and $
0.2
million in 2023.
In
December 2023 the lease payments adjusted to $
0.1
million annually due to a reduction in the size of the parcel leased by the
Company.
The payments under the lease agreement provide for annual lease payments of approximately
$
0.1
million annually
through December 2033, and thereafter,
increase by
% every
years until 2053 at which time the rent amount will adjust based
on reappraisal of the parcel rental value.
The Company then has
four
successive options to extend the lease for
five years
each
with rental increases of
% at each extension. Further, in accordance with
this lease agreement, the Company made payments of
$
0.5
million in May 2024 and $
0.2
million in July 2025 to the lessor as reimbursement for a portion of the costs related to the
development of subject property to support the construction of a new banking
office by the Company.
William G. Smith, III, the son of our Chairman
and Chief Executive Officer, William
G. Smith, Jr., is employed as
Chief Lending
Officer at Capital City Bank.
In 2025, William G. Smith, III’s
total compensation (consisting of annual base salary,
annual
bonus, and stock-based compensation) was determined in accordance
with the Company’s standard employment
and
compensation practices applicable to associates with similar responsibilities
and positions.
Note 20
OTHER NONINTEREST EXPENSE
Components of other noninterest expense in excess of
% of the sum of total interest income and noninterest income, which are
not disclosed separately elsewhere, are presented below for each of
the respective years.
$
1,867
$
1,724
$
1,721
5,816
6,311
6,245
Telephone
3,030
2,857
2,729
3,190
3,111
3,349
Processing Services
9,580
8,411
6,984
Insurance – Other
2,990
3,137
3,120
Pension – Other
(3,489)
(1,675)
Pension – Settlement
(1,552)
(291)
Other
10,459
12,736
11,643
Total
$
31,891
36,612
35,576
Note 21
COMMITMENTS AND CONTINGENCIES
Lending Commitments
.
The Company is a party to financial instruments with off-balance
sheet risks in the normal course of
business to meet the financing needs of its clients.
These financial instruments consist of commitments to extend credit and
standby letters of credit.
The Company’s maximum exposure
to credit loss under standby letters of credit and commitments to extend credit is
represented by the contractual amount of those instruments.
The Company uses the same credit policies in establishing
commitments and issuing letters of credit as it does for on-balance sheet instruments.
At December 31, the amounts associated
with the Company’s off-balance
sheet obligations were as follows:
Fixed
Variable
Total
Fixed
Variable
Total
Commitments to Extend Credit
(1)
$
188,834
$
456,328
$
645,162
$
184,223
$
479,191
$
663,414
Standby Letters of Credit
7,828
7,828
7,287
7,287
Total
$
196,662
$
456,328
$
652,990
$
191,510
$
479,191
$
670,701
(1)
- Commitments include unfunded loans, revolving lines of credit, and off-balance sheet residential loan commitments.
Commitments to extend credit are agreements to lend to a client so long as there is no violation of
any condition established in
the contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn
upon, the total commitment amounts do not
necessarily represent future cash requirements.
Standby letters of credit are conditional commitments issued by the
Company to guarantee the performance of a client to a third
party.
The credit risk involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities. In
general, management does not anticipate any material losses as a result of
participating in these types of transactions.
However,
any potential losses arising from such transactions are reserved for in the same manner
as management reserves for their other
credit facilities.
For both on- and off-balance sheet financial instruments, the Company
requires collateral to support such instruments when it is
deemed necessary.
The Company evaluates each client’s
creditworthiness on a case-by-case basis.
The amount of collateral
obtained upon extension of credit is based on management’s
credit evaluation of the counterparty.
Collateral held varies but
may include deposits held in financial institutions; U.S. Treasury
securities; other marketable securities; real estate; accounts
receivable; property,
plant and equipment; and inventory.
The allowance for credit losses for off-balance sheet credit commitments
that are not unconditionally cancellable by the Bank is
adjusted as a provision for credit loss expense and is recorded in other liabilities.
The following table shows the activity in the
allowance.
$
2,155
$
3,191
$
2,989
(48)
(1,036)
$
2,107
$
2,155
$
3,191
Other Commitments
.
In the normal course of business, the Company enters into lease commitments
which are classified as
operating leases.
See Note 7 – Leases for additional information on the maturity of the Company’s
operating lease commitments.
The Company has an outstanding commitment of up to $
1.0
million in a bank tech venture capital fund focused on finding and
funding technology solutions for community banks. At December 31,
2025, the amount remaining to be funded for the bank tech
venture capital commitment was $
0.3
Contingencies
.
The Company is a party to lawsuits and claims arising out of the normal course of business.
In management’s
opinion, there are
no
known pending claims or litigation, the outcome of which would, individually
or in the aggregate, have a
material effect on the consolidated results of operations,
financial position, or cash flows of the Company.
Indemnification Obligation
.
The Company is a member of the Visa U.S.A. network.
Visa U.S.A believes that its member
banks
are required to indemnify it for potential future settlement of certain litigation
(the “Covered Litigation”) that relates to several
antitrust lawsuits challenging the practices of Visa
and MasterCard International.
In 2008, the Company, as a member
of the Visa
U.S.A. network, obtained Class B shares of Visa,
Inc. upon its initial public offering.
Since its initial public offering, Visa,
Inc.
has funded a litigation reserve for the Covered Litigation resulting in a reduction in the
Class B shares held by the Company.
During the first quarter of 2011, the Company
sold its remaining Class B shares.
Associated with this sale, the Company entered
into a swap contract with the purchaser of the shares that requires a payment to the counterparty
in the event that Visa, Inc. makes
subsequent revisions to the conversion ratio for its Class B shares.
Fixed charges included in the swap liability are payable
quarterly until the litigation reserve is fully liquidated and at which time the
aforementioned swap contract will be terminated.
Conversion ratio payments and ongoing fixed quarterly charges
are reflected in earnings in the period incurred.
Quarterly fixed
payments totaled $
0.6
million for 2025, $
0.7
million for 2024, and $
0.8
million for 2023.
Conversion ratio payments totaled $
0.3
million in 2025 due to a revision to the share conversion rate related to
additional funding by VISA of the merchant litigation
reserve.
There was a $
0.2
million counterparty payment accrued and payable at December 31, 2025 due to a revision to the share
conversion rate related to additional funding by VISA of the merchant
litigation reserve.
At December 31, 2024, there was
no
amounts payable.
Note 22
FAIR VALUE
MEASUREMENTS
The fair value of an asset or liability is the exchange price that would be received
were the Bank to sell that asset or paid to
transfer that liability (exit price) in an orderly transaction occurring in the principal
market (or most advantageous market in the
absence of a principal market) for such asset or liability.
In estimating fair value, the Company utilizes valuation techniques that
are consistent with the market approach, the income approach and/or
the cost approach.
Such valuation techniques are
consistently applied.
Inputs to valuation techniques include the assumptions that market participants would
use in pricing an asset
or liability.
ASC Topic 820 establishes a fair value
hierarchy for valuation inputs that gives the highest priority to quoted prices
in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs.
The fair value hierarchy is as
follows:
Level 1 Inputs -
Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting
entity has
the ability to access at the measurement date
.
Level 2 Inputs -
Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either
directly or indirectly.
These might include quoted prices for similar assets or liabilities in active markets, quoted prices
for identical or similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are
observable for the asset or liability (such as interest rates, volatilities, prepayment
speeds, credit risks, etc.) or inputs that
are derived principally from, or corroborated, by market data by correlation
or other means
.
Level 3 Inputs -
Unobservable inputs for determining the fair values of assets or liabilities that reflect an
entity’s own
assumptions about the assumptions that market participants would
use in pricing the assets or liabilities.
Assets and Liabilities Measured at Fair Value
on a Recurring Basis
Securities Available for Sale.
U.S. Treasury securities are reported at fair value
utilizing Level 1 inputs.
Other securities
classified as AFS are reported at fair value utilizing Level 2 inputs.
For these securities, the Company obtains fair value
measurements from an independent pricing service.
The fair value measurements consider observable data that may include
dealer quotes, market spreads, cash flows, the U.S. Treasury
yield curve, live trading levels, trade execution data, credit
information and the bond’s
terms and conditions, among other things.
In general, the Company does not purchase securities that have a complicated structure.
The Company’s entire portfolio consists
of traditional investments, nearly all of which are U.S. Treasury
obligations, federal agency bullet or mortgage pass-through
securities, or general obligation or revenue based municipal bonds.
Pricing for such instruments is easily obtained.
At least
annually, the Company
will validate prices supplied by the independent pricing service by comparing them
to prices obtained
from an independent third-party source.
Equity Securities.
Investments securities classified as equity securities are carried at cost and the share of
earnings or losses is
reported through net income as an adjustment to the investment balance.
These securities are not readily marketable and therefore
are classified as a Level 3 input within the fair value hierarchy.
. The fair value of residential mortgage loans held for sale based on Level 2 inputs is determined,
when
possible, using either quoted secondary-market prices or investor commitments.
If no such quoted price exists, the fair value is
determined using quoted prices for a similar asset or assets, adjusted for
the specific attributes of that loan, which would be used
by other market participants. The Company has elected the fair value option
accounting for its held for sale loans.
Mortgage Banking Derivative Instruments.
The fair values of IRLCs are derived by valuation models incorporating
market
pricing for instruments with similar characteristics, commonly referred
to as best execution pricing, or investor commitment
prices for best effort IRLCs which have unobservable inputs, such as an
estimate of the fair value of the servicing rights expected
to be recorded upon sale of the loans, net estimated costs to originate the loans, and the pull-through
rate, and are therefore
classified as Level 3 within the fair value hierarchy.
The fair value of forward sale commitments is based on observable market
pricing for similar instruments and are therefore classified as Level 2 within
the fair value hierarchy.
Interest Rate Swap.
The Company’s derivative positions are
classified as Level 2 within the fair value hierarchy and are valued
using models generally accepted in the financial services industry and
that use actively quoted or observable market input values
from external market data providers. The fair value derivatives are determined
using discounted cash flow models.
Swap
.
The Company entered into a stand-alone derivative contract with the purchaser of
its Visa Class B shares.
The
valuation represents the amount due and payable to the counterparty based upon
the revised share conversion rate, if any,
during
the period.
There was $
0.2
million counterparty payment accrued and payable at December 31, 2025 and
no
amounts payable at
A summary of fair values for assets and liabilities at December 31 consisted
of the following:
Level 1
Level 2
Level 3
Total
Fair
Inputs
Inputs
Inputs
Value
ASSETS:
Securities Available for
Sale:
$
333,264
$
$
$
333,264
172,114
172,114
34,911
34,911
52,004
52,004
43,532
43,532
2,069
2,069
21,695
21,695
Residential Mortgage Loan Commitments ("IRLC")
ASSETS:
Securities Available for
Sale:
$
105,801
$
$
$
105,801
143,127
143,127
State and Political Subdivisions
39,382
39,382
55,477
55,477
51,462
51,462
2,399
2,399
28,672
28,672
Interest Rate Swap Derivative
5,319
5,319
Residential Mortgage Loan Commitments ("IRLC")
Mortgage Banking Activities.
The Company had Level 3 issuances and transfers related to mortgage banking
activities of $
7.7
16.9
million, respectively,
for the year ended December 31, 2025.
The Company had Level 3 issuances and
transfers related to mortgage banking activities of $
7.1
14.1
million, respectively, for the year
ended December 31,
Issuances are valued based on the change in fair value of the underlying mortgage
loan from inception of the IRLC to the
statement of financial condition date, adjusted for pull-through rates and
costs to originate.
IRLCs transferred out of Level 3
represent IRLCs that were funded and moved to mortgage loans held for sale, at fair
value.
Assets Measured at Fair Value
on a Non-Recurring Basis
Certain assets are measured at fair value on a non-recurring basis (i.e., the
assets are not measured at fair value on an ongoing
basis but are subject to fair value adjustments in certain circumstances).
An example would be assets exhibiting evidence of
impairment.
The following is a description of valuation methodologies used for assets measured on a non-recurring
basis.
Collateral Dependent Loans
.
Impairment for collateral dependent loans is measured using the fair
value of the collateral less
selling costs.
The fair value of collateral is determined by an independent valuation
or professional appraisal in conformance with
banking regulations.
Collateral values are estimated using Level 3 inputs due to the volatility in the real
estate market, and the
judgment and estimation involved in the real estate appraisal process.
Collateral dependent loans are reviewed and evaluated on
at least a quarterly basis for additional impairment and adjusted accordingly.
techniques are consistent with those
techniques applied in prior periods.
Collateral dependent loans had a carrying value of $
6.4
million with a valuation allowance of
$
0.1
million at December 31, 2025.
Collateral dependent loans had a carrying value of $
3.6
million with a valuation allowance of
$
0.1
.
During 2025 and 2024, certain foreclosed assets, upon initial recognition, were measured
and reported
at fair value through a charge-off to the allowance
for credit losses based on the fair value of the foreclosed asset less estimated
cost to sell.
At December 31, 2025 and 2024, these assets were recorded at fair value, which
is determined by an independent
valuation or professional appraisal in conformance with banking regulations.
On an ongoing basis, we obtain updated appraisals
on foreclosed assets and record valuation adjustments as necessary.
The fair value of foreclosed assets is estimated using Level 3
inputs due to the judgment and estimation involved in the real estate valuation process.
. Residential mortgage loan servicing rights are evaluated for impairment
at each reporting period
based upon the fair value of the rights as compared to the carrying amount.
Fair value is determined by a third-party valuation
model using estimated prepayment speeds of the underlying mortgage loans
serviced and stratifications based on the risk
characteristics of the underlying loans (predominantly loan type and note
interest rate).
The fair value is estimated using Level 3
inputs, including a discount rate, weighted average prepayment speed,
and the cost of loan servicing.
Further detail on the key
inputs utilized are provided in Note 4 – Mortgage Banking Activities.
At December 31, 2025 and 2024, there was
no
valuation
allowance for mortgage servicing rights.
Other Fair Value
Disclosures
The Company is required to disclose the estimated fair value of financial instruments,
both assets and liabilities, for which it is
practical to estimate fair value and the following is a description of valuation
methodologies used for those assets and liabilities.
Cash and Short-Term
Investments.
The carrying amount of cash and short-term investments is used to approximate
fair value,
given the short time frame to maturity and as such assets do not present unanticipated
credit concerns.
Securities Held to Maturity
.
Securities held to maturity are valued in accordance with the methodology previously
noted in the
caption “Assets and Liabilities Measured at Fair Value
on a Recurring Basis – Securities Available
for Sale”.
Other Equity Securities.
Other equity securities are accounted for under the equity method (Topic
- and recorded at cost.
These securities are not readily marketable securities and are reflected in
Other Assets on the Statement of Financial Condition.
Loans.
The loan portfolio is segregated into categories, and the fair value of each loan category
is calculated using present value
techniques based upon projected cash flows and estimated discount
rates.
Pursuant to the adoption of ASU 2016-01,
Recognition
and Measurement of Financial Assets and Financial
Liabilities
, the values reported reflect the incorporation of a liquidity
discount to meet the objective of “exit price” valuation.
Deposits.
The fair value of Noninterest Bearing Deposits, NOW Accounts, Money Market
Accounts and Savings Accounts are
the amounts payable on demand at the reporting date. The fair value of fixed
maturity certificates of deposit is estimated using
present value techniques and rates currently offered for deposits of similar remaining
maturities.
Subordinated Notes Payable.
The fair value of each note is calculated using present value techniques,
based upon projected cash
flows and estimated discount rates as well as rates being offered
for similar obligations.
and Long-Term
Borrowings.
The fair value of each note is calculated using present value techniques,
based upon
projected cash flows and estimated discount rates as well as rates being offered
for similar debt.
A summary of estimated fair values of significant financial instruments at December
31 consisted of the following:
Level 1
Level 2
Level 3
Value
Inputs
Inputs
Inputs
ASSETS:
Cash
$
62,189
$
62,189
$
$
Fed Funds Sold and Interest Bearing Deposits
467,782
467,782
Investment Securities, Held to Maturity
377,446
129,268
240,052
(1)
2,848
2,848
1,359
Loans, Net of Allowance for Credit Losses
2,515,117
2,416,937
$
$
$
3,662,466
$
50,092
50,092
42,582
40,116
Long-Term Borrowings
Level 1
Level 2
Level 3
Value
Inputs
Inputs
Inputs
ASSETS:
Cash
$
70,543
$
70,543
$
$
Short-Term Investments
321,311
321,311
Investment Securities, Held to Maturity
567,155
361,529
182,931
(1)
2,848
2,848
1,616
Loans, Net of Allowance for Credit Losses
2,622,299
2,457,883
$
$
$
3,046,926
$
28,304
28,304
52,887
42,530
Long-Term Borrowings
(1)
Accounted for under the equity method – not readily
marketable securities – reflected in other assets.
All non-financial instruments are excluded from the above table.
The disclosures also do not include goodwill.
Accordingly, the
aggregate fair value amounts presented do not represent the underlying
value of the Company.
Note 23
PARENT COMPANY
FINANCIAL INFORMATION
The following are condensed statements of financial condition of the parent company
at December 31:
Parent Company Statements of Financial Condition
Data)
ASSETS
Cash and Due From Subsidiary Bank
$
84,338
$
70,721
Investment in Subsidiary Bank
519,386
483,632
3,678
4,072
$
604,636
$
562,725
$
42,582
$
52,887
9,203
14,521
Total Liabilities
51,785
67,408
Common Stock, $
0.01
90,000,000
and
shares issued and outstanding at December 31, 2025 and 2024, respectively
Additional Paid-In Capital
41,650
37,684
Retained Earnings
508,443
463,949
Accumulated Other Comprehensive Income (Loss), Net of Tax
2,587
(6,486)
Total Shareowners’
Equity
552,851
495,317
Total Liabilities and Shareowners’
Equity
$
604,636
$
562,725
The operating results of the parent company for the three years ended December
31 are shown below:
Parent Company Statements of Operations
OPERATING INCOME
Income Received from Subsidiary Bank:
Administrative Fees
$
8,364
$
6,334
$
6,367
Dividends
37,000
35,000
30,000
Other Income
1,261
Total Operating
Income
46,625
41,640
36,820
OPERATING EXPENSE
Salaries and Associate Benefits
6,635
5,433
4,257
Interest on Subordinated Notes Payable
1,924
2,450
2,427
1,187
1,842
Other
1,527
1,667
1,670
Total Operating
Expense
12,219
12,420
10,110
Earnings Before Income Taxes
and Equity in Undistributed
Earnings of Subsidiary Bank
34,406
29,220
26,710
Income Tax Benefit
(234)
(828)
(650)
Earnings Before Equity in Undistributed Earnings of Subsidiary Bank
34,640
30,048
27,360
Equity in Undistributed Earnings of Subsidiary Bank
26,917
22,867
24,898
$
61,557
$
52,915
$
52,258
The cash flows for the parent company for the three years ended December 31 were
Parent Company Statements of Cash Flows
CASH FLOWS FROM OPERATING
ACTIVITIES:
$
61,557
$
52,915
$
52,258
Adjustments to Reconcile Net Income to Net Cash Provided By
Operating Activities:
Equity in Undistributed Earnings of Subsidiary Bank
(26,917)
(22,867)
(24,898)
Gain on sale of subsidiary
(773)
Stock Compensation
2,324
1,801
1,468
Amortization of Intangible Asset
Increase in Other Assets
4,206
6,686
(117)
Increase in Other Liabilities
(5,016)
(6,191)
(1,557)
Net Cash Provided By Operating Activities
$
35,488
32,504
27,314
CASH FROM INVESTING ACTIVITIES:
Purchase of Equity Securities
$
$
(52)
(369)
Decrease in Investment in Subsidiaries
1,781
Net Cash Received for Divestitures
2,375
Net Cash (Used in) Provided by Investing Activities
$
4,156
$
(52)
$
(369)
CASH FROM FINANCING ACTIVITIES:
Principal Payments of Subordinated Notes
(10,305)
Dividends Paid
Issuance of Common Stock Under Compensation Plans
1,341
1,501
Payments to Repurchase Common Stock
(2,330)
(3,710)
Net Cash Used In Financing Activities
$
(26,027)
$
(15,735)
$
(15,678)
Net Increase in Cash and Due from Subsidiary Bank
13,617
16,717
11,267
Cash and Due from Subsidiary Bank at Beginning of Year
70,721
54,004
42,737
Cash and Due from Subsidiary Bank at End of Year
$
84,338
$
70,721
$
54,004
Note 24
SEGMENT REPORTING
The Company operates a single reportable business segment that is comprised
of commercial banking within the states of Florida,
Georgia, and Alabama.
The Company’s CEO is deemed
the Chief Operating Decision Maker (“CODM”). The CODM evaluates
the financial performance of the Company by evaluating revenue streams, significant
expenses, and budget to actual results in
assessing the Company’s
single reporting segment and in the determination of allocating resources. The CODM uses consolidated
net income to benchmark the Company against peers and to evaluate performance
and allocate resources.
Significant revenue and
expense categories evaluated by the CODM are consistent with the presentation
of the Consolidated Statement of Income and
components of other noninterest expense as presented in Note 20.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.