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What changed in CAPITAL CITY BANK GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CAPITAL CITY BANK GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+435 added−437 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-13)

Top changes in CAPITAL CITY BANK GROUP INC's 2024 10-K

435 paragraphs added · 437 removed · 343 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

77 edited+18 added−20 removed146 unchanged
Biggest changeIn 2022, we made a commitment for a $7 million investment in SOLCAP 2022-1, LLC and, in 2023, we made a commitment for a $7 million investment in SOLCAP 2023-1, LLC. Each of these funds were formed to make solar tax equity investments in renewable solar energy projects that will provide us with tax credits and other tax benefits.
Biggest changeEach of these funds were formed to make solar tax equity investments in renewable solar energy projects and provided us with tax credits and other tax benefits. These projects will produce approximately 31,778,716 kw hours of clean power each year. The clean power produced is equivalent to removing approximately 21,350 metric tons of greenhouse gas emissions.
Johns 0.8% 0.7% 0.7% Suwannee 6.6% 7.0% 6.8% Taylor 75.0% 73.8% 73.2% Wakulla 8.4% 10.0% 10.5% Walton 0.3% - - Washington 9.2% 11.2% 11.2% Georgia Bibb 2.9% 3.2% 3.3% Cobb 0.1% 0.0% 0.0% Gwinnett (2) 0.0% - - Grady 13.8% 16.3% 14.8% Laurens 6.7% 7.8% 7.9% Troup 5.6% 6.4% 6.1% Alabama Chambers 8.6% 9.3% 9.3% (1) Obtained from the FDIC Summary of Deposits Report for the year indicated.
Johns 0.7% 0.8% 0.7% Suwannee 6.4% 6.6% 7.0% Taylor 73.7% 75.0% 73.8% Wakulla 8.4% 8.4% 10.0% Walton 0.6% 0.3% - Washington 7.8% 9.2% 11.2% Georgia Bibb 3.1% 2.9% 3.2% Cobb 0.1% 0.1% 0.0% Gwinnett (2) 0.0% 0.0% - Grady 14.0% 13.8% 16.3% Laurens 6.0% 6.7% 7.8% Troup 5.4% 5.6% 6.4% Alabama Chambers 9.0% 8.6% 9.3% (1) Obtained from the FDIC Summary of Deposits Report for the year indicated.
We do not originate subprime residential real estate loans. ● Retail Credit – We provide a full-range of loan products to meet the needs of consumers, including personal loans, automobile loans, boat/RV loans, home equity loans, and through a marketing alliance with ELAN, we offer credit card programs. ● Institutional Banking – We provide banking services to meet the needs of state and local governments, public schools and colleges, charities, membership and not-for-profit associations including customized checking and savings accounts, cash management systems, tax-exempt loans, lines of credit, and term loans. ● Retail Banking – We provide a full-range of consumer banking services, including checking accounts, savings programs, interactive/automated teller machines (ATMs/ITMs), debit/credit cards, night deposit services, safe deposit facilities, online banking, and mobile banking.
We do not offer subprime residential real estate loans ● Retail Credit – We provide a full-range of loan products to meet the needs of consumers, including personal loans, automobile loans, boat/RV loans, home equity loans, and through a marketing alliance with ELAN, we offer credit card programs. ● Institutional Banking – We provide banking services to meet the needs of state and local governments, public schools and colleges, charities, membership and not-for-profit associations including customized checking and savings accounts, cash management systems, tax-exempt loans, lines of credit, and term loans. ● Retail Banking – We provide a full-range of consumer banking services, including checking accounts, savings programs, interactive/automated teller machines (ATMs/ITMs), debit/credit cards, night deposit services, safe deposit facilities, online banking, and mobile banking.
These laws may also require us to notify law enforcement, regulators or consumer reporting agencies in the event of a data breach, as well as businesses and governmental agencies that own data. 20 Cybersecurity The federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, regarding cybersecurity intended to enhance cyber risk management among financial institutions.
These laws may also require us to notify law enforcement, regulators or consumer reporting agencies in the event of a data breach, as well as businesses and governmental agencies that own data. Cybersecurity The federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, regarding cybersecurity intended to enhance cyber risk management among financial institutions.
In addition, CCB generally may not purchase securities issued or underwritten by affiliates. 17 Loans to executive officers and directors of an insured depository institution or any of its affiliates or to any person who directly or indirectly, or acting through or in concert with one or more persons, owns, controls or has the power to vote more than 10% of any class of voting securities of a bank, which we refer to as “10% Shareowners,” or to any political or campaign committee the funds or services of which will benefit those executive officers, directors, or 10% Shareowners or which is controlled by those executive officers, directors or 10% Shareowners, are subject to Sections 22(g) and 22(h) of the Federal Reserve Act and the corresponding regulations (Regulation O) and Section 13(k) of the Exchange Act relating to the prohibition on personal loans to executives (which exempts financial institutions in compliance with the insider lending restrictions of Section 22(h) of the Federal Reserve Act).
In addition, CCB generally may not purchase securities issued or underwritten by affiliates. 16 Loans to executive officers and directors of an insured depository institution or any of its affiliates or to any person who directly or indirectly, or acting through or in concert with one or more persons, owns, controls or has the power to vote more than 10% of any class of voting securities of a bank, which we refer to as “10% Shareowners,” or to any political or campaign committee the funds or services of which will benefit those executive officers, directors, or 10% Shareowners or which is controlled by those executive officers, directors or 10% Shareowners, are subject to Sections 22(g) and 22(h) of the Federal Reserve Act and the corresponding regulations (Regulation O) and Section 13(k) of the Exchange Act relating to the prohibition on personal loans to executives (which exempts financial institutions in compliance with the insider lending restrictions of Section 22(h) of the Federal Reserve Act).
In October 2023, the Federal Reserve, along with the FDIC and OCC, issued a joint final rule that made significant amendments to the regulations implementing the CRA to “strengthen and modernize” those regulations, including by creating rigorous data- driven performance tests and growing the geographic areas in which a bank’s CRA performance may be evaluated.
In 2023, the Federal Reserve, along with the FDIC and OCC, issued a joint final rule that made significant amendments to the regulations implementing the CRA to “strengthen and modernize” those regulations, including by creating rigorous data-driven performance tests and growing the geographic areas in which a bank’s CRA performance may be evaluated.
As a result, we are not deemed to have a concentration in commercial real estate lending under applicable regulatory guidelines. Prompt Corrective Action The federal banking agencies are required to take “prompt corrective action” with respect to financial institutions that do not meet minimum capital requirements.
As a result, we are not deemed to have a concentration in commercial real estate lending under applicable regulatory guidelines. 18 Prompt Corrective Action The federal banking agencies are required to take “prompt corrective action” with respect to financial institutions that do not meet minimum capital requirements.
An institution may borrow from the Federal Reserve Bank “discount window” as a secondary source of funds, provided that the institution meets the Federal Reserve Bank’s credit standards. Dividends CCB is subject to legal limitations on the frequency and amount of dividends that can be paid to CCBG.
An institution may borrow from the Federal Reserve Bank “discount window” as a secondary source of funds, provided that the institution meets the Federal Reserve Bank’s credit standards. 15 Dividends CCB is subject to legal limitations on the frequency and amount of dividends that can be paid to CCBG.
The priorities include corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing. There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced by the Office of Foreign Assets Control of the U.S.
The priorities include corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing. 19 There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced by the Office of Foreign Assets Control of the U.S.
The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. In computing total risk-weighted assets, bank and bank holding company assets are given risk-weights of 0%, 20%, 50%, 100% and 150%.
The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. 17 In computing total risk-weighted assets, bank and bank holding company assets are given risk-weights of 0%, 20%, 50%, 100% and 150%.
Reserves 16 The Federal Reserve requires all depository institutions to maintain reserves against transaction accounts (noninterest bearing and NOW checking accounts). The balances maintained to meet the reserve requirements imposed by the Federal Reserve may be used to satisfy liquidity requirements.
Reserves The Federal Reserve requires all depository institutions to maintain reserves against transaction accounts (noninterest bearing and NOW checking accounts). The balances maintained to meet the reserve requirements imposed by the Federal Reserve may be used to satisfy liquidity requirements.
Your banker.”) and purpose (“We empower our clients’ financial wellness and help them build secure futures”), together with our core values statement (“Do the Right Thing, Build Relationships & Loyalty, Embrace Individuality & Value Others, Promote Career Growth, Be Committed to Community, and Represent the Star (our bank) Proudly”), are the foundation on which our culture is built. 11 The bank has grown significantly since its beginnings in 1895.
Your banker.”) and purpose (“We empower our clients’ financial wellness and help them build secure futures”), together with our core values statement (“Do the Right Thing, Build Relationships & Loyalty, Embrace Individuality & Value Others, Promote Career Growth, Be Committed to Community, and Represent the Star (our bank) Proudly”), are the foundation on which our culture is built. 10 The bank has grown significantly since its beginnings in 1895.
Safe and Sound Banking Practices 15 Bank holding companies and their nonbanking subsidiaries are prohibited from engaging in activities that represent unsafe and unsound banking practices or that constitute a violation of law or regulations.
Safe and Sound Banking Practices Bank holding companies and their nonbanking subsidiaries are prohibited from engaging in activities that represent unsafe and unsound banking practices or that constitute a violation of law or regulations.
Proposed legislative or regulatory changes may also affect our operations. The following description summarizes some of the laws and regulations to which we are subject. References to applicable statutes and regulations are brief summaries, do not purport to be complete, and are qualified in their entirety by reference to such statutes and regulations. 13 Capital City Bank Group, Inc.
Proposed legislative or regulatory changes may also affect our operations. The following description summarizes some of the laws and regulations to which we are subject. References to applicable statutes and regulations are brief summaries, do not purport to be complete, and are qualified in their entirety by reference to such statutes and regulations. 12 Capital City Bank Group, Inc.
Insurance sales within this division include life, health, disability, long-term care, and annuity solutions. 8 Lending Activities One of our core goals is to support the communities in which we operate. We seek loans from within our primary market area, which is defined as the counties in which our banking offices are located.
Insurance sales within this division include life, health, disability, long-term care, and annuity solutions. 7 Lending Activities One of our core goals is to support the communities in which we operate. We seek loans from within our primary market area, which is defined as the counties in which our banking offices are located.
Risk Factors under the section captioned “Our future success is dependent on our ability to compete effectively in the highly competitive banking industry” for further discussion related to the competitive environment in which we operate. Our primary market area consists of 21 counties in Florida, six counties in Georgia, and one county in Alabama.
Risk Factors under the section captioned “Our future success is dependent on our ability to compete effectively in the highly competitive banking and financial services industry” for further discussion related to the competitive environment in which we operate. Our primary market area consists of 21 counties in Florida, six counties in Georgia, and one county in Alabama.
Through Capital City Home Loans, LLC (“CCHL”), we have 29 additional offices in the Southeast for our mortgage banking business. The majority of the revenue (excluding CCHL), approximately 85%, is derived from our Florida market areas while approximately 14% and 1% of the revenue is derived from our Georgia and other market areas, respectively.
Through Capital City Home Loans, LLC (“CCHL”), we have 27 additional offices in the Southeast for our mortgage banking business. The majority of the revenue (excluding CCHL), approximately 85%, is derived from our Florida market areas while approximately 14% and 1% of the revenue is derived from our Georgia and other market areas, respectively.
Subsidiaries of CCBG CCBG’s principal asset is the capital stock of CCB, our wholly owned banking subsidiary, which accounted for nearly 100% of consolidated assets and net income attributable to CCBG at December 31, 2023. CCBG also maintains an insurance subsidiary, Capital City Strategic Wealth, LLC.
Subsidiaries of CCBG CCBG’s principal asset is the capital stock of CCB, our wholly owned banking subsidiary, which accounted for nearly 100% of consolidated assets and net income attributable to CCBG at December 31, 2024. CCBG also maintains an insurance subsidiary, Capital City Strategic Wealth, LLC.
Treasury indices. 9 Commercial Real Estate Loans We have adopted guidelines for debt service coverage ratios, LTV ratios and documentation standards for commercial real estate loans. These loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal guarantees.
Treasury indices. 8 Commercial Real Estate Loans We have adopted guidelines for debt service coverage ratios, LTV ratios and documentation standards for commercial real estate loans. These loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal guarantees.
However, a Florida state-chartered bank may not declare any dividend if (i) its net income (loss) from the current year combined with the retained net income (loss) for the preceding two years aggregates a loss or (ii) the payment of such dividend would cause the capital account of the bank to fall below the minimum amount required by law, regulation, order or any written agreement with the Florida Office of Financial Regulation or a federal regulatory agency.
However, a Florida state-chartered bank may not declare any dividend if (i) its net income (loss) from the current year combined with the retained net income (loss) for the preceding two years aggregates a loss or (ii) the payment of such dividend would cause the capital account of the bank to fall below the minimum amount required by law, regulation, order or any written agreement with the Florida OFR or a federal regulatory agency.
Social Matters Community Involvement . We aim to give back to the communities where we live and work and believe that this commitment helps in our efforts to attract and retain associates. Our commitment to help our community starts with our associates. Community involvement is a hallmark for our organization, and it comes naturally to our associates.
We aim to give back to the communities where we live and work and believe that this commitment helps in our efforts to attract and retain associates. Our commitment to help our community starts with our associates. Community involvement is a hallmark for our organization, and it comes naturally to our associates.
Environmental Matters We recognize the value of environmental stewardship and seek opportunities to reduce our carbon footprint and incorporate energy efficiency products into business operations. We have implemented company-wide recycling programs and have converted exterior lighting to LED at 64 offices.
Environmental Matters We recognize the value of environmental stewardship and seek opportunities to reduce our carbon footprint and incorporate energy efficiency products into business operations. We have implemented company-wide recycling programs and have converted exterior lighting to LED at 58 offices.
A core value is providing associates the ability to “grow a career.” To that end, we support and encourages associates to develop a life-long habit of continuous learning that focuses on personal and professional development through higher education.
A core value is providing associates the ability to “grow a career.” To that end, we support and encourage associates to develop a life-long habit of continuous learning that focuses on personal and professional development through higher education.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including any amendments to those reports filed or furnished pursuant to section 13(a) or 15(d), and reports filed pursuant to Section 16, 13(d), and 13(g) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including any amendments to those reports filed or furnished pursuant to section 13(a) or 15(d), and reports filed pursuant to Section 16, 13(d), and 13(g) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
We are also a member bank of the Federal Reserve System, which makes our operations subject to broad federal regulation and oversight by the Federal Reserve. In addition, our deposit accounts are insured by the FDIC up to the maximum extent permitted by law, and the FDIC has certain supervisory enforcement powers over us.
We are also a member bank of the Federal Reserve System, which makes our operations subject to broad federal regulation and oversight by the Federal Reserve. In addition, our deposit accounts are insured by the Federal Deposit Insurance Corporation (the ”FDIC”) up to the maximum extent permitted by law, and the FDIC has certain supervisory enforcement powers over us.
Our commitment to people and being an employer with integrity and heart has earned us numerous accolades including: one of the “Best Companies to Work for in Florida” by Florida Trend for 12 consecutive years, a “Best Bank to Work For” by American Bankers Association for 11 consecutive years and being named by Forbes in 2023 as one of “America’s Best-in-State Banks, a selection made from direct consumer feedback and online reviews.
Our commitment to people and being an employer with integrity and heart has earned us numerous accolades including: one of the “Best Companies to Work for in Florida” by Florida Trend for 13 consecutive years, a “Best Bank to Work For” by American Bankers for 12 consecutive years and being named by Forbes in 2023 and 2024 as one of “America’s Best-in-State Banks, a selection made from direct consumer feedback and online reviews.
As of December 31, 2023, approximately 53% of our residential home equity loan portfolio consisted of first mortgages. Interest rates may be fixed or adjustable. Adjustable-rate loans are tied to the Prime Rate with a typical margin of 1.0% or more. Commercial Loans Our policy sets forth guidelines for debt service coverage ratios, LTV ratios and documentation standards.
As of December 31, 2024, approximately 48% of our residential home equity loan portfolio consisted of first mortgages. Interest rates may be fixed or adjustable. Adjustable-rate loans are tied to the Prime Rate with a typical margin of 1.0% or more. Commercial Loans Our policy sets forth guidelines for debt service coverage ratios, LTV ratios and documentation standards.
The final rules are intended to achieve the following key goals, among others: strengthen the achievement of the core purpose of the CRA; encourage banks to expand access to credit, investment, and banking services in LMI communities; adapt to changes in the banking industry, including internet and mobile banking; provide greater clarity and consistency in the application of the CR A regulations; and tailor CRA evaluations and data collection to bank size and type.
The final rules were intended to achieve the following key goals, among others: ● strengthen the achievement of the core purpose of the CRA; ● encourage banks to expand access to credit, investment, and banking services in LMI communities; ● adapt to changes in the banking industry, including internet and mobile banking; ● provide greater clarity and consistency in the application of the CRA regulations; and ● tailor CRA evaluations and data collection to bank size and type.
Many of these grants are provided to low-moderate income communities in the Big Bend area. Access, affordability, and financial inclusion. Our community commitment to further financial literacy in the markets we service remains an ongoing focus. In 2023, the CCBG Foundation made grants totaling $143,000 to Community Reinvestment Act of 1977 (“CRA”) eligible organizations in our market area.
Many of these grants are provided to low-moderate income communities in the Big Bend area. Access, affordability, and financial inclusion. Our community commitment to further financial literacy in the markets we service remains an ongoing focus. In 2024, the CCBG Foundation made grants totaling $167,000 to Community Reinvestment Act of 1977 (“CRA”) eligible organizations in our market area.
We are registered with the Board of Governors of the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956 (“BHC Act”) and have also elected to be a financial holding company. As a result, we are subject to supervisory regulation and examination by the Federal Reserve.
We are registered with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) as a bank holding company under the Bank Holding Company Act of 1956 (“BHC Act”) and have also elected to be a financial holding company. As a result, we are subject to supervisory regulation and examination by the Federal Reserve.
Our financial condition and results of operations are more fully discussed in our Management’s Discussion and Analysis on page 43 and our consolidated financial statements on page 73.
Our financial condition and results of operations are more fully discussed in our Management’s Discussion and Analysis on page 43 and our consolidated financial statements on page 72.
The Florida Statutes define “control” as either (i) indirectly or directly owning, controlling or having power to vote 25% or more of the voting securities of a bank; (ii) controlling the election of a majority of directors of a bank; (iii) owning, controlling, or having power to vote 10% or more of the voting securities as well as directly or indirectly exercising a controlling influence over management or policies of a bank; or (iv) as determined by the Florida Office of Financial Regulation.
The Florida Statutes define “control” as either (i) indirectly or directly owning, controlling or having power to vote 25% or more of the voting securities of a bank; (ii) controlling the election of a majority of directors of a bank; (iii) owning, controlling, or having power to vote 10% or more of the voting securities as well as directly or indirectly exercising a controlling influence over management or policies of a bank; or (iv) as determined by the Florida OFR.
We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection services. The Bank has 63 banking offices and 103 ATMs/ITMs in Florida, Georgia, and Alabama.
We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management and asset protection services. The Bank has 62 banking offices and 104 ATMs/ITMs in Florida, Georgia, and Alabama.
The Florida Office of Financial Regulation supervises and regulates all areas of our operations including, without limitation, the making of loans, the issuance of securities, the conduct of our corporate affairs, the satisfaction of capital adequacy requirements, the payment of dividends, and the establishment or closing of banking centers.
The Florida OFR supervises and regulates all areas of our operations including, without limitation, the making of loans, the issuance of securities, the conduct of our corporate affairs, the satisfaction of capital adequacy requirements, the payment of dividends, and the establishment or closing of banking centers.
Market Share as of June 30, (1) County 2023 2022 2021 Florida Alachua 5.1% 4.9% 4.6% Bay 0.3% 0.3% 0.2% Bradford 37.1% 34.9% 32.4% Citrus 4.4% 4.7% 4.1% Clay 2.4% 2.3% 2.8% Dixie 17.5% 19.8% 18.9% Gadsden 81.9% 82.1% 81.1% Gilchrist 42.2% 41.2% 39.6% Gulf 12.4% 14.8% 14.6% Hernando 4.9% 5.0% 3.9% Jefferson 28.3% 24.8% 24.4% Leon 16.9% 15.4% 11.9% Levy 26.4% 25.4% 26.4% Madison 13.5% 14.0% 14.5% Putnam 34.4% 26.4% 23.2% St.
Market Share as of June 30, (1) County 2024 2023 2022 Florida Alachua 4.9% 5.1% 4.9% Bay 0.2% 0.3% 0.3% Bradford 34.3% 37.1% 34.9% Citrus 4.3% 4.4% 4.7% Clay 2.2% 2.4% 2.3% Dixie 21.5% 17.5% 19.8% Gadsden 81.8% 81.9% 82.1% Gilchrist 41.6% 42.2% 41.2% Gulf 11.2% 12.4% 14.8% Hernando 5.2% 4.9% 5.0% Jefferson 24.6% 28.3% 24.8% Leon 15.5% 16.9% 15.4% Levy 26.4% 26.4% 25.4% Madison 13.5% 13.5% 14.0% Putnam 28.3% 34.4% 26.4% St.
In addition, with the approval of the Florida Office of Financial Regulation and Federal Reserve, the bank’s board of directors may declare a dividend from retained net profits which accrued prior to the preceding two years.
In addition, with the approval of the Florida OFR and Federal Reserve, the bank’s board of directors may declare a dividend from retained net profits which accrued prior to the preceding two years.
Competition There is significant competition among commercial banks in our market areas. We compete against a wide range of banking and nonbanking institutions including banks, savings and loan associations, credit unions, money market funds, mutual fund advisory companies, mortgage banking companies, investment banking companies, insurance agencies and companies, securities firms, brokerage firms, finance companies and other types of financial institutions.
Competition We face significant competition in our market areas. We compete against a wide range of banking and nonbanking institutions including banks, savings and loan associations, credit unions, money market funds, mutual fund advisory companies, mortgage banking companies, investment banking companies, insurance agencies and companies, securities firms, brokerage firms, financial technology firms, finance companies and other types of financial institutions.
Furthermore, the CCBG Foundation donated $0.3 million in 2023 to various non-profit organizations in the communities we serve and $0.3 million and $0.2 million in 2022, and 2021, respectively. Since 2015, we have annually supported the United Way of the Big Bend in analyzing financial information for its annual grant review process.
Additionally, the CCBG Foundation donated approximately $0.3 million in 2024 and 2023 and approximately $0.2 million in 2022 to various non-profit organizations in the communities we serve. Since 2015, we have annually supported the United Way of the Big Bend in analyzing financial information for its annual grant review process.
Approximately 48% of the revenue from CCHL is derived from our Georgia market areas while approximately 38% and 14% is derived from our Florida and other market areas, respectively. Below is a summary of our financial condition and results of operations for the past three fiscal years, which we believe is a sufficient period for understanding our general business development.
Approximately 55% of the revenue from CCHL is derived from our Georgia market areas while approximately 33% and 12% is derived from our Florida and other market areas, respectively. Below is a summary of our financial condition and results of operations for the past three fiscal years, which we believe is a sufficient period for understanding our general business development.
The final rule does not apply to any banking organization with less than $5 billion in total consolidated assets and therefore the special assessment is not expected to impact the Company.
The final rule does not apply to any banking organization with less than $5 billion in total consolidated assets and therefore the special assessment did not directly impact the Company.
At December 31, 2023, CCB’s ratio of construction, land development and other land loans to total risk-based capital was 77%, its ratio of total commercial real estate loans to total risk-based capital was 235% and, therefore, CCB was under the 100% and 300% thresholds, respectively, set forth in clauses (iii) and (iv) above.
At December 31, 2024, CCB’s ratio of construction, land development and other land loans to total risk-based capital was 78%, its ratio of total commercial real estate loans to total risk-based capital was 212% and, therefore, CCB was under the 100% and 300% thresholds, respectively, set forth in clauses (iii) and (iv) above.
Under a final rule adopted by federal banking agencies in 2021, banking organizations are required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.
Banking organizations are also required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.
We encourage our associates to volunteer their hours with service organizations and philanthropic groups in the communities we serve. We recorded 10,526 community service hours in 2023, and 9,508, and 8,697 hours in 2022 and 2021, respectively.
We encourage our associates to volunteer their hours with service organizations and philanthropic groups in the communities we serve. We recorded 9,542 community service hours in 2024, and 10,526, and 9,508 hours in 2023 and 2022, respectively.
We also believe clients who bank at community banks tend to prefer the relationship style service of community banks compared to larger banks.
We also believe clients who bank at community banks tend to prefer the relationship style service of community banks compared to larger banks and financial services companies.
Dollars in millions Year Ended December 31, Assets Deposits Shareowners’ Equity Revenue (1) Net Income 2023 $4,304.5 $3,701.8 $440.6 $252.7 $52.3 2022 $4,519.2 $3,939.3 $387.3 $207.1 $33.4 2021 $4,263.8 $3,712.9 $383.2 $213.9 $33.4 (1) Revenue represents interest income plus noninterest income Dividends and management fees received from the Bank are CCBG’s primary source of income.
Dollars in millions Year Ended December 31, Assets Deposits Shareowners’ Equity Revenue (1) Net Income 2024 $4,324.9 $3,672.0 $495.3 $270.6 $52.9 2023 $4,304.5 $3,701.8 $440.6 $252.7 $52.3 2022 $4,519.2 $3,939.3 $387.3 $207.1 $33.4 (1) Revenue represents interest income plus noninterest income Dividends and management fees received from the Bank are CCBG’s primary source of income.
The average tenure of our associates is approximately 9.6 years, and the average tenure of our management team is 28 years. Tenure statistics support these accolades and further demonstrate that associates enjoy working for CCB. Compensation and Benefits Program .
The average tenure of our associates is approximately 9.4 years, and the average tenure of our management team is 23.9 years. Tenure statistics support these accolades and further demonstrate that associates enjoy working for CCBG. Compensation and Benefits Program .
The agencies have identified a spectrum of risks facing a banking institution including, but not limited to, credit, market, liquidity, operational, legal and reputational risk. In particular, recent regulatory pronouncements have focused on operational risk, which arises from the potential that inadequate information systems, operational problems, breaches in internal controls, fraud or unforeseen catastrophes will result in unexpected losses.
The agencies have identified a spectrum of risks facing a banking institution including, but not limited to, credit, market, liquidity, operational, legal and reputational risk. A particular area of focus for regulators has been operational risk, which arises from the potential that inadequate information systems, operational problems, breaches in internal controls, fraud or unforeseen catastrophes will result in unexpected losses.
Most of Florida’s major banking concerns have a presence in Leon County, where our main office is located. Our Leon County deposits totaled $1.272 billion, or 34.4% of our consolidated deposits at December 31, 2023. 10 The table below depicts our market share percentage within each county, based on commercial bank deposits within the county.
Most of Florida’s major banking concerns have a presence in Leon County, where our main office is located. Our Leon County deposits totaled $1.200 billion, or 32.7% of our consolidated deposits at December 31, 2024. 9 The table below depicts our market share percentage within each county, based on commercial bank deposits within the county.
We offer an educational Tuition Assistance Plan to help eligible associates continue or begin post-high school education, develop skills, increase knowledge and aid in career development. We have invested in tools and capabilities that allow our team members to work remotely as appropriate. Health and Safety . Our business success is fundamentally connected to our associates’ well-being.
We offer an educational Tuition Assistance Plan to help eligible associates continue or begin post-high school education, develop skills, increase knowledge and aid in career development. We have invested in tools and capabilities that allow our team members to work remotely as appropriate. Inclusion.
A diverse team produces more creative solutions, offers better client service and is vital to attracting and retaining talent—key factors that contribute to our success. We continue to build an inclusive culture through a variety of DE&I initiatives for internal promotions and hiring practices.
A diverse team produces more creative solutions, offers better client service and is vital to attracting and retaining talent—key factors that contribute to our success. We continue to build an inclusive culture through a variety of inclusion initiatives for internal promotions and hiring practices. Health and Safety . Our business success is fundamentally connected to our associates’ well-being.
Our common stock is registered under Section 12 of the Exchange Act so we are subject to these rules. 14 As a financial holding company, we are required to obtain prior approval from the Federal Reserve before (i) acquiring all or substantially all of the assets of a bank or bank holding company, (ii) acquiring direct or indirect ownership or control of more than 5% of the outstanding voting stock of any bank or bank holding company (unless we own a majority of such bank’s voting shares), or (iii) acquiring, merging or consolidating with any other bank or bank holding company.
As a financial holding company, we are required to obtain prior approval from the Federal Reserve before (i) acquiring all or substantially all of the assets of a bank or bank holding company, (ii) acquiring direct or indirect ownership or control of more than 5% of the outstanding voting stock of any bank or bank holding company (unless we own a majority of such bank’s voting shares), or (iii) acquiring, merging or consolidating with any other bank or bank holding company.
Transaction -related contingencies such as bid bonds, standby letters of credit backing nonfinancial obligations, and undrawn commitments (including commercial credit lines with an initial maturity of more than one year) have a 50% conversion factor.
Transaction-related contingencies such as bid bonds, standby letters of credit backing nonfinancial obligations, and undrawn commitments (including commercial credit lines with an initial maturity of more than one year) have a 50% conversion factor. Short -term commercial letters of credit are converted at 20% and certain short-term unconditionally cancelable commitments have a 0% factor.
Although the effective date of the final rule is April 1, 2024, the compliance date for the majority of the rule’s provisions is January 1, 2026. The remaining requirements, including the data reporting requirements, will be applicable on January 1, 2027.
The compliance date for a majority of the rule’s provisions is January 1, 2026. The remaining requirements, including the data reporting requirements, will be applicable on January 1, 2027.
During tax season, we provide locations for community residents to access Volunteer Income Tax Assistance (VITA) services. VITA is a nationwide IRS program that offers free tax preparation assistance to people who generally make $60,000 or less, persons with disabilities, the elderly, and limited English-speaking taxpayers who need assistance in preparing their own tax returns.
VITA is a nationwide IRS program that offers free tax preparation assistance to people who generally make $60,000 or less, persons with disabilities, the elderly, and limited English-speaking taxpayers who need assistance in preparing their own tax returns.
In determining whether to approve a proposed bank acquisition, federal bank regulators will consider, among other factors, the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post- acquisition basis, and the companies’ records of addressing the credit needs of the communities they serve, including the needs of low and moderate income neighborhoods, consistent with the safe and sound operation of the bank, under the CRA.
In determining whether to approve a proposed bank acquisition, federal bank regulators will consider, among other factors, the effect of the acquisition on competition, the public benefits expected to be received from the acquisition, the projected capital ratios and levels on a post- acquisition basis, and the companies’ records of addressing the credit needs of the communities they serve, including the needs of low and moderate income neighborhoods, consistent with the safe and sound operation of the bank, under the CRA. 13 Under Florida law, a person or entity proposing to directly or indirectly acquire control of a Florida chartered bank must also obtain permission from the Florida Office of Financial Regulation (the “Florida OFR”).
Credit products are available to purchase land and build structures for business use and for investors who are developing residential or commercial property. ● Residential Real Estate Lending – We provide products through our strategic alliance with CCHL and its existing network of locations to help meet the home financing needs of consumers, including conventional permanent and construction/ permanent (fixed, adjustable, or variable rate) financing arrangements, and FHA/VA/Government National Mortgage Association (“GNMA”) loan products.
Credit products are available to purchase land and build structures for business use and for investors who are developing residential or commercial property. ● Residential Real Estate Lending – We provide an array of loan products through our subsidiary, CCHL, to help meet the home financing needs of consumers, including conventional permanent and construction-to-permanent (fixed, adjustable, or variable rate) financing arrangements as well as FHA, VA and USDA rural development loan products.
Our commitment to fostering a culture that values our associates across our entire footprint remains unwavering. We have a Chief Culture Officer and a Chief Diversity Officer who make it a priority to ensure our culture is maintained and associates exemplify our values. Diversity and Inclusion .
Our commitment to fostering a culture that values our associates across our entire footprint remains unwavering. We have a Chief Culture Officer and a Chief Inclusion Officer who make it a priority to ensure our culture is maintained and associates exemplify our values. At December 31, 2024, we had approximately 940 full-time associates and approximately 29 part-time associates.
We offer both fixed and adjustable-rate residential mortgage (ARM) loans. We offer these products through our existing network of CCHL locations.
CCHL also offers both fixed and adjustable-rate residential mortgage (ARM) loans. CCHL offers these products through its network of locations.
Capital City Investments We offer our customers access to retail investment products through LPL Financial pursuant to which retail investment products would be offered through LPL. LPL offers a full line of retail securities products, including U.S. Government bonds, tax-free municipal bonds, stocks, mutual funds, unit investment trusts, annuities, life insurance and long-term health care.
LPL offers a full line of retail securities products, including U.S. Government bonds, tax-free municipal bonds, stocks, mutual funds, unit investment trusts, annuities, life insurance and long-term health care.
Significant services offered by CCB include: ● Business Banking – We provide banking services to corporations and other business clients. Credit products are available for a wide variety of general business purposes, including financing for commercial business properties, equipment, inventories and accounts receivable, as well as commercial leasing and letters of credit.
Credit products are available for a wide variety of general business purposes, including financing for commercial business properties, equipment, inventories and accounts receivable, as well as commercial leasing and letters of credit.
We work to ensure lending activities do not encourage business activities that could cause irreparable damage to our reputation or the environment.
We plan to continue to review these kinds of investment opportunities as they arise. We work to ensure lending activities do not encourage business activities that could cause irreparable damage to our reputation or the environment.
Revenues from these principal services for the year ended 2023 totaled approximately 93.5% and 6.5% of our total revenue, respectively. In 2022 and 2021, Banking Services (CCB) revenue was approximately 90.3% and 93.2% of our total revenue for each respective year. 7 Capital City Bank CCB is a Florida-chartered full-service bank engaged in the commercial and retail banking business.
In 2023 and 2022, Banking Services (CCB) revenue was approximately 93.5% and 90.3% of our total revenue for each respective year. 6 Capital City Bank CCB is a Florida-chartered full-service bank engaged in the commercial and retail banking business. Significant services offered by CCB include: ● Business Banking – We provide banking services to corporations and other business clients.
This buffer is added to each of the three risk-based capital ratios to determine whether an institution has established the buffer. The rules provide for a minimum ratio of Tier 1 Capital to Risk-Weighted Assets of 6% and include a minimum leverage ratio of 4% for all banking organizations.
The rules provide for a Common Equity Tier 1 Capital conservation buffer of 2.5% of risk-weighted assets. This buffer is added to each of the three risk-based capital ratios to determine whether an institution has established the buffer.
Additionally, a staff of well-trained professionals serves individuals requiring the services of a trustee, personal representative, or a guardian. The market value of trust assets under discretionary management exceeded $1.121 billion at December 31, 2023, with total assets under administration exceeding $1.136 billion.
Additionally, a staff of well-trained professionals serves individuals requiring the services of a trustee, personal representative, or a guardian. The market value of trust assets under discretionary management exceeded $1.234 billion at December 31, 2024, with total assets under administration exceeding $1.244 billion. Capital City Investments We offer our customers retail investment products through LPL Financial.
CCB must comply with these consumer protection laws and regulations as part of its ongoing client relations. 21 In addition, the Consumer Financial Protection Bureau (“CFPB”) issues regulations and standards under these federal consumer protection laws that affect our consumer businesses.
In addition, the Consumer Financial Protection Bureau (“CFPB”) issues regulations and standards under these federal consumer protection laws that affect our consumer businesses.
Consistent with the international Basel III framework, the rules include a minimum ratio of Common Equity Tier 1 Capital to Risk-Weighted Assets of 4.5%. The rules provide for a Common Equity Tier 1 Capital conservation buffer of 2.5% of risk-weighted assets.
The rules implement strict eligibility criteria for regulatory capital instruments and improve the methodology for calculating risk- weighted assets to enhance risk sensitivity. Consistent with the international Basel III framework, the rules include a minimum ratio of Common Equity Tier 1 Capital to Risk-Weighted Assets of 4.5%.
At February 8, 2024, we had approximately 811 associates, which included approximately 784 full-time associates and approximately 27 part-time associates. At February 8, 2024, approximately 70% of our workforce was female, 30% was male, and approximately 22% was ethnic minorities. None of our associates are represented by a labor union or covered by a collective bargaining agreement.
At December 31, 2024, approximately 68% of our workforce was female, 32% was male, and approximately 21% was ethnic minorities. None of our associates are represented by a labor union or covered by a collective bargaining agreement.
Consumer Laws and Regulations CCB is also subject to other federal and state consumer laws and regulations that are designed to protect consumers in transactions with banks.
Risk Factors for a further discussion of risks related to cybersecurity and Item 1C. Cybersecurity for a further discussion of risk management strategies and governance processes related to cybersecurity. 20 Consumer Laws and Regulations CCB is also subject to other federal and state consumer laws and regulations that are designed to protect consumers in transactions with banks.
Operating Segment We have one reportable segment with two principal services: Banking Services and Wealth Management Services. Banking Services are operated at CCB, and Wealth Management Services are operated under three separate subsidiaries (Capital City Trust Company, Capital City Investments, and Capital City Strategic Wealth, LLC).
CCB has three primary subsidiaries, Capital City Trust Company and Capital City Banc Investments, Inc. which are wholly owned, and CCHL which became wholly owned effective January 1, 2025. Operating Segment We have one reportable segment with two principal services: Banking Services and Wealth Management Services.
The individual perspectives, life experiences, capabilities and talents, which our associates invest in their work, represent a significant part of our culture, reputation and collective achievements.
The individual perspectives, life experiences, capabilities and talents, which our associates invest in their work, represent a significant part of our culture, reputation and collective achievements. The Chief Inclusion Officer and the Inclusion Council, which comprises diverse associates from various levels and offices throughout our organization, connect the company’s diversity and inclusion initiatives with our broader business strategies.
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver. 19 At December 31, 2023, we exceeded the requirements contained in the applicable regulations, policies and directives pertaining to capital adequacy to be classified as “well capitalized” and are unaware of any material violation or alleged violation of these regulations, policies or directives (see table below).
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver.
Also, the more recent TILA-RESPA Integrated Disclosure, or TRID, rules for mortgage closings have impacted our loan applications. These rules, including the required loan forms, generally increased the time it takes to approve mortgage loans. Future Legislative Developments Various bills are from time to time introduced in the U.S. Congress and the Florida legislature.
Also, the TILA-RESPA Integrated Disclosure, or TRID, rules for mortgage closings have impacted our loan applications. These rules, including the required loan forms, generally increased the time it takes to approve mortgage loans. In 2022, certain members of Congress and the leadership of the CFPB expressed a heightened interest in bank consumer overdraft protection programs.
The Federal Reserve also has the authority to regulate the debt of bank holding companies, including the authority to impose interest rate ceilings and reserve requirements on such debt. The Federal Reserve may also require a bank holding company to file written notice and obtain its approval prior to purchasing or redeeming its equity securities, unless certain conditions are met.
The Federal Reserve also has the authority to regulate the debt of bank holding companies, including the authority to impose interest rate ceilings and reserve requirements on such debt.
We make available to our associates a voluntary wellness program, StarFit that provides associates with resources and good-health opportunities through exercise, diet and preventive care.
We make available to our associates a voluntary wellness program, StarFit that provides associates with resources and good-health opportunities through exercise, diet and preventive care. In response to emerging workplace practices, we made changes to our flex–work program to assist our associates in maintaining a work/life balance consistent with their professional and personal goals. 11 Social Matters Community Involvement.
This legislation may change banking and tax statutes and the environment in which our banking subsidiary and we operate in substantial and unpredictable ways. We cannot determine the ultimate effect that potential legislation, if enacted, or implementing regulations with respect thereto, would have upon our financial condition or results of operations or that of our banking subsidiary.
We cannot determine the ultimate effect that potential legislation, if enacted, or implementing regulations with respect thereto, would have upon our financial condition or results of operations or that of our banking subsidiary. 21 Effect of Governmental Monetary Policies The commercial banking business is affected not only by general economic conditions, but also by the monetary policies of the Federal Reserve.
Capital City Bank Capital City Bank is a state-chartered commercial banking institution that is chartered by and headquartered in the State of Florida and is subject to supervision and regulation by the Florida Office of Financial Regulation.
The Federal Reserve may also require a bank holding company to file written notice and obtain its approval prior to purchasing or redeeming its equity securities, unless certain conditions are met. 14 Capital City Bank Capital City Bank is a state-chartered commercial banking institution that is chartered by and headquartered in the State of Florida and is subject to supervision and regulation by the Florida OFR.
These laws and regulations mandate certain disclosures and regulate the manner in which financial institutions must deal with clients when taking deposits or making loans to clients.
These laws and regulations, among other things, mandate certain disclosures and regulate the manner in which financial institutions must deal with clients when taking deposits or making loans to clients, provide substantive consumer rights, prohibit discrimination in credit transactions, regulate the use of credit report information, provide financial privacy protections, prohibit unfair, deceptive and abusive practices, restrict our ability to raise interest rates, and subject us to substantial regulatory oversight.
Removed
CCB has two primary subsidiaries, which are wholly owned, Capital City Trust Company and Capital City Investments. CCB also maintains a 51% membership interest in a consolidated subsidiary, CCHL, which we acquired on March 1, 2020. The nature of these subsidiaries is provided below.
Added
Banking Services are operated at CCB, and Wealth Management Services are operated under three divisions (Capital City Trust Company, Capital City Investments, and Capital City Strategic Wealth, LLC). Revenues from these principal services for the year ended 2024 totaled approximately 92.6% and 7.4% of our total revenue, respectively.
Removed
The Chief Diversity Officer and the Diversity, Equity, and Inclusion (DE&I) Council, which comprises diverse associates from various levels and offices throughout our organization, connect the company’s diversity and inclusion initiatives with our broader business strategies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

90 edited+40 added−24 removed121 unchanged
Biggest changeIf the Company is unable to maintain effective internal control over financial reporting, its ability to record, process and report financial information timely and accurately could be adversely affected, which could subject the Company to litigation, investigations, or breach of contract claims, require management resources, increase costs, negatively affect investor confidence, and adversely impact its stock price.
Biggest changeAny failure to maintain or implement required new or improved controls (as we had recently discussed in Item 9A), or difficulties encountered in implementation could cause us to fail to meet our reporting obligations, which could subject the Company to litigation, investigations, or breach of contract claims, require management resources, increase costs, negatively affect investor confidence, and adversely impact its stock price. 34 Strategic Risks Our future success is dependent on our ability to compete effectively in the highly competitive banking and financial services industry.
Factors that can impact operations and expose us to risks varying in size, scale and scope include: ● failures of technological systems or breaches of security measures, including, but not limited to, those resulting from computer viruses or cyber-attacks; ● unsuccessful or difficult implementation of computer systems upgrades; ● human errors or omissions, including failures to comply with applicable laws or corporate policies and procedures; ● theft, fraud or misappropriation of assets, whether arising from the intentional actions of internal personnel or external third parties; ● breakdowns in processes, breakdowns in internal controls or failures of the systems and facilities that support our operations; ● deficiencies in services or service delivery; ● negative developments in relationships with key counterparties, third-party vendors, or associates in our day-to-day operations; and ● external events that are wholly or partially beyond our control, such as pandemics, geopolitical events, political unrest, natural disasters or acts of terrorism.
Factors that can impact operations and expose us to risks varying in size, scale and scope include: ● failures of technological systems or breaches of security measures, including, but not limited to, those resulting from computer viruses or cyber-attacks; ● unsuccessful or difficult implementation of computer systems upgrades; ● human errors or omissions, including failures to comply with applicable laws or corporate policies and procedures; ● theft, fraud or misappropriation of assets, whether arising from the intentional actions of internal personnel or external third parties; ● breakdowns in processes, breakdowns in internal controls or failures of the systems and facilities that support our operations; ● deficiencies in services or service delivery; ● negative developments in relationships with key counterparties, third-party vendors, or associates in our day-to-day operations; and 31 ● external events that are wholly or partially beyond our control, such as pandemics, geopolitical events, political unrest, natural disasters or acts of terrorism.
We evaluate the collectability of our loan portfolio and provide an allowance for credit losses that we believe is adequate based upon such factors as: ● the risk characteristics of various classifications of loans; ● previous loan loss experience; ● specific loans that have loss potential; ● delinquency trends; ● estimated fair market value of the collateral; ● current and future economic conditions; and ● geographic and industry loan concentrations.
We evaluate the collectability of our loan portfolio and provide an allowance for credit losses that we believe is adequate based upon such factors as: ● the risk characteristics of various classifications of loans; ● previous loan loss experience; ● specific loans that have loss potential; ● delinquency trends; ● estimated fair market value of the collateral; 26 ● current and future economic conditions; and ● geographic and industry loan concentrations.
It is possible that these laws may be interpreted and applied by various jurisdictions in a manner inconsistent with our current or future practices, or that is inconsistent with one another. Fee revenues from overdraft protection programs constitute a significant portion of our noninterest income and may be subject to increased supervisory scrutiny.
It is possible that these laws may be interpreted and applied by various jurisdictions in a manner inconsistent with our current or future practices, or that is inconsistent with one another. Fee revenues from overdraft protection programs constitute a significant portion of our noninterest income and may continue to be subject to increased supervisory scrutiny.
Additionally, if our CET1 to Risk Weighted Assets ratio does not exceed the minimum required plus the additional CET1 conservation buffer, we may be restricted in our ability to pay dividends or make other distributions of capital to our shareowners. 29 Capital and liquidity requirements are frequently introduced and amended.
Additionally, if our CET1 to Risk Weighted Assets ratio does not exceed the minimum required plus the additional CET1 conservation buffer, we may be restricted in our ability to pay dividends or make other distributions of capital to our shareowners. Capital and liquidity requirements are frequently introduced and amended.
We may be prohibited from taking capital actions such as paying or increasing dividends or repurchasing securities. Changes in accounting standards or assumptions in applying accounting policies could adversely affect us. Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations.
We may be prohibited from taking capital actions such as paying or increasing dividends or repurchasing securities. 30 Changes in accounting standards or assumptions in applying accounting policies could adversely affect us. Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations.
Nonetheless, if we fail to provide the appropriate environment that sensitizes all of our associates to managing risk, our business could be impacted adversely. 31 We are subject to certain operational risks, including, but not limited to risk arising from failure or circumvention of our controls and procedures.
Nonetheless, if we fail to provide the appropriate environment that sensitizes all of our associates to managing risk, our business could be impacted adversely. We are subject to certain operational risks, including, but not limited to risk arising from failure or circumvention of our controls and procedures.
If any of these risks materialized, they could have an adverse effect on our business and operations and may have other adverse effects on us in ways that we are unable to predict. 34 Litigation may adversely affect our results. We are subject to litigation in the ordinary course of business.
If any of these risks materialized, they could have an adverse effect on our business and operations and may have other adverse effects on us in ways that we are unable to predict. Litigation may adversely affect our results. We are subject to litigation in the ordinary course of business.
In addition, adverse publicity or negative information posted on social media by associates, the media or otherwise, whether or not factually correct, may adversely impact our reputation. Harm to our reputation may adversely and materially affect our competitive position, business prospects, and financial results.
In addition, adverse publicity or negative information posted on social media by associates, the media or otherwise, whether or not factually correct, may adversely impact our reputation or future prospects. Harm to our reputation may adversely and materially affect our competitive position, business prospects, and financial results.
Similarly, significant sales of our common stock, or the expectation of these sales, could cause our stock prices to fall. Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on its market price.
Similarly, significant sales of our common stock, or the expectation of these sales, could cause our stock prices to fall. 24 Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on its market price.
If we are required to liquidate the collateral securing a loan during a period of reduced real estate values to satisfy the debt, our earnings and capital could be adversely affected. Additionally, at December 31, 2023, a significant number of our loans secured by real estate are secured by commercial and residential properties located in Florida and Georgia.
If we are required to liquidate the collateral securing a loan during a period of reduced real estate values to satisfy the debt, our earnings and capital could be adversely affected. Additionally, at December 31, 2024, a significant number of our loans secured by real estate are secured by commercial and residential properties located in Florida and Georgia.
If we are unable to raise funds through deposits, borrowings, earnings and other sources, it could have a substantial negative effect on our liquidity. In particular, a majority of our liabilities during 2023 were checking accounts and other liquid deposits, which are generally payable on demand or upon short notice.
If we are unable to raise funds through deposits, borrowings, earnings and other sources, it could have a substantial negative effect on our liquidity. In particular, a majority of our liabilities during 2024 were checking accounts and other liquid deposits, which are generally payable on demand or upon short notice.
Moreover, if we need to raise capital in the future, we may have to do so when many other financial institutions are also seeking to raise capital and would have to compete with those institutions for investors. We may be unable to pay dividends in the future. In 2023, our Board of Directors declared four quarterly cash dividends.
Moreover, if we need to raise capital in the future, we may have to do so when many other financial institutions are also seeking to raise capital and would have to compete with those institutions for investors. We may be unable to pay dividends in the future. In 2024, our Board of Directors declared four quarterly cash dividends.
Commercial real estate, commercial, construction, vacant land, and consumer loans may expose a lender to greater credit risk than traditional fixed-rate fully amortizing loans secured by single- family residential real estate because the collateral securing these loans may not be sold as easily as single-family residential real estate.
Commercial real estate, commercial, construction, vacant land, and consumer loans may expose a lender to greater credit risk than traditional fixed-rate fully amortizing loans secured by residential real estate because the collateral securing these loans may not be sold as easily as residential real estate.
The GLBA, the BHC Act, and other federal laws subject financial holding companies to restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.
The GLBA, the Dodd-Frank Act, the BHC Act, and other federal laws subject financial holding companies to restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations.
The Company’s, or its third-party providers’, inability or resistance to timely innovate or adapt its operations, products, and services to evolving industry standards and consumer preferences could result in service disruptions and harm our business and adversely affect our results of operations and reputation.
The Company’s, or its third-party providers’, inability or resistance to timely innovate or adapt its operations, products, and services to evolving industry standards and consumer preferences could result in service disruptions and harm our business, and materially and adversely affect our results of operations, financial condition, and reputation.
Regulatory and Compliance Risks We are subject to extensive regulation, which could restrict our activities and impose financial requirements or limitations on the conduct of our business. We are subject to extensive regulation, supervision and examination by our regulators, including the Florida Office of Financial Regulation, the Federal Reserve, and the FDIC.
Regulatory and Compliance Risks We are subject to extensive regulation, which could restrict our activities and impose financial requirements or limitations on the conduct of our business. 29 We are subject to extensive regulation, supervision and examination by our regulators, including the Florida OFR, the Federal Reserve, and the FDIC.
The Company’s inability to retain public fund deposit balances due to increased competition in the current higher interest-rate environment and seasonal nature of these deposits could materially and adversely affect our liquidity or result in the use of higher-cost funding sources, which, in turn, could materially and adversely affect our business, results of operations or financial condition.
The Company’s inability to retain public fund deposit balances due to increased competition in the current higher interest-rate environment and seasonal nature of these deposits could materially and adversely affect our liquidity or result in the use of higher-cost funding sources, which, in turn, could materially and adversely affect our business, results of operations or financial condition. 28 Unrealized losses in our securities portfolio could materially and adversely affect our liquidity.
At December 31, 2023, our allowance for credit losses for loans held for investment was $29.9 million, which represented approximately 1.10% of our total loans held for investment. We had $6.2 million in nonaccruing loans at December 31, 2023. The allowance is based on management’s reasonable estimate and may not prove sufficient to cover future loan losses.
At December 31, 2024, our allowance for credit losses for loans held for investment was $29.3 million, which represented approximately 1.10% of our total loans held for investment. We had $6.3 million in nonaccruing loans at December 31, 2024. The allowance is based on management’s reasonable estimate and may not prove sufficient to cover future loan losses.
The widespread adoption and rapid evolution of emerging technologies, including artificial intelligence, analytic capabilities, self- service digital trading platforms and automated trading markets, internet services, and digital assets, such as central bank digital currencies, cryptocurrencies (including stablecoins), tokens, and other cryptoassets that utilize distributed ledger technology (DLT), as well as DLT in payment, clearing, and settlement processes creates additional risks, could negatively impact our ability to compete, and require substantial expenditures to the extent we were to modify or adapt our existing products and services.
The widespread adoption and rapid evolution of emerging technologies in the financial services industry, including artificial intelligence, analytic capabilities, cloud technologies, self-service digital trading platforms and automated trading markets, internet services, and digital assets, such as central bank digital currencies, cryptocurrencies (including stablecoins and memecoins), tokens, and other cryptoassets that utilize blockchain and distributed ledger technology (DLT), as well as DLT in payment, clearing, and settlement processes creates additional risks, could negatively impact our ability to compete, and require substantial expenditures to the extent we were to modify or adapt our existing products and services to keep pace with such new technologies.
These loans are susceptible to adverse conditions in the real estate market and local economy. At December 31, 2023, vacant land loans comprised approximately 3.5% of our total loan portfolio. ● HELOCs .
These loans are susceptible to adverse conditions in the real estate market and local economy. At December 31, 2024, vacant land loans comprised approximately 3.7% of our total loan portfolio. ● HELOCs .
Smith, Jr. is the Chairman, President, and Chief Executive Officer of CCBG and Chairman of CCB, he has substantial control over all matters on a day-to-day basis, including the nomination and election of directors.
Moreover, because William G. Smith, Jr. is the Chairman, President, and Chief Executive Officer of CCBG and Chairman of CCB, he has substantial control over all matters on a day-to-day basis, including the nomination and election of directors.
Further, as a result of our failure to timely file our Quarterly Report on Form 10-Q for the three-month period ended September 30, 2023, we are currently ineligible to file new short form registration statements on Form S-3 and, absent a waiver of the Form S-3 eligibility requirements, we are not currently permitted to use our existing registration statement on Form S-3D.
Further, as a result of our failure to timely file our Quarterly Report on Form 10-Q for the three-month period ended March 31, 2024, we are currently ineligible to file new short form registration statements on Form S-3 and, absent a waiver of the Form S-3 eligibility requirements, we are not currently permitted to use our existing registration statement on Form S-3D.
Further, any new laws, rules, regulations, policies, and supervisory guidance or changes in existing laws, rules, regulations, policies, and supervisory guidance (including changes in interpretation and implementation) could make compliance more difficult or expensive or otherwise adversely affect our business and financial condition.
Changes to any new laws, rules, regulations, policies, and supervisory guidance (including changes in interpretation and implementation) have and could make compliance more difficult or expensive and could otherwise adversely affect our business and financial condition.
At December 31, 2023, HELOCs comprised approximately 7.7% of our total loan portfolio. ● Consumer Loans . Consumer loans (such as automobile loans and personal lines of credit) are collateralized, if at all, with assets that may not provide an adequate source of payment of the loan due to depreciation, damage, or loss.
At December 31, 2024, HELOCs comprised approximately 8.3% of our total loan portfolio. 25 ● Consumer Loans . Consumer loans (such as automobile loans and personal lines of credit) are collateralized, if at all, with assets that may not provide an adequate source of payment of the loan due to depreciation, damage, or loss.
Additional state laws generally applicable to Florida corporations may also limit our ability to declare and pay dividends. Thus, our ability to fund future dividends may be restricted by state and federal laws and regulations.
Additional state laws generally applicable to Florida corporations and guidelines of the Federal Reserve may also limit our ability to declare and pay dividends. Thus, our ability to fund future dividends may be restricted by state and federal laws and regulations.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. 23 Our profitability depends significantly on economic conditions in the States of Florida and Georgia.
Pandemics, severe weather, natural disasters, global climate change, acts of terrorism and global conflicts may have a negative impact on our business and operations.
Severe weather, natural disasters, global climate change, widespread health emergencies (including pandemics), acts of terrorism and global conflicts may have a negative impact on our business and operations.
Other provisions in our Articles of Incorporation or Bylaws that may discourage takeover attempts or make them more difficult include: ● Supermajority voting requirements to remove a director from office; ● Provisions regarding the timing and content of shareowner proposals and nominations; ● Supermajority voting requirements to amend Articles of Incorporation unless approval is received by a majority of “disinterested directors”; ● Absence of cumulative voting; and ● Inability for shareowners to take action by written consent. 36 Reputational Risks Damage to our reputation could harm our businesses, including our competitive position and business prospects.
Other provisions in our Articles of Incorporation or Bylaws that may discourage takeover attempts or make them more difficult include: ● Supermajority voting requirements to remove a director from office; ● Provisions regarding the timing and content of shareowner proposals and nominations; ● Supermajority voting requirements to amend Articles of Incorporation unless approval is received by a majority of “disinterested directors”; ● Absence of cumulative voting; and ● Inability for shareowners to take action by written consent.
Our compliance with these industry regulations is costly and restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, lending and interest rates charged on loans, interest rates paid on deposits, access to capital and brokered deposits and locations of banking offices.
Our compliance with these industry regulations is costly and restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, lending and interest rates charged on loans, interest rates paid on deposits, the fees we can charge for certain products or transactions, access to capital and brokered deposits, and locations of banking offices.
These changes may be difficult to predict and could impact how we prepare and report our financial statements. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in us revising prior-period financial statements.
These changes may be difficult to predict and could impact how we prepare and report our financial statements. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in us revising prior-period financial statements. We are subject to government regulation and oversight relating to data and privacy protection.
If we are not able to remediate this material weakness, or if we experience additional material weaknesses or other deficiencies in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, prevent fraud, or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, prevent fraud, or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.
Financial institutions and companies engaged in data processing have increasingly reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disrupt or degrade service, sabotage systems, or cause other damage.
Any failure, interruption, or breach in security of these systems could result in significant disruption to our operations. 32 Financial institutions and companies engaged in data processing have increasingly reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disrupt or degrade service, sabotage systems, or cause other damage.
Pandemics (such as the COVID-19 pandemic), severe weather, natural disasters, global climate change, acts of terrorism, global conflicts, or other similar events have in the past, and may in the future have, a negative impact on our business and operations.
Severe weather, natural disasters, global climate change, widespread health emergencies (including pandemics), acts of terrorism, global conflicts, or other similar events have in the past, and may in the future have, a negative impact on our business and operations.
If our estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing our loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.
During the construction phase, a number of factors can result in delays or cost overruns. If our estimate is inaccurate or if actual construction costs exceed estimates, the value of the property securing our loan may be insufficient to ensure full repayment when completed through a permanent loan, sale of the property, or by seizure of collateral.
At December 31, 2023, consumer loans comprised approximately 9.9% of our total loan portfolio, with indirect auto loans making up a majority of this portfolio at approximately 91.2% of the total balance.
At December 31, 2024, consumer loans comprised approximately 7.6% of our total loan portfolio, with indirect auto loans making up a majority of this portfolio at approximately 87.9% of the total balance.
We could face increased scrutiny or be viewed as higher risk by regulators and the investor community, which could have a material adverse effect on our business, financial condition, and results of operations. Please refer to the Section entitled “Business – Regulatory Considerations” on page 10.
We could face increased scrutiny or be viewed as higher risk by regulators and the investor community, which could have a material adverse effect on our business, financial condition, and results of operations.
Cybersecurity incidents, including security breaches and failures of our information systems could significantly disrupt our business, result in the unintended disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses.
Any such losses could have a material adverse effect on our business, financial condition, and results of operations. Cybersecurity incidents, including security breaches and failures of our information systems could significantly disrupt our business, result in the unintended disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses.
At December 31, 2023, approximately 30.2% and 44.4% of our $2.7 billion loan portfolio was secured by commercial real estate and residential real estate, respectively. As of this same date, approximately 7.2% was secured by property under construction.
At December 31, 2024, approximately 29.4% and 47.6% of our $2.652 billion loan portfolio was secured by commercial real estate and residential real estate, respectively. As of this same date, approximately 8.3% was secured by property under construction.
In addition, due to our contractual obligations with the holders of our trust preferred securities, if we defer the payment of accrued interest owed to the holders of our trust preferred securities, we may not make dividend payments to our shareowners. 28 Further, under applicable statutes and regulations, CCB’s board of directors, after charging-off bad debts, depreciation and other worthless assets, if any, and making provisions for reasonably anticipated future losses on loans and other assets, may quarterly, semi-annually, or annually declare and pay dividends to CCBG of up to the aggregate net income of that period combined with the CCB’s retained net income for the preceding two years and, with the approval of the Florida Office of Financial Regulation and Federal Reserve, declare a dividend from retained net income which accrued prior to the preceding two years.
Further, under applicable statutes and regulations, CCB’s board of directors, after charging-off bad debts, depreciation and other worthless assets, if any, and making provisions for reasonably anticipated future losses on loans and other assets, may quarterly, semi-annually, or annually declare and pay dividends to CCBG of up to the aggregate net income of that period combined with the CCB’s retained net income for the preceding two years and, with the approval of the Florida OFR, declare a dividend from retained net income which accrued prior to the preceding two years.
At December 31, 2023, construction loans comprised approximately 7.2% of our total loan portfolio. ● Vacant Land Loans .
At December 31, 2024, construction loans comprised approximately 8.3% of our total loan portfolio. ● Vacant Land Loans .
In response to this increased congressional and regulatory scrutiny, and in anticipation of enhanced supervision and enforcement of overdraft protection practices in the future, certain banking organizations have begun to modify their overdraft protection programs, including by discontinuing the imposition of overdraft transaction fees and amending their payment priority policies and procedures.
Business under the section captioned “Consumer Laws and Regulations”), and in anticipation of enhanced supervision and enforcement of overdraft protection practices in the future, certain banking organizations have begun to modify their overdraft protection programs, including by discontinuing the imposition of overdraft transaction fees, lowering their overdraft transaction fees, and amending their payment priority policies and procedures.
If CCB’s policies, procedures and systems are deemed deficient or the policies, procedures and systems of the financial institutions that it has already acquired or may acquire in the future are deficient, CCB would be subject to liability, including fines and regulatory actions such as restrictions on its ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of its business plan, including its acquisition plans.
If our policies, procedures and systems are deemed deficient or the policies, procedures are deficient, we would be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including any acquisition plans.
Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry.
Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry. If we are unable to maintain adequate liquidity, it could materially and adversely affect our business, results of operations or financial condition.
Although we use models to assess the impact of interest rates on mortgage-related revenues, the estimates of revenues produced by these models are dependent on estimates and assumptions of future loan demand, prepayment speeds and other factors which may differ from actual subsequent experience. Our profitability depends significantly on economic conditions in the States of Florida and Georgia.
Although we use models to assess the impact of interest rates on mortgage-related revenues, the estimates of revenues produced by these models are dependent on estimates and assumptions of future loan demand, prepayment speeds and other factors which may differ from actual subsequent experience. Shares of our common stock are not an insured deposit and may lose value.
In addition to the regulations of the bank regulatory agencies, as a member of the FHLB of Atlanta, we must also comply with applicable regulations of the Federal Housing Finance Agency and the Federal Home Loan Bank.
In addition to the regulations of the bank regulatory agencies, as a member of the FHLB of Atlanta, we must also comply with applicable regulations of the Federal Housing Finance Agency and the Federal Home Loan Bank. Regulators have continued to focus on compliance with AMLA and BSA obligations and the rules enforced by OFAC.
These third-party vendors are sources of operational and informational security risk to us, including risks associated with operational errors, information system failures, interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information.
We rely on certain external vendors to provide products and services necessary to maintain our day-to-day operations. These third-party vendors are sources of operational, cybersecurity and informational security risk to us, including risks associated with operational errors, coding errors, information system failures, interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information.
In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business. At December 31, 2023, commercial loans comprised approximately 8.2% of our total loan portfolio. ● Construction Loans .
At December 31, 2024, commercial mortgage loans comprised approximately 29.4% of our total loan portfolio. ● Commercial Loans . Repayment is generally dependent upon the successful operation of the borrower’s business. In addition, the collateral securing the loans may depreciate over time, be difficult to appraise, be illiquid, or fluctuate in value based on the success of the business.
We generally use short- term deposits to fund longer-term assets. When interest rates change, assets and liabilities with shorter terms reprice more quickly than those with longer terms, which could have a material adverse effect on our net interest margin.
We generally use short- term deposits to fund longer-term assets. When interest rates change, assets and liabilities with shorter terms reprice more quickly than those with longer terms, which could have a material adverse effect on our net interest margin. During 2022 and 2023, the Federal Reserve raised the federal funds rate 11 times for a cumulative increase of 5.25%.
If we are unable to maintain adequate liquidity, it could materially and adversely affect our business, results of operations or financial condition. 27 A significant decrease in our public fund deposit balances as a result of increased competition in the current higher interest-rate environment and seasonal nature of these deposits could materially and adversely affect our liquidity.
A significant decrease in our public fund deposit balances as a result of increased competition in the current higher interest-rate environment and seasonal nature of these deposits could materially and adversely affect our liquidity.
We are subject to government regulation and oversight relating to data and privacy protection. Our business requires the collection and retention of large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract.
Our business requires the collection and retention of large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract. We also maintain important internal company data such as personally identifiable information about our associates and information relating to our operations.
Any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations. In addition, we anticipate increased regulatory scrutiny, in the course of routine examinations and otherwise, and new regulations in response to recent negative developments in the banking industry, which may increase our cost of doing business and reduce our profitability.
In addition, we face increased regulatory scrutiny, in the course of routine examinations and otherwise, and new regulations in response to negative developments in the banking industry, which may increase our cost of doing business and reduce our profitability.
Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse effect on our business, financial condition, and results of operations. 35 Also, we may not be timely or successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding, managing, or adapting to changes in consumer behavior, preferences, spending, investing and saving habits, achieving market acceptance of our products and services, or reducing costs in response to pressures to deliver products and services at lower prices.
We may not be timely or successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding, managing, or adapting to changes in consumer behavior, preferences, spending, investing and saving habits, achieving market acceptance of our products and services, or reducing costs in response to pressures to deliver products and services at lower prices.
Accordingly, these directors, executive officers, and principal shareowners, if acting together, may be able to influence or control matters requiring approval by our shareowners, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. Moreover, because William G.
Smith, Jr., our Chairman, President and Chief Executive Officer beneficially owned 17.3% of our shares as of that date. Accordingly, these directors, executive officers, and principal shareowners, if acting together, may be able to influence or control matters requiring approval by our shareowners, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations under the section captioned “Net Interest Income” and “Market Risk and Interest Rate Sensitivity” elsewhere in this report for further discussion related to interest rate sensitivity and our management of interest rate risk. The fair value of our investments could decline which would cause a reduction in shareowners’ equity.
Management’s Discussion and Analysis of Financial Condition and Results of Operations under the section captioned “Net Interest Income” and “Market Risk and Interest Rate Sensitivity” elsewhere in this report for further discussion related to interest rate sensitivity and our management of interest rate risk. Inflationary pressures and rising prices may affect our results of operations and financial condition.
While we maintain “cyber” insurance coverage, which would apply in the event of certain cyber-related incidents, the amount of coverage may not be adequate depending on the magnitude of the incident.
While we maintain “cyber” insurance coverage, which would apply in the event of certain cyber-related incidents, the amount of coverage may not be adequate depending on the magnitude of the incident. Furthermore, because cyber- related incidents are inherently difficult to predict and can take many forms, some incidents may not be covered under our cyber insurance coverage.
The increased risks associated with these types of loans result in a correspondingly higher probability of default on such loans (as compared to fixed-rate fully amortizing single-family real estate loans).
The increased risks associated with these types of loans result in a correspondingly higher probability of default on such loans (as compared to fixed-rate fully amortizing single-family real estate loans). Loan defaults would likely increase our loan losses and nonperforming assets and could adversely affect our allowance for credit losses and our results of operations.
A material increase in our allowance for credit losses would adversely impact our net income and capital in future periods, while having the effect of overstating our current period earnings. 26 We may incur significant costs associated with the ownership of real property as a result of foreclosures, which could reduce our net income.
A material increase in our allowance for credit losses would adversely impact our net income and capital in future periods, while having the effect of overstating our current period earnings.
Shares of our common stock are not an insured deposit and may lose value. The shares of our common stock are not a bank deposit and will not be insured or guaranteed by the FDIC or any other government agency.
The shares of our common stock are not a bank deposit and will not be insured or guaranteed by the FDIC or any other government agency. Your investment will be subject to investment risk, and you must be capable of affording the loss of your entire investment.
The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower; however, the value of the collateral may decline during the time the credit is extended.
At December 31, 2024, approximately 85.3% of our loans included real estate as a primary, secondary, or tertiary component of collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower; however, the value of the collateral may decline during the time the credit is extended.
A portion of our investment securities portfolio (35.1%) at December 31, 2023 has been designated as available-for-sale pursuant to U.S. generally accepted accounting principles relating to accounting for investments.
The fair value of our investments could decline which would cause a reduction in shareowners’ equity. A portion of our investment securities portfolio (41.5%) at December 31, 2024 has been designated as available-for-sale pursuant to U.S. generally accepted accounting principles relating to accounting for investments.
Unrealized losses related to available-for-sale securities are reflected in accumulated other comprehensive income in our consolidated statements of financial condition and reduce the level of our book capital and tangible common equity. However, such unrealized losses do not affect our regulatory capital ratios.
We have experienced significant unrealized losses on our available-for-sale securities portfolio as a result of increases in market interest rates. Unrealized losses related to available-for-sale securities are reflected in accumulated other comprehensive income in our consolidated statements of financial condition and reduce the level of our book capital and tangible common equity.
Our increased use of cloud and other technologies, such as remote work technologies, also increases our risk of being subject to a cyber-related incident. The risk of a cybersecurity- related incident has increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a cybersecurity -related incident has increased as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased.
Loan defaults would likely increase our loan losses and nonperforming assets and could adversely affect our allowance for credit losses and our results of operations. 25 Our loan portfolio is heavily concentrated in mortgage loans secured by properties in Florida and Georgia which causes our risk of loss to be higher than if we had a more geographically diversified portfolio.
Our loan portfolio is heavily concentrated in mortgage loans secured by properties in Florida and Georgia which causes our risk of loss to be higher than if we had a more geographically diversified portfolio. Our interest-earning assets are heavily concentrated in mortgage loans secured by real estate, particularly real estate located in Florida and Georgia.
In addition, the scope and content of U.S. banking regulators’ policies on incentive compensation, as well as changes to these policies, could adversely affect our ability to hire, retain, and motivate our key associates.
In addition, the scope and content of U.S. banking regulators’ policies on incentive compensation, as well as changes to these policies, could adversely affect our ability to hire, retain, and motivate our key associates. 33 Issues we encounter with respect to external vendors upon which we rely could have a material adverse effect on our business and, in turn, our financial condition and results of operations.
Conversely, in a constant or increasing rate environment, we would expect fewer loans to be refinanced and a decline in payoffs.
A decline in mortgage rates generally increases the demand for mortgage loans as borrowers refinance, but also generally leads to accelerated payoffs. Conversely, in a constant or increasing rate environment, we would expect fewer loans to be refinanced and a decline in payoffs.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. Any failure to maintain or implement required new or improved controls, or difficulties encountered in implementation could cause us to fail to meet our reporting obligations.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.
We actively monitor our available-for-sale securities portfolio and we do not currently anticipate the need to realize material losses from the sale of securities for liquidity purposes. Furthermore, we believe it is unlikely that we would be required to sell any such securities before recovery of their amortized cost bases, which may be at maturity.
Furthermore, we believe it is unlikely that we would be required to sell any such securities before recovery of their amortized cost bases, which may be at maturity.
Revenues derived from transaction fees associated with overdraft protection programs offered to consumers represent a significant portion of our noninterest income. In 2023, the Company collected approximately $9.6 million in net consumer overdraft transaction fees. 30 In 2022, certain members of Congress and the leadership of the CFPB have expressed a heightened interest in bank consumer overdraft protection programs.
Revenues derived from transaction fees associated with overdraft protection programs offered to consumers represent a significant portion of our noninterest income. In 2024, the Company collected approximately $9.5 million in net consumer overdraft transaction fees. In response to increased congressional and regulatory scrutiny (See Item 1.
Our directors, executive officers, and principal shareowners, if acting together, have substantial control over all matters requiring shareowner approval, including changes of control. Because Mr. William G. Smith, Jr. is a principal shareowner and our Chairman, President, and Chief Executive Officer and Chairman of CCB, he has substantial control over all matters on a day-to-day basis.
Smith, Jr. is a principal shareowner and our Chairman, President, and Chief Executive Officer and Chairman of CCB, he has substantial control over all matters on a day-to-day basis. Our directors, executive officers, and principal shareowners beneficially owned approximately 19.5% of the outstanding shares of our common stock at December 31, 2024. William G.
The average daily trading volume of our common stock over the 12-month period ending December 31, 2023 was approximately 33,775 shares. Due to the limited trading activity of our common stock, relativity small trades may have a significant impact on the price of our common stock.
Due to the limited trading activity of our common stock, relativity small trades may have a significant impact on the price of our common stock.
If one or more of these analysts ceases to cover our Company or fails to publish regular reports on us, we could lose visibility in the financial markets, which may cause our stock price or trading volume to decline. 24 Credit Risks Our loan portfolio includes loans with a higher risk of loss which could lead to higher loan losses and nonperforming assets.
If one or more of analysts covering our common stock ceases to cover our Company or fails to publish regular reports on us, the lack of research coverage and lose of visibility in the financial markets may cause our stock price or trading volume to decline.
The risk of loss is largely dependent on our initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing. During the construction phase, a number of factors can result in delays or cost overruns.
At December 31, 2024, commercial loans comprised approximately 7.1% of our total loan portfolio. ● Construction Loans . The risk of loss is largely dependent on our initial estimate of whether the property’s value at completion equals or exceeds the cost of property construction and the availability of take-out financing.
Many of our non-bank competitors are not subject to the same extensive regulations that govern our activities. As a result, these non-bank competitors have advantages over us in providing certain services. The effect of this competition may reduce or limit our margins or our market share and may adversely affect our results of operations and financial condition.
Many of our non-bank competitors are not subject to the same extensive regulations that govern our activities. As a result, these non-bank competitors have advantages over us in providing certain services, including the ability to offer financial products and services on more favorable terms than we are able to offer.
As a result, the cost of operating real property assets may exceed the rental income earned from such properties or we may be required to dispose of the real property at a loss.
As a result, the cost of operating real property assets may exceed the rental income earned from such properties or we may be required to dispose of the real property at a loss. 27 Reliance on inaccurate or misleading financial statements, credit reports, or other financial information could have a material adverse impact on our business, financial condition, and results of operations.
Inflation rose sharply at the end of 2021 and continued rising in 2022 at levels not seen for over 40 years. Inflationary pressures eased but remained elevated throughout 2023. Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Inflation rose sharply at the end of 2021 and continued rising in 2022 at levels not seen for over 40 years. Inflationary pressures eased but remained elevated throughout 2023 and 2024.
Your investment will be subject to investment risk, and you must be capable of affording the loss of your entire investment. Limited trading activity for shares of our common stock may contribute to price volatility. While our common stock is listed and traded on the Nasdaq Global Select Market, there has historically been limited trading activity in our common stock.
Limited trading activity for shares of our common stock may contribute to price volatility. While our common stock is listed and traded on the Nasdaq Global Select Market, there has historically been limited trading activity in our common stock. The average daily trading volume of our common stock over the 12-month period ending December 31, 2024 was approximately 31,390 shares.
We originate commercial real estate loans, commercial loans, construction loans, vacant land loans, consumer loans, and residential mortgage loans primarily within our market area.
Credit Risks Our loan portfolio includes loans with a higher risk of loss which could lead to higher loan losses and nonperforming assets. We originate commercial real estate loans, commercial loans, construction loans, vacant land loans, consumer loans, and residential mortgage loans primarily within our market area.
Strategic Risks Our future success is dependent on our ability to compete effectively in the highly competitive banking industry. We face vigorous competition for deposits, loans and other financial services in our market area from other banks and financial institutions, including savings and loan associations, savings banks, finance companies and credit unions.
We face vigorous competition for deposits, loans and other financial services in our market area from other banks and financial institutions, including savings and loan associations, savings banks, finance companies and credit unions. A number of our competitors are significantly larger than we are and have greater access to capital and other resources.
To a lesser extent, we also compete with other providers of financial services, such as money market mutual funds, brokerage firms, consumer finance companies, insurance companies and governmental organizations, which may offer financial products and services on more favorable terms than we are able to.
Many of our competitors also have higher lending limits, more expansive branch networks, and offer a wider array of financial products and services. We also compete with other non-bank providers of financial services, such as money market mutual funds, brokerage firms, consumer finance companies, insurance companies, governmental organizations, and non-bank financial technology providers, including digital asset service providers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors under the section captioned “Cybersecurity incidents, including security breaches and failures of our information systems could significantly disrupt our business, result in the unintended disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses.” Governance Our CISO is responsible for managing our Corporate Security Department and overseeing our information security program, including cybersecurity risks.
Biggest changeRisk Factors under the section captioned “Cybersecurity incidents, including security breaches and failures of our information systems could significantly disrupt our business, result in the unintended disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause losses.” 38 Governance Our CISO is responsible for managing our Corporate Security Department and overseeing our information security program, including cybersecurity risks.
We seek to maintain a risk management infrastructure that implements physical, administrative and technical controls that are designed, based on risk, to protect our information systems and the information stored on our networks, including personal information, intellectual property and proprietary information of our Company and our clients. 37 ◾ Incident response program: We have an incident response program and dedicated teams to respond to cybersecurity, physical and administrative incidents.
We seek to maintain a risk management infrastructure that implements physical, administrative and technical controls that are designed, based on risk, to protect our information systems and the information stored on our networks, including personal information, intellectual property and proprietary information of our Company and our clients. ◾ Incident response program: We have an incident response program and dedicated teams to respond to cybersecurity, physical and administrative incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOf these locations, we lease the land, buildings, or both at 13 locations and own the land and buildings at the remaining 50. CCHL had 30 loan production offices, 29 of which were leased. Capital City Strategic Wealth, LLC. maintained five offices, all of which were leased.
Biggest changeOf these locations, we lease the land, buildings, or both at 11 locations and own the land and buildings at the remaining 51. CCHL had 27 loan production offices, 26 of which were leased. Capital City Strategic Wealth, LLC maintained five offices, all of which were leased.
Item 2. Properties We are headquartered in Tallahassee, Florida. Our executive office is in the Capital City Bank building located on the corner of Tennessee and Monroe Streets in downtown Tallahassee. The building is owned by CCB, but is located on land leased under a long-term agreement. At December 31, 2023, Capital City Bank had 63 banking offices.
Item 2. Properties We are headquartered in Tallahassee, Florida. Our executive office is in the Capital City Bank building located on the corner of Tennessee and Monroe Streets in downtown Tallahassee. The building is owned by CCB, but is located on land leased under a long-term agreement. At December 31, 2024, Capital City Bank had 62 banking offices.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosure Not applicable. 38 PART II
Biggest changeMine Safety Disclosure Not applicable. 39 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosure 36 PART II Item 5. Market for the Registrant’s Common Equity, Related Shareowner Matters, and Issuer Purchases of Equity Securities 38 Item 6. Selected Financial Data 41 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 68 Item 8.
Biggest changeItem 4. Mine Safety Disclosure 37 PART II Item 5. Market for the Registrant’s Common Equity, Related Shareowner Matters, and Issuer Purchases of Equity Securities 39 Item 6. Selected Financial Data 41 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 68 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table presents the range of high and low closing sales prices reported on the Nasdaq Global Select Market and cash dividends declared for each quarter during the past two years. 2023 2022 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter Common stock price: High $ 32.56 $ 33.44 $ 34.16 $ 36.86 $ 36.23 $ 33.93 $ 28.55 $ 28.88 Low 26.12 28.64 28.03 28.18 31.14 27.41 24.43 25.96 Close 29.43 29.83 30.64 29.31 32.50 31.11 27.89 26.36 Cash dividends per share 0.20 0.20 0.18 0.18 0.17 0.17 0.16 0.16 Florida law and Federal regulations impose restrictions on our ability to pay dividends and limitations on the amount of dividends that the Bank can pay annually to us.
Biggest changeThe following table presents the range of high and low closing sales prices reported on the Nasdaq Global Select Market and cash dividends declared for each quarter during the past two years. 2024 2023 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter Common stock price: High $ 40.86 $ 36.67 $ 28.58 $ 31.34 $ 32.56 $ 33.44 $ 34.16 $ 36.86 Low 33.00 26.72 25.45 26.59 26.12 28.64 28.03 28.18 Close 36.65 35.29 28.44 27.7 29.43 29.83 30.64 29.31 Cash dividends per share 0.23 0.23 0.21 0.21 0.20 0.20 0.18 0.18 Florida law and Federal regulations impose restrictions on our ability to pay dividends and limitations on the amount of dividends that the Bank can pay annually to us.
Small Cap Banks Index for the past five years. The graph assumes that $100 was invested on December 31, 2018 in our common stock and each of the above indices, and that all dividends were reinvested. The shareowner return shown below represents past performance and should not be considered indicative of future performance.
Small Cap Banks Index for the past five years. The graph assumes that $100 was invested on December 31, 2019 in our common stock and each of the above indices, and that all dividends were reinvested. The shareowner return shown below represents past performance and should not be considered indicative of future performance.
“Liquidity and Capital Resources – Dividends” – in Management’s Discussion and Analysis of Financial Condition and Operating Results on page 56 and Note 17 in the Notes to Consolidated Financial Statements. 39 Performance Graph This performance graph compares the cumulative total shareowner return on our common stock with the cumulative total shareowner return of the Nasdaq Composite Index and the S&P U.S.
“Liquidity and Capital Resources – Dividends” – in Management’s Discussion and Analysis of Financial Condition and Operating Results on page 66 and Note 17 in the Notes to Consolidated Financial Statements. 40 Performance Graph This performance graph compares the cumulative total shareowner return on our common stock with the cumulative total shareowner return of the Nasdaq Composite Index and the S&P U.S.
Item 5. Market for the Registrant’s Common Equity, Related Shareowner Matters, and Issuer Purchases of Equity Securities Common Stock Market Prices and Dividends Our common stock trades on the Nasdaq Global Select Market under the symbol “CCBG.” We had a total of 1,080 shareowners of record at January 31, 2024.
Item 5. Market for the Registrant’s Common Equity, Related Shareowner Matters, and Issuer Purchases of Equity Securities Common Stock Market Prices and Dividends Our common stock trades on the Nasdaq Global Select Market under the symbol “CCBG.” We had a total of 1,027 shareowners of record at January 31, 2025.
See Item 1. “Capital; Dividends; Sources of Strength” and “Dividends” in the Business section on page 11 and 13, Item 1A. “Market Risks” in the Risk Factors section on page 19, Item 7.
See Item 1. “Capital; Dividends; Sources of Strength” and “Dividends” in the Business section on page 14 and 16, Item 1A. “Market Risks” in the Risk Factors section on page 22, Item 7.
Removed
Period Ending Index 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Capital City Bank Group, Inc. $ 100.00 $ 133.95 $ 110.72 $ 121.82 $ 153.27 $ 142.32 Nasdaq Composite 100.00 136.69 198.10 242.03 163.28 236.17 SNL $1B-$5B Bank Index 100.00 125.46 113.94 158.62 139.85 140.55 40 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table contains information about all purchases made during the fourth quarter of 2023 by, or on behalf of, us and any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) of shares or other units of any class of our equity securities that is registered pursuant to Section 12 of the Exchange Act.
Added
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Capital City Bank Group, Inc. $ 100.00 $ 82.66 $ 90.84 $ 114.42 $ 106.25 $ 136.06 Nasdaq Composite 100.00 144.92 177.06 119.45 172.77 223.87 SNL $1B-$5B Bank Index 100.00 90.82 126.43 111.47 112.03 132.44 41
Removed
Total number of Maximum Number of Total number Average shares purchased as shares that may yet be of shares price paid part of our share purchased under our share Period purchased per share repurchase program (1) repurchase program October 1, 2023 to October 31, 2023 4,000 $28.05 4,000 466,901 November 1, 2023 to November 30, 2023 16,391 $29.07 16,391 450,510 December 1, 2023 to December 31, 2023 - - - 450,510 Total 20,391 $30.24 20,391 450,510 (1) This balance represents the number of shares that were repurchased during the fourth quarter of 2023 through the Capital City Bank Group, Inc.
Removed
Share Repurchase Program (the “Program”), which was approved on January 31, 2019 for a five year period, under which we were authorized to repurchase up to 750,000 shares of our common stock. The Program is flexible and shares are acquired from the public markets and other sources using free cash flow. No shares are repurchased outside of the Program. 41

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−0 removed2 unchanged
Biggest changeSelected Financial Data (Dollars in Thousands, Except Per Share Data) 2023 2022 2021 Interest Income $ 181,068 $ 131,910 $ 106,351 Net Interest Income 158,988 125,022 102,861 Provision for Credit Losses 9,714 7,494 (1,553) Noninterest Income 71,610 75,181 107,545 Noninterest Expense (1) 157,023 151,634 162,508 Pre-Tax Loss (Income) Attributable to Noncontrolling Interests (2) 1,437 135 (6,220) Net Income Attributable to Common Shareowners 52,258 33,412 33,396 Per Common Share: Basic Net Income $ 3.08 $ 1.97 $ 1.98 Diluted Net Income 3.07 1.97 1.98 Cash Dividends Declared 0.76 0.66 0.62 Diluted Book Value 25.92 22.73 22.63 Diluted Tangible Book Value (3) 20.45 17.27 17.12 Performance Ratios: Return on Average Assets 1.22 % 0.77 % 0.84 % Return on Average Equity 12.40 8.81 9.92 Net Interest Margin (FTE) 4.05 3.14 2.83 Noninterest Income as % of Operating Revenues 31.05 37.55 51.11 Efficiency Ratio 67.99 75.62 77.11 Asset Quality: Allowance for Credit Losses ("ACL") $ 29,941 $ 25,068 $ 21,606 ACL to Loans Held for Investment ("HFI") 1.10 % 0.98 % 1.12 % Nonperforming Assets ("NPAs") 6,243 2,728 4,339 NPAs to Total Assets 0.15 0.06 0.10 NPAs to Loans HFI plus OREO 0.23 0.11 0.22 ACL to Non-Performing Loans 479.70 1091.33 499.93 Net Charge-Offs to Average Loans HFI 0.18 0.18 -0.03 Capital Ratios: Tier 1 Capital 15.37 % 14.27 % 16.14 % Total Capital 16.57 15.30 17.15 Common Equity Tier 1 Capital 13.52 12.38 13.86 Tangible Common Equity (3) 8.26 6.65 6.95 Leverage 10.30 8.91 8.95 Equity to Assets 10.24 8.57 8.99 Dividend Pay-Out 24.76 33.50 31.31 Averages for the Year: Loans Held for Investment $ 2,656,394 $ 2,189,440 $ 2,000,563 Earning Assets 3,933,800 3,989,248 3,652,486 Total Assets 4,278,686 4,332,302 3,984,064 Deposits 3,669,612 3,763,336 3,406,886 Shareowners’ Equity 421,482 379,290 336,821 Year -End Balances: Loans Held for Investment $ 2,733,918 $ 2,547,685 $ 1,931,465 Earning Assets 3,957,452 4,177,177 3,949,111 Total Assets 4,304,477 4,519,223 4,263,849 Deposits 3,701,822 3,939,317 3,712,862 Shareowners’ Equity 440,625 387,281 383,166 Other Data: Basic Average Shares Outstanding 16,987,167 16,950,810 16,862,932 Diluted Average Shares Outstanding 17,022,922 16,984,740 16,892,947 Shareowners of Record (4) 1,080 1,124 1,157 Banking Locations (4) 63 59 57 Full-Time Equivalent Associates (4)(5) 970 992 954 (1) For 2023, 2022 and 2021, includes pension settlement gain of $0.3 million, charge of $2.3 million and $3.1 million, respectively.
Biggest changeSelected Financial Data (Dollars in Thousands, Except Per Share Data) 2024 2023 2022 Interest Income $ 194,657 $ 181,068 $ 131,910 Net Interest Income 158,938 158,988 125,022 Provision for Credit Losses 4,031 9,714 7,494 Noninterest Income 75,976 71,610 75,181 Noninterest Expense (1) 165,315 157,023 151,634 Pre-Tax Loss Attributable to Noncontrolling Interests (2) 1,271 1,437 135 Net Income Attributable to Common Shareowners 52,915 52,258 33,412 Per Common Share: Basic Net Income $ 3.12 $ 3.08 $ 1.97 Diluted Net Income 3.12 3.07 1.97 Cash Dividends Declared 0.88 0.76 0.66 Diluted Book Value 29.11 25.92 22.73 Diluted Tangible Book Value (3) 23.65 20.45 17.27 Performance Ratios: Return on Average Assets 1.25 % 1.22 % 0.77 % Return on Average Equity 11.18 12.40 8.81 Net Interest Margin (FTE) 4.08 4.05 3.14 Noninterest Income as % of Operating Revenues 32.34 31.05 37.55 Efficiency Ratio 70.30 67.99 75.62 Asset Quality: Allowance for Credit Losses ("ACL") $ 29,251 $ 29,941 $ 25,068 ACL to Loans Held for Investment ("HFI") 1.10 % 1.10 % 0.98 % Nonperforming Assets ("NPAs") 6,669 6,243 2,728 NPAs to Total Assets 0.15 0.15 0.06 NPAs to Loans HFI plus OREO 0.25 0.23 0.11 ACL to Non-Performing Loans 464.14 479.70 1091.33 Net Charge-Offs to Average Loans HFI 0.21 0.18 0.18 Capital Ratios: Tier 1 Capital 17.46 % 15.37 % 14.27 % Total Capital 18.64 16.57 15.30 Common Equity Tier 1 Capital 15.54 13.52 12.38 Tangible Common Equity (3) 9.51 8.26 6.65 Leverage 11.05 10.30 8.91 Equity to Assets 11.45 10.24 8.57 Dividend Pay-Out 28.21 24.76 33.50 Averages for the Year: Loans Held for Investment $ 2,706,461 $ 2,656,394 $ 2,189,440 Earning Assets 3,897,580 3,933,800 3,989,248 Total Assets 4,234,603 4,278,686 4,332,302 Deposits 3,597,438 3,669,612 3,763,336 Shareowners’ Equity 473,216 421,482 379,290 Year -End Balances: Loans Held for Investment $ 2,651,550 $ 2,733,918 $ 2,547,685 Earning Assets 3,974,431 3,957,452 4,177,177 Total Assets 4,324,932 4,304,477 4,519,223 Deposits 3,671,977 3,701,822 3,939,317 Shareowners’ Equity 495,317 440,625 387,281 Other Data: Basic Average Shares Outstanding 16,942,788 16,987,167 16,950,810 Diluted Average Shares Outstanding 16,968,623 17,022,922 16,984,740 Shareowners of Record (4) 1,027 1,080 1,124 Banking Locations (4) 63 63 59 Full-Time Equivalent Associates (5) 940 970 992 (1) For 2023 and 2022, includes pension settlement gain of $0.3 million and charge of $2.3 million, respectively.
Non-GAAP Reconciliation - Selected Financial Data (Dollars in Thousands, except per share data) 2023 2022 2021 Shareowners' Equity (GAAP) $ 440,625 $ 387,281 $ 383,166 Less: Goodwill and Other Intangibles (GAAP) 92,933 93,093 93,253 Tangible Shareowners' Equity (non-GAAP) A 347,692 294,188 289,913 Total Assets (GAAP) 4,304,477 4,519,223 4,263,849 Less: Goodwill and Other Intangibles (GAAP) 92,933 93,093 93,253 Tangible Assets (non-GAAP) B $ 4,211,544 $ 4,426,130 $ 4,170,596 Tangible Common Equity Ratio (non-GAAP) A/B 8.26% 6.65% 6.95% Actual Diluted Shares Outstanding (GAAP) C 17,000,758 17,039,401 16,935,389 Tangible Book Value per Diluted Share (non-GAAP) A/C 20.45 17.27 17.12 43
Non-GAAP Reconciliation - Selected Financial Data (Dollars in Thousands, except per share data) 2024 2023 2022 Shareowners' Equity (GAAP) $ 495,317 $ 440,625 $ 387,281 Less: Goodwill and Other Intangibles (GAAP) 92,773 92,933 93,093 Tangible Shareowners' Equity (non-GAAP) A 402,544 347,692 294,188 Total Assets (GAAP) 4,324,932 4,304,477 4,519,223 Less: Goodwill and Other Intangibles (GAAP) 92,773 92,933 93,093 Tangible Assets (non-GAAP) B $ 4,232,159 $ 4,211,544 $ 4,426,130 Tangible Common Equity Ratio (non-GAAP) A/B 9.51% 8.26% 6.65% Actual Diluted Shares Outstanding (GAAP) C 17,018,122 17,000,758 17,039,401 Tangible Book Value per Diluted Share (non-GAAP) A/C 23.65 20.45 17.27 43
(5) Reflects 970 full-time equivalent associates that includes 178 full-time equivalent associates at CCHL. 42 NON-GAAP FINANCIAL MEASURES We present a tangible common equity ratio and a tangible book value per diluted share that, in each case, removes the effect of goodwill that resulted from merger and acquisition activity.
(5) As of December 31, 2024. 42 NON-GAAP FINANCIAL MEASURES We present a tangible common equity ratio and a tangible book value per diluted share that, in each case, removes the effect of goodwill that resulted from merger and acquisition activity.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

162 edited+33 added−47 removed95 unchanged
Biggest changeOur asset sensitive position, with strong core deposit funding and ample liquidity provided benefits as interest rates increased. 48 Table 2 AVERAGE BALANCES AND INTEREST RATES 2023 2022 2021 (Taxable Equivalent Basis - Dollars in Thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate Average Balance Interest Average Rate ASSETS Loans Held for Sale (1)(2) $ 55,510 $ 3,232 5.82 % $ 48,502 $ 2,175 4.49 % $ 78,328 $ 2,555 3.24 % Loans Held for Investment (1)(2) 2,656,394 149,366 5.62 2,189,440 104,578 4.78 2,000,563 94,332 4.76 Investment Securities Taxable Investment Securities 1,016,550 18,652 1.83 1,098,876 15,917 1.45 778,953 8,724 1.12 Tax-Exempt Investment Securities (2) 2,199 59 2.68 2,668 54 2.03 3,772 91 2.39 Total Investment Securities 1,018,749 18,711 1.83 1,101,544 15,971 1.45 782,725 8,815 1.12 Fed Funds Sold & Int Bearing Dep 203,147 10,126 4.98 649,762 9,511 1.46 790,870 998 0.13 Total Earning Assets 3,933,800 181,435 4.61 % 3,989,248 132,235 3.32 % 3,652,486 106,700 2.92 % Cash & Due From Banks 75,786 76,929 72,409 Allowance for Credit Losses (28,190) (21,688) (22,960) Other Assets 297,290 287,813 282,129 TOTAL ASSETS $ 4,278,686 $ 4,332,302 $ 3,984,064 LIABILITIES Noninterest Bearing Deposits $ 1,507,657 $ 1,691,132 $ 1,523,717 NOW Accounts 1,172,861 12,375 1.06 % 1,065,838 2,799 0.26 % 965,320 294 0.03 % Money Market Accounts 299,581 3,670 1.22 283,407 203 0.07 278,606 134 0.05 Savings Accounts 592,033 598 0.10 628,313 309 0.05 537,023 263 0.05 Time Deposits 97,480 939 0.96 94,646 133 0.14 102,220 148 0.14 Total Interest Bearing Deposits 2,161,955 17,582 0.81 % 2,072,204 3,444 0.17 % 1,883,169 839 0.04 % Total Deposits 3,669,612 17,582 0.48 3,763,336 3,444 0.09 3,406,886 839 0.02 Repurchase Agreements 19,917 513 2.57 8,095 14 0.17 5,762 2 0.03 Short-Term Borrowings 24,146 1,538 6.37 32,388 1,747 5.40 47,749 1,360 2.54 Subordinated Notes Payable 52,887 2,427 4.53 52,887 1,652 3.08 52,887 1,228 2.29 Other Long-Term Borrowings 408 20 4.77 665 31 4.62 1,887 63 3.33 Total Interest Bearing Liabilities 2,259,313 22,080 0.98 % 2,166,239 6,888 0.32 % 1,991,454 3,490 0.18 % Other Liabilities 81,842 85,684 111,567 TOTAL LIABILITIES 3,848,812 3,943,055 3,626,738 Temporary Equity 8,392 9,957 20,505 TOTAL SHAREOWNERS’ EQUITY 421,482 379,290 336,821 TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREOWNERS’ EQUITY $ 4,278,686 $ 4,332,302 $ 3,984,064 Interest Rate Spread 3.63 % 3.00 % 2.75 % Net Interest Income $ 159,355 $ 125,347 $ 103,210 Net Interest Margin (3) 4.05 % 3.14 % 2.83 % (1) Average balances include net loan fees, discounts and premiums, and nonaccrual loans.
Biggest changeSee section titled “Financial Condition - Market Risk and Interest Rate Sensitivity” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information regarding this risk. 48 Table 2 AVERAGE BALANCES AND INTEREST RATES 2024 2023 2022 (Taxable Equivalent Basis - Dollars in Thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate Average Balance Interest Average Rate ASSETS Loans Held for Sale $ 27,306 $ 2,776 6.72 % $ 55,510 $ 3,232 5.82 % $ 48,502 $ 2,175 4.49 % Loans Held for Investment (1)(2) 2,706,461 162,385 6.03 2,656,394 149,366 5.62 2,189,440 104,578 4.78 Investment Securities Taxable Investment Securities 923,253 17,073 1.85 1,016,550 18,652 1.83 1,098,876 15,917 1.45 Tax-Exempt Investment Securities (2) 848 37 4.34 2,199 59 2.68 2,668 54 2.03 Total Investment Securities 924,101 17,110 1.85 1,018,749 18,711 1.83 1,101,544 15,971 1.45 Fed Funds Sold & Int Bearing Dep 239,712 12,627 5.27 203,147 10,126 4.98 649,762 9,511 1.46 Total Earning Assets 3,897,580 194,898 5.00 % 3,933,800 181,435 4.61 % 3,989,248 132,235 3.32 % Cash & Due From Banks 73,881 75,786 76,929 Allowance for Credit Losses (29,902) (28,190) (21,688) Other Assets 293,044 297,290 287,813 TOTAL ASSETS $ 4,234,603 $ 4,278,686 $ 4,332,302 LIABILITIES Noninterest Bearing Deposits $ 1,336,601 $ 1,507,657 $ 1,691,132 NOW Accounts 1,183,962 16,835 1.42 % 1,172,861 12,375 1.06 % 1,065,838 2,799 0.26 % Money Market Accounts 400,664 9,957 2.49 299,581 3,670 1.22 283,407 203 0.07 Savings Accounts 518,869 723 0.14 592,033 598 0.10 628,313 309 0.05 Time Deposits 157,342 4,647 2.95 97,480 939 0.96 94,646 133 0.14 Total Interest Bearing Deposits 2,260,837 32,162 1.42 % 2,161,955 17,582 0.81 % 2,072,204 3,444 0.17 % Total Deposits 3,597,438 32,162 0.89 3,669,612 17,582 0.48 3,763,336 3,444 0.09 Repurchase Agreements 26,970 838 3.11 19,917 513 2.57 8,095 14 0.17 Short-Term Borrowings 4,882 242 4.94 24,146 1,538 6.37 32,388 1,747 5.40 Subordinated Notes Payable 52,887 2,449 4.56 52,887 2,427 4.53 52,887 1,652 3.08 Other Long-Term Borrowings 534 28 5.31 408 20 4.77 665 31 4.62 Total Interest Bearing Liabilities 2,346,110 35,719 1.52 % 2,259,313 22,080 0.98 % 2,166,239 6,888 0.32 % Other Liabilities 71,964 81,842 85,684 TOTAL LIABILITIES 3,754,675 3,848,812 3,943,055 Temporary Equity 6,712 8,392 9,957 TOTAL SHAREOWNERS’ EQUITY 473,216 421,482 379,290 TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREOWNERS’ EQUITY $ 4,234,603 $ 4,278,686 $ 4,332,302 Interest Rate Spread 3.47 % 3.63 % 3.00 % Net Interest Income $ 159,179 $ 159,355 $ 125,347 Net Interest Margin (3) 4.08 % 4.05 % 3.14 % (1) Average balances include net loan fees, discounts and premiums, and nonaccrual loans.
Further, there was no pension settlement expense in 2023 whereas we realized $2.3 million in total pension settlement expense in 2022.
Further, there was no pension settlement expense in 2023 whereas we realized $2.3 million in total pension settlement expense in 2022.
Finally, the methodology does not measure or reflect the impact that higher rates may have on adjustable-rate loan clients’ ability to service their debts, or the impact of rate changes on demand for loan and deposit products. 63 The statement of financial condition is subject to testing for interest rate shock possibilities to indicate the inherent interest rate risk.
Finally, the methodology does not measure or reflect the impact that higher rates may have on adjustable-rate loan clients’ ability to service their debts, or the impact of rate changes on demand for loan and deposit products. The statement of financial condition is subject to testing for interest rate shock possibilities to indicate the inherent interest rate risk.
For 2023, the $3.1 million, or 12.6%, increase was a primarily driven by the addition of four new banking offices in mid-to-late 2022 and early 2023, and, to a lesser extent higher expense for property insurance (increased premiums) and maintenance agreements (network and security upgrades).
For 2023, the $3.1 million, or 12.6%, increase was primarily driven by the addition of four new banking offices in mid-to-late 2022 and early 2023, and, to a lesser extent higher expense for property insurance (increased premiums) and maintenance agreements (network and security upgrades). Other .
We expect capital expenditures over the next 12 months to be approximately $12.0 million, which will consist primarily of technology purchases for banking offices, office leasehold improvements, business applications, and information technology security needs as well as furniture and fixtures and banking office remodels.
We expect capital expenditures over the next 12 months to be approximately $10.0 million, which will consist primarily of technology purchases for banking offices, office leasehold improvements, business applications, and information technology security needs as well as furniture and fixtures and banking office remodels.
The reduction in commercial account analysis fees reflected a higher earnings credit rate for commercial deposit accounts. The decrease in account service charge fees was attributable to higher debit card utilization which allows the client to forego the service charge fee if a certain number of debit card transactions is achieved.
The reduction in commercial account analysis fees reflected a higher earnings credit rate for commercial deposit accounts. The decrease in account service charge fees was attributable to higher debit card utilization which allows the client to forego the service charge fee if a certain number of debit card transactions is achieved. Bank Card Fees .
Loan concentrations exist when there are amounts loaned to multiple borrowers engaged in similar activities which cause them to be similarly impacted by economic or other conditions and such amount exceeds 10% of total loans.
Loan concentrations exist when there are amounts loaned to multiple borrowers engaged in similar activities which cause them to be similarly impacted by economic or other conditions and such amount exceeds 10% of our total loans.
For a detailed discussion of our regulatory capital requirements, refer to the “Regulatory Considerations – Capital Regulations” section on page 15. See Note 17 in the Notes to Consolidated Financial Statements for additional information as to our capital adequacy.
For a detailed discussion of our regulatory capital requirements, refer to the “Regulatory Considerations – Capital Regulations” section on page 17. See Note 17 in the Notes to Consolidated Financial Statements for additional information as to our capital adequacy.
The MD&A is divided into subsections entitled “Business Overview,” “Executive Overview,” “Results of Operations,” “Financial Condition,” “Liquidity and Capital Resources,” “Off-Balance Sheet Arrangements,” and “Accounting Policies.” The following information should provide a better understanding of the major factors and trends that affect our earnings performance and financial condition, and how our performance during 2023 compares with prior years.
The MD&A is divided into subsections entitled “Business Overview,” “Executive Overview,” “Results of Operations,” “Financial Condition,” “Liquidity and Capital Resources,” “Off-Balance Sheet Arrangements,” and “Accounting Policies.” The following information should provide a better understanding of the major factors and trends that affect our earnings performance and financial condition, and how our performance during 2024 compares with prior years.
For comparison purposes, the service cost component of our pension plan expense is reflected in associate benefit expense and the non-service component and any settlement expenses are reflected in other expense.
For comparison purposes, the service cost component of our pension plan expense is reflected in associate benefit expense and the non-service component plus any settlement expenses are reflected in other expense.
If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment charge is recorded equal to the excess. During the fourth quarter of 2023, we performed our annual impairment testing. We proceeded with qualitative assessment by evaluating impairment indicators and concluded there were none that indicated that goodwill impairment had occurred. Pension Assumptions .
If the carrying amount of the reporting unit exceeds its estimated fair value, an impairment charge is recorded equal to the excess. During the fourth quarter of 2024, we performed our annual impairment testing. We proceeded with qualitative assessment by evaluating impairment indicators and concluded there were none that indicated that goodwill impairment had occurred. Pension Assumptions .
At December 31, 2023, we had $3.4 million in loans of this type which were not included in either of the nonaccrual or 90 days past due loan categories compared to $2.8 million at December 31, 2022. Management monitors these loans closely and reviews their performance on a regular basis. Loan Concentrations .
At December 31, 2024, we had $2.8 million in loans of this type which were not included in either of the nonaccrual or 90 days past due loan categories compared to $3.4 million at December 31, 2023. Management monitors these loans closely and reviews their performance on a regular basis. Loan Concentrations .
The increase in salary expense was primarily due to a $3.6 million increase in base salaries (primarily the addition of staffing in new markets and annual merit), a $3.0 million decrease in realized cost (credit offset to salary expense - lower new residential loan originations in 2023), and higher incentive expense of $1.2 million that was partially offset by lower commission expense of $3.3 million (lower residential loan originations and insurance policy sales in 2023).
The increase in salary expense was primarily due to a $3.6 million increase in base salaries (primarily the addition of staffing in new markets and annual merit), a $3.0 million decrease in realized cost (credit offset to salary expense - lower new residential loan originations in 2023), and a $1.2 million increase in incentive expense that were partially offset by a $3.3 million decrease in commission expense (lower residential loan originations and insurance policy sales in 2023).
We believe that, of our significant accounting policies, the following may involve a higher degree of judgment and complexity. 67 Allowance for Credit Losses .
We believe that, of our significant accounting policies, the following may involve a higher degree of judgment and complexity. Allowance for Credit Losses .
We have implemented initiatives in support of the strategic plan, including the implementation of an integrated marketing software aimed at deepening client relationships, continued our comprehensive review of our banking office network, continued expansion into new markets and further diversification of revenues by expanding our residential mortgage banking and wealth businesses . Markets .
We have implemented initiatives in support of the strategic plan, including the implementation of an integrated marketing software aimed at deepening client relationships, the continuation of our comprehensive review of our banking office network, and expansion into new markets and further diversification of revenues by expanding our residential mortgage banking and wealth businesses. Markets .
For 2023 and 2022, our principal source of funding was client deposits, supplemented by our short-term and long-term borrowings, primarily from our trust- preferred securities, securities sold under repurchase agreements, federal funds purchased, and FHLB borrowings.
For 2024 and 2023, our principal source of funding was client deposits, supplemented by our short-term and long-term borrowings, primarily from our trust- preferred securities, securities sold under repurchase agreements, federal funds purchased, and FHLB borrowings.
We serve an additional fourteen smaller, less competitive, rural markets located on the outskirts of, and centered between, our larger markets where we are positioned as a market leader.
We serve an additional 15 smaller, less competitive, rural markets located on the outskirts of, and centered between, our larger markets where we are positioned as a market leader.
The composition of our HFI loan portfolio at December 31 for each of the past three years is shown in Table 7. Table 8 arrays our HFI loan portfolio at December 31, 2023, by maturity period.
The composition of our HFI loan portfolio at December 31 for each of the past three years is shown in Table 7. Table 8 arrays our HFI loan portfolio at December 31, 2024, by maturity period.
The amount of the allowance for credit losses represents management’s best estimate of current expected credit losses considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts.
The amount of the allowance for credit losses represents managemen t’s best estimate of current expected credit losses considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions, and reasonable and supportable forecasts.
The discount rate is determined by matching the anticipated defined pension plan cash flows to the spot rates of a corporate AA- rated bond index/yield curve and solving for the single equivalent discount rate which would produce the same present value. This methodology is applied consistently from year to year. The discount rate utilized in 2023 was 5.63%.
The discount rate is determined by matching the anticipated defined pension plan cash flows to the spot rates of a corporate AA- rated bond index/yield curve and solving for the single equivalent discount rate which would produce the same present value. This methodology is applied consistently from year to year. The discount rate utilized in 2024 was 5.29%.
As part of 2025 In Focus, we aim to take our brand of relationship banking to the next level, further deepen relationships within our communities, expand into new higher growth markets, diversify our revenue sources, invest in new technology that will support the expansion of client relationships, scale within our lines of business, and drive higher profitability.
As part of the strategic plan, we aim to take our brand of relationship banking to the next level, further deepen relationships within our communities, expand into new higher growth markets, diversify our revenue sources, invest in new technology that will support the expansion of client relationships, scale within our lines of business, and drive higher profitability.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2023.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2024.
We provide a detailed overview of our mortgage banking operation, including a detailed break- down of mortgage banking revenues, mortgage servicing activity, and warehouse funding within Note 4 - Mortgage Banking Activities in the Notes to Consolidated Financial Statements. Other . Other noninterest income totaled $8.6 million in 2023 compared to $7.7 million in 2022 and $7.3 million in 2021.
We provide a detailed overview of our mortgage banking operation, including a detailed break-down of mortgage banking revenues, mortgage servicing activity, and warehouse funding within Note 4 - Mortgage Banking Activities in the Notes to Consolidated Financial Statements. Other . Other noninterest income totaled $6.5 million in 2024 compared to $8.6 million in 2023 and $7.7 million in 2022.
Furthermore, in the counties in which we operate, we maintain an 7.7% deposit market share in the Florida counties and 5.5% in the Georgia counties (excluding Northern Arc of Atlanta). Our markets provide for a strong core deposit funding base, a key differentiator and driver of our profitability and franchise value. Recent Acquisition/Expansion Activity .
Furthermore, in the counties in which we operate, we maintain an 8.3% deposit market share in the Florida counties and 5.2% in the Georgia counties (excluding Northern Arc of Atlanta). Our markets provide for a strong core deposit funding base, a key differentiator and driver of our profitability and franchise value. Recent Acquisition/Expansion Activity .
We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management, and asset protection services. The Bank has 63 banking offices and 103 ATMs/ITMs in Florida, Georgia and Alabama.
We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, securities brokerage services and financial advisory services, including the sale of life insurance, risk management, and asset protection services. The Bank has 62 banking offices and 104 ATMs/ITMs in Florida, Georgia and Alabama.
If interest on our loans classified as nonaccrual during 2023 had been recognized on a fully accruing basis, we would have recorded an additional $0.2 million of interest income for the year ended December 31, 2023. Other Real Estate Owned .
If interest on our loans classified as nonaccrual during 2024 had been recognized on a fully accruing basis, we would have recorded an additional $0.3 million of interest income for the year ended December 31, 2024. Other Real Estate Owned .
Based on the balances at the December 31, 2023 measurement date, the estimated impact on accumulated other comprehensive loss of a 25 basis point increase or decrease in the discount rate would have been a decrease or increase of approximately $3.2 million (after-tax).
Based on the balances at the December 31, 2024 measurement date, the estimated impact on accumulated other comprehensive loss of a 25 basis point increase or decrease in the discount rate would have been a decrease or increase of approximately $3.1 million (after-tax).
Net Interest Income at risk is within our prescribed policy limits over both the 12-month and 24-month periods for all rising rate scenarios with the exception of the down 400 bps scenario over the 24-month period primarily due to our limited ability to lower our deposit rates relative to the decline in market rate for that scenario.
Net Interest Income at risk is within our prescribed policy limits over both the 12-month and 24-month periods for all rate scenarios with the exception of the down 300 bps and down 400 bps scenario primarily due to our limited ability to lower our deposit rates relative to the decline in market rate for those scenarios.
Through Capital City Home Loans, LLC (“CCHL”), we have 29 additional offices in the Southeast for our mortgage banking business. Please see the section captioned “About Us” beginning on page 4 for more detailed information about our business.
Through Capital City Home Loans, LLC (“CCHL”), we have 27 additional offices in the Southeast for our mortgage banking business. Please see the section captioned “About Us” beginning on page 6 for more detailed information about our business.
Provision for Credit Losses For 2023, we recorded a provision for credit loss expense of $9.7 million ($9.5 million expense for loans held for investment (“HFI”) and $0.2 million expense for unfunded loan commitments) compared to a provision expense of $7.5 million for 2022 ($7.4 million benefit for loans HFI and $0.1 million expense for unfunded loan commitments), and a provision benefit of $1.6 million for 2021 ($2.8 million benefit for loans HFI and $1.2 million expense for unfunded loan commitments ).
Provision for Credit Losses For 2024, we recorded a provision for credit loss expense of $4.0 million ($5.0 million expense for loans held for investment (“HFI”) and $1.0 million benefit for unfunded loan commitments) compared to a provision expense of $9.7 million for 2023 ($9.5 million expense for loans HFI and $0.2 million expense for unfunded loan commitments), and a provision expense of $7.5 million for 2022 ($7.4 million expense for loans HFI and $0.1 million expense for unfunded loan commitments).
The estimated impact to 2023 pension expense of a 25 basis point increase or decrease in the discount rate would have been an approximate $0.6 million decrease or increase, respectively. We anticipate using a 5.29% discount rate in 2024.
The estimated impact to 2024 pension expense of a 25 basis point increase or decrease in the discount rate would have been an approximate $0.6 million decrease or increase, respectively. We anticipate using a 5.82% discount rate in 2025.
OREO totaled $1,000 at December 31, 2023 versus $0.4 million at December 31, 2022. During 2023, we added properties totaling $1.5 million and sold properties totaling $1.9 million. For 2022, we added properties totaling $2.4 million and sold properties totaling $2.0 million. Modifications to Borrowers Experiencing Financial Difficulty .
OREO totaled $0.4 million at December 31, 2024 versus $1,000 at December 31, 2023. During 2024, we added properties totaling $1.0 million and sold properties totaling $0.6 million. For 2023, we added properties totaling $1.5 million and sold properties totaling $1.9 million. Modifications to Borrowers Experiencing Financial Difficulty .
The average life of our investment portfolio decreased primarily due to the natural aging of the portfolio in conjunction with a majority of the cash flow from the investment portfolio not being reinvested in order to fund loan growth. The weighted average taxable equivalent yield of our investment portfolio at December 31, 2023 was 2.02% versus 2.03% in 2022.
The average life of our investment portfolio decreased primarily due to the natural aging of the portfolio in conjunction with a portion of the cash flow from the investment portfolio not being reinvested in order to fund loan growth. The weighted average taxable equivalent yield of our investment portfolio at December 31, 2024 was 2.41% versus 2.02% in 2023.
For 2023, $0.1 million variance in other expense was primarily due to lower expenses for OREO of $1.6 million (gain from the sale of a banking office in 2023) and miscellaneous expense of $1.2 million (mortgage servicing asset amortization of $1.0 million - mid-2023 sale of servicing rights).
For 2023, the $0.1 million variance in other expense was primarily due to a $1.6 million decrease in other real estate expense (gain from the sale of a banking office in 2023) and a $1.2 million decrease in miscellaneous expense (lower mortgage servicing asset amortization of $1.0 million due to mid-2023 sale of servicing rights).
At December 31, 2023, we had the ability to generate approximately $1.488 billion (excludes overnight funds position of $229 million) in additional liquidity through various sources including various Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, federal funds purchased lines, and brokered deposits.
At December 31, 2024, we had the ability to generate approximately $1.535 billion (excludes overnight funds position of $321 million) in additional liquidity through various sources, including various Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, federal funds purchased lines, and brokered deposits.
Nonaccrual loans totaled $6.2 million at December 31, 2023, a $3.9 million increase over December 31, 2022. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or management deems the collectability of the principal and interest to be doubtful.
Nonaccrual loans totaled $6.3 million at December 31, 2024, a $0.1 million increase over December 31, 2023. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due or management deems the collectability of the principal and interest to be doubtful.
Wealth management fees including both trust fees (i.e., managed accounts and trusts/estates) and retail brokerage fees (i.e., investment, insurance products, and retirement accounts) totaled $16.3 million in 2023 compared to $18.1 million in 2022 and $13.7 million in 2021.
Wealth management fees including both trust fees (i.e., managed accounts and trusts/estates) and retail brokerage fees (i.e., investment, insurance products, and retirement accounts) totaled $19.1 million in 2024 compared to $16.3 million in 2023 and $18.1 million in 2022.
The increase in salary expense was primarily due to a $3.6 million increase in base salaries (primarily the addition of staffing in new markets and annual merit), a $3.0 million reduction in realized cost (credit offset to salary expense - lower new residential loan originations in 2023) and higher incentive expense of $1.2 million that was partially offset by lower commission expense of $3.3 million (lower residential loan originations and insurance policy sales in 2023).
The increase in salary expense was primarily due to a $3.6 million increase in base salaries, primarily the addition of staffing in new markets and annual merit, a $3.0 million decrease in realized cost, and a $1.2 million increase in incentive expense, that were partially offset by a $3.3 million decrease in commission expense which reflected lower residential loan originations and insurance policy sales in 2023.
Table 16 ESTIMATED CHANGES IN NET INTEREST INCOME (1) Percentage Change (12-month shock) +400 bp +300 bp +200 bp +100 bp -100 bp -200 bp -300 bp -400 bp Policy Limit -15.0 % -12.5 % -10.0 % -7.5 % -7.5 % -10.0 % -12.5 % -15.0 % December 31, 2023 3.0 % 2.1 % 1.3 % 0.7 % -1.2 % -3.6 % -7.5 % -12.8 % December 31, 2022 11.3 % 8.4 % 5.5 % 2.8 % -5.0 % -12.3 % -20.0 % -27.1 % Percentage Change (24-month shock) +400 bp +300 bp +200 bp +100 bp -100 bp -200 bp -300 bp -400 bp Policy Limit -17.5 % -15.0 % -12.5 % -10.0 % -10.0 % -12.5 % -15.0 % -17.5 % December 31, 2023 29.5 % 24.4 % 19.3 % 14.8 % 4.1 % -3.5 % -12.9 % -23.6 % December 31, 2022 31.3 % 25.2 % 19.0 % 13.1 % -2.0 % -13.8 % -25.7 % -36.3 % The Net Interest Income at risk position was generally less favorable at December 31, 2023 compared to December 31, 2022 for the 12-month and 24-month shocks for the rising rate scenarios and more favorable in the falling rate environments.
Table 16 ESTIMATED CHANGES IN NET INTEREST INCOME Percentage Change (12-month shock) +400 bp +300 bp +200 bp +100 bp -100 bp -200 bp -300 bp -400 bp Policy Limit -15.0 % -12.5 % -10.0 % -7.5 % -7.5 % -10.0 % -12.5 % -15.0 % December 31, 2024 15.4 % 11.5 % 7.6 % 3.9 % -4.3 % -9.0 % -14.3 % -19.9 % December 31, 2023 3.0 % 2.1 % 1.3 % 0.7 % -1.2 % -3.6 % -7.5 % -12.8 % Percentage Change (24-month shock) +400 bp +300 bp +200 bp +100 bp -100 bp -200 bp -300 bp -400 bp Policy Limit -17.5 % -15.0 % -12.5 % -10.0 % -10.0 % -12.5 % -15.0 % -17.5 % December 31, 2024 40.8 % 32.9 % 24.8 % 17.1 % 0.1 % -9.8 % -20.9 % -31.6 % December 31, 2023 29.5 % 24.4 % 19.3 % 14.8 % 4.1 % -3.5 % -12.9 % -23.6 % The Net Interest Income at risk position was more favorable at December 31, 2024 compared to December 31, 2023 for the 12- month and 24-month shocks for the rising rate scenarios and less favorable in the falling rate scenarios.
Additional historical information on capital changes is provided in the Consolidated Statements of Changes in Shareowners’ Equity in the Consolidated Financial Statements. We continue to maintain a strong capital position. The ratio of shareowners' equity to total assets at December 31, 2023 was 10.24% compared to 8.57% at December 31, 2022.
Additional historical information on capital changes is provided in the Consolidated Statements of Changes in Shareowners’ Equity in the Consolidated Financial Statements. We continue to maintain a strong capital position. The ratio of shareowners' equity to total assets at December 31, 2024 was 11.45% compared to 10.24% at December 31, 2023.
Book value is also impacted by the recording of our unfunded pension liability through other comprehensive income in accordance with Accounting Standards Codification Topic 715. At December 31, 2023, the net pension liability reflected in accumulated other comprehensive loss was $0.4 million compared to $4.5 million at December 31, 2022.
Book value is also impacted by the recording of our unfunded pension liability through other comprehensive income in accordance with Accounting Standards Codification Topic 715. At December 31, 2024, the net pension asset reflected in accumulated other comprehensive loss was $9.7 million compared to a net pension liability of $0.4 million at December 31, 2023.
The increase in net income attributable to common shareowners for 202 3 reflected higher net interest income of $34.0 million that was partially offset by higher noninterest expense of $5.4 million, higher income taxes of $5.2 million, lower noninterest income of $3.6 million, and a $2.2 million increase in the provision for credit losses.
For 2023, the increase in net income attributable to common shareowners reflected a $34 million increase in net interest income that was partially offset by a $5.4 million increase in noninterest expense , a $5.2 million increase in income taxes, a $3.6 million decrease in noninterest income of $3.6 million, and a $2.2 million increase in the provision for credit losses.
The net variance in other expense was primarily due to lower expenses for OREO of $1.6 million (gain from the sale of a banking office) and miscellaneous expense of $1.2 million (mortgage servicing asset amortization of $1.0 million - mid-2023 sale of servicing rights).
The net variance in other expense was primarily due to a $1.6 million decrease in other real estate expense (gain from the sale of a banking office in 2023) and a $1.2 million decrease in miscellaneous expense (lower mortgage servicing asset amortization of $1.0 million due to mid-2023 sale of servicing rights).
We strive to offer a broad array of sophisticated products and to provide quality service by empowering associates to make decisions in their local markets. 44 Strategic Initiatives . In 2021, we initiated a new five-year strategic plan “2025 In Focus” that guide s us in the areas of client experience, channel optimization, market expansion, and culture.
We strive to offer a broad array of sophisticated products and to provide quality service by empowering associates to make decisions in their local markets. 44 Strategic Initiatives . Our five-year strategic plan “2025 In Focus” guides us in the areas of client experience, channel optimization, market expansion, and culture.
We have continued our expansion into the Northern Arc of Atlanta, Georgia by opening full-service offices in Marietta (Cobb County) in the fourth quarter of 2022 and Duluth (Gwinnett County) in the second quarter of 2023.
We expanded into the Northern Arc of Atlanta, Georgia by opening full-service offices in Marietta (Cobb County) in the fourth quarter of 2022 and Duluth (Gwinnett County) in the second quarter of 2023.
EVE was within prescribed tolerance levels in all rate scenarios. Factors that can impact EVE values include the absolute level of rates, the overall structure of the balance sheet (including liquidity levels), pre-payment speeds, loan floors, and the change of model assumptions.
EVE was within prescribed tolerance levels as the EVE ratio (EVE/EVA) in all rate scenarios is greater than 5.0%. Factors that can impact EVE values include the absolute level of rates, the overall structure of the balance sheet (including liquidity levels), pre-payment speeds, loan floors, and the change of model assumptions.
In 7 of 11 markets in Florida and two of four Georgia markets (excluding Northern Arc of Atlanta markets entered into in 2022 and 2023), we frequently rank within the top four banks in terms of deposit market share.
In 7 of 12 markets in Florida and one of three Georgia markets (excluding Northern Arc of Atlanta markets entered into in 2022 and 2023), we frequently rank within the top three banks in terms of deposit market share.
Specifically, due to the nature of our markets, a significant portion of our HFI loan portfolio has historically been secured with real estate, approximately 82% at December 31, 2023 and 78% at December 31, 2022 with the increase driven by a higher volume of 1-4 family residential real estate loans originated in 2023 in comparison to other loan types.
Specifically, due to the nature of our markets, a significant portion of our HFI loan portfolio has historically been secured with real estate, approximately 85% at December 31, 2024 and 82% at December 31, 2023, with the increase driven by lower loan volume in 2024 for commercial and consumer (indirect auto) loans and a higher volume of 1-4 family residential real estate loans originated in 2023 in comparison to other loan types.
Changes which are not solely due to volume changes or solely due to rate changes have been attributed to rate changes. (2) Interest income includes the effects of taxable equivalent adjustments using a 21% tax rate to adjust on tax-exempt loans and securities and securities to a taxable equivalent basis.
Changes which are not solely due to volume changes or solely due to rate changes have been attributed to rate changes. (2) Interest income includes the effects of taxable equivalent adjustments using a 21% tax rate to adjust on tax-exempt loans and securities and securities to a taxable equivalent basis. (3) Reflects one extra calendar day in 2024.
Treasury, U.S. governmental agencies, municipal governments, and corporate entities. At December 31, 2023, the weighted-average maturity and duration of our portfolio were 2.91 years and 2.53, respectively, and the AFS portfolio had a net unrealized tax-effected loss of $22.3 million.
Treasury, U.S. governmental agencies, municipal governments, and corporate entities. At December 31, 2024, the weighted-average maturity and duration of our portfolio were 2.54 years and 2.19, respectively, and the AFS portfolio had a net unrealized tax-effected loss of $19.2 million.
Interest income includes loan fees of $0.05 million for 2023, $0.5 million for 2022, and $6.6 million for 2021. (2) Interest income includes the effects of taxable equivalent adjustments using a 21% tax rate.
Interest income includes net loan cost of $0.7 million for 2024, and net loan fees of $0.05 million for 2023 and $0.5 million for 2022. (2) Interest income includes the effects of taxable equivalent adjustments using a 21% tax rate.
Table 14 reflects the shift in our deposit mix over the last year and Table 15 provides a maturity distribution of time deposits in denominations of $250,000 and over at December 31, 2023. For 2023, noninterest bearing deposits represented 41.1% of total average deposits.
Table 14 reflects the shift in our deposit mix over the last year and Table 15 provides a maturity distribution of time deposits in denominations of $250,000 and over at December 31, 2024. For 2024, noninterest bearing deposits represented 37.2% of total average deposits. This compares to 41.1% in 2023 and 44.9% in 2022.
The decrease in this metric for 2023 and 2022 was primarily driven by higher taxable equivalent net interest income (refer to caption headed Net Interest Income and Margin). For 2022, lower noninterest expense also contributed to the decrease. Expense management is an important part of our culture and strategic focus.
The increase in this metric for 2024 was attributable to a higher level of noninterest expense and the decrease in this metric for 2023 was primarily driven by higher taxable equivalent net interest income (refer to caption headed Net Interest Income and Margin). Expense management is an important part of our culture and strategic focus.
Past due loans at December 31, 2023 totaled $6.9 million compared to $7.8 million at December 31, 2022. Indirect auto loans represented a large portion of the past due balances representing 76% and 73%, respectively, of the total dollars past due at December 31, 2023 and December 31, 2022, respectively. Potential Problem Loans .
Past due loans at December 31, 2024 totaled $4.3 million compared to $6.9 million at December 31, 2023. Indirect auto loans represented a large portion of the past due balances representing 56% and 76%, respectively, of the total dollars past due at December 31, 2024 and December 31, 2023, respectively. Potential Problem Loans .
Capital Resources Shareowners’ equity was $440.6 million at December 31, 2023 compared to $387.3 million at December 31, 2022.
Capital Resources Shareowners’ equity was $495.3 million at December 31, 2024 compared to $440.6 million at December 31, 2023.
At December 31, 2023, there were 878 positions (combined AFS and HTM) with pre-tax unrealized losses totaling $63.2 million. The GNMA mortgage-backed securities, U.S. Treasuries, and SBA securities held carry the full faith and credit guarantee of the U.S. Government and are deemed to be 0% risk-weighted assets.
At December 31, 2024, there were 856 positions (combined AFS and HTM) with pre-tax unrealized losses totaling $48.4 million. The Government National Mortgage Association mortgage-backed securities, U.S. Treasuries, and SBA securities held carry the full faith and credit guarantee of the U.S. Government and are deemed to be 0% risk-weighted assets.
At December 31, 2023, our common stock had a book value of $25.92 per diluted share compared to $22.73 at December 31, 2022. Book value is impacted by the net unrealized gains and losses on investment securities. At December 31, 2023, the net unrealized loss was $25.7 million compared to an unrealized loss of $37.3 million at December 31, 2022.
At December 31, 2024, our common stock had a book value of $29.11 per diluted share compared to $25.92 at December 31, 2023. Book value is impacted by the net unrealized gains and losses on investment securities. At December 31, 2024, the net unrealized loss was $20.2 million compared to an unrealized loss of $25.7 million at December 31, 2023.
Additionally, we expanded our presence in the Florida Panhandle by opening a full-service office in Watersound, Florida in the first quarter of 2023 and Panama City, Florida (Lynn Haven) in the first quarter of 2024 and we plan to open another full-service office in Panama City, Florida (West Bay) in the second half of 2024.
Additionally, we expanded our presence in the Florida Panhandle by opening a full-service office s in Watersound, Florida in the first quarter of 2023, Panama City, Florida (Lynn Haven) in the first quarter of 2024, and Panama City, Florida (West Bay) in the first quarter of 2025.
For 2023, our taxable equivalent net interest income totaled $159.4 million compared to $125.3 million in 2022 and $103.2 million in 2021. The $34.1 million, or 27.2%, increase in 2023 reflected loan growth and higher interest rates across a majority of our earning assets, partially offset by higher deposit interest expense.
The $34.1 million, or 27.2%, increase in 2023 reflected loan growth and higher interest rates across a majority of our earning assets, partially offset by higher deposit interest expense. For 2024, our taxable equivalent interest income totaled $194.9 million compared to $181.4 million in 2023 and $132.2 million in 2022.
The improvement in the ratios in 2023 was primarily attributable to strong earnings and a decrease in the unrealized loss on AFS securities which is recognized in accumulated other comprehensive loss. We are subject to regulatory risk-based capital requirements that measure capital relative to risk-weighted assets and off-balance sheet financial instruments.
The improvement in the ratios in 2024 was primarily attributable to strong earnings and decreases in the unrealized loss on AFS securities and the unfunded pension liability, both of which are recognized in accumulated other comprehensive loss. 66 We are subject to regulatory risk-based capital requirements that measure capital relative to risk-weighted assets and off-balance sheet financial instruments.
This relatively unchanged yield reflected a minimal reinvestment of investment securities. Our bond portfolio contained no investments in obligations, other than U.S. Governments, of any state, municipality, political subdivision, or any other issuer that exceeded 10% of our shareowners’ equity at December 31, 2023.
This increase in yield reflected a favorable reinvestment rate on securities purchased in 2024. Our bond portfolio contained no investments in obligations, other than U.S. Governments, of any state, municipality, political subdivision, or any other issuer that exceeded 10% of our shareowners’ equity at December 31, 2024.
Table 9 CREDIT QUALITY (Dollars in Thousands) 2023 2022 2021 Nonaccruing Loans: Commercial, Financial and Agricultural $ 311 $ 41 $ 90 Real Estate – Construction 322 17 - Real Estate – Commercial Mortgage 909 645 604 Real Estate – Residential 2,990 239 2,097 Real Estate – Home Equity 999 771 1,319 Consumer 711 584 212 Total Nonaccruing Loans 6,242 2,297 4,322 Other Real Estate Owned 1 431 17 Total Nonperforming Assets $ 6,243 $ 2,728 $ 4,339 Past Due Loans 30 – 89 Days $ 6,855 $ 7,829 $ 3,600 Classified Loans $ 22,203 $ 19,342 $ 17,912 Nonaccruing Loans/Loans 0.23 % 0.09 % 0.22 % Nonperforming Assets/Total Assets 0.15 0.06 0.10 Nonperforming Assets/Loans Plus OREO 0.23 0.11 0.22 Allowance/Nonaccruing Loans 479.70 % 1091.33 % 499.93 % 57 Nonaccrual Loans .
Table 9 CREDIT QUALITY (Dollars in Thousands) 2024 2023 2022 Nonaccruing Loans: Commercial, Financial and Agricultural $ 37 $ 311 $ 41 Real Estate – Construction - 322 17 Real Estate – Commercial Mortgage 566 909 645 Real Estate – Residential 3,127 2,990 239 Real Estate – Home Equity 1,782 999 771 Consumer 790 711 584 Total Nonaccruing Loans 6,302 6,242 2,297 Other Real Estate Owned 367 1 431 Total Nonperforming Assets $ 6,669 $ 6,243 $ 2,728 Past Due Loans 30 – 89 Days $ 4,311 $ 6,855 $ 7,829 Classified Loans $ 19,896 $ 22,203 $ 19,342 Nonaccruing Loans/Loans 0.24 % 0.23 % 0.09 % Nonperforming Assets/Total Assets 0.15 0.15 0.06 Nonperforming Assets/Loans Plus OREO 0.25 0.23 0.11 Allowance/Nonaccruing Loans 464.14 % 479.70 % 1091.33 % 57 Nonaccrual Loans .
Further, our tangible common equity ratio was 8.26% (non-GAAP financial measure) at December 31, 2023 compared to 6.65% at December 31, 2022. If our unrealized HTM securities losses of $21.5 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 7.74%.
Further, our tangible common equity ratio was 9.51% (non-GAAP financial measure) at December 31, 2024 compared to 8.26% at December 31, 2023. If our unrealized HTM securities losses of $16.0 million (after-tax) were recognized in accumulated other comprehensive loss, our adjusted tangible capital ratio would be 9.14%.
Nonperforming assets (nonaccrual loans and other real estate) totaled $6.2 million at December 31, 2023 compared to $2.7 million at December 31, 2022. At December 31, 2023, nonperforming assets as a percent of total assets was 0.15%, compared to 0.06% at December 31, 2022.
Nonperforming assets (nonaccrual loans and other real estate) totaled $6.7 million at December 31, 2024 compared to $6.2 million at December 31, 2023. At December 31, 2024 and December 31, 2023, nonperforming assets as a percent of total assets equaled 0.15%. Nonaccrual loans totaled $6.3 million at December 31, 2024, a $0.1 million increase over December 31, 2023.
Table 12 provides the composition of our investment securities portfolio at December 31 for each of the last three fiscal years. 60 Table 12 INVESTMENT SECURITIES COMPOSITION 2023 2022 2021 (Dollars in Thousands) Carrying Amount Percent Carrying Amount Percent Carrying Amount Percent Available for Sale U.S.
At December 31, 2024, $1.3 million was remaining in unrealized losses for these securities. Table 12 provides the composition of our investment securities portfolio at December 31 for each of the last three fiscal years. Table 12 INVESTMENT SECURITIES COMPOSITION 2024 2023 2022 (Dollars in Thousands) Carrying Amount Percent Carrying Amount Percent Carrying Amount Percent Available for Sale U.S.
Table 4 NONINTEREST INCOME (Dollars in Thousands) 2023 2022 2021 Deposit Fees $ 21,325 $ 22,121 $ 18,882 Bank Card Fees 14,918 15,401 15,274 Wealth Management Fees 16,337 18,059 13,693 Mortgage Banking Revenues 10,400 11,909 52,425 Other 8,630 7,691 7,271 Total Noninterest Income $ 71,610 $ 75,181 $ 107,545 Significant components of noninterest income are discussed in more detail below.
Table 4 NONINTEREST INCOME (Dollars in Thousands) 2024 2023 2022 Deposit Fees $ 21,346 $ 21,325 $ 22,121 Bank Card Fees 14,707 14,918 15,401 Wealth Management Fees 19,113 16,337 18,059 Mortgage Banking Revenues 14,343 10,400 11,909 Other 6,467 8,630 7,691 Total Noninterest Income $ 75,976 $ 71,610 $ 75,181 Significant components of noninterest income are discussed in more detail below.
At December 31, 2023, our total risk-based capital ratio was 16.57% compared to 15.30% at December 31, 2022. Our common equity tier 1 capital ratio was 13.52% and 12.38%, respectively, on these dates. Our leverage ratio was 10.30% and 8.91%, respectively, on these dates.
At December 31, 2024, our total risk-based capital ratio was 18.64% compared to 16.57% at December 31, 2023. Our common equity tier 1 capital ratio was 15.54% and 13.52%, respectively, on these dates. Our leverage ratio was 11.05% and 10.30%, respectively, on these dates.
Net income attributable to common shareowners included a $6.4 million increase in the deduction to record the 49% non-controlling interest in the earnings of CCHL.
Net income attributable to common shareowners included a $0.2 million decrease in the deduction to record the non-controlling interest in the earnings of CCHL.
Our public funds balances have historically realized growth in the fourth quarter of the year when municipalities collect tax receipts and will be at a seasonal low in the third quarter. At December 31, 2023, public funds balances totaled $709.8 million and at December 31, 2022, totaled $720.7 million.
Our public funds balances have historically realized growth in the fourth quarter of the year when municipalities collect tax receipts and will be at a seasonal low in the third quarter.
Further, CCHL loan originators will reside in the Northern Arc and Walton County offices. On March 1, 2020, CCB acquired a 51% membership interest in Brand Mortgage Group, LLC (“Brand”) which is now operated as CCHL, a consolidated entity in the Company’s financial statements.
Further, CCHL loan originators reside in the Northern Arc and Walton County offices. On March 1, 2020, CCB acquired from BMGBMG, LLC (“BMG”) an initial 51% membership interest in CCHL (formerly known as Brand Mortgage Group, LLC), which became a consolidated entity in the Company’s financial statements.
Bank card fees totaled $14.9 million in 2023 compared to $15.4 million in 2022 and $15.3 million in 2021. The decrease in 2023 was generally due to lower card volume reflective of overall slower consumer spending.
Bank card fees totaled $14.7 million in 2024 compared to $14.9 million in 2023 and $15.4 million in 2022. The decreases in 2024 and 2023 were generally due to lower card volume reflective of overall slower consumer spending. Wealth Management Fees .
Government Treasury 457,681 47.4 457,374 42.6 115,499 11.6 Mortgage-Backed Securities 167,341 17.3 203,370 18.9 224,102 22.5 Total 625,022 64.7 660,744 61.5 339,601 34.1 Other Equity Securities 3,450 0.2 10 - 861 0.1 Total Investment Securities $ 966,374 100 % $ 1,074,048 100 % $ 995,073 100 % The classification of a security is determined upon acquisition based on how the purchase will affect our asset/liability strategy and future business plans and opportunities.
Government Treasury 368,005 37.8 457,681 47.4 457,374 42.6 Mortgage-Backed Securities 199,150 20.5 167,341 17.3 203,370 18.9 Total 567,155 58.3 625,022 64.7 660,744 61.5 Other Equity Securities 2,399 0.2 3,450 0.2 10 - Total Investment Securities $ 972,899 100 % $ 966,374 100 % $ 1,074,048 100 % The classification of a security is determined upon acquisition based on how the purchase will affect our asset/liability strategy and future business plans and opportunities.
We will continue to review and evaluate opportunities to optimize our delivery operations and invest in technology that provides favorable returns/scale and/or mitigates risk. The table below reflects the major components of noninterest expense.
We will continue to review and evaluate opportunities to optimize our delivery operations and invest in technology that provides favorable returns/scale and/or mitigates risk.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize interest and/or penalties related to income tax matters in other expenses.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize interest and/or penalties related to income tax matters in other expenses.
At December 31, 2023, $337.9 million, or 35.1%, of our investment portfolio was classified as AFS, with $625.0 million, or 64.7%, classified as HTM and $3.5 million, or 0.2%, classified as equity securities. At December 31, 2022, the AFS and HTM portfolio comprised 38.5% and 61.5%, respectively. In the third quarter of 2022, U.S.
At December 31, 2023, $337.9 million, or 35.1%, of our investment portfolio was classified as AFS, with $625.0 million, or 64.7%, classified as HTM and $3.5 million, or 0.2%, classified as equity securities. In the third quarter of 2022, U.S. Treasury obligations totaling $168.4 million with unrealized losses of $9.4 million were transferred from AFS to HTM.
Deposits Average total deposits for 2023 were $3.670 billion, a decrease of $93.7 million, or 2.5%, from 2022. Average deposits increased $356.5 million, or 10.5%, in 2022. For 2023, the decline was experienced in noninterest bearing deposits and savings accounts, partially offset by increases in NOW, money market accounts and certificates of deposit.
Deposits Average total deposits for 2024 were $3.597 billion, a decrease of $72.2 million, or 2.0%, from 2023. Average deposits decreased $93.7 million, or 2.5%, in 2023. For both year-over-year periods, the decline was experienced in noninterest bearing deposits and savings accounts, partially offset by increases in balances of NOW accounts, money market accounts and certificates of deposit.
As part of our overall strategy, we will purchase newly originated 1-4 family real estate secured adjustable-rate loans from CCHL. The strategic alliance with CCHL provides us a larger pool of loan purchase opportunities, which in large part drove the aforementioned increases in residential real estate loans.
As part of our overall strategy, we will originate 1-4 family real estate secured adjustable-rate loans through CCHL, which provides us a larger pool of loan origination opportunities, and in large part drove the aforementioned growth in residential real estate loans.
The weighted-average expected long-term rate of return on plan assets utilized for 2023 was 6.75%. The estimated impact to 2023 pension expense of a 25 basis point increase or decrease in the rate of return would have been an approximate $0.3 million decrease or increase, respectively.
The estimated impact to 2024 pension expense of a 25 basis point increase or decrease in the rate of return would have been an approximate $0.3 million decrease or increase, respectively. We anticipate using a rate of return on plan assets of 6.75% for 2025.
Compensation . Compensation expense totaled $93.8 million in 2023 compared to $91.5 million in 2022, and $101.5 million in 2021. For 2023, the $2.3 million, or 2.5%, net increase reflected an increase in salary expense of $4.7 million that was partially offset by a decrease in associate benefit expense of $2.4 million.
For 2023, the $2.3 million, or 2.5%, net increase reflected an increase in salary expense of $4.7 million that was partially offset by a decrease in associate benefit expense of $2.4 million.
The increase in our effective tax rate for 2023 was attributable to a higher level of consolidated income. The effective rate was further increased due to a lower level of pre -tax income from CCHL, in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment.
The effective rate was further increased due to a lower level of pre-tax income from CCHL, in relation to our consolidated income as the non-controlling interest adjustment for CCHL is accounted for as a permanent tax adjustment. However, these increases were offset by additional solar tax credits earned in 2023.

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