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EXPLANATORY NOTE
Capital City Bank Group, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (the “Amendment” or “Form 10-
Q/A”) to amend and restate certain items in its Quarterly Report on Form 10-Q for the three months ended March 31, 2023, originally
filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 1, 2023 (the “Original Form 10-Q”). Except as
described below, no other information included in the Original Form 10-Q is being amended or updated by this Amendment and this
Amendment does not purport to reflect any information or events subsequent to the Original Form 10-Q.
Restatement Background
As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on November 13, 2023, the Company
identified certain inter-company transactions between its subsidiaries, Capital City Home Loans Inc. (“CCHL”), and Capital City
Bank (“CCB” or “the Bank”), involving residential mortgage loan purchases that were not properly recorded. The inaccuracies
materially impacted the Company’s previously issued financial statements as of and for the annual period ended December 31, 2022,
the three months ended March 31, 2022 and 2023, the three and six months ended June 30, 2022 and 2023, and the three and nine
months ended September 30, 2022 (the “Impacted Financials”). In connection with these transactions, CCHL recorded mortgage
banking revenue and a mortgage servicing right. On an ongoing basis, CCHL recognized noninterest income for servicing these loans
on behalf of CCB.
Because these inter-company transactions were not properly eliminated and net loan fees were not properly recorded, management,
after discussion with the Company’s independent registered public accounting firm, FORVIS, LLP (“FORVIS”), and the chair of the
Audit Committee of the Company’s Board of Directors, determined that the Impacted Financials should no longer be relied upon, and
certain consolidated statement of financial condition line items, including loans, other assets, other liabilities, and equity, and
consolidated statement of income line items, including mortgage banking revenues, loan interest income, compensation expense, other
income, income taxes, and net income, needed to be restated. For additional information on the restatements, see “Part I – Item 1
Financial Information – Note 1 – Restatement of Previously Issued Consolidated Financial Statements” in this Form 10-Q/A.
The Company determined that it would file amendments to the Annual Report on Form 10-K for the year ended December 31, 2022,
the Original Form 10-Q, and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023, including restated
financial statements and related disclosures (collectively, the “Amended Reports”). All material restatement information will be
included in the Amended Reports, and we do not intend to separately amend the Quarterly Reports on Form 10-Q that the Company
has previously filed with the SEC for the three months ended March 31, 2022, the three and six months ended June 30, 2022, and the
three and nine months ended September 30, 2022 (collectively, the “2022 Form 10-Qs”). As a result, the 2022 Form 10-Qs should no
longer be relied upon.
Restatement of Previously Issued Consolidated Financial Statements
This Form 10-Q/A includes unaudited restated consolidated financial statements as of March 31, 2023 and for the three-month period
ended March 31, 2023, and the audited restated consolidated statements of financial condition as of December 31, 2022. In addition to
correcting the accounting treatment for the inter-company transactions described above, the restated consolidated financial statements
included herein also correct previously identified errors that the Company determined to be immaterial, both individually and in the
aggregate.
For additional information on the restatements, see “Part I – Item 1 Financial Information – Note 1 – Restatement of Previously Issued
Consolidated Financial Statements” in this Form 10-Q/A.
This Form 10-Q/A also amends and restates the following items included in the Original Form 10-Q as appropriate to reflect the
restatement and revision of the relevant periods: Part I – Item 1 Financial Information; Item 2. Management’s Discussions and
Analysis of Financial Condition and Results of Operations; Item 3. Quantitative and Qualitative Disclosures About Market Risk; Item
4. Controls and Procedures; and Part II – Item 6. Exhibits.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is also
including with this Form 10-Q/A currently dated certifications of the Company’s Chief Executive Officer and Chief Financial Officer
(attached as Exhibits 31.1, 31.2, 32.1, and 32.2).