CAPITAL CITY BANK GROUP INCCCBG
CAPITAL CITY BANK GROUP INC Commitments Disclosure
Note 21
COMMITMENTS AND CONTINGENCIES
Lending Commitments
. The Company is a party to financial instruments with off-balance sheet risks in the normal course of
business to meet the financing needs of its clients. These financial instruments consist of commitments to extend credit and
standby letters of credit.
The Company’s maximum exposure to credit loss under standby letters of credit and commitments to extend credit is
represented by the contractual amount of those instruments. The Company uses the same credit policies in establishing
commitments and issuing letters of credit as it does for on-balance sheet instruments. At December 31, the amounts associated
with the Company’s off-balance sheet obligations were as follows:
2025
2024
(Dollars in Thousands)
Fixed
Variable
Total
Fixed
Variable
Total
Commitments to Extend Credit
(1)
$
188,834
$
456,328
$
645,162
$
184,223
$
479,191
$
663,414
Standby Letters of Credit
7,828
-
7,828
7,287
-
7,287
Total
$
196,662
$
456,328
$
652,990
$
191,510
$
479,191
$
670,701
(1)
Commitments to extend credit are agreements to lend to a client so long as there is no violation of any condition established in
the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements.
Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third
party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. In
general, management does not anticipate any material losses as a result of participating in these types of transactions. However,
any potential losses arising from such transactions are reserved for in the same manner as management reserves for their other
credit facilities.
For both on- and off-balance sheet financial instruments, the Company requires collateral to support such instruments when it is
deemed necessary. The Company evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral
obtained upon extension of credit is based on management’s credit evaluation of the counterparty. Collateral held varies but
may include deposits held in financial institutions; U.S. Treasury securities; other marketable securities; real estate; accounts
receivable; property, plant and equipment; and inventory.
The allowance for credit losses for off-balance sheet credit commitments that are not unconditionally cancellable by the Bank is
adjusted as a provision for credit loss expense and is recorded in other liabilities. The following table shows the activity in the
allowance.
(Dollars in Thousands)
2025
2024
2023
Beginning Balance
$
2,155
$
3,191
$
2,989
Provision for Credit Losses
(48)
(1,036)
202
Ending Balance
$
2,107
$
2,155
$
3,191
Other Commitments
. In the normal course of business, the Company enters into lease commitments which are classified as
operating leases. See Note 7 – Leases for additional information on the maturity of the Company’s operating lease commitments.
The Company has an outstanding commitment of up to $
1.0
funding technology solutions for community banks. At December 31, 2025, the amount remaining to be funded for the bank tech
venture capital commitment was $
0.3
Contingencies
. The Company is a party to lawsuits and claims arising out of the normal course of business. In management’s
opinion, there are
no
material effect on the consolidated results of operations, financial position, or cash flows of the Company.
Indemnification Obligation
. The Company is a member of the Visa U.S.A. network. Visa U.S.A believes that its member banks
are required to indemnify it for potential future settlement of certain litigation (the “Covered Litigation”) that relates to several
antitrust lawsuits challenging the practices of Visa and MasterCard International. In 2008, the Company, as a member of the Visa
U.S.A. network, obtained Class B shares of Visa, Inc. upon its initial public offering. Since its initial public offering, Visa, Inc.
has funded a litigation reserve for the Covered Litigation resulting in a reduction in the Class B shares held by the Company.
During the first quarter of 2011, the Company sold its remaining Class B shares. Associated with this sale, the Company entered
into a swap contract with the purchaser of the shares that requires a payment to the counterparty in the event that Visa, Inc. makes
subsequent revisions to the conversion ratio for its Class B shares. Fixed charges included in the swap liability are payable
quarterly until the litigation reserve is fully liquidated and at which time the aforementioned swap contract will be terminated.
Conversion ratio payments and ongoing fixed quarterly charges are reflected in earnings in the period incurred. Quarterly fixed
payments totaled $
0.6
0.7
0.8
0.3
million in 2025 due to a revision to the share conversion rate related to additional funding by VISA of the merchant litigation
reserve. There was a $
0.2
conversion rate related to additional funding by VISA of the merchant litigation reserve. At December 31, 2024, there was
no
amounts payable.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 5, 2020 | |
| 2018 | Mar 5, 2019 | |
| 2016 | Mar 2, 2017 | |
| 2015 | Mar 8, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.