CAPITAL CITY BANK GROUP INC

Risk Management and Strategy

Our enterprise risk management program is designed to identify,

assess, and mitigate risks across various aspects of our

Company, including

financial, operational, market, regulatory,

technology, legal, and reputational.

Cybersecurity risk is a critical

component of our technology risk management program, specifically our

information security program given the increasing

reliance on technology and potential of cyber risk threats.

Our Chief Information Security Officer (“CISO”) is primarily

responsible for coordinating the various aspects of the information security

program with cross-functional support teams.

The

Chief Operating Officer (“COO”), management risk committees,

and the Board of Directors provide oversight of the program and

its activities.

Our objective for managing cybersecurity risk is to avoid or minimize the impacts

of external threat events or other efforts to

penetrate, disrupt or misuse systems or information.

Our cybersecurity risk management infrastructure is designed around

regulatory guidance, other industry standards and the National Institute of

Standards and Technology

(“NIST”) Cybersecurity

Framework, although this does not imply that we meet all technical standards,

specification, or requirements under the NIST.

Our

CISO and Information Security Officer (“ISO”) along

with key members of their respective teams, regularly collaborate with peer

banks, industry groups, and policymakers to discuss cybersecurity trends and

issues and identify best practices.

Our information

security program and cyber risk management policies and procedures are periodically

reviewed by the CISO and ISO with the

goal of addressing changing threats and conditions.

The parts of our information security program relating to cybersecurity are built

on a multi-layered and integrated defense model

and include the following processes:

◾

Risk-based controls for information systems and information

on our networks:

We maintain risk

processes designed to identify,

assess, and manage cybersecurity risks associated with external service

providers and the

services we provide to our clients. We

leverage people, processes, and technology as part of our efforts

to manage and

maintain cybersecurity controls. We

also employ a variety of preventative and detective tools designed

to monitor, block,

and provide alerts regarding suspicious activity,

as well as to report on suspected advanced persistent threats. 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. When a cybersecurity incident occurs,

we have cross-functional teams that are

responsible for leading the initial assessment of priority and severity and

communicating material cybersecurity incidents

to the appropriate members of management and the Board of Directors.

◾

Training and testing:

We have

established processes and systems designed to mitigate cybersecurity risk, including

regular and on-going education and training for associates, preparedness simulations

and tabletop exercises, and recovery

and resilience tests. We

also actively monitor our email gateways for malicious phishing

email campaigns and monitor

remote connections.

◾

Internal and external risk assessments:

We engage

in regular assessments of our infrastructure, software systems, and

network architecture using internal experts and third-party specialists.

Our internal auditor and other independent external

partners will periodically review our processes, systems, and controls, including

with respect to our information security

program, to assess their design and operating effectiveness and

make recommendations to strengthen our risk management

processes.

Notwithstanding our defensive measures and processes, the threat posed

by cyber-attacks is severe.

Our internal systems,

processes, and controls are designed to mitigate loss from cyber-attacks

and, while we have experienced cybersecurity incidents

in the past, to date, risks from cybersecurity threats have not materially affected

our Company.

For further discussion of risks

from cybersecurity threats, see Item 1A. Risk 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.

The CISO reports the day-to-day status of the program to the COO who in turn

reports to our Bank

President.

On a quarterly basis, and as needed, the CISO reports the status of the program, notable

threats or incidents, and other

developments related to information security and cybersecurity risks to our Operations

Risk Oversight Committee (“OROC”) and

to our Enterprise Risk Oversight Committee (“ROC”). The CISO also provides

reports to our Board of Directors at least annually

on the status of the information security program and risks, notable threats and

incidents, and other developments related to

cybersecurity. In

addition, the CISO provides more frequent reports to the Audit Committee on the

aforementioned activities,

including remediation efforts and the status of incident

response, as needed.

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.

Of 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.

LLC. maintained five offices, all of which were leased.