Panama City is the county seat of Bay County in Florida's Panhandle, sitting on the northern shore of St. Andrews Bay. Most visitors blow straight past it on their way to the beaches, which is a shame — the city has a modest downtown, a working waterfront, and a quieter character than its famous neighbour six miles to the south.
The city of about 35,000 is distinct from Panama City Beach, though the two are often lumped together. Panama City proper is where the courthouse is, where people live year-round, and where you'll find the bay rather than the Gulf. St. Andrews Bay is worth your time: calm water, good fishing, and the St. Andrews State Park just across the bay bridge — one of the best state parks in Florida, with Gulf-facing dunes, a fishing pier, and a shuttle boat to Shell Island.
Downtown has seen some investment since Hurricane Michael flattened much of Bay County in 2018. A cluster of restaurants and bars has re-emerged along Harrison Avenue, the main commercial strip. The pace is slow, prices are lower than on the beach, and the absence of tourist infrastructure is mostly a feature.
If you're spending time in the area, Panama City makes a reasonable and cheaper base than Panama City Beach, especially if you have a car.