Capital City Bank Group Inc.
01/27/2026 | Press release | Distributed by Public on 01/27/2026 14:23
Business/Financial Results (Form 8-K)
Capital City Bank Group, Inc.
Reports Fourth Quarter 2025 Results
TALLAHASSEE, Fla.(January 27, 2026) - Capital City Bank Group, Inc. (NASDAQ:CCBG) today reported net income
attributable to common shareowners of $13.7 million, or $0.80 per dilutedshare, for the fourth quarter of 2025 compared to $16.0
million, or $0.93 per diluted share, for the third quarter of 2025, and$13.1 million, or $0.77 per diluted share for the fourth quarter
of 2024.
For 2025, net income attributable to common shareowners totaled $61.6million, or $3.60 per diluted share, compared to net income
of $52.9 million, or $3.12 per diluted share, for 2024.
QUARTER HIGHLIGHTS (4
th
Quarter 2025versus 3
rd
Quarter 2025)
Income Statement
●
Tax-equivalentnet interest income totaled $43.4 million comparedto $43.6 million for the prior quarter
-
Net interest margin decreasedby 8 basis points to 4.26% (decrease in earningasset yield of 4 basis points and increase in cost
of funds of 4 basis points)
●
Stable credit quality metrics and creditloss provision - net loan charge-offs were 18 basis points (annualized) of averageloans -
allowance coverage ratio was 1.22% at December 31, 2025
●
Noninterest income decreased$2.2 million, or 10.0%, due to lower other income of $0.8 million (thirdquarter gain from sale of
insurance subsidiary), mortgage revenuesof $0.6 million, and wealth management fees of $0.6 million
●
Noninterest expense was comparableto the third quarter of 2025 and reflectedhigher performance-based pay that was
significantly offset by a pension plan settlement gain of $1.5 million
Balance Sheet
●
Loan balances decreased $38.1 million,or 1.5% (average), and decreased $35.9 million, or1.4% (end of period)
●
Deposit balances increased $35.2million, or 1.0% (average), and increased $47.4 million,or 1.3% (end of period) due to the
normal seasonal inflow of public fund balances
●
Tangiblebook value per diluted share (non-GAAP financial measure)increased by $0.65, or 2.5%
FULL YEAR 2025 HIGHLIGHTS
Income Statement
●
Tax-equivalentnet interest income totaled $171.8 millioncompared to $159.2 million for 2024
-
Net interest margin increasedby 20 basis points to 4.28% (increase in earningasset yield of 10 basis points and decrease in
cost of funds of 10 basis points)
●
Credit quality metrics remainedstrong throughoutthe year - allowance coverage ratio increased to 1.22%in 2025 compared to
1.10% in 2024 - net loan charge-offs were14 basis points of average loans for 2025 comparedto 21 basis points for 2024
●
Noninterest income increasedby $6.4 million, or 8.4%, due to higher mortgage banking revenuesof $2.6 million, wealth
management fees of $1.6 million, other income of $1.5 million, and deposit fees of$0.7 million
●
Noninterest expense increased$1.7 million, or 1.0%, primarily due to higher compensation expense(primarily performance-
based pay and health care cost) partially offset by lower pensionexpense and higher gains from sale of bankingfacilities
Balance Sheet
●
Loan balances decreased $83.6 million,or 3.1% (average), and decreased $105.4million, or 4.0% (end of period)
●
Average deposit balances increased$53.9 million, or 1.5% driven by strong coredeposit growth
●
Tangiblebook value per diluted share (non-GAAP financial measure)increased by $3.38, or 14.3%
"2025 was an exceptional year for Capital City Bank," said WilliamG. Smith, Jr., Capital City BankGroup Chairman and
CEO."Another record year of earnings generated strong shareholder returns,highlighted by a 14.3% increase in tangible book value
per share and a 13.6% increase in the dividend. Our results were driven by ourlong-time commitment to the fundamentals - core
deposits, disciplined credit management and healthy liquidity andcapital.I want to congratulate and thank our associates for their
outstanding results and unwavering commitment to our clients andcommunities. I look forward to another successful year in 2026."
2
Discussion of Operating Results
Net Interest Income/Net InterestMargin
Tax-equivalent netinterest income for the fourth quarter of 2025 totaled $43.4 million comparedto $43.6 million for the third
quarter of 2025 and $41.2 million for the fourth quarter of 2024.Compared to the third quarter of 2025, the decrease was due to a
$0.7 million decrease in loan income and a $0.5 million increase in interest expense,partially offset by a $0.6 million increase in
investment securities income and a $0.4 million increase in overnightfunds income.Compared to the fourth quarter of 2024, the
increase was due to a $3.1 million increase in investment securities income,a $0.8 million increase in overnight funds income, and a
$0.3 million decrease in interest expense, partially offset by a decreaseof $1.8million in loan income.
For 2025, tax-equivalent net interest income totaled $171.8 millioncompared to $159.2 million for 2024 with the increase
attributable to a $10.3million increase in investment securities income, a $3.1 million increase in overnightfunds income, and a $2.6
million decrease in deposit interest expense,partially offset by a $3.5 million decrease in loan income.New investment purchases at
higher yields drove the increase in investment securities income.Higher average deposit balances contributed to the increase in
overnight funds income.The decrease in deposit interest expense reflected the decrease in our deposit ratesthroughout 2025.The
decrease in loan income was due to lower loan balances that were partiallyoffset by favorable rate repricing.
Our net interest margin for the fourth quarter of 2025 was 4.26%,a decrease of 8 basis pointsfrom the third quarter of 2025 and an
increase of 9 basis points over the fourth quarter of 2024.Compared to the third quarter of 2025, the decrease in the margin
reflected a lower yield on earning assets due to an unfavorable shift in mixand lower interest rates.For 2025, our net interest
margin of 4.28% reflected a 20 basis point increase over2024.The improvement in the net interest margin compared to both prior
year periods was primarily due to a higher yield for investment securities drivenby new purchases at higher yields, favorable loan
repricing, and lower deposit cost.For the fourth quarter of 2025, our cost of funds was 82 basis points, an increaseof 4 basis points
over the third quarter of 2025 and a 6 basis point decrease from the fourth quarterof 2024.Our cost of deposits (including
noninterest bearing accounts) was 82 basis points, 80 basis points, and86 basis points, respectively, for thesame periods.
Provision for Credit Losses
We recordeda provision expense for credit losses of $2.0 million for the fourth quarter of 2025compared to $1.9 million for the
third quarter of 2025 and $0.7 million for the fourth quarter of 2024.For 2025, we recorded a provision expense for credit losses of
$5.3 million compared to $4.0 million in 2024.Activity within the components of the provision (loans held for investment("HFI")
and unfunded loan commitments) for each reported period is providedin the table on page 14.We discuss the various factors that
impacted our provision expense for Loans HFI in further detail below underthe heading
Allowance for Credit Losses
.
3
Noninterest Income and NoninterestExpense
Noninterest income for the fourth quarter of 2025 totaled $20.1 millioncompared to $22.3 million for the third quarter of 2025and
$18.8 million for the fourth quarter of 2024.Compared to the third quarter of 2025, the $2.2 million, or 10.0%, decrease was
primarily attributable to a $0.8 million decrease in other income, a $0.6million decrease in mortgage banking revenues and a $0.6
million decrease in wealth management fees.The decline in other income reflected the $0.7 million gain from the sale of our
insurance subsidiary in the third quarter of 2025.The decline in mortgage banking revenues was due to a lower gain on sale
margin.The decrease in wealth management fees was attributable to lower retail brokerage fees.The $1.3 million, or 7.2%,
increase over the fourth quarter of 2024 was primarily due to a $1.0 million increasein mortgage banking revenues which reflected
higher production volume and gain on sale margin.
For 2025, noninterest income totaled $82.4 million compared to $76.0 millionfor 2024, attributable to increases in mortgage
banking revenues of $2.6 million, wealth management fees of $1.6 million,other income of $1.5 million, and deposit fees of $0.7
million.Higher production volume and gain on sale margin drovethe improvement in mortgage banking revenues.The increase in
wealth management fees was due to higher trust fees and reflected a combinationof new business, higher account valuations, and
fee adjustments.The increase in other income reflected the aforementioned $0.7million gain from the sale of our insurance
subsidiary in 2025.Fee adjustments implemented in mid-2025 contributed to the increase in depositfees and other income.
Noninterest expense for the fourth quarter of 2025 totaled $42.9million comparable to the third quarter of 2025 and $41.8 million
for the fourth quarter of 2024.Compared to the third quarter of 2025, a $2.3 million increase in compensationexpense was offset
by a $2.4 million decrease in other expense.The increase in compensation was driven by higher performance-basedpay and the
decrease in other expense was primarily attributable to a $1.5 million pensionsettlement gain and to a lesser extent lower
professional fees and processing fees.Compared to the fourth quarter of 2024, the $1.1 million increase was primarilyattributable
to a $2.3 million increase in compensation expense partially offsetby a $1.3million decrease in other expense.The increase in
compensation reflected higher performance-based pay and to a lesser extenthigher health insurance cost.The decrease in other
expense was primarily due to the aforementioned pension settlement gainof $1.5 million and a $0.8 million decrease in professional
fees, partially offset by a $1.1 million increase in otherreal estate expense which reflected gains from the sale of banking facilities
in the fourth quarter of 2024.
For 2025, noninterest expense totaled $167.0 million compared to$165.3 million for 2024 with the $1.7 million, or 1.0%, increase
primarily due to a $6.5 million increase in compensation expense that was partiallyoffset by a $4.7 million decrease in other
expense.The increase in compensation was driven by higher performance-basedpay and health insurance cost, and to a lesser
extent an increase in 401k matching expense.The decrease in other expense was primarily due to a $3.4 million decrease in other
real estate expense due to higher gains from the sale of banking facilities in2025 and a $3.7 million decrease in pension expense
(non-service component), partially offset by increases in processingexpense of $1.2million (outsource of core processing system)
and charitable contribution expense of $0.9 million.The variance in pension expense included the aforementioned $1.5 million
pension settlement gain that occurred in the fourth quarter of 2025.
Income Taxes
We realized incometax expense of $4.9 million (effective rate of 26.3%) for thefourth quarter of 2025 compared to $5.1 million
(effective rate of 24.4%) for the third quarter of 2025and $4.2 million (effective rate of 24.3%) for the fourth quarter of 2024.For
2025, we realized income tax expense of $20.2 million (effectiverate of 24.7%) compared to $13.9 million (effective rate of 21.2%)
for 2024.The increase in the effective tax rate for the fourth quarter of 2025 was attributableto a higher than projectedInternal
Revenue Code ("IRC") Section 162(m) limitation related to currentand future compensation.A lower level of tax benefit accrued
from a solar tax credit equity fund drove the increase in our effectivetax rate compared to 2024.Absent discrete items or new tax
credit investments, we expect our annual effective taxrate to approximate 24% for 2026.
4
Discussion of Financial Condition
Earning Assets
Average earningassets totaled $4.036 billion for the fourth quarter of 2025, an increase of $54.4 million,or 1.4%, over the third
quarter of 2025, and an increase of $114.0million, or 2.9%, over the fourth quarter of 2024.Compared to the third quarter of 2025,
the change in the earning asset mix reflected an $81.4 million increasein overnight funds sold and a $12.2 million increase in
investment securities, partially offset by a $38.1million decrease in loans HFI and a $1.0 million decrease in loans held for sale
("HFS").Compared to the fourth quarter of 2024, the change in earning asset mix reflecteda $139.3 million increase in overnight
funds sold and a $90.8 million increase in investment securities, partiallyoffset by a $109.3 million decrease in loans HFI and a
$6.8 million decrease in loans HFS.
Average loansHFI decreased by $38.1 million, or 1.5%, from the third quarter of 2025 and decreasedby $109.3 million, or 4.1%,
from the fourth quarter of 2024.Compared to the third quarter of 2025, the decline was primarily attributableto decreases in
commercial real estate loans of $15.9 million, residential real estate loans of $12.9million, and consumer loans (primarily indirect
auto) of $8.8 million.Compared to the fourth quarter of 2024, the decline was driven by decreases in constructionloans of $61.2
million, consumer loans (primarily auto indirect loans) of $23.3 million, andcommercial real estate loans of $22.7 million.
Loans HFI at December 31, 2025, decreased by $35.9 million,or 1.4%, from September 30, 2025, and decreased by $105.4 million,
or 4.0%, from December 31, 2024.Compared to September 30, 2025, the decline was primarily due to decreases in commercial
real estate loans of $16.6 million, residential real estate loans of $16.4 million,and construction loans of $9.8 million.Compared to
December 31, 2024, the decline was driven by decreases in constructionloans of $73.1 million, consumer loans (primarily indirect
auto) of $17.2 million, and commercial real estate loans of $10.4 million.
Allowance for Credit Losses
At December 31, 2025, the allowance for credit losses for loans HFI totaled$31.0 million compared to $30.2 million at September
30, 2025 and $29.3 million at December 31, 2024.Activity within the allowance is provided on Page 14.The increase in the
allowance over both prior periods was primarily attributable to qualitativefactor adjustments that were partially offset by lower loan
balances.Net loan charge-offs were 18 basis points ofaverage loans for the fourth quarter of 2025 comparable to the third quarter
of 2025 and 25 basis points for the fourth quarter of 2024.For 2025, net loan charge-offs were 14 basis pointscompared to 21 basis
points for 2024.At December 31, 2025, the allowance represented 1.22% of loans HFI comparedto 1.17% at September 30, 2025,
and 1.10% at December 31, 2024.
Credit Quality
Nonperforming assets (nonaccrual loans and other real estate) totaled$10.6 million at December 31, 2025, compared to $10.0
million at September 30, 2025, and $6.7 million at December 31,2024.At December 31, 2025, nonperforming assets as a
percentage of total assets was 0.24%, compared to 0.23% at September30, 2025 and 0.15% at December 31, 2024.Nonaccrual
loans totaled $8.7 million at December 31, 2025, a $0.5 million increase overSeptember 30, 2025 and a $2.4 million increase over
December 31, 2024.Classified loans totaled $14.3 million at December 31, 2025, a $12.2 milliondecrease from September 30,
2025,and a $5.6 million decrease from December 31, 2024.
Deposits
Average totaldeposits were $3.648 billion for the fourth quarter of 2025, an increase of $35.2 million, or1.0%, over the third
quarter of 2025 and an increase of $47.1 million, or 1.3%, over the fourth quarterof 2024.Compared to the third quarter of 2025,
the increase was primarily attributable to higher public funds balances(primarily NOW accounts) due to the seasonal inflow of
funds from municipal clients as they receive their tax receipts beginning in late November.The increase over the fourth quarter of
2024was primarily due to growth in core deposit balances (primarily business NOW accounts).
At December 31, 2025, total deposits were $3.662 billion, an increase of $47.4million, or 1.3%, over September 30 2025, and a
decrease of $9.7 million, or 0.3%, from December 31, 2024.The decrease compared to September 30, 2025 reflected the
aforementioned seasonal inflow of public funds partially offset bylower core deposit balances, primarily noninterest bearing and
NOW business accounts.Public funds totaled $654.7 million at December 31, 2025, $497.9million at September 30, 2025, and
$660.9 million at December 31, 2024.
5
Liquidity
We maintainedan average net overnight funds (i.e., deposits with banks plus FED funds sold less FED fundspurchased) sold
position of $437.5 million in the fourth quarter of 2025 compared to $356.2million in the third quarter of 2025 and $298.3 million
in the fourth quarter of 2024.Compared to the third quarter of 2025, the increase reflected growthin average public fund deposit
balances and lower average loan balances.The increase over the fourth quarter of 2024 was primarily due to higher average core
deposit balances and lower average loan balances, partially offsetby higher average investment security balances.
At December 31, 2025, we had the ability to generate approximately $1.523billion (excludes overnight funds position of $467.8
million) in additional liquidity through various sources includingvarious federal funds purchased lines, Federal Home Loan Bank
borrowings, the Federal Reserve Discount Window,and brokered deposits.
We also view ourinvestment portfolio as a liquidity source, as we have the option to pledge securitiesin our portfolio as collateral
for borrowings or deposits and/or to sell selected securities in our portfolio.Our portfolio consists of debt issued by the U.S.
Treasury,U.S. governmental agencies, municipal governments, and corporateentities.At December 31, 2025, the weighted-
average maturity and duration of our portfolio were 2.57 years and 2.12years, respectively, and the available-for-sale portfolio had
a net unrealized after-tax loss of $9.4 million.
Capital
Shareowners' equity was $552.9 million at December 31, 2025,compared to $540.6 million at September 30, 2025, and $495.3
million at December 31, 2024.For the full year 2025, shareowners' equity was positively impactedby net income attributable to
shareowners of $61.6 million, a net $9.1 million decrease in the accumulatedother comprehensive loss, the issuance of common
stock of $3.5 million, and stock compensation accretion of $2.4 million.The net favorable change in accumulated other
comprehensive loss reflected a $10.7million decrease in the investment securities loss that was partially offsetby a $1.3 million
decrease in the fair value of the interest rate swap related to subordinated debtand a $0.3 million decrease in the pension plan loss
from the year-end re-measurement of the plan.Shareowners' equity was reduced by common stock dividendsof $17.1 million
($1.00 per share) and net adjustments totaling $1.9 million related to transactionsunder our stock compensation plans.
At December 31, 2025, our total risk-based capital ratio was 21.45%compared to 20.59% at September 30, 2025, and 18.64% at
December 31, 2024.Our common equity tier 1 capital ratio was 18.54%, 17.73%, and 15.54%, respectively,on these dates.Our
leverage ratio was 11.77%, 11.64%, and 11.05%, respectively,on these dates.At December 31, 2025, all our regulatory capital
ratios exceeded the thresholds to be designated as "well-capitalized"under the Basel III capital standards.Further, our tangible
common equity ratio (non-GAAP financial measure) was 10.79% at December 31, 2025, compared to 10.66% and 9.51% at
September 30, 2025, and December 31, 2024, respectively.
6
About Capital City Bank Group, Inc.
Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largestpublicly traded financial holding companies headquartered
in Florida and has approximately $4.4billion in assets.We providea full range of banking services, including traditional deposit
and credit services, mortgage banking, asset management, trust, merchantservices, bankcards, and securities brokerage services.
Our bank subsidiary,Capital City Bank, was founded in 1895 and has 62 banking offices and 108ATMs/ITMsin Florida, Georgia
and Alabama.For more information about Capital City Bank Group, Inc., visit
https://www.ccbg.com/
.
FORWARD-LOOKING STATEMENTS
Forward-looking statements in this Press Release are based on current plansand expectations that are subject to uncertainties and
risks, which could cause our future results to differ materially.The words "may," "could," "should,""would," "believe,"
"anticipate," "estimate," "expect," "intend," "plan," "target," "vision,""goal," and similar expressions are intended to identify
forward-looking statements.The following factors, among others, could cause our actual results to differ:the effects of and changes
in trade and monetary and fiscal policies and laws, including the interest rate policies ofthe Federal Reserve Board; inflation,
interest rate, market and monetary fluctuations; local, regional, national, and internationaleconomic conditions and the impact they
may have on us and our clients and our assessment of that impact; the costs andeffects of legal and regulatory developments, the
outcomes of legal proceedings or regulatory or other governmental inquiries,the results of regulatory examinations or reviews and
the ability to obtain required regulatory approvals; the effect ofchanges in laws and regulations (including laws and regulations
concerning taxes, banking, securities, and insurance) and their applicationwith which we and our subsidiaries must comply; the
effect of changes in accounting policies and practices, as maybe adopted by the regulatory agencies, as well as other accounting
standard setters; the accuracy of our financial statement estimates and assumptions;changes in the financial performance and/or
condition of our borrowers; changes in the mix of loan geographies, sectors andtypes or the level of non-performing assets and
charge-offs; changes in estimates of future creditloss reserve requirements based upon the periodic review thereof under relevant
regulatory and accounting requirements; changes in our liquidity position;the timely development and acceptance of new products
and services and perceived overall value of these products and services by users;changes in consumer spending, borrowing, and
saving habits; greater than expected costs or difficulties related to theintegration of new products and lines of business;
technological changes, including the impact of generative artificial intelligence; thecosts and effects of cyber incidents or other
failures, interruptions, or security breaches of our systems or those of ourcustomers or third-party providers; dispositions (including
the impact from the sale of our insurance subsidiary); acquisitions and integrationof acquired businesses; impairment of our
goodwill or other intangible assets; changes in the reliability of our vendors,internal control systems, or information systems; our
ability to increase market share and control expenses; our ability to attract and retain qualifiedemployees; changes in our
organization, compensation, and benefit plans; the soundness ofother financial institutions; volatility and disruption in national and
international financial and commodity markets; changes in the competitiveenvironment in our markets and among banking
organizations and other financial service providers; action or inactionby the federal government, including tariffs or trade wars
(including potential resulting reduced consumer spending, lower economicgrowth or recession, reduced demand for U.S. exports,
disruptions to supply chains, and decreased demand for other bankingproducts and services), government intervention in the U.S.
financial system; policies related to credit card interest rates, and legislative,regulatory or supervisory actions related to so-called
"de-banking," including any new prohibitions, requirements or enforcementpriorities that could affect customer relationships,
compliance obligations, or operational practices; the effectsof natural disasters (including hurricanes), widespread health
emergencies (including pandemics), military conflict,terrorism, civil unrest, climate change or other geopolitical events; our ability
to declare and pay dividends; structural changes in the markets for origination,sale and servicing of residential mortgages; any
inability to implement and maintain effective internal control overfinancial reporting and/or disclosure control; negative publicity
and the impact on our reputation; and the limited trading activity and concentrationof ownership of our common stock.Additional
factors can be found in our Annual Report on Form 10-K for the fiscal yearended December 31, 2024 and our other filings with the
SEC, which are available at the SEC's internetsite (https://www.sec.gov).Forward-looking statements in this Press Release speak
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