Capital City Bank Group Inc.
07/21/2026 | Press release | Distributed by Public on 07/21/2026 09:43
Business/Financial Results (Form 8-K)
CapitalCity Bank Group,Inc.
ReportsSecond Quarter2026Results
TALLAHASSEE,Fla. (July21, 2026) - Capital City BankGroup, Inc. (NASDAQ:CCBG) todayreported net incomeattributableto
commonshareownersof $16.3million, or $0.95 per diluted share,for thesecondquarterof 2026comparedto $15.8million, or
$0.92per diluted share,for thefirst quarterof 2026,and$15.0million, or $0.88 per diluted share,for thesecondquarterof 2025.
Returnon Assets was1.48% andReturnon Equitywas 11.38%for thesecondquarterof 2026comparedto 1.45%and11.30%,
respectivelyfor thefirst quarterof 2026,and1.38% and11.44%,respectively forthe secondquarterof 2025.
QUARTERHIGHLIGHTS(2
nd
Quarter 2026versus 1
st
Quarter 2026)
Income Statement
●
Tax-equivalent net interest income totaled $44.2million compared to $42.9 million forthe prior quarter and reflected one
additional calendar day in the secondquarter
-
Net interest margin increased 11 basispoints to 4.35% (earning asset yieldincreased 5 basis points and costof funds
decreased 6 basis points to 75basis points)
●
Credit loss provision increased $0.2 million -net loan charge-offs of 14 basispoints (annualized) of average loans -
allowance coverage ratio increased one basispoint to 1.24% at June 30,2026
●
Noninterest income increased $0.7 million, or3.3%, driven by higher mortgage bankingrevenues and bank card fees
●
Noninterest expense increased $1.3 million, or3.1%, primarily due to a higherother expense of $0.9 million andoccupancy
expenseof $0.3million
BalanceSheet
●
Loan balancesdecreased$32.4million,or 1.3% (average),and decreased$18.5million,or 0.7% (endof period)
●
Stablecreditquality- totalnonperformingassets of $13.4million(30 basispointsof totalassets) at June30, 2026,a $0.4
million increase over the prior quarter
●
Deposit balancesdecreased$12.2million,or 0.3% (average),and decreased$30.6million,or 0.8% (endof period)due to
the seasonal decrease in our publicfund balances
●
Tangiblebookvalueper dilutedshare(non-GAAP financialmeasure) increased$0.56, or2.0%
"We'repleasedwith anotherstrong quarterof performanceandthe momentumour teamcontinuesto build," saidWilliam G.
Smith,Jr., ChairmanandCEO. "As welook to thesecondhalfof theyear,we'llremainfocusedon serving our clients' financial
needs, managingrisk wisely andexecuting onthe opportunitiesahead.None ofthis happenswithout thededicationof our
associatesandthe strong communitieswe're privileged to serve."
2
Discussionof OperatingResults
Net InterestIncome/NetInterestMargin
Tax
-equivalentnet interestincomefor thesecondquarterof 2026totaled$44.2million, comparedto $42.9million for the first
quarterof 2026,and$43.2million for the secondquarterof 2025.Comparedto thefirst quarterof 2026,the increasewas
attributableto higher investmentsecurities income andlower deposit interest expense,partiallyoffsetby lower loan interestincome
andovernight fundsincomedue tolower averagebalances.The increasein investmentsecurities income reflectednew investment
purchasesathigher rates andhigher balancesas we deployadditionalliquidity into the investmentsecurity portfolio.The increase
over thesecond quarterof 2025was alsodriven by the sameaforementionedfactors. One additionalcalendarday alsocontributedto
the increaseover thefirst quarterof 2026.
For thefirst six monthsof 2026,tax-equivalentnet interestincometotaled$87.1million comparedto $84.8million for the same
period of2025,primarily attributableto higher investmentsecurities income andlower deposit interest expense,partiallyoffsetby
lower loaninterest incomeandovernight fundsincome. New investmentpurchasesathigher yields and higher balancesdrove the
increase ininvestmentsecurities income. Thedecreasein deposit interestexpensereflected lowerpublic fundsdeposit balancesand
lower ratesacross ourproductlines. Lower averageloanbalancescontributedto thedecreasein loan interestincome, while the
decreasein overnight fundsincomereflected thedeploymentof moreliquidity into the investmentportfolio.
Our netinterest marginfor thesecond quarterof 2026was 4.35%,an increaseof 11 basispoints fromthe firstquarter of 2026and an
increase offive basis pointsover thesecondquarterof 2025.For the first six monthsof 2026,our net interestmargin increasedby
four basispoints to4.30% comparedto thesameperiod of2025.The increasein net interest marginover all prior periods was
largely attributableto ahigher investmentsecurity yield driven bynew purchasesathigher rates andlower deposit costs.For the
secondquarterof 2026,our cost offundswas 75 basispoints, adecreaseof six basis pointsfromthe first quarterof 2026,anda
decrease ofseven basispoints fromthe secondquarterof 2025.Our cost of deposits(including noninterest bearingaccounts)was 76
basis points,81 basispoints, and81 basispoints, respectively,for thesameperiods.
Provision for Credit Losses
Werecorded aprovision expensefor credit lossesof $0.9million for thesecondquarterof 2026,comparedto $0.7million for the
first quarterof 2026and$0.6 million for thesecondquarterof 2025.For the first six monthsof 2026,we recorded aprovision
expensefor credit lossesof $1.6million comparedto $1.4million for the first six monthsof 2025.Activity within the components
of theprovision (loansheld for investment("HFI") andunfundedloancommitments)for eachreportedperiod is providedin the
tableon page10. Wediscuss the variousfactorsthatimpactedour provision expensefor LoansHFI in furtherdetail below under
the heading
Allowance for Credit Losses
.
Noninterest Income and Noninterest Expense
Noninterestincomefor thesecondquarterof 2026totaled$20.6million, a $0.7 million, or 3.3%, increaseover thefirst quarterof
2026 anda $0.6 million,or 2.9%,increase overthe secondquarter of 2025.The increaseover the first quarterof 2026was primarily
attributableto increasesin mortgage bankingrevenuesof $0.4million and bankcardfees of$0.2 million. The increasein mortgage
bankingrevenueswas primarily dueto higher productionvolumeandthe increasein bankcardfees reflectedhigher cardvolume.
The increaseover thesecondquarterof 2025was driven byincreases in otherincomeof $0.7million, mortgage bankingrevenues
of $0.5million, anddeposit feesof $0.3million thatwere partially offsetby adecreasein wealth managementfees of$1.0million.
The increasein otherincomewas primarily dueto ahigher level of otherfees/commissions,bankowned life insuranceincome,and
miscellaneousincome. Theincrease inmortgagebankingrevenueswas dueto ahigher gain on sale margin.The decreasein wealth
managementfees wasattributableto lower retail brokeragefees, which reflects adecline in assets undermanagement.
For thefirst six monthsof 2026,noninterestincometotaled$40.5million, a $0.6 million, or 1.5%, increaseover thesameperiodof
2025,primarily attributableto increasesin other incomeof $1.4million, mortgage bankingrevenuesof $0.9million, and deposit
fees of$0.9 million, thatwere partially offsetby adecreasein wealth managementfees of$2.7 million. The increasein other
incomewas primarilyattributableto a$0.5 million miscellaneousrecovery andincreases in otherfees/commissionsof $0.3million,
miscellaneousincomeof $0.2million, andbankowned life insuranceincomeof $0.1million. The increase in mortgagebanking
revenuesreflected a highergainon sale margin.Higher servicechargefees andcommercialaccountanalysis feesdrove theincrease
in depositfees. Weare currentlyin theprocess of reviewingand updatingour depositproductofferingsagainstpeer andindustry
best practicesand we expectmodificationswill reducerelatedfee revenuesbeginningin thethird quarterof 2026.The decreasein
wealth managementfees wasattributableto theaforementioneddecreasein retail brokerageassetsunder managementandlower
insurancecommissions.
3
Noninterestexpensefor thesecondquarterof 2026totaled$42.6million, a $1.3 million, or 3.1%, increaseover thefirst quarterof
2026 anda $0.1 million,or 0.2%,increase overthe secondquarter of 2025.The increaseover the first quarterof 2026was primarily
attributableto increasesin other expenseof $0.9million and occupancyexpenseof $0.2million. Increasesin other real estate
(ORE) expenseof $0.4million, travel/entertainmentexpenseof $0.2million, professional feesof $0.1million, and miscellaneous
expensesof $0.1million drove the increasein otherexpense.The increasein occupancyexpensewas primarily attributableto
higher FF&Emaintenanceagreementexpense.The increaseover thesecondquarterof 2025reflected increasesin other expense
of
$0.5 millionandoccupancyexpenseof $0.2million thatwas partiallyoffsetby a$0.6million decrease in compensationexpense,
includinga $0.3million decline in salaryexpenseand$0.3 million decreasein associatebenefits.
For thefirst six monthsof 2026,noninterestexpensetotaled$84.0million, a $2.8 million, or 3.4%, increaseover thesameperiod of
2025andreflected increasesin other expenseof $3.4million and occupancyexpenseof $0.6million thatwas partiallyoffsetby a
$1.2 milliondecreasein compensationexpense.The increasein other expensewas primarily dueto a$4.2 million increasein ORE
expense,which reflecteda lower levelof gains fromthe saleof properties,namelya large gainrealized fromthe saleof our
operationscenter buildingin 2025. Higherexpensefor charitablecontributionsof $0.6million was partially offsetting.Theincrease
in occupancyexpensereflected higher expensefor FF&E maintenanceagreementsandsoftwarelicenses. The decreasein
compensationexpensereflected lower salaryexpenseof $0.9million and associatebenefitexpenseof $0.3million. Lower
commissionexpensedrove thedecline in salaryexpenseandthe decreasein associatebenefitexpensewas attributableto lower
stock basedcompensation.
IncomeTaxes
Werealized incometaxexpenseof $5.0million (effectiverate of23.4%) forthe secondquarterof 2026,comparedto $4.8million
(effectiverate of23.5%) forthe first quarterof 2026and$5.0 million (effectiverate of24.9%) forthe secondquarterof2025.For
the first six monthsof 2026,we realized incometaxexpenseof $9.8million (effectiverate of23.4%) comparedto $10.1million
(effective rateof 24.1%) forthe sameperiod of2025. The effectiverate for thesecond quarterof 2026reflected a taxbenefitrelated
to aninvestmentin a solar taxequity fundduring the quarterandthe effectiverate forthe first quarterof 2026included adiscrete
item relatedto stock-basedcompensation.Absent discrete itemsor new taxcredit investments,we expectour annualeffectivetax
rate toapproximate23.5% for2026.
Discussion ofFinancialCondition
Earning Assets
Averageearning assetstotaled$4.069billion for the secondquarterof 2026,a decreaseof $21.0million, or 0.5% from thefirst
quarter of2026, andan increase of$32.9 million,or 0.8%over thefourth quarterof 2025.Comparedto the first quarter of2026,the
changein earning assetmix reflecteda $42.6million decrease in overnightfundsanda $32.4million decrease in loansheld for
investment,partiallyoffsetby a$48.2million increase in investmentsecurities anda $5.8million increase in loansheld for sale
("HFS").Comparedto the fourthquarterof 2025,the changereflected a$161.3million increase in investmentsecurities anda $6.2
million increasein loansHFS, partially offsetby a$72.4million decrease in overnightfundsanda $62.2million decrease inloans
held for investment.
Averageloans HFIdecreasedby $32.4million, or 1.3% from thefirst quarterof 2026,anddecreasedby $62.2million, or 2.4%
fromthe fourthquarterof 2025.Comparedto thefirst quarterof 2026,the decline wasprimarily attributableto decreasesin
residentialreal estateloans of$14.4million, commercialreal estateloans of$14.4million, and commercialloans of$5.2 million,
partiallyoffsetby increases inhome equityloans of$1.9 million. Comparedto thefourthquarterof 2025,the decline wasprimarily
attributableto decreasesin residential real estateloans of$30.6million, commercialreal estateloans of$24.5million, commercial
loans of$6.6 million, constructionloans of$4.1 million, consumerloans (primarilyindirect auto)of $2.9million, partially offsetby
anincrease in homeequity loansof $5.9million.
LoansHFI atJune 30,2026,decreasedby $18.5million, or 0.7% from March31, 2026,anddecreasedby $46.2million, or 1.8%,
fromDecember31, 2025.Comparedto March31, 2026,the decline wasprimarily dueto decreasesin other loansof $9.7million,
constructionloans of$7.5 million, andcommercialreal estateloans of$5.2 million, partiallyoffsetby increasesin commercial
loans of$2.3 million, andconsumerloans (primarilyindirect auto)of $1.3million. Comparedto December31, 2025,the decline
was primarilyattributableto decreasesin residential real estateloans of$22.8million, commercialreal estateloans of$18.1
million, commercialloans of$7.8 million, other loansof $2.1million, consumerloans (primarilyindirect auto)of $1.5million,
partiallyoffsetby increasesin homeequity loansof $3.6million, and constructionloans of$2.2 million.
4
Allowance for Credit Losses
At June30, 2026,the allowancefor credit losses for loansHFI totaled$31.0million comparable toMarch31, 2026andDecember
31, 2025.Activity withinthe allowanceis provided onPage 10. Net loancharge-offswere 14 basis pointsof averageloans forthe
second quarterof 2026versus 10 basispoints forthe first quarterof 2026and 18 basispoints forthe fourthquarterof 2025.At June
30, 2026, theallowancerepresented1.24% ofloans HFIcomparedto 1.23%atMarch31, 2026,and1.22% atDecember31, 2025.
Credit Quality
Nonperformingassets(nonaccrualloans andother real estate)totaled$13.4million at June30, 2026,comparedto $13.0million at
March 31, 2026and $10.5million atDecember31, 2025. AtJune 30,2026, nonperformingassets asa percentageof total assetswas
0.30%, comparedto 0.29% at March31, 2026 and0.24% atDecember31, 2025.Nonaccrualloans totaled$10.0million at June30,
2026,a $1.1million decrease fromMarch31, 2026anda $1.4million increase over December31, 2025.Other real estatetotaled
$3.4 millionatJune 30,2026,a $1.6million increase over March31, 2026and
a
$1.5 million increaseover December31, 2025.
Further,classifiedloans totaled$29.8million at June30, 2026,a $15.3million increase over March31, 2026anda $15.5million
increase overDecember31, 2025.The increaseover bothprior periods reflectedthe downgradeof fourcommercialreal estate
relationships(two privateschools totaling$9.8 million($6.4 millionand$3.4 million),hotel $2.0million, funeralhome$5.0
million).
Deposits
Averagetotaldeposits were $3.679billion for the secondquarterof 2026,a decreaseof $12.2million, or 0.3%, from thefirst
quarterof 2026,andanincrease of$31.3million, or 0.9%, over the fourthquarterof 2025.Comparedto thefirst quarterof2026,
the decreasewas primarily attributableto lower public fundsbalancesof $43.5million (primarily NOW accountbalances)as those
balancesbegin to seasonallydecline in the secondquarter,partiallyoffsetby higher core accountbalancesof $31.3million
(primarily MMAandnoninterestbearing checking). Theincrease overthe fourthquarterof 2025was primarily dueto higher public
fundsbalancesof $56.1million, partially offsetby lower core depositbalancesof $24.8million.
At June30, 2026,totaldeposits were $3.721billion, a decreaseof $30.6million, or 0.8% from March31, 2026,andanincrease
of
$58.7million, or 1.6%over December31, 2025.The decreasefromMarch31, 2026,was driven bylower public funds balancesof
$68.4million (primarilyNOW accounts),partiallyoffsetby anincrease in core depositbalancesof $37.8million (primarily
noninterestbearing accounts).The increaseover December31, 2025was primarily dueto core depositgrowth
of
$151.9million,
partiallyoffsetby lower public fundsbalancesof $93.2million.Totalpublic fundsbalanceswere $561.5million at June30, 2026,
$629.9million atMarch31, 2026,and$654.7million at December31, 2025,respectively.
Liquidity
The Bankmaintainedanaveragenet overnightfunds(i.e.,deposits with banksplus FED funds sold, less FED funds purchased)sold
position of$365.1million in the secondquarterof 2026comparedto $407.7million in the first quarterof 2026and$437.5million
in thefourthquarterof 2025.Comparedto thefirst quarterof 2026,the variancereflected lower averagedeposits andthe
deploymentof excessliquidity into the investmentsecurity portfolio.Comparedto thefourthquarterof 2025,the variancewas
driven by thedeploymentof excessliquidity into theinvestmentsecurity portfolio.
Wealso view ourinvestmentportfolio asa liquidity sourceas we havethe optionto pledge securities in our portfolioas collateral
for borrowingsor deposits and/orto sell selected securitiesin our portfolio.Our portfolioconsists ofdebtissued by theU.S.
Treasury,U.S. governmentalagencies, municipalgovernments,andcorporateentities. At June 30,2026,the weighted-average
maturityanddurationof ourportfolio were 2.95years and2.60 years,respectively,andthe available-for-sale portfoliohada net
unrealizedafter-taxloss of $14.0million.
At June 30, 2026,we hadthe abilityto generateapproximately$1.721billion (excludes overnight fundsposition of$413million) in
additionalliquidity through varioussources includingvariousfederalfundspurchasedlines, Federal HomeLoanBankborrowings,
the FederalReserve DiscountWindow,andbrokereddeposits.
Capital
Shareowners'equity was$570.1million at June30, 2026comparedto $559.9million at March31, 2026and$552.9million at
December31, 2025.For the firstsix monthsof 2026,shareowners'equity waspositively impactedby netincomeattributableto
shareownersof $32.1million, theissuance ofstock of $3.4 million,and stockcompensationaccretionof $0.9million. Shareowners'
equity wasreducedby commonstock dividendsof $9.2million ($0.54 per share), repurchasesof ourcommonstock of$2.6 million
(63,088shares), netadjustmentstotaling $2.6million related to transactionsunder ourstock-basedcompensationplans, andan
unfavorablenet changeof $4.8million in accumulatedother comprehensiveloss due to anunfavorablefair valuemarkon the
investmentsecurities portfoliodriven by higherbondrates in thesecondquarter.
5
At June30, 2026,our totalrisk-based capitalratio was22.35%,comparedto 21.62%atMarch31, 2026and21.45%atDecember
31, 2025.Our commonequity tier 1 capitalratio was19.80%,19.08%,and18.56%,respectively,on thesedates.Our leverage ratio
was 11.96%,11.65%,and11.77%,respectively,on thesedates.At June 30, 2026,all our regulatorycapitalratios exceededthe
thresholds tobe designatedas "well-capitalized"under theBasel IIIcapitalstandards.Further, our tangiblecommonequity ratio
(non-GAAPfinancialmeasure)was 11.03%atJune 30,2026,comparedto 10.79%atbothMarch31, 2026,andDecember31,
2025.If ourunrealizedheld-to-maturitysecurities loss of $7.8 million (after-tax) wasrecognized in accumulatedother
comprehensiveloss, our adjustedtangible capitalratio would be10.85%.
About CapitalCity Bank Group,Inc.
CapitalCity BankGroup, Inc. (NASDAQ: CCBG)is oneof thelargest publicly tradedfinancialholding companiesheadquartered
in Floridaandhasapproximately$4.5 billion in assets.We providea full rangeof bankingservices, including traditionaldeposit
andcredit services, mortgagebanking,assetmanagement,trust, merchantservices, bankcards,andsecurities brokerageservices.
Our banksubsidiary,CapitalCity Bank,was foundedin 1895andhas62 bankingofficesand107 ATMs/ITMsin Florida, Georgia
andAlabama.For more informationaboutCapitalCity BankGroup, Inc., visit https://www.ccbg.com/.
FORWARD-LOOKINGSTATEMENTS
Forward-lookingstatementsin this Press Release are basedon currentplans andexpectationsthatare subjectto uncertaintiesand
risks, whichcould causeour futureresults to differmaterially.The words "may,""could," "should,""would," "believe,"
"anticipate,""estimate,""expect,""intend,""plan,""target,""vision," "goal," andsimilar expressions areintendedto identify
forward-looking statements.The following factors,amongothers, couldcause our actualresults to differ:the effectsof andchanges
in tradeandmonetaryandfiscal policies andlaws, including the interest ratepolicies of the FederalReserve Board;inflation,
interestrate, marketand monetaryfluctuations;local, regional, national,andinternationaleconomicconditionsandthe impactthey
mayhaveon us andour clients andour assessmentof thatimpact;supply-demandimbalancesandgeneral economicconditions
affectinglocal real estateprices anda generaldeteriorationin commercialreal estatemarketfundamentals;the costsandeffectsof
legal andregulatory developments,the outcomesof legal proceedingsor regulatory or othergovernmentalinquiries, the results of
regulatory examinationsor reviews and theability to obtainrequired regulatoryapprovals;the effectof changesin laws and
regulations(including lawsandregulations concerningtaxes,banking,securities, andinsurance)andtheir applicationwith which we
andour subsidiaries mustcomply;the effectof changesin accountingpolicies and practices,as maybe adoptedby theregulatory
agencies,as well as otheraccountingstandardsetters; the accuracyof our financial statementestimatesandassumptions;changesin
the financialperformanceand/orconditionof ourborrowers; changesin the mix ofloangeographies, sectorsandtypes or thelevel
of non-performingassetsandcharge-offs;changesin estimatesof futurecredit loss reserve requirementsbaseduponthe periodic
reviewthereof under relevantregulatory andaccountingrequirements;changesin our liquidity position;the timelydevelopmentand
acceptanceof new productsandservices andperceived overallvalueof theseproductsandservices by users; changesin consumer
spending,borrowing,and savinghabits; greaterthanexpectedcosts or difficultiesrelated to theintegrationof new productsandlines
of business;increasedcompetitionandits effecton depositfees; technologicalchanges,including the impactof generativeartificial
intelligence;the costsandeffectsof cyberincidents or otherfailures, interruptions,or security breachesof oursystemsor those of
our customersor third-partyproviders; dispositions;acquisitionsandintegrationof acquiredbusinesses; impairmentof ourgoodwill
or other intangibleassets;changesin the reliability ofour vendors,internal controlsystems, or informationsystems;our abilityto
increase marketshare andcontrol expenses;our ability toattractandretain qualifiedemployees;changesin our organization,
compensation,andbenefitplans;the soundnessof otherfinancialinstitutions;volatility anddisruption in nationalandinternational
financialandcommoditymarkets;changesin the competitiveenvironmentin our marketsandamongbankingorganizationsand
other financialservice providers; actionor inactionby thefederalgovernment,including tariffsor tradewars (including potential
resulting reducedconsumerspending, lower economicgrowth or recession,reduceddemandfor U.S. exports, disruptionsto supply
chains, anddecreaseddemandfor otherbankingproductsandservices), governmentinterventionin the U.S. financialsystem;
policies relatedto credit cardinterest rates,andlegislative, regulatoryor supervisoryactionsrelatedto so-called"de-banking,"
includinganynew prohibitions, requirementsor enforcementpriorities thatcould affectcustomerrelationships, compliance
obligations,or operationalpractices;the effectsof naturaldisasters (including hurricanes), widespreadhealthemergencies (including
pandemics),military conflict(including impactsrelatedto theconflictsin the Middle Eastandresulting disruptions to energyand
other commoditiesmarketsandsupply chains),terrorism, civilunrest, climatechangeor other geopoliticalevents;our abilityto
declare andpay dividends;structuralchangesin the marketsfor origination, saleandservicing of residential mortgages;anyinability
to implementandmaintaineffectiveinternal controlover financialreporting and/ordisclosure control;negativepublicity andthe
impacton our reputation;andthe limited tradingactivityandconcentrationof ownershipof ourcommonstock.Additional factors
canbe foundin our AnnualReporton Form 10-K for the fiscal yearendedDecember31, 2025andour otherfilingswith the SEC,
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