Capital City Bank Group, Inc. (CCBG) - 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Capital City Bank Group, Inc. is a financial holding company headquartered in Tallahassee, Florida, operating through its wholly owned subsidiary, Capital City Bank. The company provides full-service banking, mortgage banking, wealth management, and trust services across Florida, Georgia, and Alabama. As of July 27, 2026, there were 17,113,297 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | YTD 2026 (6 Months) | Q2 2025 (3 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Net Income | $16.3 million | $32.1 million | $15.0 million | $31.9 million |
| Diluted EPS | $0.95 | $1.87 | $0.88 | $1.87 |
| Net Interest Income (FTE) | $44.2 million | $87.1 million | $43.2 million | $84.8 million |
| Net Interest Margin (FTE) | 4.35% | 4.30% | 4.30% | 4.26% |
| Noninterest Income | $20.6 million | $40.5 million | $20.0 million | $39.9 million |
| Noninterest Expense | $42.6 million | $84.0 million | $42.5 million | $81.2 million |
| Efficiency Ratio | 65.76% | 65.83% | 67.26% | 65.13% |
| Total Assets | $4.45 billion | - | - | - |
| Total Deposits | $3.72 billion | - | - | - |
| Loans Held for Investment | $2.50 billion | - | - | - |
| Allowance for Credit Losses | $31.0 million | - | $29.9 million | - |
| Cash Flow from Operations (YTD) | $28.7 million | - | $54.5 million | - |
Material Changes vs. Prior Periods
- Profitability: Net income increased 8.2% year-over-year for the quarter and 0.6% year-over-year for the six-month period. The quarterly increase was driven by higher net interest income and noninterest income.
- Net Interest Income: Increased due to higher investment securities income (driven by new purchases at higher rates) and lower deposit interest expense. This was partially offset by lower loan interest income due to decreased average loan balances.
- Noninterest Income: Increased primarily due to higher mortgage banking revenues (higher gain on sale margins) and deposit fees. This was partially offset by a significant decrease in wealth management fees (down $1.0 million QoQ and $2.7 million YoY) due to lower retail brokerage assets under management and the sale of the insurance subsidiary in Q3 2025.
- Noninterest Expense: Increased slightly year-over-year. The six-month increase was largely driven by a $4.2 million increase in Other Real Estate Owned (OREO) expense, reflecting a lack of large gains from property sales compared to Q1 2025. Compensation expense decreased due to lower commissions and stock-based compensation.
- Asset Quality: Nonperforming assets (NPAs) rose to $13.4 million (0.30% of total assets) from $10.5 million at year-end 2025. This increase was attributed to the downgrade of four commercial real estate relationships (private schools, a hotel, and a funeral home). Net charge-offs were 14 basis points of average loans for the quarter.
- Capital: The company remains "well-capitalized" with a Total Risk-Based Capital ratio of 22.35% and a Tangible Common Equity ratio of 11.03%.
Guidance, Outlook, and Risks
- Outlook: Management expects deposit fee income to decline beginning in Q3 2026 due to updates in deposit product offerings. Capital expenditures are projected to be approximately $10.0 million over the next 12 months, funded by existing resources.
- Interest Rate Sensitivity: The company's Net Interest Income (NII) is positively impacted by rising rates and negatively impacted by falling rates. Simulation analysis indicates a +200 bp rate ramp would increase NII by 4.8% over 12 months.
- Liquidity: The company maintains strong liquidity with approximately $1.721 billion in available funding sources (excluding overnight funds). Excess liquidity has been deployed into the investment securities portfolio as loan demand remains selective.
- Risks: Key risks include changes in interest rates, credit quality deterioration (specifically in commercial real estate), inflation, regulatory changes, and the impact of the sale of the insurance subsidiary on wealth management revenue. The company also faces risks related to cyber incidents and the integration of new technologies.
Investor Verification Checklist
- Wealth Management Decline: Verify the trajectory of assets under management (AUM) and the long-term impact of the insurance subsidiary sale on fee revenue.
- Commercial Real Estate Exposure: Review the specific details of the four downgraded commercial real estate relationships ($16.8 million total) and the adequacy of the allowance for credit losses relative to these specific credits.
- Deposit Mix Stability: Monitor the seasonal decline in public funds and the impact of upcoming deposit product changes on fee income and cost of funds.
- Investment Portfolio Valuation: Note the $29.4 million in unrealized pre-tax losses on investment securities and the impact of rising rates on Accumulated Other Comprehensive Income (AOCI).
- OREO Expense Volatility: Assess the sustainability of the "Other" expense line, which was heavily influenced by the absence of a large property sale gain in the current period compared to the prior year.