Business Context and Reporting Period
Company: Capital City Bank Group, Inc. (CCBG)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three months ended March 31, 2026
Operations: CCBG operates as a financial holding company with its wholly owned subsidiary, Capital City Bank, providing full-service banking, mortgage banking, and wealth management services across Florida, Georgia, and Alabama. The company operates 62 full-service offices and 107 ATMs/ITMs.
Key Financial Metrics
| Metric | Q1 2026 | Q4 2025 | Q1 2025 |
|---|---|---|---|
| Net Income | $15.8 million | $13.7 million | $16.9 million |
| Diluted EPS | $0.92 | $0.80 | $0.99 |
| Total Assets | $4.45 billion | $4.39 billion | $4.46 billion |
| Total Deposits | $3.75 billion | $3.66 billion | $3.78 billion |
| Net Interest Income (FTE) | $42.9 million | $43.4 million | $41.6 million |
| Net Interest Margin (FTE) | 4.24% | 4.26% | 4.22% |
| Noninterest Income | $19.9 million | $20.1 million | $19.9 million |
| Noninterest Expense | $41.4 million | $42.9 million | $38.7 million |
| Efficiency Ratio | 65.89% | 67.50% | 62.93% |
| Return on Average Assets | 1.45% | 1.25% | 1.58% |
| Return on Average Equity | 11.30% | 9.78% | 13.32% |
| Allowance for Credit Losses (ACL) | $31.0 million | $31.0 million | $29.7 million |
| Nonperforming Assets (NPAs) | $13.0 million | $10.5 million | $4.4 million |
| Tangible Common Equity Ratio | 10.79% | 10.79% | 9.61% |
Material Changes vs. Prior Periods
- Profitability: Net income increased $2.1 million (15.4%) compared to Q4 2025, driven by lower compensation expenses and a reduced provision for credit losses. However, it decreased $1.0 million (6.2%) compared to Q1 2025, primarily due to a significant decline in wealth management fees following the sale of the insurance subsidiary in 2025.
- Asset Quality: Nonperforming assets (NPAs) rose to $13.0 million (0.29% of total assets) from $10.5 million in Q4 2025 and $4.4 million in Q1 2025. This increase was driven by a $2.5 million rise in nonaccrual loans and the addition of a $1.2 million banking office property to Other Real Estate Owned (OREO).
- Loan Portfolio: Loans held for investment decreased $27.7 million (1.1%) from Q4 2025 and $142.4 million (5.4%) from Q1 2025. Declines were observed across residential, commercial real estate, and consumer loan categories, partially offset by growth in home equity loans.
- Investment Portfolio: Investment securities increased $132.5 million from Q4 2025 as the company deployed excess liquidity into higher-yielding securities. The portfolio now consists of $800.6 million in Available-for-Sale (AFS) and $353.3 million in Held-to-Maturity (HTM) securities.
- Expense Management: Noninterest expense decreased $1.5 million from Q4 2025, largely due to a $2.7 million reduction in compensation (performance-based incentives). Compared to Q1 2025, expenses increased $2.7 million, primarily due to the absence of a $4.1 million gain from the sale of an operations center building recorded in the prior year.
Guidance, Outlook, and Risks
- Capital Position: The company remains "well-capitalized" under Basel III standards with a Total Risk-Based Capital ratio of 21.62% and a Common Equity Tier 1 ratio of 19.08%.
- Liquidity: Liquidity is robust, with approximately $1.65 billion in additional liquidity available through federal funds, FHLB borrowings, and the Federal Reserve Discount Window, excluding overnight funds.
- Dividends and Buybacks: The company declared a cash dividend of $0.27 per share. Additionally, it repurchased 63,088 shares of common stock for $2.6 million under its ongoing share repurchase program.
- Interest Rate Sensitivity: Simulation analysis indicates that rising interest rate environments will positively impact net interest income over the next 12-24 months, while falling rates would have a negative impact. The company's Economic Value of Equity (EVE) remains within policy limits across all tested scenarios.
- Risk Factors: 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 notes risks related to cybersecurity, artificial intelligence, and geopolitical events.
Investor Verification Checklist
- Asset Quality Trend: Verify the trajectory of nonperforming assets, which have more than tripled year-over-year, and monitor the allowance for credit losses coverage ratio (currently 1.23% of loans).
- Wealth Management Revenue: Assess the long-term impact of the 2025 insurance subsidiary sale on wealth management fees, which dropped $1.7 million year-over-year.
- Investment Portfolio Valuation: Review the $26.3 million in unrealized pre-tax losses on investment securities and the company's strategy for managing duration and liquidity.
- Expense Run Rate: Confirm if the Q1 2025 gain on the sale of the operations center building was a one-time event and evaluate the sustainability of the current efficiency ratio.
- Capital Deployment: Monitor the company's ability to deploy the $1.65 billion in available liquidity into loan growth or higher-yielding investments to maintain net interest margin.