Capital City Bank Group(CCBG) - 2025 Q3 - Quarterly Results

Executive Summary & Quarter Highlights Quarter Highlights (Q3 2025 vs Q2 2025) Capital City Bank Group reported strong Q3 2025 results, with increased net income, robust ROA and ROE, and revenue growth | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income Attributable to Common Shareowners | $16.0 million | $15.0 million | $13.1 million | | Diluted EPS | $0.93 | $0.88 | $0.77 | | Return on Average Assets (ROA) | 1.47% | - | - | | Return on Average Equity (ROE) | 11.67% | - | - | | Tangible Book Value per Diluted Share Increase | $1.01 (4.0%) | - | - | - Revenue growth was driven by continued net interest margin expansion and higher noninterest income[3] | Metric (Q3 2025 vs Q2 2025) | Value | Change | | :-------------------------------- | :---- | :----- | | Tax-equivalent Net Interest Income | $43.6 million | Up $0.4 million | | Net Interest Margin | 4.34% | Up 4 basis points | | Cost of Funds | 78 basis points | Down 4 basis points | | Provision for Credit Losses | $1.9 million | Up $1.3 million | | Net Loan Charge-offs (annualized) | 18 basis points | - | | Allowance Coverage Ratio | 1.17% | Up from 1.13% | | Noninterest Income | Up $2.3 million | Up 11.6% | | Noninterest Expense | Up $0.4 million | Up 0.9% | | Loan Balances (average) | Down $46.4 million | Down 1.7% | | Deposit Balances (average) | Down $68.4 million | Down 1.9% | | Noninterest Bearing Deposits (% of total deposits) | 36.4% | - | Discussion of Operating Results Net Interest Income/Net Interest Margin Net interest income and margin grew, driven by increased investment securities income and lower interest expense | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Tax-equivalent Net Interest Income | $43.6M | $43.2M | $40.3M | $128.4M | $118.0M | | Net Interest Margin | 4.34% | 4.30% | 4.12% | 4.28% | 4.05% | | Cost of Funds | 78 bps | 82 bps | 93 bps | - | - | | Cost of Deposits | 80 bps | 81 bps | 92 bps | - | - | - The increase in net interest income was primarily due to a $3.0 million increase in investment securities income (YoY) and a $0.4 million decrease in interest expense (QoQ), driven by new investment purchases at higher yields and gradual decreases in deposit rates[5] - Net interest margin improved by 4 basis points QoQ and 22 basis points YoY, reaching 4.34% in Q3 2025, reflecting a higher yield in the investment portfolio and lower deposit costs[7] Provision for Credit Losses Provision for credit losses increased significantly in Q3 2025, but year-to-date provision remained comparable | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------ | :------- | :------- | | Provision for Credit Losses | $1.9 million | $0.6 million | $1.2 million | $3.3 million | $3.3 million | Noninterest Income and Noninterest Expense Noninterest income grew substantially in Q3 2025, driven by an insurance subsidiary sale; noninterest expense slightly increased | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------- | :------ | :------ | :------ | :------- | :------- | | Noninterest Income | $22.3 million | $20.0 million | $19.5 million | $62.3 million | $57.2 million | | Noninterest Expense | $42.9 million | $42.5 million | $42.9 million | $124.2 million | $123.5 million | - The $2.3 million (11.6%) QoQ increase in noninterest income was primarily driven by a $1.2 million increase in other income (including a $0.7 million gain from the sale of an insurance subsidiary), $0.6 million in mortgage banking revenues, and $0.6 million in deposit fees[10] - The $0.4 million (0.9%) QoQ increase in noninterest expense was due to an $0.8 million increase in other expense (higher miscellaneous and professional fees), partially offset by a $0.4 million decrease in compensation expense[13] Income Taxes Income tax expense and effective tax rate increased due to reduced tax benefits; a 24% annual rate is expected for 2025 | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------ | :------ | :------ | :------ | :------- | :------- | | Income Tax Expense | $5.1 million | $5.0 million | $3.0 million | $15.3 million | $9.7 million | | Effective Tax Rate | 24.4% | 24.9% | 19.1% | 24.2% | 20.1% | - The increase in the effective tax rate compared to prior year periods was driven by a lower level of tax benefit accrued from a solar tax credit equity fund[15] - The company expects its annual effective tax rate to approximate 24% for 2025, absent discrete items or new tax credit investments[15] Discussion of Financial Condition Earning Assets Average earning assets slightly decreased QoQ, mainly from lower loans HFI and investment securities, partially offset by overnight funds | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------- | :---------------- | :---------------- | :---------------- | | Total Earning Assets | $3.982 billion | $4.032 billion | $3.922 billion | | Change QoQ | Down $50.5 million (1.3%) | - | - | | Change vs Q4 2024 | Up $59.6 million (1.5%) | - | - | - The QoQ change in earning asset mix reflected a $46.4 million decrease in loans HFI and a $14.1 million decrease in investment securities, partially offset by a $7.4 million increase in overnight funds sold and a $2.6 million increase in loans HFS[16] Loans Held for Investment (HFI) Loans HFI decreased on average and end-of-period, with declines in construction and consumer loans, partially offset by home equity growth | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------------- | :---------------- | :---------------- | :---------------- | | Average Loans HFI | Down $46.4 million (1.8%) | - | - | | Average Loans HFI vs Q4 2024 | Down $71.2 million (2.7%) | - | - | | EOP Loans HFI (Sep 30, 2025) | $2.582 billion | Down $49.5 million (1.9%) QoQ | Down $69.5 million (2.6%) vs Dec 31, 2024 | - The QoQ decline in average loans HFI was primarily in construction loans ($22.4 million), consumer loans ($10.4 million), and commercial real estate loans ($8.7 million), partially offset by a $2.0 million increase in home equity loans[17] Allowance for Credit Losses Allowance for credit losses for loans HFI slightly increased due to qualitative adjustments; net charge-offs rose QoQ but fell YTD | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Allowance for Credit Losses (HFI) | $30.2 million | $29.9 million | $29.3 million | | Allowance as % of Loans HFI | 1.17% | 1.13% | 1.10% | | Net Loan Charge-offs (Q3 2025) | 18 bps of average loans | 9 bps (Q2 2025) | - | | Net Loan Charge-offs (YTD 2025) | 12 bps | - | 20 bps (YTD 2024) | - The slight increase in the allowance was primarily attributable to qualitative factor adjustments that were partially offset by lower loan balances[19] Credit Quality Nonperforming assets and nonaccrual loans significantly increased in Q3 2025, mainly from home equity loans, while classified loans decreased QoQ | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Nonperforming Assets (NPAs) | $10.0 million | $6.6 million | $6.7 million | | NPAs as % of Total Assets | 0.23% | 0.15% | 0.15% | | Nonaccrual Loans | $8.2 million | $6.4 million | $6.3 million | | Classified Loans | $26.5 million | $28.6 million | $19.9 million | - The increase in nonaccrual loans was primarily attributable to two home equity loans totaling $1.8 million[20] Deposits Total deposits decreased due to seasonal public fund reductions, partially offset by core deposit growth | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------- | :---------------- | :---------------- | :---------------- | | Average Total Deposits | $3.612 billion | Down $68.4 million (1.86%) QoQ | Up $11.9 million (0.33%) vs Q4 2024 | | EOP Total Deposits (Sep 30, 2025) | $3.615 billion | Down $89.9 million (2.4%) QoQ | Down $57.1 million (1.6%) vs Dec 31, 2024 | | Public Funds (EOP) | $497.9 million | $596.6 million (Jun 30, 2025) | $660.9 million (Dec 31, 2024) | - The decrease in deposits compared to both prior periods was due to a decline in public fund deposits, partially offset by growth in core deposits[22] Liquidity The company maintained strong liquidity with increased average net overnight funds sold and substantial additional capacity from various sources | Metric | Q3 2025 (Average) | Q2 2025 (Average) | Q4 2024 (Average) | | :-------------------------- | :---------------- | :---------------- | :---------------- | | Average Net Overnight Funds Sold | $356.2 million | $348.8 million | $298.3 million | | Additional Liquidity Capacity | ~$1.625 billion | - | - | | Investment Portfolio Weighted-Average Maturity | 2.66 years | - | - | | Investment Portfolio Duration | 2.15 years | - | - | | Available-for-Sale Portfolio Net Unrealized After-Tax Loss | $11.2 million | - | - | - The company had the ability to generate approximately $1.625 billion in additional liquidity through various sources including federal funds purchased lines, Federal Home Loan Bank borrowings, the Federal Reserve Discount Window, and brokered deposits[25] Capital Shareowners' equity and all regulatory capital ratios significantly improved, exceeding 'well-capitalized' thresholds, driven by net income and reduced AOCI | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Shareowners' Equity | $540.6 million | $526.4 million | $495.3 million | | Total Risk-Based Capital Ratio | 20.59% | 19.60% | 18.64% | | Common Equity Tier 1 Capital Ratio | 17.73% | 16.81% | 15.54% | | Leverage Ratio | 11.64% | 11.14% | 11.05% | | Tangible Common Equity Ratio | 10.66% | 10.09% | 9.51% | - Shareowners' equity was positively impacted by net income attributable to shareowners of $47.9 million and a net $7.7 million decrease in the accumulated other comprehensive loss for the first nine months of 2025[27] - All regulatory capital ratios exceeded the thresholds to be designated as 'well-capitalized' under the Basel III capital standards at September 30, 2025[28] About Capital City Bank Group, Inc. Company Overview Capital City Bank Group, Inc. is a Florida-headquartered publicly traded financial holding company offering comprehensive banking services across three states - Capital City Bank Group, Inc. (NASDAQ: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida, with approximately $4.3 billion in assets[30] - The company provides a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, and securities brokerage services[30] - Its bank subsidiary, Capital City Bank, founded in 1895, operates 62 banking offices and 108 ATMs/ITMs in Florida, Georgia, and Alabama[30] FORWARD-LOOKING STATEMENTS Disclaimer on Future Results Forward-looking statements are subject to uncertainties and risks, which could cause actual results to differ materially due to economic, regulatory, and operational factors - Forward-looking statements are based on current plans and expectations that are subject to uncertainties and risks, which could cause future results to differ materially[31] - Key factors that could cause actual results to differ include changes in trade, monetary, and fiscal policies, inflation, interest rate fluctuations, economic conditions, legal and regulatory developments, and technological changes[31] - The company assumes no obligation to update forward-looking statements or the reasons why actual results could differ, except as required by law[31] USE OF NON-GAAP FINANCIAL MEASURES Non-GAAP Reconciliation Non-GAAP measures like tangible common equity and book value per share are presented to compare capital adequacy by excluding goodwill and intangibles - The company presents tangible common equity ratio and tangible book value per diluted share, which remove the effect of goodwill and other intangibles resulting from merger and acquisition activity[33] - These non-GAAP measures are considered useful to investors for comparing capital adequacy to other companies in the industry[33] | (Dollars in Thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Shareowners' Equity (GAAP) | $540,635 | $526,423 | $495,317 | $476,499 | | Less: Goodwill and Other Intangibles (GAAP) | 89,095 | 92,693 | 92,773 | 92,813 | | Tangible Shareowners' Equity (non-GAAP) | 451,540 | 433,730 | 402,544 | 383,686 | | Total Assets (GAAP) | 4,323,774 | 4,391,753 | 4,461,233 | 4,225,316 | | Less: Goodwill and Other Intangibles (GAAP) | 89,095 | 92,693 | 92,773 | 92,813 | | Tangible Assets (non-GAAP) | $4,234,679 | $4,299,060 | $4,232,159 | $4,132,503 | | Tangible Common Equity Ratio (non-GAAP) | 10.66% | 10.09% | 9.51% | 9.28% | | Actual Diluted Shares Outstanding (GAAP) | 17,115,336 | 17,097,986 | 17,018,122 | 16,980,686 | | Tangible Book Value per Diluted Share (non-GAAP) | $26.38 | $25.37 | $23.65 | $22.60 | EARNINGS HIGHLIGHTS Earnings Highlights Table This table summarizes key earnings, performance, capital adequacy, asset quality, and stock metrics for Q3 and YTD 2025, with comparative data | (Dollars in thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 (YTD) | Sep 30, 2024 (YTD) | | :------------------------------------------ | :----------- | :----------- | :----------- | :----------------- | :----------------- | | EARNINGS | | | | | | | Net Income Attributable to Common Shareowners | $15,950 | $15,044 | $13,118 | $47,852 | $39,825 | | Diluted Net Income Per Share | $0.93 | $0.88 | $0.77 | $2.80 | $2.35 | | PERFORMANCE | | | | | | | Return on Average Assets (annualized) | 1.47 % | 1.38 % | 1.24 % | 1.47 % | 1.26 % | | Return on Average Equity (annualized) | 11.67 | 11.44 | 10.87 | 12.12 | 11.39 | | Net Interest Margin | 4.34 | 4.30 | 4.12 | 4.28 | 4.05 | | Noninterest Income as % of Operating Revenue | 33.89 | 31.67 | 32.67 | 32.67 | 32.69 | | Efficiency Ratio | 65.09 % | 67.26 % | 71.81 % | 65.11 % | 70.49 % | | CAPITAL ADEQUACY | | | | | | | Tier 1 Capital | 19.33 % | 18.38 % | 16.77 % | 19.33 % | 16.77 % | | Total Capital | 20.59 | 19.60 | 17.97 | 20.59 | 17.97 | | Leverage | 11.64 | 11.14 | 10.89 | 11.64 | 10.89 | | Common Equity Tier 1 | 17.73 | 16.81 | 14.88 | 17.73 | 14.88 | | Tangible Common Equity (1) | 10.66 | 10.09 | 9.28 | 10.66 | 9.28 | | Equity to Assets | 12.50 % | 11.99 % | 11.28 % | 12.50 % | 11.28 % | | ASSET QUALITY | | | | | | | Allowance as % of Non-Performing Loans | 368.54 % | 463.01 % | 452.64 % | 368.54 % | 452.64 % | | Allowance as a % of Loans HFI | 1.17 | 1.13 | 1.11 | 1.17 | 1.11 | | Net Charge-Offs as % of Average Loans HFI | 0.18 | 0.09 | 0.19 | 0.12 | 0.20 | | Nonperforming Assets as % of Loans HFI and OREO | 0.39 | 0.25 | 0.27 | 0.39 | 0.27 | | Nonperforming Assets as % of Total Assets | 0.23 % | 0.15 % | 0.17 % | 0.23 % | 0.17 % | | STOCK PERFORMANCE | | | | | | | Close | $41.79 | $39.35 | $35.29 | $41.79 | $35.29 | | Average Daily Trading Volume | 42,187 | 27,397 | 37,151 | 31,559 | 32,720 | CONSOLIDATED STATEMENT OF FINANCIAL CONDITION Balance Sheet Data This table presents the consolidated statement of financial condition, detailing assets, liabilities, and equity, showing decreased assets and deposits, and increased shareowners' equity | (Dollars in thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | ASSETS | | | | | | | Total Cash and Cash Equivalents | $465,899 | $473,402 | $524,563 | $391,854 | $345,210 | | Total Investment Securities | 984,137 | 999,298 | 980,715 | 972,899 | 904,643 | | Loans Held for Investment, Net | 2,551,805 | 2,601,628 | 2,631,036 | 2,622,299 | 2,653,260 | | Total Assets | $4,323,774 | $4,391,753 | $4,461,233 | $4,324,932 | $4,225,316 | | LIABILITIES | | | | | | | Total Deposits | 3,614,912 | 3,704,853 | 3,783,890 | 3,671,977 | 3,579,077 | | Total Liabilities | 3,783,139 | 3,865,330 | 3,948,658 | 3,829,615 | 3,742,000 | | SHAREOWNERS' EQUITY | | | | | | | Total Shareowners' Equity | 540,635 | 526,423 | 512,575 | 495,317 | 476,499 | | Book Value Per Diluted Share | $31.59 | $30.79 | $30.02 | $29.11 | $28.06 | | Tangible Book Value Per Diluted Share | 26.38 | 25.37 | 24.59 | 23.65 | 22.60 | CONSOLIDATED STATEMENT OF OPERATIONS Income Statement Data This table details the consolidated statement of operations, including interest income/expense, net interest income, noninterest income/expense, and net income for Q3 and YTD 2025 | (Dollars in thousands, except per share data) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | :------- | :------- | | INTEREST INCOME | | | | | | | | | Total Interest Income | $51,431 | $51,459 | $49,782 | $49,743 | $49,328 | $152,672 | $144,914 | | INTEREST EXPENSE | | | | | | | | | Total Interest Expense | 7,874 | 8,275 | 8,235 | 8,640 | 9,117 | 24,384 | 27,079 | | Net Interest Income | 43,557 | 43,184 | 41,547 | 41,103 | 40,211 | 128,288 | 117,835 | | Provision for Credit Losses | 1,881 | 620 | 768 | 701 | 1,206 | 3,269 | 3,330 | | Net Interest Income after Provision for Credit Losses | 41,676 | 42,564 | 40,779 | 40,402 | 39,005 | 125,019 | 114,505 | | NONINTEREST INCOME | | | | | | | | | Total Noninterest Income | 22,331 | 20,014 | 19,907 | 18,760 | 19,513 | 62,252 | 57,216 | | NONINTEREST EXPENSE | | | | | | | | | Total Noninterest Expense | 42,916 | 42,538 | 38,701 | 41,782 | 42,921 | 124,155 | 123,533 | | OPERATING PROFIT | 21,091 | 20,040 | 21,985 | 17,380 | 15,597 | 63,116 | 48,188 | | Income Tax Expense | 5,141 | 4,996 | 5,127 | 4,219 | 2,980 | 15,264 | 9,705 | | Net Income | 15,950 | 15,044 | 16,858 | 13,161 | 12,617 | 47,852 | 38,483 | | NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS | $15,950 | $15,044 | $16,858 | $13,090 | $13,118 | $47,852 | $39,825 | | PER COMMON SHARE | | | | | | | | | Diluted Net Income | 0.93 | 0.88 | 0.99 | 0.77 | 0.77 | 2.80 | 2.35 | | Cash Dividend | $0.26 | $0.24 | $0.24 | $0.23 | $0.23 | $0.74 | $0.65 | ALLOWANCE FOR CREDIT LOSSES ("ACL") AND CREDIT QUALITY ACL and Credit Quality Data This table details the Allowance for Credit Losses (ACL) for HFI loans, unfunded commitments, and debt securities, including charge-offs, recoveries, and key credit quality indicators | (Dollars in thousands, except per share data) | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | :------- | :------- | | ACL - HELD FOR INVESTMENT LOANS | | | | | | | | | Balance at End of Period | $30,202 | $29,862 | $29,734 | $29,251 | $29,836 | $30,202 | $29,836 | | As a % of Loans HFI | 1.17% | 1.13% | 1.12% | 1.10% | 1.11% | 1.17% | 1.11% | | As a % of Nonperforming Loans | 368.54% | 463.01% | 692.10% | 464.14% | 452.64% | 368.54% | 452.64% | | ACL - UNFUNDED COMMITMENTS | | | | | | | | | Balance at End of Period | 2,095 | 1,738 | 1,832 | 2,155 | 2,522 | 2,095 | 2,522 | | CHARGE-OFFS | | | | | | | | | Total Charge-Offs | $1,968 | $1,498 | $1,611 | $2,504 | $2,283 | $5,077 | $6,878 | | Total Recoveries | $758 | $908 | $1,011 | $834 | $1,021 | $2,677 | $2,883 | | NET CHARGE-OFFS (RECOVERIES) | $1,210 | $590 | $600 | $1,670 | $1,262 | $2,400 | $3,995 | | Net Charge-Offs as a % of Average Loans HFI | 0.18% | 0.09% | 0.09% | 0.25% | 0.19% | 0.12% | 0.20% | | CREDIT QUALITY | | | | | | | | | Nonaccruing Loans | $8,195 | $6,449 | $4,296 | $6,302 | $6,592 | | | | Total Nonperforming Assets ("NPAs") | $10,026 | $6,581 | $4,428 | $6,669 | $7,242 | | | | NPAs as a % of Total Assets | 0.23% | 0.15% | 0.10% | 0.15% | 0.17% | | | AVERAGE BALANCE AND INTEREST RATES Average Balance and Interest Rates Data This table details average balances, interest income/expense, and rates for earning assets and interest-bearing liabilities for Q3 2025 and comparative periods | (Dollars in thousands) | Q3 2025 Average Balance | Q3 2025 Average Interest | Q3 2025 Rate | Q2 2025 Average Balance | Q2 2025 Average Interest | Q2 2025 Rate | Q3 2024 Average Balance | Q3 2024 Average Interest | Q3 2024 Rate | | :------------------------------------------ | :---------------------- | :----------------------- | :----------- | :---------------------- | :----------------------- | :----------- | :---------------------- | :----------------------- | :----------- | | ASSETS: | | | | | | | | | | | Loans Held for Investment (1) | 2,606,213 | 39,894 | 6.07% | 2,652,572 | 40,436 | 6.11% | 2,693,533 | 40,985 | 6.09% | | Total Investment Securities | 993,880 | 7,193 | 2.88% | 1,007,981 | 6,683 | 2.65% | 908,456 | 4,158 | 1.82% | | Federal Funds Sold and Interest Bearing Deposits | 356,161 | 3,964 | 4.42% | 348,787 | 3,909 | 4.49% | 256,855 | 3,514 | 5.44% | | Total Earning Assets | $3,981,530 | $51,476 | 5.12% | $4,032,008 | $51,503 | 5.12% | $3,883,414 | $49,377 | 5.06% | | LIABILITIES: | | | | | | | | | | | Total Interest Bearing Deposits | 2,297,771 | 7,265 | 1.25% | 2,338,403 | 7,405 | 1.27% | 2,239,729 | 8,223 | 1.46% | | Total Interest Bearing Liabilities | $2,375,753 | $7,874 | 1.32% | $2,424,236 | $8,275 | 1.37% | $2,323,210 | $9,117 | 1.56% | | Interest Rate Spread | | $43,602 | 3.81% | | $43,228 | 3.75% | | $40,260 | 3.49% | | Net Interest Margin | | $43,602 | 4.34% | | $43,228 | 4.30% | | $40,260 | 4.12% |