Capital City Bank Group profit rises 6.21% from a year earlier as margin expands and credit losses retreat

Capital City Bank Group, Inc. reported third-quarter 2026 net income attributable to common shareowners of $16.9 million, or $0.99 per diluted share, against $16.0 million, or $0.93, a year earlier, a 6.21% increase. Profit rose 4.07% from the second quarter's $16.3 million, or $0.95 a share. The Tallahassee, Florida-based parent of Capital City Bank filed the figures in a Form 8-K earnings release on October 20, 2026.

Margin expansion carries a quarter of falling fees

Tax-equivalent net interest income of $45.1 million compared with $43.6 million a year earlier, a 3.44% increase, and with $44.2 million in the second quarter. The release attributes the gain to higher investment-securities income, lower deposit interest expense and one additional calendar day. The release puts the net interest margin at 4.42%, compared with 4.35% in the second quarter and 4.34% a year earlier, with the earning-asset yield at 5.15% and the cost of funds at 73 basis points, down two basis points sequentially. Nine-month net interest income reached $132.2 million against $128.4 million, and the nine-month margin of 4.34% compared with 4.28%.

Fees moved the other way. Noninterest income of $19.4 million fell $1.2 million, or 5.9%, from the second quarter and $2.9 million, or 13.2%, from a year earlier. Mortgage banking revenue was down $1.1 million and deposit fees $700,000 year over year, and the year-earlier quarter included a $700,000 gain on the sale of the insurance subsidiary. Noninterest expense decreased $300,000, or 0.8%, from the second quarter and $600,000, or 1.4%, from a year earlier, leaving the efficiency ratio at 65.63% against 65.09%.

Credit becomes a small benefit as public funds drain deposits

The quarter carried a provision benefit for credit losses rather than an expense: $100,000, against a $900,000 expense in the second quarter and $1.9 million a year earlier, while the nine-month provision fell to $1.6 million from $3.3 million. Net charge-offs were 8 basis points of average loans, annualized, against 14 basis points and 18 basis points in the two comparison periods. Nonperforming assets totaled $9.7 million, or 0.22% of total assets, down $3.7 million from the second quarter's $13.4 million, and the allowance for credit losses was $30.4 million, or 1.22% of loans held for investment.

The balance sheet contracted slightly. Total assets were $4.4 billion at September 30, 2026, and the release states its tables in thousands of dollars. Total deposits of $3.667 billion were down $54.4 million, or 1.5%, from the second quarter as public funds fell $58.3 million on seasonal NOW-account declines, partly offset by $3.9 million of core growth. Loans held for investment fell $10.1 million, or 0.4%, sequentially, and $56.4 million, or 2.2%, in the first nine months of 2026, led by commercial real estate.

Capital ratios rise while unrealized losses linger

Shareowners' equity was $573.9 million, and the regulatory ratios all rose: the total risk-based capital ratio was 22.99%, common equity tier 1 was 20.43% and the leverage ratio was 12.31%, against 22.35%, 19.80% and 11.96% at June 30. Tangible book value per diluted share, a non-GAAP measure, was $28.26 versus $28.07 at June 30 and $27.03 at December 31, 2025.

The securities book remains the drag. The available-for-sale portfolio carried a net unrealized after-tax loss of $23.1 million, or 2.7% of book value, and the company said an unrealized held-to-maturity loss of $16.0 million after tax would put its adjusted tangible capital ratio at 10.88%. Capital City repurchased 63,088 shares for $2.6 million in the first nine months and paid $13.9 million of common dividends, or $0.81 a share.

A tax-rate outlook and the next dated document

The one forward-looking number in the release is the tax rate. Income tax expense was $5.2 million, an effective rate of 23.6%, against 23.4% in the second quarter and 24.4% a year earlier, and the company said it expects its annual effective tax rate to approximate 23-24% for 2026 absent discrete items or new tax credit investments.

William G. Smith, Jr., chairman and chief executive, said the quarter "delivered strong earnings and solid momentum across our Company," and added: "Continued net interest margin expansion and improved credit quality contributed meaningfully to our third quarter results. We remain well positioned to build on this momentum and finish the year strong."

The quarter shows earnings growth coming from the spread and from credit rather than from fees, which fell at a double-digit year-over-year rate. The release says nothing about the fourth quarter, announces no conference call and offers no comparison with analyst estimates; no consensus figure or market reaction appears here. The next document is the Form 10-Q for the quarter ended September 30, 2026, which will carry the allowance rollforward and any subsequent-event disclosure.