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CAPITAL CITY BANK GROUP INC (CCBG)·Q2 2025 Earnings Summary

Executive Summary

  • CCBG delivered a clean beat vs. Street on both EPS and revenue: Diluted EPS of $0.88 vs. $0.79 consensus and revenue of $62.6M vs. $62.35M consensus; margin expanded and credit costs remained benign, though nonperformers and classified loans edged up sequentially . EPS/revenue consensus per S&P Global: $0.787 and $62.35M; actual $0.88 and $62.58M; see Estimates Context for details.*
  • Net interest margin rose 8 bps q/q to 4.30% on higher investment yields and slightly lower funding costs; tax‑equivalent NII grew 3.9% q/q, while noninterest income was stable; expenses rose due to the Q1 gain on property sale not repeating .
  • Balance sheet mix tilted toward securities and overnight funds; loans contracted 1.1% q/q (EOP) on construction, consumer, and commercial runoff, while deposits fell 2.1% seasonally at quarter‑end; tangible book value/share increased 3.2% q/q to $25.37 and TCE ratio to 10.09% .
  • Post‑quarter, the Board raised the quarterly dividend 8.3% to $0.26/share (annualized $1.04), reinforcing capital strength and shareholder return momentum; 2025 effective tax rate guidance maintained at ~24% .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 4.30% (+8 bps q/q; +28 bps y/y) as new securities purchases at higher yields and lower deposit cost supported spread; tax‑equivalent NII rose to $43.2M (+3.9% q/q; +10% y/y) .
  • Capital strengthened: TCE ratio improved to 10.09% (from 9.61% in Q1) and CET1 to 16.81%; tangible book value/share increased $0.78 to $25.37 (+3.2% q/q) .
  • Management tone confident on “fortress balance sheet” and profitable growth: “sustained revenue growth and continued credit strength… tangible capital ratio increasing to 10.1%” — William G. Smith, Jr., Chairman & CEO .

What Went Wrong

  • Loans declined both average (‑0.5% q/q) and end‑of‑period (‑1.1% q/q), with broad‑based pressure across construction, consumer (indirect auto), and commercial; growth areas (residential, HELOC, CRE) only partially offset .
  • Asset quality mixed: nonperforming assets rose to $6.6M (0.15% of assets) and classified loans increased to $28.6M, driven by downgrades in residential and CRE; allowance coverage stepped up modestly to 1.13% .
  • Expenses rose 9.9% q/q to $42.5M, mainly because Q1 benefitted from a $3.9M net gain on the sale of the operations center which did not recur in Q2; occupancy and compensation also ticked up .

Financial Results

Headline performance vs. prior periods

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Diluted EPS ($)0.83 0.77 0.99 0.88
Net Interest Margin (%)4.02 4.17 4.22 4.30
Efficiency Ratio (%)68.61 69.74 62.93 67.26
Tax-Equivalent NII ($M)39.27 41.10 41.55 43.18
Total Noninterest Income ($M)19.61 18.76 19.91 20.01

Revenue and EPS vs. S&P Global consensus (Q2 2025)

MetricConsensusActualSurprise
Revenue ($M)62.35*62.58*+0.23*
Diluted EPS ($)0.787*0.88 +0.093*

Values marked with * retrieved from S&P Global.

Balance sheet and credit KPIs

KPIQ2 2024Q1 2025Q2 2025
Loans HFI (EOP, $M)2,690.2 2,660.8 2,631.5
Total Deposits (EOP, $M)3,608.6 3,783.9 3,704.9
NCOs / Avg Loans HFI (%)0.18 0.09 0.09
NPAs / Total Assets (%)0.15 0.10 0.15
ACL / Loans HFI (%)1.09 1.12 1.13
TBV / Diluted Share ($)21.69 24.59 25.37
Tangible Common Equity (%)8.91 9.61 10.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateFY 2025~24% (Q1 update) ~24% (reiterated) Maintained
Quarterly Dividend/ShareQ3 2025$0.24 (Q2 dividend rate) $0.26 (announced Aug 28, 2025) Raised

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in our document set; themes below reflect management commentary from the press release and recent quarters.

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Net interest margin trajectoryNIM 4.17%, +5 bps q/q on security yield and lower deposit costs NIM 4.22%, +5 bps q/q; cost of funds 0.84% NIM 4.30%, +8 bps q/q; cost of funds 0.82% Improving
Deposit mix & costSeasonal public funds inflow; remix toward MMA/CDs Average deposits +1.8% q/q; EOP +3.0% on seasonal public funds Avg deposits +0.4% q/q; EOP −2.1% on seasonal public funds decline Stable/seasonal
Credit qualityNCOs 0.25%; NPAs 0.15% of assets NCOs 0.09%; NPAs 0.10% NCOs 0.09%; NPAs 0.15%; classified up to $28.6M Slightly softer
Mortgage/fee incomeMortgage down q/q; wealth mgmt up Mortgage +$0.7M q/q; wealth mgmt +$0.5M Mortgage +$0.4M q/q; wealth mgmt −$0.6M; deposit fees +$0.3M Mixed
Capital & TBVTBV/share +$1.05 q/q; capital ratios higher TCE 9.61%; CET1 16.08% TCE 10.09%; CET1 16.81%; TBV/share $25.37 Strengthening

Management Commentary

  • “Capital City delivered another strong quarter, highlighted by sustained revenue growth and continued credit strength… net interest margin to 4.30%… tangible capital ratio increasing to 10.1%… fortress balance sheet” — William G. Smith, Jr., Chairman & CEO .
  • On revenue drivers and funding: increases in investment securities income from higher‑yield purchases and lower deposit interest expense versus prior year; cost of funds decreased to 82 bps .
  • On expenses: q/q increase driven by the absence of Q1’s $3.9M net gain from the operations center sale, plus modest occupancy and compensation upticks .

Q&A Highlights

  • A Q2 2025 earnings call transcript was not available in our document set; no Q&A details to report. We will update if a transcript is filed subsequently.

Estimates Context

  • Wall Street (S&P Global) consensus for Q2 2025 EPS was $0.787 across 3 estimates; reported EPS was $0.88, a clear beat.*
  • Revenue consensus was $62.35M across 2 estimates; reported revenue was $62.58M, a slight beat.*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat with operating leverage: EPS and revenue exceeded consensus, powered by an 8 bps NIM expansion and 3.9% q/q growth in tax‑equivalent NII; watch for continued security repricing tailwind if funding costs remain contained .
  • Asset quality broadly solid but watch‑items emerging: NPAs and classified loans rose sequentially from low levels; allowance coverage increased to 1.13% with NCOs steady at 9 bps .
  • Capital return trajectory intact: tangible book value/share rose 3.2% q/q to $25.37; post‑quarter dividend lifted to $0.26, signaling confidence in sustainable earnings/capital build .
  • Balance sheet mix shift continues: lower loans (construction, consumer, commercial) offset by growth in residential, HELOC and CRE; higher securities and overnight funds bolster liquidity with duration ~2.1–2.7 years .
  • Expense normalization likely as Q1’s one‑time real estate gain rolls off; near‑term focus on maintaining efficiency ratio amid investment in software/maintenance and wage/benefit inflation .
  • Near‑term trading implications: margin expansion and dividend hike are supportive; monitor credit migration (classified loans/NPAs) and seasonal deposit flows into H2 for stock narrative catalysts .