CCBG earnings increased in the third quarter of 2026 as higher interest income and lower credit costs outweighed declining mortgage banking revenue and deposit fees. Capital City Bank Group reported net income attributable to common shareholders of $16.9 million, or $0.99 per diluted share, on October 20, compared with $16.3 million, or $0.95 per share, in the preceding quarter.
Key Takeaways
- Diluted earnings increased from $0.95 in the second quarter and $0.93 a year earlier.
- Net interest margin widened seven basis points sequentially to 4.42%, despite lower average loan balances.
- A small credit-loss provision benefit helped offset a 5.9% quarterly decline in noninterest income.
Table of Contents
- CCBG earnings benefit from higher securities yields
- Mortgage banking and deposit fees weigh on revenue
- Improved credit quality reduces provision costs
- Conclusion
CCBG earnings benefit from higher securities yields
Capital City Bank Group’s third-quarter 2026 results showed tax-equivalent net interest income of $45.1 million, up from $44.2 million in the second quarter and $43.6 million a year earlier. Net income also exceeded the $16.0 million earned in the third quarter of 2025.
Higher-yielding securities purchases and lower deposit costs supported the improvement in net interest margin. An additional calendar day also contributed to the sequential increase in interest income.
The improvement did not depend on loan growth. Average loans held for investment declined $10.3 million, or 0.4%, from the second quarter, while the bank deployed more liquidity into its securities portfolio.
| Item | Details |
|---|---|
| Return on assets | 1.53% in Q3 2026, compared with 1.48% in Q2. |
| Return on equity | 11.67%, compared with 11.38% in Q2. |
| Quarter-end deposits | $3.667 billion at September 30, down 1.5% from June 30. |
| Loan-loss allowance coverage | 1.22% of loans held for investment, compared with 1.24% at June 30. |
Mortgage banking and deposit fees weigh on revenue
Noninterest income totaled $19.4 million, down $1.2 million from the preceding quarter and 13.2% below a year earlier. Mortgage banking revenue fell $1.0 million sequentially as production volume declined.
Deposit fees decreased $0.5 million from the second quarter. The bank attributed the decline to lower overdraft fees following processing changes intended to better align with industry practices. A $0.5 million increase in wealth management fees provided a partial offset.
Operating costs moved in the opposite direction: noninterest expense fell $0.3 million to $42.3 million, primarily reflecting lower compensation expense.
Improved credit quality reduces provision costs
The bank recorded a $0.1 million credit-loss provision benefit, compared with a $0.9 million expense in the second quarter and a $1.9 million expense a year earlier. That change supported profit even as fee income weakened.
Nonperforming assets declined to $9.7 million at September 30 from $13.4 million at June 30. Annualized net loan charge-offs fell to eight basis points of average loans from 14 basis points in the preceding quarter.
Deposit balances declined seasonally, but the underlying movements differed: quarter-end public-fund balances fell $58.3 million, while core deposits increased $3.9 million.
Conclusion
The quarter’s profit improvement rested on wider interest margins, lower expenses and reduced credit costs rather than expanding loan balances. The fourth-quarter results will provide the next comparison for whether those gains continue to offset weaker fee income.
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