Capital City Bank Group is the Tallahassee, Florida-based holding company for Capital City Bank that operates across Florida, Georgia, and Alabama with a community banking franchise emphasizing relationship banking, treasury services, wealth management, and bank card services, and the company is in the middle of a fiscal second quarter that demonstrates the kind of margin pivot the Florida community bank cohort has been waiting for. Q2 2026 net income of $16.3 million, or $0.95 per diluted share, was 3.2 percent above the prior-year quarter's $15.0 million, or $0.88 per diluted share, and the Q2 2026 tax-equivalent net interest income of $44.2 million was 2.3 percent above the prior-year quarter's $43.2 million. The combination of the 4.35 percent Q2 2026 net interest margin, the 1.48 percent Q2 2026 return on average assets, the 11.38 percent Q2 2026 return on average equity, the 21.10 percent Q2 2026 Tier 1 capital ratio, the 0.30 percent Q2 2026 NPAs to total assets, the 0.14 percent Q2 2026 net charge-offs to average loans, the 309.72 percent Q2 2026 ACL to non-performing loans coverage, and the $4.45 billion of Q2 2026 total assets is the cleanest single-sentence read on what the Florida community bank business model is producing, and the combination is the source of the operating-leverage spread the equity offers the buy-side.
The numbers tell the story with the kind of operational detail the Florida community bank equity has been waiting for. The Q2 2026 tax-equivalent net interest income of $44.2 million was 3.0 percent above the Q1 2026 level of $42.9 million and 2.3 percent above the prior-year quarter's $43.2 million. The Q2 2026 net interest margin of 4.35 percent was 11 basis points above the Q1 2026 level of 4.24 percent and 9 basis points above the prior-year quarter's 4.26 percent.
The Q2 2026 net income of $16.3 million was 3.2 percent above the prior-year quarter's $15.0 million and 3.2 percent above the Q1 2026 level's $15.8 million. The Q2 2026 earnings per diluted share of $0.95 was 8.0 percent above the prior-year quarter's $0.88 and 3.3 percent above the Q1 2026 level's $0.92. The H1 2026 net income of $32.1 million was 0.6 percent above the prior-year period's $31.9 million.
The Q2 2026 total assets of $4,450.5 million were 1.5 percent above the prior year-end's $4,385.8 million. The Q2 2026 total deposits of $3,721.0 million were 1.6 percent above the prior year-end's $3,662.3 million. The Q2 2026 noninterest bearing deposits of $1,344.7 million were 7.4 percent above the prior year-end's $1,251.9 million, with the noninterest bearing deposit growth reflecting the relationship banking model. The Q2 2026 interest bearing deposits of $2,376.3 million were 1.4 percent below the prior year-end's $2,410.4 million.
The Q2 2026 short-term borrowings of $46.9 million were 6.4 percent below the prior year-end's $50.1 million. The Q2 2026 subordinated notes payable of $33.3 million were 21.8 percent below the prior year-end's $42.6 million. The Q2 2026 total liabilities of $3,880.4 million were 1.2 percent above the prior year-end's $3,832.9 million.
The Q2 2026 shareowners equity of $570.1 million was 4.1 percent above the prior year-end's $552.9 million, with the shareowners equity growth reflecting the net income retention. The Q2 2026 tangible book value per diluted share of $28.07 was 3.9 percent above the prior year-end's $27.03. The Q2 2026 tangible common equity ratio of 11.03 percent was 24 basis points above the prior year-end's 10.79 percent.
The Q2 2026 asset quality metrics include the 0.30 percent NPAs to total assets ratio (vs. 0.29 percent at March 31, 2026 and 0.24 percent at December 31, 2025), the 0.54 percent NPAs to Loans HFI plus OREO ratio, the 309.72 percent ACL to non-performing loans coverage (vs. 278.19 percent at March 31, 2026), the 0.14 percent net charge-offs to average loans ratio (vs. 0.10 percent at March 31, 2026), and the 0.30 percent nonaccrual loans to total assets ratio. The Q2 2026 nonaccrual loans of $10.0 million were $1.1 million below the March 31, 2026 level of $11.1 million and $1.4 million above the December 31, 2025 level of $8.6 million.
The Q2 2026 capital ratios include the 21.10 percent Tier 1 capital ratio (vs. 20.37 percent at March 31, 2026), the 22.35 percent Total Capital ratio (vs. 21.62 percent at March 31, 2026), the 19.80 percent Common Equity Tier 1 ratio (vs. 19.08 percent at March 31, 2026), the 11.96 percent Leverage ratio (vs. 11.65 percent at March 31, 2026), and the 11.03 percent Tangible Common Equity ratio (vs. 10.79 percent at March 31, 2026).
The question the next four quarters resolve is whether the company can sustain the 4.35 percent net interest margin and the 1.48 percent return on average assets, and whether the asset quality metrics can continue. A Q3 2026 print that continues the net interest margin and the asset quality metrics would confirm the operating profile is sustainable. A Q3 2026 print that shows net interest margin compression or asset quality deterioration would force the market to reprice the equity for a more modest terminal value.