Capital City Bank stock target cut to $43 at Keefe, Bruyette & Woods

Published 23/04/2025, 13:32
Capital City Bank stock target cut to $43 at Keefe, Bruyette & Woods

On Wednesday, Keefe, Bruyette & Woods analyst Wood Lay adjusted the price target for Capital City Bank Group (NASDAQ:CCBG) to $43.00, a decrease from the previous $44.00, while maintaining an Outperform rating on the bank’s shares. The adjustment comes in the wake of a strong first-quarter performance in 2025, where the bank saw pre-provision net revenue (PPNR) improve significantly across various segments.

Lay noted that Capital City Bank’s net interest margin (NIM) expanded by 5 basis points from the last quarter to 4.22%. This increase was accompanied by a rise in fees, thanks to positive developments in mortgage and wealth management services. The bank also demonstrated clean credit trends and continued capital accumulation, boasting a tangible common equity (TCE) ratio of 9.6%. Furthermore, the bank’s return on assets (ROA) for the first quarter stood at a robust 1.3%.

The analyst’s optimism is reflected in the revised earnings estimates for the years 2025 and 2026. The forecast for 2025 earnings has been increased to $3.23 per share, up from $3.05, and the 2026 earnings estimate has been raised to $3.30 per share from the earlier prediction of $3.20. These revisions are primarily based on a better-than-expected net interest income (NII).

Despite the positive performance indicators and raised earnings estimates, the price target has been adjusted downward to $43. This new target reflects a 13.0 times multiple of the bank’s projected 2026 earnings and 1.75 times its tangible book value (TBV). The bank has demonstrated consistent shareholder returns, maintaining dividend payments for 12 consecutive years with a current yield of 2.66%. Lay’s commentary suggests that Capital City Bank’s high-quality business model is expected to stand out even amidst the current uncertain macroeconomic environment. InvestingPro subscribers can access 7 additional key insights about CCBG’s financial health and growth prospects.

In other recent news, Capital City Bank Group, Inc. has announced notable changes within its executive team. Ramsay Sims has been appointed as the new chief banking officer, a position created to enhance the bank’s strategic focus on growth and operational efficiency. Sims, who previously served as the chief lending officer, will now oversee both the lending and deposit functions. This appointment has led to William Smith stepping into the role of chief lending officer, where he will focus on advancing the bank’s lending strategies under Sims’ guidance. The bank’s Chairman, President, and CEO, Bill Smith, expressed confidence in these appointments, citing Sims’ extensive experience and Smith’s deep market understanding as crucial for the bank’s future growth. Sims joined Capital City Bank in 2010, bringing a background in public finance, corporate tax-exempt finance, and a tenure with GE Capital. William Smith, who began his career at the bank in 2007, has held key positions, including market president for Leon County, and is involved in various community service activities. These executive changes are part of the bank’s ongoing efforts to strengthen its strategic direction and operational efficiency.

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