Capital City Bank Group Inc. (NASDAQ:CCBG) is set to fully acquire Capital City Home Loans, LLC (CCHL) following an agreement reached on Monday. The bank, which already owns a 51% majority stake in CCHL, will purchase the remaining 49% interest from BMGBMG, LLC, effective January 1, 2025. This move comes after BMG exercised a put option as per CCHL's operating agreement.
The terms of the agreement dictate that the purchase price will be based on the capital account balances of CCHL's members as of December 31, 2024, although the exact amount has yet to be determined. Upon completion of the transaction, Capital City Bank will have complete ownership of CCHL, a mortgage banking business with 27 offices across the Southeast that offers a variety of residential real estate lending products.
Capital City Bank Group's acquisition of the remaining shares in CCHL is a strategic move that will allow the bank to further consolidate its mortgage banking operations. The bank has been treating CCHL as a consolidated subsidiary since its initial acquisition of a majority stake in 2020. CCHL provides a range of financing options for homebuyers, including conventional loans, construction loans, and government-backed loans such as those offered by the Federal Housing Authority and the U.S. Department of Veterans Affairs.
The integration of CCHL into Capital City Bank Group's full ownership is expected to enhance the bank's service offerings and streamline operations within the mortgage banking sector. The information reported is based on statements from the press release and SEC filings, ensuring an unbiased account of the event.
In other recent news, Capital City Bank Group announced a 9.5% increase in its quarterly cash dividend to $0.23 per share, resulting in an annualized payout of $0.92 per common share. This move signifies the company's confidence in its financial stability and future performance. In other developments, the bank has appointed Lynne Jensen as its new Chief Technology Officer, underlining its commitment to enhancing its technological capabilities.
Capital City Bank's second-quarter earnings have surpassed expectations, leading to Piper Sandler revising its earnings estimates for 2024 and 2025 to $3.03 and $2.68 respectively. However, the firm has downgraded the bank's stock from Overweight to Neutral, despite an increased price target of $34.
InvestingPro Insights
Capital City Bank Group's (NASDAQ:CCBG) decision to fully acquire Capital City Home Loans aligns with its strong financial performance and growth trajectory. According to InvestingPro data, CCBG has demonstrated robust revenue growth, with a 9.14% increase in quarterly revenue as of Q3 2024. This growth is complemented by a healthy operating income margin of 27.67% over the last twelve months.
InvestingPro Tips highlight CCBG's commitment to shareholder value, noting that the company has raised its dividend for 10 consecutive years and maintained payments for 11 years. This consistent dividend policy, coupled with a current dividend yield of 2.43%, may appeal to income-focused investors considering the bank's expansion in the mortgage sector.
The market has responded positively to CCBG's performance and strategic moves, with the stock showing a strong return of 15.48% over the last three months and an impressive 36.73% over the past six months. These returns suggest investor confidence in the bank's growth strategy, including the full acquisition of CCHL.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights on CCBG's financial health and market position. There are 8 more InvestingPro Tips available for Capital City Bank Group, providing a deeper understanding of the company's prospects as it moves to consolidate its mortgage banking operations.
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