FITZGERALD, Ga.--(BUSINESS WIRE)--Colony Bankcorp, Inc. (NYSE: CBAN) (“Colony” or the “Company”) today reported financial results for the third quarter of 2026. Financial highlights are shown below.

Financial Highlights:

• Net income was $10.5 million, or $0.50 per diluted share, for the third quarter of 2026, compared to $10.9 million, or $0.51 per diluted share, for the second quarter of 2026, and $5.8 million, or $0.33 per diluted share, for the third quarter of 2025.
• Operating net income was $11.6 million, or $0.54 of operating earnings per diluted share, for the third quarter of 2026, compared to $11.0 million, or $0.52 of operating earnings per diluted share, for the second quarter of 2026, and $8.2 million, or $0.47 of operating earnings per diluted share, for the third quarter of 2025. (See Reconciliation of Non-GAAP Measures).
• Provision for credit losses of $1.7 million was recorded in the third quarter of 2026 compared to $1.9 million in the second quarter of 2026, and $900,000 in the third quarter of 2025.
• Total loans, excluding loans held for sale, were $2.48 billion at September 30, 2026, an increase of $12.3 million, or 0.50%, from the prior quarter.
• Total deposits were $2.96 billion and $2.97 billion at September 30, 2026 and June 30, 2026, respectively, a decrease of $14.5 million.
• Mortgage production was $96.5 million, and mortgage sales totaled $69.2 million in the third quarter of 2026 compared to $115.4 million and $67.3 million, respectively, for the second quarter of 2026.
• Small Business Specialty Lending (“SBSL”) closed $29.9 million in Small Business Administration (“SBA”) loans and sold $12.7 million in SBA loans in the third quarter of 2026 compared to $13.0 million and $5.5 million, respectively, for the second quarter of 2026.

The Company also announced that on October 28, 2026, the Board of Directors declared a quarterly cash dividend of $0.12 per share, to be paid on its common stock on November 25, 2026, to shareholders of record as of the close of business on November 11, 2026. The Company had 21,220,149 shares of its common stock outstanding as of October 26, 2026.

“We are pleased to report improved financial performance in the third quarter, driven by solid execution and sustained profitability across our core franchise,” said Heath Fountain, Chief Executive Officer. “The momentum built over recent quarters reflects the resilience of our business model and our focus on disciplined balance sheet management, efficiency, and sound credit quality. As we move through the remainder of the year and complete our partnership with First Reliance, we believe we are well positioned to capitalize on the opportunities that will allow us to deliver consistent results.”

“Loan growth was lower in the third quarter and is reflective of our commitment to pricing discipline in a changing rate environment. Margin continues to improve, which is a result of increasing earning asset yields and consistent pricing on our new and renewed loans. While our long-term target for loan growth remains unchanged, we are likely to see softer growth in the near-term.”

“We previously announced that all necessary regulatory approvals and shareholder approvals have been obtained for our partnership with First Reliance. Both teams have been working to ensure a smooth transition at legal close as well as preparing for our systems conversion and customer integration currently expected in the second quarter of 2027 and we remain on track to successfully achieve our goals.”

“As we look ahead, our outlook remains bright. Uniting our teams and strengths allows us to build on our momentum, sharpen our focus on operational excellence, and deliver even greater long-term value to our shareholders, customers, and communities.”

Balance Sheet

• Total assets were $3.65 billion at September 30, 2026, an increase of $20.3 million from June 30, 2026.
• Total loans, excluding loans held for sale, were $2.48 billion at September 30, 2026, an increase of $12.3 million from June 30, 2026.
• Total deposits were $2.96 billion and $2.97 billion at September 30, 2026 and June 30, 2026, respectively, a decrease of $14.5 million. Decreases were seen in noninterest-bearing demand deposits of $6.8 million and interest-bearing demand deposits of $44.1 million partially offset by increases in savings and money market deposits of $15.1 million and time deposits of $21.4 million, from June 30, 2026 to September 30, 2026.
• Total borrowings at September 30, 2026 were $263.2 million, an increase of $30.0 million compared to June 30, 2026.

Capital

• Colony continues to maintain a strong capital position, with ratios that exceed applicable regulatory minimums required to be considered as “well-capitalized.”
• The Company’s preliminary consolidated tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 10.57%, 14.41%, 16.78%, and 13.50%, respectively, at September 30, 2026.

Third Quarter and Nine-Months Ended September 30, 2026 Results of Operations

• Net interest income, on a tax-equivalent basis, totaled $30.5 million for the third quarter ended September 30, 2026 compared to $22.9 million for the same period in 2025. Net interest income, on a tax-equivalent basis, totaled $89.9 million for the nine months ended September 30, 2026 compared to $66.6 million for the same period in 2025. For both periods, increases occurred in income on interest earning assets which was partially offset by increases in expense on interest bearing liabilities. Income on interest earning assets increased $9.5 million to $46.6 million for the third quarter of 2026 compared to the same period in 2025. Expense on interest bearing liabilities increased $1.9 million to $16.1 million for the third quarter of 2026 compared to the same period in 2025. Income on interest earning assets increased $27.8 million to $137.6 million for the nine months ended September 30, 2026 compared to the same period in 2025. Expense on interest bearing liabilities increased $4.5 million to $47.7 million for the nine months ended September 30, 2026 compared to the same period in 2025.

• Net interest margin for the third quarter of 2026 was 3.59% compared to 3.17% for the third quarter of 2025. Net interest margin for the nine months ended September 30, 2026 was 3.53% compared to 3.07% for the nine months ended September 30, 2025. The increase for both periods was impacted by the Company’s acquisition of TC Bancshares, Inc. in the fourth quarter of 2025, and was also impacted by increases in interest earning asset yields period over period, as well as the decreased cost of funds.
• Noninterest income totaled $12.3 million for the third quarter of 2026, an increase of $2.2 million, or 21.6%, compared to the same period in 2025. Noninterest income totaled $35.1 million for the nine months ended September 30, 2026, an increase of $5.9 million, or 20.1%, compared to the same period in 2025. For both periods, increases occurred in service charges on deposits, mortgage fee income, interchange fees, BOLI income, which included a tax-free gain of $706 thousand in the second quarter of 2026, along with an increase in wealth advisor income and an insurance gain of $813 thousand in the third quarter of 2026 related to a previous branch building fire, both which are included in other noninterest income, partially offset by decreases in gains on sales of SBA loans.
• Noninterest expense totaled $27.6 million for the third quarter of 2026, compared to $24.6 million for the same period in 2025. Noninterest expense totaled $81.8 million for the nine months ended September 30, 2026, compared to $66.8 million for the same period in 2025. Increases for both periods occurred in salaries and employee benefits, occupancy and equipment, information technology expenses and acquisition and integration-related expenses related to the acquisition of TC Bancshares, Inc. which occurred in the fourth quarter of 2025 as well as expenses related to the upcoming merger with First Reliance Bancshares, Inc.

Asset Quality

• Nonperforming assets totaled $25.0 million and $20.9 million at September 30, 2026 and June 30, 2026, respectively, an increase of $4.1 million.
• Other real estate owned and repossessed assets totaled $3.9 million at September 30, 2026 and $2.0 million at June 30, 2026.
• Net loans charged-off were $1.7 million, or 0.27% of average loans for the third quarter of 2026, compared to $1.8 million, or 0.29% for the second quarter of 2026.
• The allowance for credit losses on loans was $22.5 million, or 0.91% of total loans, at September 30, 2026, compared to $22.0 million, or 0.89% of total loans at June 30, 2026.
• The increase in classified and criticized loans is primarily driven by the downgrade of one construction relationship with circumstances unique to the individual borrower.

Subsequent Event: Strategic Sale-Leaseback and Balance Sheet Repositioning

On October 27, 2026, Colony Bank (the “Bank”), a Georgia state-chartered bank and wholly-owned subsidiary of the Company, entered into a Purchase and Sale Agreement for the sale of three retail banking branch properties for an aggregate gross purchase price of approximately $19.9 million. The Bank entered into a 15-year master lease agreement to lease back each property, with Bank options to extend the term for an additional 15 years. Aggregate first-year base rent under the triple-net lease is approximately $1.65 million, subject to 2.0% annual escalations. The Bank will not close any branches or exit any markets in connection with this transaction. The Company estimates that the sale-leaseback transaction will result in an aggregate pre-tax gain of approximately $15 million, which is expected to be offset by realized losses from a planned repositioning of the Bank’s investment securities portfolio. The Bank intends to use available net proceeds to enhance liquidity, support future loan growth, and improve the Company's overall balance sheet flexibility and interest rate risk profile. The combined transactions are expected to be accretive to tangible book value per share and recurring earnings.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, October 29, 2026, to discuss the recent results and answer relevant questions. The conference call can be accessed by dialing 1-833-461-5787 and using the Conference ID: 588 312 883. A replay of the call will be available until Thursday, November 5, 2026. To listen to the replay, dial 1-833-309-1852 and enter the passcode 588 312 883.

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in Fitzgerald, Georgia in 1975, Colony operates locations throughout Georgia and across North Florida, including Tallahassee, Jacksonville, and the Florida Panhandle. Colony Bank provides a consultative approach in offering a range of banking solutions for personal and business customers. In addition to traditional banking services, Colony Bank provides specialized solutions including mortgage lending, government-guaranteed lending, consumer insurance, wealth management, credit cards and merchant services. Colony Bankcorp’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “CBAN.” For more information, please visit www.colony.bank. You can also follow the Company on social media.

Forward-Looking Statements

Certain statements contained in this press release that are not statements of historical fact constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, certain statements may be contained in the Company’s future filings with the Securities and Exchange Commission (the “SEC”), in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to: (i) projections and/or expectations of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; (iv) statements regarding growth strategy, capital management, liquidity and funding, and future profitability; (v) statements relating to the timing, benefits, costs, and synergies of the recently announced acquisition of First Reliance Bancshares, Inc. (“First Reliance”) (the “Merger”); (vi) statements concerning the sale-leaseback transactions and investment securities portfolio repositioning, including their timing, expected proceeds, estimated gains and losses, accounting and tax treatment, intended use of proceeds, continued branch operations, and anticipated effects on earnings, liquidity, capital and tangible book value, and (vii) statements of assumptions underlying such statements. Words such as “may”, “will”, “anticipate”, “assume”, “should”, “support”, “indicate”, “would”, “believe”, “contemplate”, “expect”, “estimate”, “continue”, “further”, “plan”, “point to”, “project”, “could”, “intend”, “target” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: the impact of current and future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, tariffs or trade wars (including the resulting reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), high unemployment rates, inflationary pressures, changes in interest rates (including the impact of volatile interest rates on our financial projections and models) and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; the risk of reductions in benchmark interest rates and the resulting impacts on net interest income; potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; risks arising from negative media coverage and perceived instability in the banking industry and the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company’s net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the Company’s ability to implement its various strategic and growth initiatives; increased competition in the financial services industry, particularly from regional and national institutions, as well as fintech companies and other non-bank financial service providers offering digital, automated or alternative financial products and services; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; changes in the prices, values and sales volumes of residential and commercial real estate; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs, those related to credit card interest rates, and legislative, regulatory or supervisory actions related to so-called “de-banking,” including any new prohibitions, requirements or enforcement priorities that could affect customer relationships, compliance obligations, or operational practices; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in the stock market prices on our investment securities; significant volatility in the markets for equity, fixed income and other asset classes globally or within specific markets; the effects of war or other conflicts, including the ongoing conflicts in the Middle East; major political shifts domestically or internationally (including the potential for retaliatory actions by governments, market participants or clients based on diverging perspectives or otherwise); general risks related to the Company’s merger and acquisition activity, including risks associated with integrating and realizing the expected financial benefits of previous or pending acquisitions, and the Company’s pursuit of future acquisitions; risks associated with the pending Merger, including the risk that the cost savings and any revenue synergies may not be realized or take longer than anticipated to be realized as well as disruption to relationships with customers, suppliers, employees or other business partners relationships; the risk that First Reliance’s business may not be successfully integrated into the Company; the reaction of each of the Company’s and First Reliance’s customers, suppliers, employees or other business partners to the Merger; the risk that the integration of First Reliance’s operations into the operations of the Company will be materially delayed or will be more costly or difficult than expected; the timing and achievement of expected cost reductions following the Merger; the timing and achievement of the recovery of the reduction of tangible book value resulting from the Merger; general competitive, economic, political, and market conditions; the impact of emerging technologies, such as generative artificial intelligence; fraud or misconduct by internal or external actors, and system failures, cybersecurity threats or security breaches and the cost of defending against them; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding debt ceiling and the federal budget; and general competitive, economic, political and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict.

Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” and in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements.

Explanation of Certain Unaudited Non-GAAP Financial Measures

The measures entitled operating noninterest income, operating noninterest expense, operating net income, operating earnings per diluted share, operating return on average assets, operating return on average equity, return on average tangible equity, operating return on average tangible equity, tangible book value per common share, tangible equity to tangible assets, operating efficiency ratio, operating net noninterest expense to average assets, pre-provision net revenue, operating pre-provision net revenue, fully tax-equivalent interest income and net interest income, and the related fully tax-equivalent yields, interest rate spread and net interest margin are not measures recognized under U.S. generally accepted accounting principles (“GAAP”) and therefore are considered non-GAAP financial measures. Operating noninterest income and operating noninterest expense are compared with GAAP noninterest income and noninterest expense, respectively. Operating net income and operating earnings per diluted share are compared with GAAP net income and diluted earnings per share, respectively. Operating return on average assets and operating return on average equity are compared with the corresponding returns calculated using GAAP amounts. Return on average tangible equity and operating return on average tangible equity are compared with return on average equity calculated using GAAP amounts. Tangible book value per common share and tangible equity to tangible assets are compared with book value per common share and total equity to total assets, respectively. Operating efficiency ratio and operating net noninterest expense to average assets are compared with the corresponding unadjusted ratios calculated using GAAP amounts. Pre-provision net revenue and operating pre-provision net revenue are compared with GAAP net income, with income taxes and the provision for credit losses separately added back. Fully tax-equivalent measures are compared with the corresponding income measures or ratios calculated without the tax-equivalent adjustment. Operating noninterest income excludes loss on sales of securities, the tax-free gain related to the BOLI claim, and the insurance gain related to the branch building fire. Operating noninterest expense excludes acquisition-related expenses and loss related to wire fraud incident. Operating net income reflects the exclusion of acquisition-related expenses, loss on sales of securities, the tax-free gain related to the BOLI claim, the insurance gain related to the branch building fire and loss related to the wire fraud incident, together with the related tax effects. Operating returns use operating net income and the applicable average asset or equity denominator. Operating efficiency ratio is operating noninterest expense divided by the sum of net interest income and operating noninterest income. Operating net noninterest expense to average assets is calculated using operating noninterest expense less operating noninterest income, divided by average assets and annualized. Acquisition-related expenses include fees associated with acquisitions and vendor contract buyouts. Acquisition-related expenses were incurred in each period presented; their exclusion does not mean that such expenses are nonrecurring. Operating earnings per diluted share includes the adjustments to operating net income. Tangible book value per common share deducts goodwill and other intangible assets from common equity before dividing by period-end common shares. Tangible equity to tangible assets deducts goodwill and other intangible assets from both total equity and total assets. Return on average tangible equity and operating return on average tangible equity deduct average goodwill and other intangible assets from average equity. Pre-provision net revenue is calculated by adding noninterest income to net interest income before provision for credit losses, and subtracting noninterest expense. Operating pre-provision net revenue is calculated by adding operating noninterest income to net interest income before provision for credit losses, and subtracting operating noninterest expense.

Management uses these non-GAAP financial measures in its analysis of the Company’s performance and believes these presentations provide useful supplemental information. Operating income, expense, earnings and return measures help management and investors assess period-to-period results separately from the specifically identified adjustments. Tangible book value and tangible equity measures show equity after deducting goodwill and other intangible assets. Tangible return measures assess returns relative to the resulting tangible equity base. Pre-provision net revenue shows earnings before income taxes and the provision for credit losses; operating pre-provision net revenue also reflects the specified operating adjustments. Operating efficiency and net noninterest expense ratios show the relationship of adjusted expenses to adjusted revenues or average assets. Fully tax-equivalent measures facilitate comparison of taxable and tax-exempt earning assets. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently. Excluded expenses may recur, and pre-provision net revenue and operating pre-provision net revenue do not reflect credit costs or income taxes.

These disclosures should not be considered an alternative to GAAP. The computations of operating noninterest income, operating noninterest expense, operating net income, operating earnings per diluted share, operating return on average assets, operating return on average equity, return on average tangible equity, operating return on average tangible equity, tangible book value per common share, tangible equity to tangible assets, operating efficiency ratio, operating net noninterest expense to average assets, pre-provision net revenue, operating pre-provision net revenue, fully tax-equivalent interest income and net interest income, and the related fully tax-equivalent yields, interest rate spread and net interest margin, and the reconciliation of these measures to their respective comparable GAAP measures or ratios calculated using GAAP amounts, as described above, are set forth in the tables below.

Colony Bankcorp, Inc.
Reconciliation of Non-GAAP Measures

Colony Bankcorp, Inc.
Reconciliation of Non-GAAP Measures

Colony Bankcorp, Inc.
Selected Financial Information

Colony Bankcorp, Inc.
Selected Financial Information

Colony Bankcorp, Inc.
Average Balance Sheet and Net Interest Analysis