Colony Bankcorp, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income was $10.5 million ($0.50 per diluted share) for the third quarter of 2026, compared to $10.9 million ($0.51 per share) in the second quarter of 2026 and $5.8 million ($0.33 per share) in the third quarter of 2025.
• Operating net income was $11.6 million ($0.54 per diluted share) for the third quarter of 2026, compared to $11.0 million ($0.52 per share) in the second quarter of 2026 and $8.2 million ($0.47 per share) in the third quarter of 2025.
• Net interest income on a tax-equivalent basis totaled $30.5 million for the third quarter of 2026, an increase from $22.9 million in the third quarter of 2025. For the nine months ended September 30, 2026, net interest income was $89.9 million, compared to $66.6 million in the same period in 2025.
• Net interest margin was 3.59% for the third quarter of 2026, up from 3.17% in the third quarter of 2025. For the nine months ended September 30, 2026, the margin was 3.53%, compared to 3.07% in the prior year period.
• Noninterest income totaled $12.3 million for the third quarter of 2026, an increase of $2.2 million (21.6%) compared to the third quarter of 2025. For the nine months ended September 30, 2026, noninterest income was $35.1 million, up $5.9 million (20.1%) from the prior year period.
• Noninterest expense was $27.6 million for the third quarter of 2026, compared to $24.6 million in the third quarter of 2025. For the nine months ended September 30, 2026, noninterest expense totaled $81.8 million, compared to $66.8 million in the same period in 2025.
• Provision for credit losses was $1.7 million for 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 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 (0.50%) from the prior quarter.
• Total deposits were $2.96 billion at September 30, 2026, a decrease of $14.5 million from $2.97 billion at June 30, 2026.
• Total borrowings were $263.2 million at September 30, 2026, an increase of $30.0 million compared to June 30, 2026.
• The allowance for credit losses on loans was $22.5 million (0.91% of total loans) at September 30, 2026, compared to $22.0 million (0.89%) at June 30, 2026.
• Return on average assets was 1.14% for the third quarter of 2026, compared to 0.75% in the third quarter of 2025. Return on average equity was 10.66% for the third quarter of 2026, compared to 7.80% in the third quarter of 2025.
• Operating efficiency ratio was 61.89% for the third quarter of 2026, compared to 75.06% in the third quarter of 2025.

Guidance and Future Outlook:

• Management indicated that loan growth was lower in the third quarter due to pricing discipline in a changing rate environment, with likely softer growth in the near term, though the long-term target remains unchanged.
• The Company expects to complete its partnership with First Reliance Bancshares, Inc., with systems conversion and customer integration currently expected in the second quarter of 2027.
• Management stated the outlook remains bright, anticipating that uniting teams will allow for operational excellence and greater long-term value delivery.
• The sale-leaseback transaction is expected to be accretive to tangible book value per share and recurring earnings.

Business Segments and Product Lines:

• Banking Division: Generated net income of $10.2 million for the third quarter of 2026. Total assets were $3.54 billion.
• Mortgage Banking Division: Reported a net loss of $58,000 for the third quarter of 2026, compared to a net income of $337,000 in the second quarter of 2026. 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, in the second quarter of 2026.
• Small Business Specialty Lending (SBSL): Closed $29.9 million in 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, in the second quarter of 2026. The division reported net income of $387,000 for the third quarter of 2026.
• Noninterest income increases were driven by service charges on deposits, mortgage fee income, interchange fees, BOLI income, wealth advisor income, and an insurance gain of $813,000 related to a previous branch building fire, partially offset by decreases in gains on sales of SBA loans.

Market and Competitive Landscape:

• The Company operates in Georgia and North Florida, including Tallahassee, Jacksonville, and the Florida Panhandle.
• The increase in net interest income was impacted by the acquisition of TC Bancshares, Inc. in the fourth quarter of 2025, increases in interest earning asset yields, and decreased cost of funds.
• The Company faces competition from regional and national institutions, as well as fintech companies and other non-bank financial service providers.

Risks and Challenges:

• Nonperforming assets increased to $25.0 million at September 30, 2026, from $20.9 million at June 30, 2026.
• Other real estate owned and repossessed assets totaled $3.9 million at September 30, 2026, compared to $2.0 million 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.
• Risks include potential impacts of adverse developments in the banking industry, changes in interest rates, economic conditions, and the successful integration of the First Reliance partnership.

Management Commentary and Tone:

• Heath Fountain, Chief Executive Officer, stated the Company is pleased with improved financial performance driven by solid execution and sustained profitability.
• Management emphasized resilience of the business model, disciplined balance sheet management, efficiency, and sound credit quality.
• The tone reflects confidence in the partnership with First Reliance and the ability to capitalize on future opportunities.

Other Key Points:

• The Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on November 25, 2026, to shareholders of record as of November 11, 2026.
• On October 27, 2026, Colony Bank entered into a Purchase and Sale Agreement to sell three retail banking branch properties for an aggregate gross purchase price of approximately $19.9 million, with a 15-year master lease agreement to lease back each property.
• The sale-leaseback transaction is estimated to result in an aggregate pre-tax gain of approximately $15 million, expected to be offset by realized losses from a planned repositioning of the investment securities portfolio.
• Net proceeds from the sale-leaseback are intended to enhance liquidity, support future loan growth, and improve balance sheet flexibility and interest rate risk profile.
• All necessary regulatory and shareholder approvals have been obtained for the partnership with First Reliance.
• The Company's preliminary consolidated tier one leverage ratio was 10.57%, tier one capital ratio was 14.41%, total risk-based capital ratio was 16.78%, and common equity tier one capital ratio was 13.50% at September 30, 2026.