Georgia Banking Company — Third Quarter 2026 Earnings Summary

Financial Performance

• Net interest income was $31.4 million for the quarter, an 8.0% increase from the second quarter of 2026.
• Net interest margin (NIM) was 4.17% for the quarter, a 14 basis point decrease from the second quarter of 2026, driven by higher costs on refinanced subordinated debt; year-to-date NIM was 4.29%.
• Noninterest income was $2.8 million, a 13.8% decrease from the second quarter of 2026, primarily due to lower retail mortgage originations.
• Adjusted noninterest expense resulted in an operating efficiency ratio of 62.3% for the quarter.
• Operating pre-tax, pre-provision net revenue (PPNR) improved 6.2% from the second quarter of 2026.
• Diluted earnings per share (EPS) were $0.57; operating diluted EPS was $0.74.
• Operating return on average tangible common equity (ROTCE) was 12.41% for the quarter, compared to 9.70% on a reported basis.
• Average loans held for investment (HFI) were $2.2 billion, up 23.7% from the third quarter of 2025.
• Average deposits were $2.7 billion, up 27.7% from the third quarter of 2025.
• Net charge-offs to average loans averaged approximately 10 basis points annually over the presented periods.
• Allowance for credit losses (ACL) to total loans HFI remained relatively flat at 1.36% coverage.

Guidance and Future Outlook

• The company is in Phase 3 of its growth strategy, focusing on ongoing growth, maximizing operational leverage, and gaining market share through organic growth and potential acquisitions.
• Management targets producing sustainable return on average assets (ROAA) and ROTCE as the franchise scales.
• Future growth levers include diversifying earnings streams, expanding asset exposure, and evaluating strategic measures such as acquisitions, team lift-outs, and other opportunities.
• The company anticipates continued growth in treasury services fees, which have grown at a 90% CAGR since 2021.
• Management expects mortgage warehouse fee income to rise as rates decline, acting as a natural hedge to balance sheet asset yield pressure.

Business Segments and Product Lines

• Treasury services fees contributed approximately 30–40% of Treasury Services-related fee income, with deposits from these services representing ~15% of total deposits.
• The mortgage warehouse business serves 60 active clients with an average dwell time of less than 30 days from funding to sale.
• The loan portfolio includes $2.2 billion in loans HFI, with Commercial & Industrial (C&I) loans at 14% and Commercial Real Estate (CRE) at 39% of the total loan mix.
• Non-owner occupied CRE loans represent 25.3% of the loan portfolio, while owner-occupied CRE represents 10.9%.
• The company has a 302% CRE concentration and an 86% ADC concentration relative to regulatory capital.
• Treasury solutions provide cash management, payments, payroll, merchant acquiring, and fraud prevention to commercial customers.

Market and Competitive Landscape

• Georgia Banking Company is the largest locally focused Atlanta-based community bank with $2.7 billion in deposits.
• The company ranks 14th in the Atlanta MSA deposit market with a 1.13% share, trailing Truist Bank (23.00%), Bank of America (19.76%), and Wells Fargo (14.77%).
• The Atlanta MSA is projected to see a 4.2% population change from 2026 to 2031, outpacing the Georgia average of 3.7% and the national average of 2.6%.
• The Atlanta MSA has a projected median household income of $95.9k, compared to the Georgia median of $83.4k and the national median of $86.7k.
• The company differentiates itself by focusing exclusively on the Georgia metro Atlanta area, unlike multi-state regional competitors such as Pinnacle Financial Partners and Ameris Bancorp.

Risks and Challenges

• Forward-looking statements are subject to risks including changes in interest rates and economic conditions, particularly in the Atlanta MSA.
• Risks include deposit flows, funding costs, and liquidity, specifically regarding the concentration of treasury services and payments-related deposits.
• The company faces credit quality risks and a concentration in commercial real estate.
• Potential risks include the failure to realize anticipated benefits from the Tandem acquisition or to identify, complete, and integrate future acquisitions.
• Operational risks include cybersecurity, fraud, and the limited trading history of the company's common stock.
• Regulatory capital and liquidity requirements may constrain operations.

Management Commentary and Tone

• The third quarter marked the first full quarter of combined operations following the merger with Tandem Bancorp, which closed on June 1, 2026.
• Management highlighted the company as "Atlanta's Natural Consolidator" with a proven track record of integrating two bank acquisitions.
• The tone reflects confidence in the company's ability to compound value through a disciplined M&A playbook and organic growth in the Atlanta market.
• Management emphasized that the Tandem merger cost savings and expense discipline are improving operating leverage and returns as the franchise scales.
• Insider ownership is approximately 34%, aligning management incentives with shareholder value creation.

Other Key Points

• The company completed the acquisition of Tandem Bancorp, Inc. on June 1, 2026, adding approximately $321 million in assets.
• In June 2026, the company completed an oversubscribed private placement of common equity for approximately $78 million at $30.00 per share.
• The company listed its common stock on the Nasdaq under the ticker "GBC" in 2026.
• Total assets crossed the $3 billion threshold in 2026.
• The company refinanced $55 million in subordinated debt in 2026.
• The company has completed two acquisitions since 2021: Primary Bancshares Corp. (closed March 2025) and Tandem Bancorp, Inc. (closed June 2026).
• The company maintains a CET1 ratio of 10.59% as of the third quarter of 2026.
• Non-GAAP financial measures used include operating earnings, adjusted efficiency ratio, tangible common equity, and core deposits.