Georgia Banking Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net interest income was $31.4 million, 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.
• Diluted earnings per share (EPS) was $0.57; operating diluted EPS was $0.74.
• Operating pre-tax, pre-provision net revenue (PPNR) improved 6.2% sequentially from the second quarter of 2026.
• Average held-for-investment (HFI) loans were $2.2 billion, representing a 23.7% increase from the third quarter of 2025.
• Average deposits were $2.7 billion, a 27.7% increase from the third quarter of 2025.
• The operating efficiency ratio was 62.3% for the quarter.
• Return on average tangible common equity (ROTCE) was 9.70%; operating ROTCE was 12.41%.
• Common Equity Tier 1 (CET1) ratio was 10.59%, up from 10.29% in the second quarter of 2026.
• Tangible common equity to tangible assets ratio was 8.6%.
• Tangible book value per common share was $25.08.

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 sustainable ROAA and ROTCE as the franchise scales.
• Future growth levers include diversifying earnings streams, expanding asset exposure, and evaluating opportunities such as acquisitions, team lift-outs, and other strategic measures.
• The company anticipates retail mortgage banking volume growth as the rate environment normalizes.
• Treasury services fees have grown at a 90% CAGR since 2021 and are expected to continue driving fee income.

Business Segments and Product Lines:

• Treasury services platform generates recurring fee income and retains core operating deposits, contributing approximately 30–40% of treasury services-related fee income.
• Treasury services deposits, combined with commercial banking deposits, represent approximately 15% of total deposits.
• Mortgage warehouse lending serves 60 active clients with short-duration, self-liquidating lines; average dwell time is less than 30 days.
• The loan portfolio includes $2.219 billion in held-for-investment loans and approximately $374 million in loans held for sale.
• Non-owner occupied commercial real estate (CRE) loans comprise 25.3% of the loan portfolio, while owner-occupied CRE loans comprise 10.9%.
• Construction and Land Development (ADC) loans represent 11% of the portfolio, with an ADC concentration ratio of 86%.
• Total CRE concentration ratio is 302%.

Market and Competitive Landscape:

• Georgia Banking Company is the largest locally focused Atlanta-based community bank with a market share of 1.13% in the Atlanta MSA deposit market.
• The Atlanta MSA has a projected population change of 4.2% from 2026–2031, outpacing the Georgia average (3.7%) and national average (2.6%).
• The Atlanta MSA median household income is projected at $95.9k for 2026, compared to $83.4k for Georgia and $86.7k nationally.
• The company operates 10 branches and 3 Loan Production Offices (LPOs) in the Atlanta area.
• The company completed the acquisition of Tandem Bancorp, Inc. on June 1, 2026, adding approximately $321 million in assets.
• The company previously acquired Primary Bancshares Corp. (GPB) in March 2025, adding approximately $341 million in assets.
• Combined acquisitions since 2021 added approximately $491 million in loans and $547 million in deposits.

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, liquidity, and concentration of treasury services and payments-related deposits.
• Credit quality risks involve commercial real estate concentration and the potential for future net charge-offs.
• Risks associated with treasury services, payments, and mortgage warehouse businesses are noted.
• Potential failure to realize anticipated benefits from the Tandem acquisition or to identify, complete, and integrate future acquisitions.
• Cybersecurity, fraud, and operational risks are identified as potential threats.
• The company faces risks related to the limited trading history of its common stock.

Management Commentary and Tone:

• Management describes the company as "built to compound in Atlanta" with a "scarce, scaled Atlanta franchise."
• The tone emphasizes a "proven three-phase playbook" and a "repeatable M&A playbook."
• Management highlights "meaningful additions across the MSA" and "efficient M&A closing and integration timelines."
• The company notes that "credit quality remains sound" with NPAs representing 0.70% of total assets.
• Management states that the merger with Tandem was completed with integration finished by September 2026.
• Insider ownership is approximately 34%, aligning management incentives with shareholder value creation.

Other Key Points:

• The company completed a ~$78 million private placement of common equity in June 2026 at $30.00 per share, led by Fortress Investment Group, AllianceBernstein LP, and others.
• The company listed its common stock on Nasdaq under the ticker "GBC" 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's investment portfolio has a weighted average duration of 4.0 years and average life of 5.3 years, with a fair value of $152.7 million.
• Net charge-offs have averaged approximately 10 basis points annually over the periods presented.
• The company has no material credit losses incurred over 28 years in its mortgage warehouse business.