Colony Bankcorp, Inc.

What they do

The Company is a registered bank holding company incorporated in Georgia in 1982 and owns 100% of Colony Bank, its principal subsidiary. The Bank takes deposits and makes loans, including small and medium-sized business loans, residential and commercial construction, land development, commercial real estate, commercial and agri-business production loans, residential mortgages, home equity and consumer loans. It also runs a Small Business Specialty Lending (SBSL) department for government-guaranteed loans and finances marine and recreational vehicles. Banking centers and loan production offices operate across Georgia (including Atlanta, Savannah, Macon, Columbus, Augusta and Albany) plus Birmingham, Alabama, and Jacksonville, Santa Rosa Beach and Tallahassee, Florida.

Revenue drivers

• Net interest income from lending — Loans, excluding held-for-sale, were $2.46 billion at June 30, 2026, the largest asset category and the core earnings driver; mortgage production was $115.4 million in Q2 2026 with $67.3 million sold.
• Small Business Specialty Lending (SBSL) — Closes and sells government-guaranteed SBA loans, generating gain-on-sale income; closed $13.0 million of SBA loans and sold $5.5 million in Q2 2026 versus $13.1 million and $10.4 million in Q1 2026.
• Deposit funding and treasury services — Deposits of $2.97 billion at June 30, 2026 fund the loan book; the Bank also offers treasury solutions, merchant services and cash-management tools for business customers.
• Wealth management, insurance and fee services — Noninterest income comes from wealth management, consumer insurance, internet and telephone banking, bill payment, safe deposit boxes, and credit/debit card and remote deposit services.

Recent performance

For Q2 2026, net income was $10.9 million, or $0.51 per diluted share, up from $8.2 million ($0.39) in Q1 2026 and $8.0 million ($0.46) in Q2 2025; operating net income was $11.0 million, or $0.52 per diluted share. Loans, excluding held for sale, rose $51.4 million (2.13%) quarter over quarter to $2.46 billion, while total deposits fell $76.2 million to $2.97 billion and total assets declined $93.0 million to $3.63 billion. The provision for credit losses was $1.90 million, versus $1.75 million in Q1 2026 and $450,000 in Q2 2025. Total borrowings were $233.2 million, down $25.0 million from March 31, 2026. The Board declared a quarterly cash dividend of $0.12 per share on July 22, 2026, payable August 19, 2026 to holders of record August 5, 2026, with 21,221,503 shares outstanding as of July 20, 2026.

Strategy

Management cited improvement in net interest margin, noninterest income and operating expenses and said the bank achieved its 1.20% target return on average assets on an operating basis. CEO Heath Fountain credited efficiencies captured following the TC Federal integration and said the company is positioned to maximize the earnings power of its balance sheet. Colony announced a strategic partnership with First Reliance Bancshares during the quarter and said both leadership teams see scalable long-term growth opportunities from the combination. The company reported progress on merger milestones and said it remains on track for a legal close in the fourth quarter of 2026. On lending, management said Q2 loan growth landed within the lower end of its annualized 8% to 12% target range and described continued focus on expanding primary deposit relationships.

Risks

• Geographic concentration — The 10-K states the business is concentrated in Georgia, Alabama, Florida and neighboring markets, so regional economic weakness, real estate price declines or elevated unemployment could pressure borrower repayment and collateral values.
• Credit quality and loss provisioning — The provision for credit losses rose to $1.90 million in Q2 2026 from $450,000 in Q2 2025, and the 10-K flags the credit risk of lending activities and the Company's ability to estimate the allowance for credit losses.
• Deposit competition and funding costs — Total deposits fell $76.2 million in Q2 2026, and management described a highly competitive funding environment with rate changes affecting deposit levels, composition and cost.
• Interest rate and yield curve sensitivity — The 10-K and 10-Q cite interest rate risk, the shape of the yield curve, and the effect of rates on net interest income, loan demand and the value of loan collateral and securities.

Outlook

Management said it is confident in maintaining the 1.20% operating return on average assets level achieved in Q2 2026. It reaffirmed being on track for a legal close of the First Reliance combination in the fourth quarter of 2026 and reported progress on merger milestones. Executives pointed to Q2 loan growth in the lower end of the 8% to 12% annualized target range and said significant runway remains as strategic initiatives are executed. They also noted the deposit decline was consistent with historical seasonal patterns and said the team remains focused on expanding primary deposit relationships.