Colony Bankcorp Reports Strong Second-Quarter 2026 Results as Loan Growth, Margin Expansion and Strategic Initiatives Support Earnings
Colony Bankcorp, Inc. (NYSE: CBAN) reported improved financial performance for the second quarter of 2026, with higher net income, stronger loan growth, an expanded net interest margin and continued progress in integrating its recent acquisition. The company also highlighted ongoing operating efficiencies, growth across several fee-generating businesses and progress toward its planned strategic combination with First Reliance Bancshares, Inc.
For the quarter ended June 30, 2026, Colony Bankcorp reported net income of $10.9 million, or $0.51 per diluted share. The result compares with net income of $8.2 million, or $0.39 per diluted share, in the first quarter of 2026 and $8.0 million, or $0.46 per diluted share, in the second quarter of 2025.
On an operating basis, the company reported operating net income of $11.0 million, or $0.52 in operating earnings per diluted share. This compares with operating net income of $9.5 million, or $0.45 per diluted share, in the first quarter of 2026 and $8.0 million, or $0.46 per diluted share, in the second quarter of 2025.
The second-quarter results reflect continued improvement in the company’s core operating performance. Management pointed to stronger net interest margin performance, growth in noninterest income and improved expense management as key contributors to the quarter’s results.
Management Highlights Continued Earnings Improvement
Heath Fountain, Chief Executive Officer of Colony Bankcorp, said the company’s second-quarter performance reflected continued improvement across several important areas of the business.
According to Fountain, the company benefited from continued improvement in net interest margin, noninterest income and operating expenses. He also credited the company’s team with successfully capturing efficiencies following the integration of TC Federal.
On an operating basis, Colony achieved its target return on average assets of 1.20%. Management said it believes the company is well positioned to maintain this level of performance as it continues executing its strategic plan.
The company also highlighted the strategic partnership announced with First Reliance during the quarter. Both leadership teams believe the combination could create opportunities for scalable, long-term growth. Integration teams are progressing on merger-related milestones, with the legal closing of the transaction expected in the fourth quarter of 2026.
The planned combination represents another significant step in Colony Bankcorp’s growth strategy as the company seeks to expand its scale, improve operating leverage and strengthen its competitive position.
Loan Growth Accelerates
Loan growth was one of the strongest highlights of the quarter. Total loans, excluding loans held for sale, reached $2.46 billion as of June 30, 2026, an increase of $51.4 million, or 2.13%, from the previous quarter.
Management said the pace of loan growth accelerated during the quarter and landed within the lower end of the company’s annualized target range of 8% to 12%.
The growth was supported by disciplined pricing on new loan production and renewals. Management also emphasized the importance of maintaining a well-managed cost of funds as the company works to expand its lending business.
Loan growth contributed to the company’s improved net interest margin during the quarter. As the loan portfolio expands, the company has the opportunity to generate additional interest income while continuing to focus on credit quality and disciplined underwriting.
The growth also reflects ongoing demand from the markets served by Colony Bankcorp. Commercial borrowers and other customers continue to seek financing for business expansion, working capital, capital expenditures and other financial needs.
Deposit Balances Decline Seasonally
Total deposits stood at $2.97 billion at June 30, 2026, compared with $3.05 billion at March 31, 2026. The $76.2 million decline reflected seasonal trends and the competitive nature of the current funding environment.
The company reported decreases across several deposit categories. Noninterest-bearing demand deposits declined by $31.2 million, interest-bearing demand deposits decreased by $27.2 million and savings and money market deposits declined by $26.5 million.
These decreases were partially offset by an $8.7 million increase in time deposits.
Management said the decline in total deposits was consistent with historical seasonal patterns for the period. At the same time, Colony continues to focus on expanding primary deposit relationships.
The company’s efforts to attract and retain core deposits remain particularly important in a competitive funding environment. Stable, relationship-based deposits can provide banks with a more reliable source of funding and help manage overall funding costs.
As Colony continues to grow its loan portfolio, maintaining a strong deposit base will remain a key priority. The company will likely continue focusing on deepening relationships with existing customers while attracting new primary banking relationships.
Net Interest Margin Expands
Net interest income, on a tax-equivalent basis, totaled $30.0 million during the second quarter of 2026, compared with $22.6 million during the same quarter of 2025.
For the first six months of 2026, tax-equivalent net interest income reached $59.4 million, compared with $43.7 million during the first six months of 2025.
The increase in net interest income was driven primarily by higher income generated from interest-earning assets. This growth was partially offset by higher expenses related to interest-bearing liabilities.
Income on interest-earning assets increased $8.9 million to $45.9 million during the second quarter of 2026 compared with the same period of 2025. Meanwhile, interest-bearing liability expense increased $1.5 million to $15.9 million.
For the first six months of the year, income on interest-earning assets increased $18.2 million to $91.0 million, while interest-bearing liability expense increased $2.6 million to $31.6 million.
The company’s net interest margin was 3.52% during the second quarter of 2026, compared with 3.12% during the second quarter of 2025. For the six months ended June 30, 2026, net interest margin was 3.50%, compared with 3.02% during the same period in 2025.
The improvement in net interest margin was influenced by the acquisition of TC Bancshares, Inc. during the fourth quarter of 2025. The company also benefited from higher yields on interest-earning assets and a lower cost of funds.
Margin expansion is an important component of Colony’s earnings strategy. As the company continues to grow loans and manage funding costs, maintaining a healthy spread between asset yields and funding expenses will remain critical to future profitability.
Noninterest Income Shows Broad-Based Growth
Noninterest income totaled $12.2 million during the second quarter of 2026, an increase of $2.1 million, or 20.4%, from the same period of 2025.
For the first six months of 2026, noninterest income totaled $22.9 million, representing an increase of $3.7 million, or 19.4%, compared with the first six months of 2025.
The increase reflected growth across several revenue categories, including service charges on deposits, mortgage fee income, interchange fees, bank-owned life insurance income, insurance commissions and wealth advisor income.
BOLI income included a tax-free gain of $706,000 during the period.
The company also reported an increase in wealth advisor income, which is included in other noninterest income. These results demonstrate the value of Colony’s diversified financial services platform.
The improvement in fee-based revenue helped offset decreases in gains on sales of SBA loans and increased losses on sales of securities.
Diversifying revenue sources remains an important strategy for financial institutions. Fee-generating businesses can help reduce reliance on traditional lending income and provide additional opportunities to grow customer relationships.
Mortgage and SBA Businesses Continue to Contribute
Colony’s mortgage business generated production of $115.4 million during the second quarter of 2026. Mortgage sales totaled $67.3 million.
The results compare with mortgage production of $88.5 million and mortgage sales of $61.4 million during the first quarter of 2026.
The increase in mortgage production demonstrates continued activity in the company’s mortgage business and contributed to growth in mortgage-related fee income.
The company’s Small Business Specialty Lending division also remained active. SBSL closed $13.0 million in Small Business Administration loans and sold $5.5 million in SBA loans during the second quarter.
In the first quarter, SBSL closed $13.1 million in SBA loans and sold $10.4 million.
Although SBA loan sales were lower than in the previous quarter, the business continues to provide Colony with an important source of commercial lending and fee-generating activity.
Operating Expenses Reflect Growth and Integration Investments
Noninterest expense totaled $26.4 million during the second quarter of 2026, compared with $22.0 million during the same period in 2025.
For the first six months of 2026, noninterest expense reached $54.1 million, compared with $42.2 million during the first six months of 2025.
The increase reflected higher salaries and employee benefits, occupancy and equipment costs, information technology expenses, professional fees and advertising and public relations expenses.
The company also incurred acquisition and integration-related expenses associated with the TC Bancshares acquisition, which closed during the fourth quarter of 2025. Additional expenses were related to the recently announced merger with First Reliance Bancshares.
While these expenses increased the company’s overall cost base, management continues to focus on capturing efficiencies from its recent acquisitions and strategic initiatives.
The successful integration of TC Federal is expected to provide opportunities for additional operating efficiencies and improved earnings power over time.
Strong Capital Position
Colony Bankcorp continues to maintain a strong capital position, with regulatory capital ratios above the minimum levels required for a bank to be considered well capitalized.
As of June 30, 2026, preliminary capital ratios included a Tier 1 leverage ratio of 10.20%, a Tier 1 capital ratio of 13.87%, a total risk-based capital ratio of 16.18% and a common equity Tier 1 capital ratio of 12.96%.
These ratios provide the company with a strong capital foundation to support continued lending, absorb potential credit losses and pursue future strategic opportunities.
Strong capital levels will also be important as Colony moves toward the planned First Reliance transaction. Capital strength can provide flexibility as the company continues to expand its balance sheet and execute its long-term growth strategy.
Asset Quality Remains Manageable
Nonperforming assets totaled $20.9 million at June 30, 2026, compared with $19.9 million at March 31, 2026, an increase of $1.0 million.
Other real estate owned and repossessed assets totaled $2.0 million at the end of the second quarter, compared with $2.1 million at the end of the first quarter.
Net loans charged off totaled $1.8 million, representing 0.29% of average loans. This was consistent with the first quarter, when net charge-offs totaled $1.7 million, or 0.29% of average loans.
The company’s credit loss reserve stood at $22.0 million, or 0.89% of total loans, at June 30, 2026. This compared with $21.7 million, or 0.90% of total loans, at March 31, 2026.
The provision for credit losses totaled $1.90 million during the second quarter, compared with $1.75 million during the first quarter and $450,000 during the second quarter of 2025.
As loan growth accelerates, Colony will continue to monitor credit quality closely. The company’s reserve position and ongoing credit management efforts remain important components of its broader risk-management strategy.
Quarterly Dividend Declared
The company also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per share.
The dividend is scheduled to be paid on August 19, 2026, to shareholders of record as of the close of business on August 5, 2026.
Colony had 21,221,503 shares of common stock outstanding as of July 20, 2026.
The dividend declaration reflects the company’s continued commitment to returning capital to shareholders while maintaining sufficient resources to support business growth and strategic initiatives.
Colony Bankcorp enters the second half of 2026 with positive momentum across several key areas of its business.
The company reported stronger earnings, accelerated loan growth, improved net interest margin performance and continued growth in noninterest income. At the same time, management continues to focus on expense discipline and capturing efficiencies from the integration of TC Federal.
The planned combination with First Reliance Bancshares represents another major opportunity for long-term growth. With the legal closing expected during the fourth quarter of 2026, management is continuing to work through merger-related milestones.
The company’s balance sheet remains well capitalized, while asset quality continues to be actively managed. Although deposits declined during the quarter, management remains focused on expanding primary relationships and strengthening its funding base.
Overall, Colony Bankcorp’s second-quarter performance reflects a company building momentum through a combination of organic loan growth, diversified fee income, operating efficiencies and strategic expansion.
Management believes there is significant opportunity for further performance improvement as the company continues executing its strategic initiatives. With a focus on customer service, disciplined growth and operational efficiency, Colony Bankcorp is positioning itself for continued expansion in the highly competitive banking sector.
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