Key Highlights

  • Operating earnings were USD 0.54 per diluted share, against GAAP earnings of USD 0.50 per share.
  • Net interest margin widened to 3.59% from 3.17% a year earlier, lifting tax-equivalent net interest income to USD 30.5 million.
  • Total loans grew USD 12.3 million, or 0.50%, to USD 2.48 billion, while deposits eased to USD 2.96 billion.
  • Nonperforming assets rose to USD 25.0 million from USD 20.9 million, tied mainly to one downgraded construction relationship.

Colony Bankcorp, Inc. (NYSE:CBAN) reported third-quarter 2026 operating earnings of USD 0.54 per diluted share, above a consensus estimate of USD 0.52 and up from USD 0.47 a year earlier. Net revenue, defined here as net interest income of USD 30.4 million plus noninterest income of USD 12.3 million, was about USD 42.7 million, above a consensus estimate of USD 41.20 million.

GAAP net income was USD 10.5 million, or USD 0.50 per diluted share, compared with USD 10.9 million, or USD 0.51, in the second quarter and USD 5.8 million, or USD 0.33, in the third quarter of 2025. Operating net income, a non-GAAP measure, reached USD 11.6 million, and operating return on average assets was 1.26%. The operating efficiency ratio stood at 61.89%, compared with 66.89% a year earlier.

Margin, Fees and Credit Quality

Net interest income on a tax-equivalent basis rose to USD 30.5 million from USD 22.9 million, helped by the fourth-quarter 2025 acquisition of TC Bancshares, higher earning asset yields and a lower cost of funds. Noninterest income increased 21.6% to USD 12.3 million, including an insurance gain of USD 813 thousand tied to a branch building fire. Noninterest expense totaled USD 27.6 million versus USD 24.6 million, reflecting higher salary, occupancy and technology costs, plus integration and merger-related expenses.

The provision for credit losses was USD 1.7 million. Net charge-offs were 0.27% of average loans, and the allowance for credit losses was 0.91% of loans. Nonperforming assets climbed USD 4.1 million to USD 25.0 million, and the company attributed the increase in classified loans mainly to one construction relationship. Tangible book value per share was USD 15.16, and preliminary common equity tier one capital stood at 13.50%.

Merger Timeline and Balance Sheet Repositioning

CEO Heath Fountain said all regulatory and shareholder approvals for the partnership with First Reliance have been obtained, with the systems conversion and customer integration currently targeted for the second quarter of 2027. Management said loan growth was lower in the quarter because of pricing discipline, and that near-term growth may be softer while its long-term target is unchanged.

On October 27, the bank agreed to sell three branch properties for about USD 19.9 million and lease them back for 15 years, with first-year base rent of roughly USD 1.65 million. The company estimates a pre-tax gain of about USD 15 million, which it projects to be offset by realized losses from a planned securities repositioning. No branches or markets are being exited. Total borrowings were USD 263.2 million, up USD 30.0 million.

Reference Points for the Next Report

Four items give concrete reference points. The first is credit, with nonperforming assets at USD 25.0 million and other real estate owned at USD 3.9 million versus USD 2.0 million in June. The second is balance sheet growth: loans rose only 0.50% sequentially while deposits slipped USD 14.5 million and noninterest-bearing demand deposits fell USD 6.8 million. The third is the sale-leaseback and securities repositioning, whose roughly USD 15 million gain is paired with offsetting losses. The fourth is dated: a USD 0.12 dividend payable November 25 to holders of record on November 11, and the First Reliance conversion targeted for the second quarter of 2027. An earnings call was scheduled for October 29 at 9:00 a.m. Eastern Time.