Skip to content
    CBAN
    Earnings call· Jun 2026(Q2 FY26)

    COLONY BANKCORP INC CBAN

    Jul 23, 2026 Source

    Executive summary

    Colony Bankcorp Q2 FY26 — Strong Operating Performance and Merger Integration Progress

    Colony Bankcorp delivered strong Q2 FY26 results, achieving its 1.20% operating ROA target and demonstrating continued margin expansion and expense discipline. The company is progressing well with the First Reliance Bank merger integration, targeting a Q4 legal close. While loan growth may be slightly below target due to competitive pricing discipline, management remains focused on deposit generation and fee income growth to drive future profitability and market share expansion.

    Highlights

    7

    • Achieved 1.20% operating ROA, meeting internal expectations.

    • Operating net income increased over $1.5 million from last quarter.

    • Operating pre-provision net revenue increased approximately $2.2 million to over $16 million.

    • Earning asset yields increased 6 basis points, driving margin higher to 3.52%.

    • Loans held for investment increased $51.4 million or 8.5% annualized.

    • Operating noninterest income increased $950,000 from Q1 and $1.5 million YoY to $11.6 million.

    • TCE at the end of the quarter was 8.99%, up from 8.49% in Q1.

    Concerns

    3

    • Near-term loan growth could land slightly below the 8% threshold, below the 8%-12% target range.

    • Total deposits declined $76.2 million, including a $13.4 million payoff of brokered deposits.

    • SBSL division revenue from gain on sale activity was softer.

    Guidance & targets

    5
    CategoryTargetConfidence
    First Reliance merger legal close
    Q4 FY26
    high materiality
    High
    Loan growth
    slightly below 8% threshold
    medium materiality
    Medium
    Net interest margin
    modest increases of a few basis points per quarter
    medium materiality
    Medium
    Operating noninterest expenses
    stay around this level for the third quarter and then increase after legal close with First Reliance
    medium materiality
    High
    Net noninterest expense to average assets
    1.45% or better
    medium materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    SBSL division
    Expected to see more improvement over the next few quarters, with stabilization in charge-offs.
    Revenue from gain on sale activity: softerCharge-offs: similar to Q1
    		———improved on a pretax basis
    Colony Financial Advisors
    Q2 was the first full quarter after transitioning to a dual program, leading to more commissions/fees but also additional expenses. Continued growth in AUM is expected.
    Assets under management (AUM): $637 millionAUM growth QoQ: almost 15%AUM (prior quarter): $555 millionAUM (Q2 last year): $219 million
    		———pretax income increased
    Mortgage
    Improvement driven by higher production and sales in Q2, as the company enters a period of more seasonal activity. The merger with First Reliance Mortgage is expected to create greater scale.
    		———pretax income improvement
    Colony Insurance
    Had a better quarter. Pricing on policy premiums has eased, and optimism remains for continued improvement in customer retention and acquisition. Bank referrals are up year-over-year.
    Premiums in force: more
    		higher revenue———
    Columbus market
    Added Colby Cardin as a private banker. Significant opportunity for growth due to M&A disruption from Synovus and Pinnacle.
    Loan growth: top 2 in Q2
    		————
    Tallahassee market
    One of the top two markets for loan growth in the second quarter.
    Loan growth: top 2 in Q2
    		————
    Valdosta market
    Loan growth has been strong year-to-date.
    Loan growth: strong year-to-date
    		————

    Operational metrics

    11
    Operating net income
    $1.5 millionincreased from last quarter
    Q2 FY26

    Primary driver of increase was continued margin expansion, improved operating noninterest income, and decreased operating noninterest expense.

    Operating pre-provision net revenue
    $16 millionincreased approximately $2.2 million
    Q2 FY26

    Increased from Q1 FY26.

    Earning asset yields
    6increase
    Q2 FY26

    Driven by loan growth and pricing on new and renewed loans, contributing to margin increase.

    Weighted average rate on new and renewed loans
    7.14up from 7.11% in Q1 FY26
    Q2 FY26

    Reflects pricing discipline. Core commercial business rate is around 6.80%.

    Overall cost of funds
    1.95up 1 basis point from Q1 FY26
    Q2 FY26

    Relatively flat overall, contributing to margin stability.

    Operating noninterest expenses decline
    $550,000from prior quarter
    Q2 FY26

    Largely a result of post-merger integration cost savings.

    BOLI death benefit
    $700,000
    Q2 FY26

    An outsized benefit during the quarter, adjusted to operating earnings.

    Tangible book value per share
    $15.12up from $14.65 in Q1 FY26
    Q2 FY26

    Increased quarter-over-quarter.

    First Reliance Bank operating EPS
    $0.38
    Q2 FY26

    Reported by First Reliance Bank for the quarter.

    First Reliance Bank operating ROA
    1.10
    Q2 FY26

    Reported by First Reliance Bank for the quarter.

    First Reliance Bank operating earnings
    $3.1 millionmeaningful improvement compared to the same period last year
    Q2 FY26

    Reported by First Reliance Bank for the quarter.

    Industry KPIs

    12
    MetricValueDetails
    Loans$51.4 millionUSD
    Deposits$76.2 millionUSD
    Rotce ROE1.20%
    Cet1 ratio8.99%
    Capital returns$0.12USD
    Fee income lines$11.6 millionUSD
    Net interest income$700,000USD
    Net interest margin3.52%
    Net charge offs npls—
    Total operating expenses$550,000USD
    Provision for credit losses$1.9 millionUSD
    Efficiency ratio operating leverage1.51%

    Deals & partnerships

    1
    First Reliance BankStrategic partnership to create a combined company with greater scale and operating performance.

    Integration planning is well underway, with both management teams working towards a legal close in the fourth quarter. Merger applications have been submitted, and the S-4 filing is expected soon. The combined company will bring broader opportunities to customers and team members.

    Risks & headwinds

    4
    Competitive lending environment

    softening pipeline

    Mitigation: Commitment to disciplined pricing and strong underwriting standards, even if it means slightly lower near-term loan growth.

    Rising rate outlook

    softening pipeline

    Mitigation: Maintaining pricing discipline on new and renewed loans to preserve margin.

    Competitive deposit landscapeQ2 FY26

    slight decline in total deposits of $76.2 million

    Mitigation: Focus on building deposit-first relationships, operating accounts, and primary consumer accounts to maintain a steady cost of funds.

    Softer gain on sale activity in SBSL divisionQ2 FY26

    revenue from gain on sale activity was softer

    Mitigation: Expectation for improvement in pipeline and revenues over the next few quarters, with stabilization in charge-offs.

    What to watch in Q3 FY26

    5

    Net interest margin expansion

    next several quarters
    Current3.52% (Q2 FY26)
    TargetContinued modest increases of a few basis points per quarter

    Why it matters

    NIM trajectory is a key driver of profitability and operating earnings, influenced by asset repricing and cost of funds.

    We still expect to see modest increases in margin of a few basis points per quarter for the next several quarters.

    Q&A highlights

    6

    Are new bankers primarily focused on deposit generation or commercial asset generation, and what is the overall priority for deposits?

    Deposits are the clear priority, especially for securing key commercial relationships and ancillary consumer business. New private banking resources are specifically aimed at deposit growth and increasing assets under management for Colony Financial Advisors.

    “our team clearly recognizes that deposits are priority one. That's been our major focus, and that will continue to be our major focus.”

    asked by David Bishop · answered by T. Fountain

    2 min read6 chapters

    Detailed Narrative

    01

    Merger Integration and Strategic Outlook

    Colony Bankcorp is actively progressing with the integration of First Reliance Bank, with the legal close anticipated in Q4 FY26. Merger applications have been submitted, and the S-4 filing is expected soon. This partnership is a cornerstone of Colony's M&A strategy, aiming to achieve greater scale and enhance operating performance. Management confirmed that First Reliance's recent performance was largely in line with their model, and no adjustments to previously released pro forma information are expected.

    02

    Operating Performance and Profitability

    The company reported continued improvement in financial performance, achieving a 1.20% operating ROA in Q2 FY26, meeting internal expectations following the TC Federal systems conversion. Operating net income increased over $1.5 million quarter-over-quarter, and operating pre-provision net revenue rose approximately $2.2 million to over $16 million. These improvements were driven by margin expansion, increased operating noninterest income, and decreased operating noninterest expenses.

    03

    Loan Growth and Pricing Discipline

    Loan growth for the quarter was 8.5% annualized, contributing to a 7% annualized year-to-date growth. The weighted average pricing on new and renewed loans slightly increased to 7.14% in Q2 from 7.11% in Q1, reflecting the company's commitment to pricing discipline. While the competitive lending environment and rising rate outlook may cause near-term growth to land slightly below the 8% threshold of their 8%-12% target, management prioritizes financial objectives and balance sheet strength over aggressive growth.

    04

    Deposit Trends and Strategic Focus

    Total deposits experienced a slight decline of $76.2 million, which included a $13.4 million payoff of brokered deposits. This decline was attributed to normal seasonal trends and a competitive deposit landscape. Despite this, average deposit balances remained stable, and the company continues to focus on building deposit-first relationships, emphasizing operating accounts and primary consumer accounts to maintain a steady cost of funds.

    05

    Diversified Fee Income Growth

    Operating noninterest income increased by $950,000 quarter-over-quarter, driven by various business lines. Colony Financial Advisors saw assets under management (AUM) grow almost 15% quarter-over-quarter to $637 million. Mortgage pretax income improved due to higher production, and Colony Insurance had a better quarter with increased premiums in force and revenue. The SBSL division improved pretax, though gain on sale activity was softer, with future improvements expected.

    06

    Market Expansion and Talent Acquisition

    Colony Bankcorp is strategically expanding its market share by adding experienced bankers in key growth markets. New hires include a private banker in Columbus, market presidents in Douglas and Savannah, and a regional president in the Jacksonville MSA focused on core customer relationships. These additions underscore the company's commitment to organic growth and deepening its presence in existing markets, particularly those experiencing disruption from larger regional bank M&A.

    AI-generated summary of the company’s earnings call. Not investment advice.