Colony Bankcorp reports Q2 net income of $10.9M, raises dividend to $0.12, merger on track

Colony Bankcorp disclosed its second quarter 2026 financial results and announced a regular quarterly cash dividend. The 8-K references a press release (Exhibit 99.1) containing the detailed results, but the body of the filing does not provide specific financial figures or the dividend amount.

Total loans grew $51.4 million (2.13%) to $2.46 billion during Q2 2026, landing within the lower end of the company's 8-12% annualized growth target. Total deposits declined $76.2 million to $2.97 billion, which management attributed to historical seasonal patterns. The loan growth was driven by disciplined pricing on new production and renewals.

Colony confirmed that its previously announced strategic partnership with First Reliance Bancshares is progressing on schedule, with both leadership teams working toward a legal close in Q4 2026. The company views this combination as creating significant opportunities for scalable, long-term growth.

Colony Bankcorp reported second-quarter 2026 operating net income of $11.0 million, with operating return on average assets of 1.20%, operating earnings per share of $0.52, and operating return on average equity of 11.51%. These results reflect the seventh consecutive quarter of net interest margin expansion to 3.52%, driven by loan growth of $51.4 million and a cost of deposits of 1.75%.

Colony Bankcorp disclosed that its previously announced acquisition of First Reliance Bancshares is expected to close in the fourth quarter of 2026, subject to shareholder and regulatory approvals. Regulatory applications were filed in early July 2026, and the S-4 registration statement is expected to be filed in the third quarter. The transaction will create a combined entity with approximately $5 billion in assets and expand Colony's footprint into South Carolina markets including Greenville, Charleston, Columbia, Myrtle Beach, and Florence.

The First Reliance merger has an implied aggregate transaction value of $163 million at 162% of tangible book value per share, with consideration consisting of 80% stock and 20% cash. Colony estimates tangible book value dilution of approximately 12% with an earnback period of less than 3.5 years, and expects approximately 20% earnings accretion with fully realized cost savings of approximately $37.6 million (35% of First Reliance's projected 2028 noninterest expense), phased in 60% in 2027 and 100% thereafter.

Colony Bankcorp's complementary lines of business generated total pre-tax profit of $1,851 thousand in the second quarter of 2026, with the largest contributions from Marine/RV Lending ($511 thousand), Colony Financial Advisors ($469 thousand), and Mortgage ($432 thousand). This represents an increase from $1,103 thousand in the first quarter of 2026 and $1,155 thousand in the second quarter of 2025, reflecting the company's strategy to diversify revenue streams beyond traditional banking.

Colony Bankcorp reported total liquidity sources of $1,752.5 million as of June 30, 2026, including FRB reserves, unencumbered securities, and FHLB borrowing capacity. Capital ratios remained strong with a Tier One Leverage Ratio of 10.2%, Tier One Ratio of 13.9%, Total Risk-based Capital Ratio of 16.2%, and Common Equity Tier One Capital Ratio of 13.0%, all well above regulatory minimums.