Colony Loan Growth Cools as Margin Rises to 3.59%

The Tip Desk · November 9, 2026 · 4 min read

Operating net income was $11.6 million, or $0.54 a share, as loans excluding held-for-sale rose only 0.50% and the net interest margin rose to 3.59% from 3.17% a year earlier.

Colony Bankcorp, Inc. (CBAN), the Georgia and North Florida community bank holding company, reported operating net income of $11.6 million, or $0.54 a share, for the third quarter of 2026, up from $11.0 million, or $0.52 a share, in the second quarter. GAAP net income was $10.5 million, or $0.50 a share.

The operating result rose even as loan growth cooled. Loans excluding held-for-sale were $2.48 billion at September 30, 2026, up $12.3 million, or 0.50%, from June 30. That followed a $51.4 million, or 2.13%, increase in the second quarter. Chief Executive Officer Heath Fountain said loan growth was lower on a commitment to pricing discipline in a changing rate environment, that margin continues to improve on higher earning-asset yields and consistent pricing on new and renewed loans, and that near-term growth is likely softer while the long-term loan-growth target remains unchanged.

Net interest income on a tax-equivalent basis was $30.5 million in the third quarter of 2026, compared with $22.9 million a year earlier. Income on interest-earning assets rose $9.5 million to $46.6 million; expense on interest-bearing liabilities rose $1.9 million to $16.1 million. Net interest margin was 3.59% in the third quarter of 2026, versus 3.17% a year earlier. The company attributed the year-over-year margin expansion to the fourth-quarter 2025 acquisition of TC Bancshares, higher earning-asset yields and a lower cost of funds.

Deposits were $2.96 billion at September 30, 2026, down $14.5 million from June 30, after a $76.2 million decline in the second quarter. Noninterest-bearing demand deposits fell $6.8 million and interest-bearing demand deposits fell $44.1 million, partly offset by $15.1 million more in savings and money market deposits and $21.4 million more in time deposits. Total borrowings were $263.2 million, up $30.0 million from June 30. Total assets were $3.65 billion.

Noninterest income was $12.3 million, up $2.2 million, or 21.6%, from the third quarter of 2025. The company cited higher service charges, mortgage fee income, interchange, BOLI and wealth-advisor income, plus an $813 thousand insurance gain on a prior branch-building fire, partly offset by lower gains on SBA loan sales. Mortgage production was $96.5 million and mortgage sales $69.2 million. Small Business Specialty Lending closed $29.9 million of SBA loans and sold $12.7 million.

Noninterest expense was $27.6 million, compared with $24.6 million a year earlier, with higher salaries and benefits, occupancy and equipment, information technology, TC Bancshares acquisition and integration costs, and First Reliance merger-related expenses. The provision for credit losses was $1.7 million. Net loans charged off were $1.7 million, or 0.27% of average loans.

Nonperforming assets rose $4.1 million to $25.0 million from $20.9 million at June 30. Other real estate owned and repossessed assets were $3.9 million. The company said the increase in classified and criticized loans was driven primarily by the downgrade of one construction relationship. The allowance for credit losses on loans was $22.5 million, or 0.91% of total loans.

Preliminary common equity tier 1 capital was 13.50% at September 30, with tier one leverage 10.57%, tier one 14.41% and total risk-based 16.78%. The board declared a $0.12 quarterly cash dividend, payable November 25, 2026.

On October 27, 2026, Colony Bank agreed to sell three retail branch properties for about $19.9 million and lease them back for 15 years, with first-year base rent of about $1.65 million. The company estimated a pre-tax gain of about $15 million, expected to be offset by losses from a planned securities-portfolio repositioning, with proceeds intended to support liquidity, loan growth and interest-rate-risk flexibility. Systems conversion and customer integration with First Reliance are currently expected in the second quarter of 2027.