Colony Bankcorp Posts Strong Q4, Eyes Growth from TC Federal Merger and Fee-Based Lines

Colony Bankcorp Sees Momentum Build After Merger, Sets Sights on Higher Profitability

ATLANTA, Jan. 30, 2026 – Colony Bankcorp (NYSE: CBAN) struck an optimistic tone during its fourth-quarter earnings call, pointing to a strengthened operational foundation following its recent acquisition of TC Federal. Executives outlined a quarter marked by net interest margin expansion, robust fee income, and integration progress that is tracking ahead of initial forecasts.

CEO Heath Fountain described the period as one of "strong operating performance," driven by strategic execution. The legal close of the TC Federal merger in early December is now expected to yield the bulk of its cost savings after system conversions are completed in Q1 2026. "We are not just combining systems; we are building a platform for more profitable growth," Fountain stated.

Financially, the bank showed clear gains. Operating net income rose by $675,000 sequentially, fueled by a 15-basis-point jump in the net interest margin to 3.32%. CFO Derek B. noted that tangible book value dilution from the deal was less than feared, and the projected "earnback" period for the acquisition has been shortened to under 2.5 years. The bank achieved its target of a 1% operating return on assets (ROA) for the full year 2025 and is now aiming for 1.20% in 2026, a goal management believes is attainable starting in the second quarter.

Beyond the core banking metrics, several ancillary businesses shined. Mortgage banking, wealth management, and SBA lending all contributed to an $11.1 million quarter for operating non-interest income. Notably, assets under management in the wealth division more than doubled year-over-year to over $460 million.

However, the integration is not without its challenges. Classified and criticized loans increased, with a majority tied to the acquired TC Federal portfolio. Management emphasized these were anticipated and adequately reserved for under purchase accounting. CEO Fountain also acknowledged a "definitely getting more competitive" lending landscape, prompting a more disciplined, relationship-focused approach that may temper loan growth to around 8%.

Looking ahead, Colony Bankcorp is not done with dealmaking. Fountain explicitly reiterated the bank's interest in further mergers and acquisitions, highlighting Georgia and contiguous states as its primary focus. "We are actively in conversations and believe we could announce another transaction in 2026," he told analysts, while emphasizing a preference for negotiated deals that align with the bank's return discipline.

Market Voices: Analysts and Observers Weigh In

Eleanor Vance, Banking Analyst at Peachtree Capital: "The results show a bank executing its playbook. The accelerated earnback on TC Federal is a positive surprise, and the growth in fee-based revenue diversifies their income stream. The guided path to a 1.20% ROA is ambitious but appears credible if the merger synergies fully materialize."

Marcus Thorne, Portfolio Manager at Southern Trust Funds: "I'm encouraged by the deposit discipline. Letting go of rate-sensitive accounts in a falling rate environment shows they're focused on profitability, not just growth for growth's sake. The wealth management growth is a hidden gem in this story."

Rebecca Sharp, Editor at 'The Prudent Investor' Newsletter: "Let's not get carried away. They're talking up future ROA targets while credit metrics are deteriorating—classified loans are up sharply. Blaming it all on the acquisition is convenient. And another M&A deal in 2026? That sounds more like empire-building distraction before they've fully digested the last meal."

David Chen, Small Business Owner in Macon, GA: "As a customer, I've noticed more products being cross-sold, especially insurance and wealth services. It's a bit more 'corporate' than the old Colony, but if their systems improve and they keep lending locally, it could work."

Colony Bankcorp, headquartered in Baxley, Georgia, operates Colony Bank across Georgia and Florida, providing community banking, mortgage, insurance, and wealth management services.