COLONY BANKCORP INC

Previous wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Colony Bankcorp, Inc. and our wholly owned subsidiary, Colony Bank, from December 31, 2024 through September 30, 2025 and on our results of operations for the three and nine months ended September 30, 2025 and 2024. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto in the Company's 2024 Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.

Current wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of Colony Bankcorp, Inc. and our wholly owned subsidiary, Colony Bank, from December 31, 2025 through March 31, 2026 and on our results of operations for the three months ended March 31, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto in the Company’s 2025 Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance and statements regarding the proposed merger of TC Bancshares, Inc. ("TCBC") with the Company (the "Proposed Merger") and expectations with regard to the benefits of the Proposed Merger. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

Previous wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Quarterly Report on Form 10-Q. Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward looking statements in this Quarterly Report on Form 10-Q. In addition, our past results of operations are not necessarily indicative of our future results. You should not rely on any forward looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Current wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Quarterly Report on Form 10-Q. Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward-looking statements in this Quarterly Report on Form 10-Q. In addition, our past results of operations are not necessarily indicative of our future results. You should not rely on any forward-Oklooking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Previous wording

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of September 30, 2025 and December 31, 2024, and results of operations for the three and nine month periods ended September 30, 2025 and 2024. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements, notes thereto and other financial information appearing elsewhere in this report.

Current wording

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of March 31, 2026 and December 31, 2025, and results of operations for the three month periods ended March 31, 2026 and 2025. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements, notes thereto and other financial information appearing elsewhere in this report.

Previous wording

At September 30, 2025, the Company had total consolidated assets of $3.2 billion, total loans, net of $2.0 billion, total deposits of $2.6 billion, and stockholders’ equity of $302.3 million. The Company reported net income of $5.8 million, or $0.33 per diluted share, for the three months ended September 30, 2025 and $20.4 million, or $1.17 per diluted share, for the first nine months of 2025, compared to net income of $5.6 million, or $0.32 per diluted share, for the three months ended September 30, 2024 and $16.4 million, or $0.94 per diluted share, for the first nine months of 2024. The increase in net income for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily a result of an increase in interest income on loans, and a minimal increase in noninterest income, along with a decrease in interest expense, that was partially offset by an increase in noninterest expense. The increase in net income for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily a result of increases in interest income, reflected in the loan and deposit in banks categories, as well as an increase in noninterest income, along with a decrease in interest expense that was partially offset by an increase in noninterest expense.

Current wording

At March 31, 2026, the Company had total consolidated assets of $3.7 billion, total loans, net of $2.4 billion, total deposits of $3.0 billion, and stockholders’ equity of $380.4 million. The Company reported net income of $8.2 million, or $0.39 per diluted share, for the three months ended March 31, 2026 compared to net income of $6.6 million, or $0.38 per diluted share, for the three months ended March 31, 2025. The increase in net income for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was a result of an increase in interest income on loans and an increase in noninterest income, partially offset by an increase in interest expense and an increase in noninterest expense as well as the impact from the acquisition of TC Bancshares in December 2025.

Previous wording

Net interest income on a tax equivalent basis was $22.9 million for the third quarter of 2025 compared to $18.7 million for the third quarter of 2024, an increase of $4.2 million. Net interest income on a tax equivalent basis for the nine months ended September 30, 2025 was $66.6 million, compared to $56.1 million for the nine months ended September 30, 2024, an increase of $10.5 million. These increases are the result of an increase in income on interest earning assets along with a decrease in expense on interest bearing liabilities. Income on interest earning assets increased $2.3 million to $37.1 million for the third quarter of 2025 compared to the respective period in 2024. Expense on interest bearing liabilities decreased $1.9 million to $14.2 million for the third quarter of 2025 compared to the respective period in 2024. Income on interest earning assets increased $8.1 million to $109.8 million for the first nine months of 2025 compared to the respective period in 2024. Expense on interest bearing liabilities decreased $2.4 million to $43.2 million for the first nine months of 2025 compared to the respective period in 2024.

Current wording

Net interest income on a tax equivalent basis was $29.3 million for the first quarter of 2026 compared to $21.1 million for the first quarter of 2025, an increase of $8.2 million. This increase is the result of an increase in income on interest earning assets slightly offset with an increase in expense on interest bearing liabilities. Income on interest earning assets increased $9.3 million to $45.0 million for the first quarter of 2026 compared to the respective period in 2025. Expense on interest bearing liabilities increased $1.1 million to $15.7 million for the first quarter of 2026 compared to the respective period in 2025.

Previous wording

Provision for credit losses for the three and nine months ended September 30, 2025 was $900,000 and $2.9 million, which represents $760,000 and $2.6 million in provision for credit losses on loans and $140,000 and $262,000 in provision for credit losses on unfunded commitments, respectively. This is compared to $750,000 and $2.4 million for the three and nine months ended September 30, 2024, which represents $996,000 and $2.8 million in provision for credit losses on loans and $246,000 and $362,000 in release of credit losses on unfunded commitments, respectively. For the third quarter of 2025, there were net charge-offs of $1.8 million compared to $139,000 for the same period in 2024. Net charge-offs for the first nine months of 2025 were $3.5 million compared to $1.5 million for the same period in 2024. Colony’s allowance for credit losses on loans was $18.1 million, or 0.89% of total loans at September 30, 2025, compared to $19.0 million, or 1.03% of total loans, at December 31, 2024. Both periods experienced increases in net charge-offs primarily due to SBA loans in the SBSL portfolio related to loans originated prior to changes made in the Company's credit policy. Newly originated loans of this type have tighter credit requirements and higher SBA guarantee percentages. At September 30, 2025 and December 31, 2024, nonperforming assets were $15.2 million and $11.3 million, or 0.48% and 0.36% of total assets, respectively.

Current wording

Provision for credit losses for the three months ended March 31, 2026 was $1.75 million, which represents $1.5 million in provision for credit losses on loans and $250,000 in provision for credit losses on unfunded commitments. This is compared to $1.5 million for the three months ended March 31, 2025, which represents $1.6 million in provision for credit losses on loans and $123,000 in release of credit losses on unfunded commitments. For the first quarter of 2026, there were net charge-offs of $1.7 million compared to $606,000 for the same period in 2025. Colony’s allowance for credit losses on loans was $21.7 million, or 0.90% of total loans at March 31, 2026, compared to $23.0 million, or 1.04% of total loans, at December 31, 2025. The increase in net charge-offs was primarily due to SBA loans in the Small Business Specialty Lending (“ SBSL”) portfolio as well as increases in commercial, financial & agricultural and consumer loans. At March 31, 2026 and December 31, 2025, nonperforming assets were $19.9 million and $24.7 million, or 0.53% and 0.66% of total assets, respectively.

Previous wording

Noninterest income of $10.1 million for the third quarter of 2025 represents an increase of $9,000, or 0.09%, from the third quarter of 2024. Noninterest income of $29.2 million for the nine months ended September 30, 2025 represents an increase of $167,000, or 0.57%, from the nine months ended September 30, 2024. These increases are a result of increases in mortgage fee income, insurance commissions, interchange fees and other noninterest income which were partially offset by a decrease in gain on sales of SBA loans. See "Table 3 - Noninterest Income" for more detail and discussion on the primary drivers to the increase in noninterest income.

Current wording

Noninterest income of $10.7 million for the first quarter of 2026 represents an increase of $1.7 million, or 18.5%, from the first quarter of 2025. These increases are a result of increases in service charges on deposits, mortgage fee income, insurance commissions, interchange fees, and income from Colony Financial Advisors, which is included in other noninterest income. See “Table 3 - Noninterest Income” for more detail and discussion on the primary drivers to the increase in noninterest income.

Previous wording

For the three months ended September 30, 2025, noninterest expense was $24.6 million, an increase of $3.8 million, or 18.13%, from the same period in 2024. For the nine months ended September 30, 2025, noninterest expense was $66.8 million, an increase of $5.3 million, or 8.57%, from the same period in 2024. Increases in noninterest expense for both periods were a result of increases in salaries and employee benefits, occupancy and equipment, acquisition related expenses, information technology expenses, professional fees and other noninterest expenses, which includes a loss related to a wire fraud incident. See "Table 4 - Noninterest Expense" for more detail and discussion on the primary drivers to the increase in noninterest expense.

Current wording

For the three months ended March 31, 2026, noninterest expense was $27.7 million, an increase of $7.5 million, or 36.9%, from the same period in 2025. Increases in noninterest expense for both periods were a result of increases in salaries and employee benefits, occupancy and equipment, acquisition related expenses, information technology expenses, professional fees and other noninterest expenses. See “Table 4 - Noninterest Expense” for more detail and discussion on the primary drivers to the increase in noninterest expense.

Previous wording

Our accounting and reporting policies are in accordance with GAAP and conform to general practices within the banking industry. We have identified certain of its accounting policies as “critical accounting policies,” consisting of those related to business combinations, allowance for credit losses and income taxes. In determining which accounting policies are critical in nature, we have identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation and disclosure of the critical accounting policies. The application of these policies has a significant impact on the Company’s unaudited interim consolidated financial statements. Our financial results could differ significantly if different judgments or estimates are used in the application of these policies. All accounting policies described in Note 1 of our consolidated financial statements as of December 31, 2024, which are included in the Company’s 2024 Form 10-K should be reviewed for a greater understanding of how we record and report our financial performance. Other than our methodology for estimating allowance for credit losses (mentioned below), there have been no significant changes to the Significant Accounting Policies as described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2024, which are included in the Company’s 2024 Form 10-K.

Current wording

Our accounting and reporting policies are in accordance with GAAP and conform to general practices within the banking industry. We have identified certain of its accounting policies as “critical accounting policies,” consisting of those related to business combinations, allowance for credit losses and income taxes. In determining which accounting policies are critical in nature, we have identified the policies that require significant judgment or involve complex estimates. It is management’s practice to discuss critical accounting policies with the Board of Directors’ Audit Committee on a periodic basis, including the development, selection, implementation and disclosure of the critical accounting policies. The application of these policies has a significant impact on the Company’s unaudited interim consolidated financial

Previous wording

The Company’s uninsured deposits represented 31.52% of total Bank deposits at September 30, 2025 compared to 33.03% of total Bank deposits at December 31, 2024. The Company continues to maintain strong liquidity with available sources of funding of approximately $1.3 billion at September 30, 2025. Furthermore, the Company’s capital remains strong with common equity Tier 1 and total capital ratios of 12.37% and 16.00%, respectively, as of September 30, 2025.

Current wording

The Company’s uninsured deposits represented 32.21% of total Bank deposits at March 31, 2026 compared to 31.65% of total Bank deposits at December 31, 2025. Adjusted uninsured deposits (which excludes deposits collateralized by public funds and internal accounts) represented 20.35% of total Bank deposits at March 31, 2026 compared to 18.62% of total Bank deposits at December 31, 2025. The Company continues to maintain strong liquidity with available sources of funding of approximately $1.9 billion at March 31, 2026. Furthermore, the Company’s capital remains strong with common equity Tier 1 and total capital ratios of 12.5% and 15.8%, respectively, as of March 31, 2026.

Previous wording

We reported net income and diluted earnings per share of $5.8 million and $0.33, respectively, for the third quarter of 2025. This compares to net income and diluted earnings per share of $5.6 million and $0.32, respectively, for the same period in 2024. We reported net income and diluted earnings per share of $20.4 million and $1.17, respectively, for the first nine months ended September 30, 2025. This compares to net income and diluted earnings per share of $16.4 million and $0.94, respectively, for the same period in 2024.

Current wording

We reported net income and diluted earnings per share of $8.2 million and $0.39, respectively, for the first quarter of 2026. This compares to net income and diluted earnings per share of $6.6 million and $0.38, respectively, for the same period in 2025.

Previous wording

The following tables indicate the relationship between interest income and interest expense and the average amounts of assets and liabilities for the periods indicated. As shown in the tables below, both average assets and average liabilities increased for the three months ended September 30, 2025 compared to the same period in 2024. The increase in average assets was primarily driven by the increase in loans of $124.8 million and deposits in banks of $140,000, which was partially offset by decreases in investment securities of $80.9 million. The increase in average liabilities was primarily attributed to an increase in interest bearing deposits of $36.2 million as well as an increase in other borrowings $1.8 million. For the nine months ended September 30, 2025, both average assets and average liabilities increased compared to the same period in 2024. The increase in average assets was primarily driven by the increase in the loan portfolio and deposits in banks of $67.8 million and $76.1 million, respectively, partially offset by a decrease in investment securities of $50.7 million. The increase in average liabilities was attributed to an increase in interest bearing deposits and Federal Home Loan Bank advances of $79.9 million and $11.5 million, respectively. The net interest spread, as well as the net interest margin, will continue to be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment.

Current wording

The following tables indicate the relationship between interest income and interest expense and the average amounts of assets and liabilities for the periods indicated. As shown in the tables below, both average assets and average liabilities increased for the three months ended March 31, 2026 compared to the same period in 2025. The increase in average assets was driven by the increase in loans of $530.5 million and deposits in banks of $10.5 million, which was partially offset by decreases in investment securities of $41.3 million. The increase in average assets was also attributable to the TC Bancshares acquisition. The increase in average liabilities of $396.8 million was primarily attributed to the TC Bancshares acquisition. The net interest spread, as well as the net interest margin, will continue to be impacted by future changes in short-term and long-term interest rate levels, as well as the impact from the competitive environment.

Previous wording

The yield on total interest-bearing liabilities decreased from 2.76% in the third quarter of 2024 to 2.40% in the third quarter of 2025. The yield on total interest-bearing liabilities decreased from 2.66% for the nine months ended September 30, 2024 to 2.43% for the nine months ended September 30, 2025. These decreases were primarily due to decreases in the federal funds interest rate of 100 basis points during the fourth quarter of 2024 as well as an additional decrease of 25 basis points in September 2025, along with low cost deposit growth during the nine months of 2025, which illustrates the Company's continued focus on its deposit first culture and building customer relationships.

Current wording

The yield on total interest-bearing liabilities decreased from 2.46% in the first quarter of 2025 to 2.28% in the first quarter of 2026. This decrease was primarily due to decreases in the federal funds interest rate of 75 basis points during the fourth quarter of 2025, along with the addition of deposits from the TC Bancshares merger in December 2025.

Previous wording

The provision for credit losses recorded in each period is based on the amount required such that the total allowance for credit losses reflects the appropriate balance, in the estimation of management, sufficient to cover expected credit losses over the expected life of a loan exposure and unfunded commitments where the likelihood is that funding will occur. Provision for credit losses for the three and nine months ended September 30, 2025 was $900,000 and $2.9 million, respectively, compared to $750,000 and $2.4 million, respectively, for the same period in 2024. The provision for credit losses for the three and nine months ended September 30, 2025 includes $760,000 and $2.6 million, respectively, in credit losses on loans and $140,000 and $262,000, respectively in credit losses on unfunded commitments. The provision for credit losses for the three and nine months ended September 30, 2024 includes $996,000 and $2.8 million, respectively, in credit losses on loans and $246,000 and $362,000, respectively, in release of credit losses on unfunded commitments. See the section captioned “Loans and Allowance for Credit Losses” elsewhere in this discussion for further analysis of the provision for credit losses.

Current wording

The provision for credit losses recorded in each period is based on the amount required such that the total allowance for credit losses reflects the appropriate balance, in the estimation of management, sufficient to cover expected credit losses over the expected life of a loan exposure and unfunded commitments where the likelihood is that funding will occur. Provision for credit losses for the three months ended March 31, 2026 was $1.75 million, compared to $1.5 million for the same period in 2025. The provision for credit losses for the three months ended March 31, 2026 includes $1.5 million in credit losses on loans and $250,000 in credit losses on unfunded commitments. The provision for credit losses for the three months ended March 31, 2025 includes $1.6 million in credit losses on loans and $123,000 in release of credit losses on unfunded commitments. See the section captioned “Loans and Allowance for Credit Losses” elsewhere in this discussion for further analysis of the provision for credit losses.

Previous wording

Noninterest income increased for the three and nine month periods ended September 30, 2025 as compared to the same periods in 2024. The increases in both periods is primarily a result of increases in mortgage fee income, insurance commissions, interchange fees and other noninterest income partially offset by a decrease in gain on sales of SBA loans.

Current wording

Noninterest income increased for the three month period ended March 31, 2026 as compared to the same period in 2025. The increase was primarily a result of increases in service charges on deposits, mortgage fee income, insurance commissions, interchange fees and other noninterest income partially offset by a decrease in gain on sales of SBA loans.

Previous wording

Service charges on deposits. For the three months ended September 30, 2025, service charges on deposits increased compared to the same period ended September 30, 2024. This increase was related to increases in deposit account fees implemented in June 2025. For the nine months ended September 30, 2025, service charges on deposits experienced a slight decrease compared to the same period ended September 30, 2024. This decrease in service charges was primarily a result of lower NSF fees on deposit accounts, partially offset by the increase in deposit account fees described above.

Current wording

Service charges on deposits. For the three months ended March 31, 2026, service charges on deposits increased compared to the same period ended March 31, 2025. This increase was related to increases in deposit account fees implemented during the last half of 2025 as well as the impact of the TC Bancshares acquisition.

Previous wording

Mortgage Fee Income. For the three and nine months ended September 30, 2025, mortgage fee income increased compared to the same periods ended September 30, 2024. These increases in mortgage fee income were the result of higher mortgage production in each respective period in 2025 compared to their prior respective periods in 2024.

Current wording

Mortgage Fee Income. For the three months ended March 31, 2026, mortgage fee income increased compared to the same period ended March 31, 2025. This increase in mortgage fee income was the result of higher mortgage production in first quarter of 2026 compared to the prior respective period in 2025.

Previous wording

Gain on sales of SBA loans. For the three and nine months ended September 30, 2025, net realized gains on the sale of the guaranteed portion of SBA loans decreased as compared to the same periods ended September 30, 2024. These decreases are related to decreased loan production and sales in 2025 in the Small Business Specialty Lending division.

Current wording

Gain on sales of SBA loans. For the three months ended March 31, 2026, net realized gains on the sale of the guaranteed portion of SBA loans decreased as compared to the same period ended March 31, 2025. This decrease was related to decreased loan production and sales in first quarter of 2026 in the SBSL division.

Previous wording

BOLI income. For the three months ended September 30, 2025, BOLI income was slightly higher when compared to the same period ended September 30, 2024 due to normal fluctuations in cash surrender value. For the nine months ended September 30, 2025 compared to the same period in 2024, BOLI income decreased due to the payout of death benefits during the first quarter of 2024.

Current wording

BOLI income. For the three months ended March 31, 2026, BOLI income was slightly higher when compared to the same period ended March 31, 2025 due to normal fluctuations in cash surrender value as well as the addition of BOLI polices from the TC Bancshares acquisition.

Previous wording

Interchange fees. For thethree and nine months ended September 30, 2025, interchange fee income was slightly higher than the same periods ended September 30, 2024. This increase in interchange fees is the result of customer use of our card programs and fluctuating purchasing habits between periods.

Current wording

Interchange fees. For the three months ended March 31, 2026, interchange fee income was slightly higher than the same period ended March 31, 2025. This increase in interchange fees is the result of customer use of our card programs and fluctuating purchasing habits between periods.

Previous wording

Insurance commissions. For thethree and nine months ended September 30, 2025, insurance commissions increased compared to the same periods ended September 30, 2024. This variance is volume driven by activity in the Company's insurance division and was also impacted by the acquisition of the Ellerbee Insurance Agency in the second quarter of 2025.

Current wording

Insurance commissions. For the three months ended March 31, 2026, insurance commissions increased compared to the same periods ended March 31, 2025. This variance is volume driven by activity in the Company’s insurance division and was also impacted by the acquisition of the Ellerbee Insurance Agency in the second quarter of 2025.

Previous wording

Other noninterest income. For thethree and nine months ended September 30, 2025, other noninterest income increased ascompared tothe same periods ended September 30, 2024. The increase in other noninterest income for both periods ended September 30, 2025 was primarily attributable to increases in wealth advisory and merchant services, SBSL related fees and income related to the Company's portion of a Fintech distribution, offset by a decrease in equity investment market valuation gains and decreases in gains on sales of other real estate and repossessed assets.

Current wording

Other noninterest income. For the three months ended March 31, 2026, other noninterest income increased as compared to the same period ended March 31, 2025. The increase in other noninterest income was primarily attributable to increases in wealth advisory and merchant services, and increases in gains on sales of other real estate and fixed assets along with decreased losses on repossessed assets, offset by a decrease in equity investment market valuation gains.

Previous wording

Noninterest expense increased for the three and nine months ended September 30, 2025 compared to the same periods in 2024.

Current wording

Noninterest expense increased for the three months ended March 31, 2026 compared to the same periods in 2025.

Previous wording

Occupancy and equipment. Occupancy and equipment expenses increased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024. These increases relate primarily to increases in repair and maintenance, real estate taxes and lease expenses.

Current wording

Occupancy and equipment. Occupancy and equipment expenses increased for the three months ended March 31, 2026 compared to the same period ended March 31, 2025. Increases occurred in utilities and lease expenses primarily due to the impact of the above listed acquisitions in 2025.

Previous wording

Acquisition related expenses. Acquisition related expenses increased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024 and consist primarily of professional fees, regulatory fees and advertising attributable to the merger with TC Bancshares announced in the third quarter of 2025.

Current wording

Acquisition related expenses. Acquisition related expenses increased for the three months ended March 31, 2026 compared to the same period ended March 31, 2025 and consists primarily of professional fees, information technology expenses, advertising, and costs associated with a lease buyout, all attributable to the merger with TC Bancshares.

Previous wording

Information technology expenses. Information technology expenses increased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024. These increases relate primarily to increases in software expenses which are partially offset by decreases in data processing expenses.

Current wording

Information technology expenses. Information technology expenses increased for the three months ended March 31, 2026 compared to the same period ended March 31, 2025. This increase relates primarily to increases in software, data processing and ATM expenses, which were all impacted by the above listed acquisitions in 2025.

Previous wording

Professional fees. Professional fees increased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024. These increases relate to increases in accounting and consulting fees partially offset by decreases in legal fees.

Current wording

Professional fees. Professional fees increased for the three months ended March 31, 2026 compared to the same periods ended March 31, 2025. These increases relate to increases in legal and consulting fees impacted by the TC Bancshares acquisition.

Previous wording

Advertising and public relations. Advertising and public relations expenses increased and decreased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024, respectively. The quarter over quarter increase was related to increases in donations to various local community projects while the decrease year over year related primarily to the timing of donations during the first quarter of 2024 compared to first quarter of 2025 related to the Georgia Scholarship Program along with a decrease in appraisal fees.

Current wording

Advertising and public relations. Advertising and public relations expenses increased for the three months ended March 31, 2026 compared to the same period ended March 31, 2025. The quarter over quarter increase was related to increases in subscriptions, marketing and advertising, which were all impacted by the TC Bancshares acquisition.

Previous wording

Communications. Communications expense increased and decreased for the three and nine months ended September 30, 2025 compared to the same periods ended September 30, 2024, respectively. The changes are related to fluctuations in data circuit fees.

Current wording

Communications. Communications expense increased for the three months ended March 31, 2026 compared to the same period ended March 31, 2025. The change is related to fluctuations in data circuit fees.

Previous wording

Income tax expense for the three and nine months ended September 30, 2025 was $1.5 million and $5.2 million, respectively, compared to $1.4 million and $4.3 million, respectively, for the same periods in 2024. The Company’s effective tax rate for the three and nine months ended September 30, 2025 was 20.0% and 20.2%, respectively, compared to 20.0% and 20.6%, respectively, for the three and nine months ended September 30, 2024. The largest driver of the difference is the tax-exempt income primarily from BOLI and tax exempt interest.

Current wording

Income tax expense for the three months ended March 31, 2026 was $2.3 million, compared to $1.7 million for the same period in 2025. The Company’s effective tax rate for the three months ended March 31, 2026 was 21.6% compared to 20.1% for the three months ended March 31, 2025. The largest driver of the difference is the tax-exempt income primarily from BOLI and tax-exempt interest as well as the impact related to the acquisition of TC Bancshares in the fourth quarter of 2025.

Previous wording

At September 30, 2025, gross loans outstanding (excluding loans held for sale) were $2.04 billion, an increase of $194.1 million, or 10.53%, compared to $1.84 billion at December 31, 2024.

Current wording

At March 31, 2026, gross loans outstanding (excluding loans held for sale) were $2.41 billion, an increase of $32.2 million, or 1.35%, compared to $2.38 billion at December 31, 2025.

Previous wording

At September 30, 2025, approximately 64.1% of our loans were secured by commercial real estate. Our total commercial real estate loans have increased since December 31, 2024 as well as our residential real estate and consumer lending, while commercial, financial & agricultural saw a slight decrease. We continue to maintain loan growth at disciplined pricing levels which has contributed to an improved net interest margin.

Current wording

At March 31, 2026, approximately 64.2% of our loans were secured by commercial real estate. Our total commercial real estate loans have decreased slightly since December 31, 2025 while residential, commercial, financial & agricultural

Previous wording

The allowance for credit losses on loans was $18.1 million at September 30, 2025 compared to $19.7 million at September 30, 2024, a decrease of $1.6 million, or 8.0%. The allowance for credit losses on loans as a percentage of loans was 0.89% and 1.04% at September 30, 2025 and 2024, respectively. The provision for credit losses was $900,000 compared to $750,000 for the three months ended September 30, 2025 and September 30, 2024, respectively. The provision for credit losses for the quarter ended September 30, 2025 includes $760,000 in credit losses on loans and $140,000 in credit losses on unfunded commitments. The provision for credit losses for the quarter ended September 30, 2024 includes $996,000 in credit losses on loans and a release of $246,000 in credit losses on unfunded commitments. The provision for credit losses was $2.9 million compared to $2.4 million for the nine months ended September 30, 2025 and 2024, respectively. The provision for credit losses for the nine months ended September 30, 2025 includes $2.6 million in credit losses on loans and $262,000 in credit losses on unfunded commitments. The provision for credit losses for the nine months ended September 30, 2024 includes $2.8 million in credit losses on loans and a release of $362,000 in credit losses on unfunded commitments. For the three and nine month periods ended September 30, 2025, we experienced increases in net charge-offs primarily related to SBA loans in our SBSL portfolio which represented 70% and 67%, respectively, of total net charge-offs for each period. These charge-offs were related to loans originated prior to changes made in the Company's credit policy. Newly originated loans of this type have tighter credit requirements and higher SBA guarantee percentages. In addition to the increased net charge-offs, another impact to the allowance for credit losses was the reduction in loss rates for 1-4 family loans in the allowance model based on updated prepayment metrics which reduced our calculated loss rate before qualitative adjustments. Therefore, the amount of provision expense recorded in each period was the amount required such that the total allowance for credit losses reflected the appropriate balance, in the estimation of management, that was sufficient to cover expected credit losses on loans over the expected life of a loan exposure and unfunded commitments where the likelihood is that funding will occur.

Current wording

The allowance for credit losses on loans was $21.7 million at March 31, 2026 compared to $20.0 million at March 31, 2025, an increase of $1.7 million, or 8.5%. The allowance for credit losses on loans as a percentage of loans was 0.90% and 1.04% at March 31, 2026 and 2025, respectively. The provision for credit losses was $1.75 million compared to $1.5 million for the three months ended March 31, 2026 and March 31, 2025, respectively. The provision for credit losses for the quarter ended March 31, 2026 includes $1.5 million in credit losses on loans and $250,000 in credit losses on unfunded commitments. The provision for credit losses for the quarter ended March 31, 2025 includes $1.6 million in credit losses on loans and a release of $123,000 in credit losses on unfunded commitments. For the three month period ended March 31, 2026, we experienced increases in net charge-offs primarily related to SBA loans in our SBSL portfolio which represented 55.1% of total net charge-offs for the period along with increases in commercial, financial & agricultural and consumer loans. Accordingly, the amount of provision expense recorded in each period was the amount required such that the total allowance for credit losses reflected the appropriate balance, in the estimation of management, that was sufficient to cover expected credit losses on loans over the expected life of a loan exposure and unfunded commitments where the likelihood is that funding will occur.

Previous wording

The following table presents an analysis of the allowance for credit losses on loans as of and for the nine months ended September 30, 2025 and 2024:

Current wording

The following table presents an analysis of the allowance for credit losses on loans as of and for the three months ended March 31, 2026 and 2025:

Previous wording

The following table presents a summary of allowance for credit loss for the three and nine months ended September 30, 2025 and 2024.

Current wording

The following table presents a summary of allowance for credit loss for the three months ended March 31, 2026 and 2025.

Previous wording

Asset quality experienced a slight decrease during the first nine months of 2025. Nonperforming assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property and other real estate owned ("OREO"). Nonaccrual loans totaled $14.3 million at September 30, 2025, an increase of $3.6 million, or 33.8%, from $10.7 million at December 31, 2024. There were ten loans contractually past due 90 days or more and still accruing totaling $98,000 at September 30, 2025 compared to six loans totaling $152,000 at December 31, 2024. There was $160,000 in repossessed personal property at September 30, 2025 and $328,000 at December 31, 2024. OREO totaled $710,000 at September 30, 2025 compared to $202,000 at December 31, 2024, which represents the addition of two properties totaling $820,000 and the sale of one of those which totaled $320,000. As of September 30, 2025, total nonperforming assets as a percent of total assets increased to 0.48% compared with 0.36% at December 31, 2024. The increase in nonperforming assets was primarily the result of increases in all loan segments except residential real estate loans, partially offset by repayments, payoffs and charged off loans.

Current wording

Asset quality experienced improvement during the first three months of 2026. Nonperforming assets include nonaccrual loans, accruing loans contractually past due 90 days or more, repossessed personal property and other real estate owned (“OREO”). Nonaccrual loans totaled $17.6 million at March 31, 2026, a decrease of $5.8 million, or 24.7%, from $23.4 million at December 31, 2025. There were fourteen loans contractually past due 90 days or more and still accruing totaling $178,000 at March 31, 2026, compared to eight loans totaling $95,000 at December 31, 2025. There was $205,000 in repossessed personal property at March 31, 2026, and $190,000 at December 31, 2025. OREO totaled $1.9 million at March 31, 2026, compared to $1.0 million at December 31, 2025, which represents the addition of seven properties totaling $1.7 million and the sale of two properties which totaled $659,000. As of March 31, 2026, total nonperforming assets as a percent of total assets decreased to 0.53% compared with 0.66% at December 31, 2025. The decrease in nonperforming assets was primarily the result of decreases in all loan segments except residential real estate loans, partially offset by repayments, payoffs and charged off loans.

Previous wording

The Company had one loan modified due to financial difficulty during the three and nine month periods ended September 30, 2025. See Note 3 - Loans, included elsewhere in this Quarterly Report on Form 10-Q for additional details on loan modifications.

Current wording

The Company had no loans modified due to financial difficulty during the three month period ended March 31, 2026. See Note 3 - Loans, included elsewhere in this Quarterly Report on Form 10-Q for additional details on loan modifications.

Previous wording

Total deposits increased $16.4 million to $2.58 billion at September 30, 2025 from $2.57 billion at December 31, 2024. As of September 30, 2025, 17.1% of total deposits were comprised of noninterest-bearing accounts and 82.9% were comprised of interest-bearing deposit accounts, compared to 18.0% and 82.0% as of December 31, 2024, respectively. The overall increase in our deposits was primarily due to an increase in time deposits related to brokered deposits, partially offset by decreases in noninterest-bearing demand, interest-bearing demand and savings and money market deposits due to seasonality in customer deposit balances.

Current wording

Total deposits decreased $19.1 million to $3.05 billion at March 31, 2026 from $3.07 billion at December 31, 2025. As of March 31, 2026, 16.2% of total deposits were comprised of noninterest-bearing accounts and 83.8% were comprised of interest-bearing deposit accounts, compared to 17.2% and 82.8% as of December 31, 2025, respectively. The overall decrease in our deposits was primarily due to a decrease in noninterest-bearing deposits, partially offset by increases in savings and money market deposits due to seasonality in customer deposit balances.

Previous wording

We had $130.0 million in brokered deposits at September 30, 2025 and $59.5 million at December 31, 2024. We use brokered deposits, subject to certain limitations and requirements, as a source of funding to support our asset growth and augment the deposits generated from our branch network, which are our principal source of funding. Our level of brokered deposits varies from time to time depending on competitive interest rate conditions and other factors, and tends to increase as a percentage of total deposits when the brokered deposits are less costly than issuing internet certificates of deposit or borrowing from the FHLB.

Current wording

We had $136.9 million in brokered deposits at March 31, 2026 and $131.9 million at December 31, 2025. We use brokered deposits, subject to certain limitations and requirements, as a source of funding to support our asset growth and augment the deposits generated from our branch network, which are our principal source of funding. Our level of brokered deposits varies from time to time depending on competitive interest rate conditions and other factors, and tends to increase as a percentage of total deposits when the brokered deposits are less costly than issuing internet certificates of deposit or borrowing from the FHLB.