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, 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.

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 June 30, 2026 and on our results of operations for the three and six months ended June 30, 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. 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, statements regarding the proposed merger of First Reliance Bancshares, Inc. (“First Reliance”) with the Company (the “Proposed Merger”) and expectations with regard to the benefits of the Proposed Merger, and statements regarding the completed acquisition of TC Bancshares, Inc. (“TC Bancshares”). 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-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.

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-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.

Previous 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.

Current wording

The following discussion and analysis presents the more significant factors affecting the Company’s financial condition as of June 30, 2026 and December 31, 2025, and results of operations for the three and six month periods ended June 30, 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 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.

Current wording

At June 30, 2026, the Company had total consolidated assets of $3.6 billion, total loans, net of $2.5 billion, total deposits of $3.0 billion, and stockholders’ equity of $390.0 million. The Company reported net income of $10.9 million, or $0.51 per diluted share, for the three months ended June 30, 2026 and $19.1 million, or $0.90 per diluted share, for the six months ended June 30, 2026 compared to net income of $8.0 million, or $0.46 per diluted share, for the three months ended June 30, 2025 and $14.6 million, or $0.83 per diluted share, for the six months ended June 30, 2025. The increases in net income for the three and six month periods ended June 30, 2026 compared to the three and six month periods ended June 30, 2025 were a result of increases in interest income on loans and increases 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 $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.

Current wording

Net interest income on a tax equivalent basis was $30.0 million for the second quarter of 2026 compared to $22.6 million for the second quarter of 2025, an increase of $7.4 million. Net interest income on a tax equivalent basis for the six months ended June 30, 2026 was $59.4 million, compared to $43.7 million for the six months ended June 30, 2025, an increase of $15.7 million. These increases are 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 $8.9 million to $45.9 million for the second quarter of 2026 compared to the respective period in 2025. Expense on interest bearing liabilities increased $1.5 million to $15.9 million for the second quarter of 2026 compared to the respective period in 2025. Income on interest earning assets increased $18.2 million to $91.0 million for the first six months of 2026 compared to the respective period in 2025. Expense on interest bearing liabilities increased $2.6 million to $31.6 million for the first six months of 2026 compared to the respective period in 2025.

Previous 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.

Current wording

Provision for credit losses for the three and six months ended June 30, 2026 was $1.9 million and $3.7 million, which represents $2.1 million and $3.6 million in provision for credit losses on loans and $210,000 in release and $40,000 in provision for credit losses on unfunded commitments, respectively. This is compared to $450,000 and $2.0 million for the three and six months ended June 30, 2025, which represents $205,000 and $1.8 million in provision for credit losses on loans and $245,000 and $122,000 in provision for credit losses on unfunded commitments, respectively. For the second quarter of 2026, there were net charge-offs of $1.8 million compared to $1.0 million for the same period in 2025. Net charge-offs for the first six months of 2026 were $3.5 million compared to $1.7 million for the same period in 2025. Colony’s allowance for credit losses on loans was $22.0 million, or 0.89% of total loans at June 30, 2026, compared to $23.0 million, or 0.97% 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 June 30, 2026 and December 31, 2025, nonperforming assets were $20.9 million and $24.7 million, or 0.58% and 0.66% of total assets, respectively.

Previous 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.

Current wording

Noninterest income of $12.2 million for the second quarter of 2026 represents an increase of $2.1 million, or 20.4%, from the second quarter of 2025. Noninterest income of $22.9 million for the six months ended June 30, 2026 represents an increase of $3.7 million, or 19.4% from the six months ended June 30, 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 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.

Current wording

For the three months ended June 30, 2026, noninterest expense was $26.4 million, an increase of $4.4 million, or 20.1%, from the same period in 2025. For the six months ended June 30, 2026, noninterest expense was $54.1 million, an increase of $11.9 million, or 28.1%, 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, and professional fees. 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

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 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, 2025, which are included in the Company’s 2025 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, 2025, which are included in the Company’s 2025 Form 10-K.

Previous 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.

Current wording

The Company’s uninsured deposits represented 32.45% of total Bank deposits at June 30, 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 20.66% of total Bank deposits at June 30, 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 $1.8 billion at June 30, 2026. Furthermore, the Company’s capital remains strong with common equity Tier 1 and total capital ratios of 13.0% and 16.2%, respectively, as of June 30, 2026.

Previous 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.

Current wording

We reported net income and diluted earnings per share of $10.9 million and $0.51, respectively, for the second quarter of 2026. This compares to net income and diluted earnings per share of $8.0 million and $0.46, respectively, for the same period in 2025. We reported net income and diluted earnings per share of $19.1 million and $0.90, respectively, for the first six months of 2026. This compares to net income and diluted earnings per share of $14.6 million and $0.83, respectively, for the same period in 2025.

Previous wording

Fully taxable equivalent net interest income for the first quarter of 2026 and 2025 was $29.4 million and $21.1 million, respectively. This increase period over period can be seen in increases in rates and volume on loans as well as a decrease in rates paid on deposits and other borrowings. The net interest margin for the first quarter of 2026 and 2025 was 3.48% and 2.93%, respectively. This increase in the net interest margin for the first quarter of 2026 compared to the same period in 2025 is the result of a combination of increased earnings asset yields through loan growth, repricing, and accretion income on acquired loans which was partially accelerated due to prepayments of acquired loans during the quarter. Additionally, a reduction in the overall cost of funds contributed to the increase in net interest margin when compared to the same period in 2025.

Current wording

Fully taxable equivalent net interest income for the three months ended June 30, 2026 compared to June 30, 2025, was $30.0 million and $22.6 million, respectively. Fully taxable equivalent net interest income for the six months ended June 30, 2026 compared to June 30, 2025, was $59.4 million and $43.7 million, respectively. These increases for both periods can be seen in increases in rates and volume on loans as well as decreases in rates paid on deposits and other borrowings. The net interest margin for the three months ended June 30, 2026 compared to 2025, was 3.52% and 3.12%, respectively. For the six months ended June 30, 2026 compared to June 30, 2025, the net interest margin was 3.50% and 3.02%, respectively. These increases for each respective period are the result of a combination of increased earnings asset yields through loan growth, repricing, and accretion income on acquired loans, which was partially accelerated due to prepayments of acquired loans during the quarter. Additionally, a reduction in the overall cost of funds contributed to the increase in net interest margin when compared to the same periods 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 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.

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 June 30, 2026 compared to the same period in 2025. The increase in average assets was primarily driven by the increase in loans of $472.7 million and deposits in banks of $88.1 million, which was partially offset by decreases in investment securities of $51.5 million. The increase in average liabilities was primarily attributed to an increase in interest-bearing deposits of $410.5 million, which was partially offset by a decrease of $13.6 million in Federal Home Loan Bank advances. For the six months ended June 30, 2026 compared to the same period in 2025, both average assets and average liabilities increased. The increase in average assets was primarily driven by the increase in loans of $501.4 million and deposits in banks of $50.0 million, which was partially offset by decreases in investment securities of $46.4 million. The increase in average liabilities was primarily attributed to an increase in interest-bearing deposits of $398.7 million, which was partially offset by a decrease of $1.9 million in Federal Home Loan Bank advances. The increases for the above periods were also impacted by the TC Bancshares acquisition in December 2025. 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 2.46% 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.

Current wording

The yield on total interest-bearing liabilities decreased from 2.42% in the second quarter of 2025 to 2.29% in the second quarter of 2026. The yield on total interest-bearing liabilities decreased from 2.44% in the first six months of 2025 to 2.28% in the first six months of 2026. These decreases were 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 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.

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 and six months ended June 30, 2026 was $1.9 million and $3.7 million, respectively, compared to $450,000 and $2.0 million, respectively, for the same period in 2025. The provision for credit losses for the three and six months ended June 30, 2026 includes $2.1 million and $3.6 million, respectively, in credit losses on loans and a release of $210,000 and provision of $40,000 in credit losses on unfunded commitments. The provision for credit losses for the three and six months ended June 30, 2025 includes $205,000 and $1.8 million in credit losses on loans and $245,000 and $122,000 in 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 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.

Current wording

Noninterest income increased for the three and six month periods ended June 30, 2026 as compared to the same periods in 2025. These increases were 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 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.

Current wording

Service charges on deposits. For the three and six months ended June 30, 2026, service charges on deposits increased compared to the same periods ended June 30, 2025. These increases were 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 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.

Current wording

Mortgage Fee Income. For the three and six months ended June 30, 2026, mortgage fee income increased compared to the same periods ended June 30, 2025. These increases in mortgage fee income was the result of higher mortgage production in the second quarter and the first six months of 2026 compared to the prior respective periods in 2025.

Previous 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.

Current wording

Gain on sales of SBA loans. For the three and six months ended June 30, 2026, net realized gains on the sale of the guaranteed portion of SBA loans decreased as compared to the same periods ended June 30, 2025. These decreases were related to decreased loan production and sales in the second quarter and the first six months of 2026 in the SBSL division.

Previous wording

Other SBA income. For the three months ended March 31, 2026, other SBA income increased slightly as compared to the same period ended March 31, 2025, primarily related to an increase in servicing fee income.

Current wording

Other SBA income. For the three and six months ended June 30, 2026, other SBA income increased slightly as compared to the same periods ended June 30, 2025, primarily related to an increase in servicing fee income.

Previous 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.

Current wording

BOLI income. For the threeand six months ended June 30, 2026, BOLI income increased when compared to the same periods ended June 30, 2025. These increases were primarily the result of a tax-free gain received on a BOLI claim in the second quarter of 2026 along with normal fluctuations in cash surrender value as well as the addition of BOLI policies from the TC Bancshares acquisition.

Previous 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.

Current wording

Interchange fees. For the three and six months ended June 30, 2026, interchange fee income was higher than the same periods ended June 30, 2025. These increases in interchange fees are the result of customer use of our card programs and fluctuating purchasing habits between periods.

Previous 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.

Current wording

Insurance commissions. For the three and six months ended June 30, 2026, insurance commissions increased compared to the same periods ended June 30, 2025. These variances are volume driven by activity in the Company’s insurance division and were also impacted by the acquisition of the Ellerbee Insurance Agency in the second quarter of 2025.

Previous 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.

Current wording

Other noninterest income. For the three and six months ended June 30, 2026, other noninterest income increased as compared to the same periods ended June 30, 2025. The increases in other noninterest income was primarily attributable to increases in wealth advisory and merchant services as well as income received from a fintech distribution, partially offset by a decrease in equity investment market valuation gains.

Previous wording

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

Current wording

Noninterest expense increased for the three and six months ended June 30, 2026 compared to the same periods in 2025.

Previous wording

Salaries and employee benefits. Salaries and employee benefits for the three months ended March 31, 2026 increased as compared to the same period ended March 31, 2025. This increase was primarily due to the increase in salaries and employee benefits expenses attributed to the additional employees from the Ellerbee Insurance Agency acquisition in April 2025 and the TC Bancshares acquisition in December 2025. In addition, there were increases in commissions paid in 2026 related to SBSL and Colony Financial Advisors.

Current wording

Salaries and employee benefits. Salaries and employee benefits for the three and six months ended June 30, 2026 increased as compared to the same periods ended June 30, 2025. These increases were primarily due to increases in salaries and employee benefits expenses attributed to the additional employees from the TC Bancshares acquisition in December 2025 along with increases in commissions paid in 2026 related to SBSL and Colony Financial Advisors.

Previous 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.

Current wording

Occupancy and equipment. Occupancy and equipment expenses increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 2025. Increases for both periods occurred in utilities and lease expenses primarily due to the impact of the above listed acquisition in 2025 as well as increases in repairs and maintenance.

Previous 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.

Current wording

Acquisition related expenses. Acquisition related expenses increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 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. In addition, the Company recorded professional fees during June 2026 related to the recently announced proposed acquisition of First Reliance.

Previous 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.

Current wording

Information technology expenses. Information technology expenses increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 2025. These increases relate primarily to increases in software, data processing and ATM expenses, which were all impacted by the above listed acquisition of TC Bancshares in 2025.

Previous 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.

Current wording

Professional fees. Professional fees increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 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 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.

Current wording

Advertising and public relations. Advertising and public relations expenses increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 2025. These increases were related to increases in subscriptions, marketing and advertising, which were all impacted by the TC Bancshares acquisition.

Previous 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.

Current wording

Communications. Communications expense increased for the three and six months ended June 30, 2026 compared to the same periods ended June 30, 2025. The change is related to fluctuations in data circuit fees.

Previous wording

Other noninterest expense. Other noninterest expense increased for the three months ended March 31, 2026 as compared to the same period ended March 31, 2025. The increase was primarily due to increases in travel, meals and entertainment, insurance, postage and stationery and supplies, all impacted by the above listed acquisitions.

Current wording

Other noninterest expense. Other noninterest expense decreased for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. This decrease was primarily due to a decrease in the valuation of the SBSL servicing asset along with a decrease in other losses. Other noninterest expense increased for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. This increase was primarily related to increases in travel, meals and entertainment, insurance, postage and stationery and supplies, all impacted by the above listed acquisition of TC Bancshares in 2025.

Previous 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.

Current wording

Income tax expense for the three and six months ended June 30, 2026 was $2.8 million and $5.1 million, respectively, compared to $2.1 million and $3.7 million, respectively, for the same periods in 2025. The Company’s effective tax rate for the three and six months ended June 30, 2026 was 20.7% and 21.1%, respectively, compared to 20.5% and 20.3%, respectively, for the three and six months ended June 30, 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

Total assets were $3.7 billion at March 31, 2026 and December 31, 2025.

Current wording

Total assets were $3.6 billion at June 30, 2026 and $3.7 billion at December 31, 2025.

Previous 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.

Current wording

At June 30, 2026, gross loans outstanding (excluding loans held for sale) were $2.46 billion, an increase of $83.6 million, or 3.51%, compared to $2.38 billion at December 31, 2025.

Previous 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

Current wording

At June 30, 2026, approximately 63.2% of our loans were secured by commercial real estate. Our construction, land & land development loans have decreased slightly since December 31, 2025 while all other categories of loans experienced increases. We continue to maintain loan growth at disciplined pricing levels which has contributed to an improved net interest margin.

Previous wording

Loans totaled $2.41 billion at March 31, 2026, an increase of 1.4% from $2.38 billion at December 31, 2025, which was primarily attributable to organic loan growth. The majority of the Company’s loan portfolio is comprised of real estate loans. Commercial and residential real estate loans which is primarily for 1-4 family residential properties, nonfarm nonresidential properties and real estate construction loans made up 84.2% and 84.5% of total loans at March 31, 2026 and December 31, 2025, respectively. Commercial, financial and agricultural loans represents 9.1% of total loans at March 31, 2026 and 9.2% at December 31, 2025. Consumer and other loans increased to 6.6% of total loans at March 31, 2026 from 6.3% at December 31, 2025.

Current wording

Loans totaled $2.46 billion at June 30, 2026, an increase of 3.5% from $2.38 billion at December 31, 2025, which was primarily attributable to organic loan growth. The majority of the Company’s loan portfolio is comprised of real estate loans. Commercial and residential real estate loans which is primarily for 1-4 family residential properties, nonfarm nonresidential properties and real estate construction loans made up 83.5% and 84.5% of total loans at June 30, 2026 and December 31, 2025, respectively. Commercial, financial and agricultural loans represent 9.3% of total loans at June 30, 2026 and 9.2% at December 31, 2025. Consumer and other loans increased to 7.2% of total loans at June 30, 2026 from 6.3% at December 31, 2025.

Previous 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.

Current wording

The allowance for credit losses on loans was $22.0 million at June 30, 2026 compared to $19.2 million at June 30, 2025, an increase of $2.8 million, or 15.0%. The allowance for credit losses on loans as a percentage of loans was 0.89% and 0.96% at June 30, 2026 and 2025, respectively. The provision for credit losses was $1.9 million compared to $450,000 for the three months ended June 30, 2026 and June 30, 2025, respectively. The provision for credit losses for the three months ended June 30, 2026 includes $2.1 million in credit losses on loans and a release of $210,000 in credit losses on unfunded commitments. The provision for credit losses for the three months ended June 30, 2025 includes $205,000 in credit losses on loans and $245,000 in credit losses on unfunded commitments. The provision for credit losses was $3.7 million compared to $2.0 million for the six months ended June 30, 2026 compared to the same period in 2025. The provision for credit losses for the six months ended June 30, 2026 includes $3.6 million in credit losses on loans and $40,000 in credit losses on unfunded commitments. The provision for credit losses for the six months ended June 30, 2025 includes $1.8 million in credit losses on loans and $122,000 in credit losses on unfunded commitments. For the three and six month periods ended June 30, 2026, we experienced increases in net charge-offs primarily related to SBA loans in our SBSL portfolio 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.