BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2025

Business Combination [Abstract]

BUSINESS COMBINATION

BUSINESS COMBINATION

Acquisition of The Ellerbee Agency

On April 1, 2025, the Company acquired The Ellerbee Agency, an Allstate appointed consumer property and casualty insurance agency which became part of Colony's insurance division and expanded our insurance footprint and customer base into two new locations in Monroe and Greensboro, Georgia. The Company paid cash consideration of $3.5 million and recorded a customer relationship intangible of $1.4 million, which is being amortized over ten years, and $1.9 million in goodwill. The goodwill was solely assigned to the Bank segment and is not expected to be deductible for income tax purposes.

Acquisition of TC Federal Bancshares, Inc.

On December 1, 2025, the Company completed its acquisition of TC Bancshares, Inc. (“TCBC”), a bank holding company headquartered in Thomasville, Georgia. Upon consummation of the acquisition, TCBC was merged with and into the Company, with Colony Bankcorp, Inc. as the surviving entity in the merger. Immediately following the holding company merger, TCBC’s wholly owned bank subsidiary, TC Federal Bank was also merged with and into the Bank. The acquisition expanded the Company’s market presence, as TC Federal Bank had four full-service banking locations in Thomasville and Savannah, Georgia and in Tallahassee and Jacksonville, Florida. Under the terms of the Agreement and Plan of Merger, each TCBC shareholder had the option to receive either $21.25 in cash or 1.25 shares of the Company’s common stock in exchange for each share of TCBC stock. As a result, the Company issued 3,839,613 common shares at a fair value of $65.9 million and paid $15.4 million in cash to the former shareholders of TCBC as merger consideration.

The assets and liabilities of TCBC as of the effective date of the merger were recorded at their respective estimated fair values and combined with those of the Company. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill. Goodwill of $13.0 million was recorded as part of the TCBC acquisition and was solely assigned to the Bank segment of the Company. Also, the goodwill recorded is not expected to be deductible for income tax purposes.

The Company's operating results for the year ended December 31, 2025 include the operating results of the acquired assets and assumed liabilities of TC Bancshares, Inc. subsequent to the acquisition on December 1, 2025. Due to the streamlining and integration of the operating activities into those of the Company post-acquisition, historical reporting for the former TC Bancshares, Inc. operations is impracticable, and thus disclosures of the revenue from the assets acquired and income before income taxes are impracticable for the period subsequent to acquisition.

The following table presents pro forma combined information as if the acquisition of TC Bancshares, Inc. had occurred on January 1, 2024. The pro forma amounts presented below give effect to changes in interest income due to the accretion of the net discount associated with the fair value adjustments to acquired loans, changes in noninterest expense associated with the amortization of the core deposit intangible had the acquisition occurred as of January 1, 2024, acquisition-related expenses attributable to the acquisition which primarily include, but is not limited to, advertising, professional fees and information technology expenses as well as related income tax effects on the aforementioned items. The pro forma results are not necessarily indicative of what would have occurred had the merger taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In addition, cost savings and other business synergies related to the acquisition are not reflected in the pro forma combined amounts.

	For the Year Ended December 31,
(dollars in thousands)	2025		2024
Revenues	$	222,652	$	208,010
Net income	32,263		25,116

The following table presents the assets acquired and liabilities assumed of TCBC as of December 1, 2025, and their fair value estimates. The fair value estimates are subject to refinement for up to one year after the closing date of the acquisition for new information obtained about facts and circumstances that existed at the acquisition date. The Company continues its evaluation of the facts and circumstances available as of December 1, 2025, to assign fair values to assets acquired and liabilities assumed, which could result in further adjustments to the fair values presented below.

 

(dollars in thousands, except market price)	Initial Fair Value Adjustments
Purchase price consideration:
Shares of CBAN common stock issued to TCBC shareholders as of December 1, 2025	3,839,613
Market price of CBAN common stock on November 28, 2025	$	17.15
Estimated fair value of CBAN common stock issued	65,850
Cash consideration paid	15,430
Total consideration	$	81,280
Assets acquired at fair value:
Cash and cash equivalents	$	16,346
Investment securities, available-for-sale	93,485
Loans	412,676
Allowance for credit losses	(4,619)
Premises and equipment	1,615
Core deposit intangible	4,622
Prepaid and other assets	31,066
Total fair value of assets acquired	$	555,191
Liabilities assumed at fair value:
Deposits	$	460,119
FHLB advances	9,969
Payables and other liabilities	16,825
Total fair value of liabilities assumed	$	486,913
Net assets acquired at fair value	$	68,278
Amount of goodwill resulting from acquisition	$	13,002

The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed.

Cash and due from banks and interest-bearing deposits with banks: The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets.

Securities: Fair values for securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or discounted cash flow methodologies.

Loans: Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans were based on current market rates for new originations of comparable loans and include adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered Purchase Credit Deteriorated ("PCD") loans. For PCD loans, the initial estimate of expected credit losses is recognized in the allowance for credit losses on the date of acquisition using the same methodology as other loans held-for-investment. In addition, the Company early adopted ASU 2025-08 as of October 1, 2025. Accordingly, the initial estimate of

expected credit losses recognized in the allowance for credit losses included both PCD and non-PCD loans which were deemed purchased seasoned loans.

The following table presents the acquired loan data for the TCBC acquisition.

(dollars in thousands)	Unpaid principal balance		Discount		Loans		Allowance for credit losses on loans		Net loans
PCD loans	$	11,625	$	(580)	$	11,045	$	(1,183)	$	9,862
Non-PCD loans	413,539		(11,908)		401,631		(3,436)		398,195
Total	$	425,164	$	(12,488)	$	412,676	$	(4,619)	$	408,057

Core deposit intangible: The Company recorded a core deposit intangible of $4.6 million as of the acquisition date. The fair value was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds, and the interest costs associated with customer deposits. The core deposit intangible is being amortized over the average remaining life of the acquired customer deposits.

Deposits: The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the acquisition date. The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.