Colony Bankcorp, Inc.

Good morning, ladies and gentlemen, and welcome to the Colony Bank fourth quarter 2025 conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, January 29th, 2026. I would now like to turn the conference over to Brantley Collins. Please go ahead.

Thanks, Dani. Before we get started, I would like to go through our standard disclosures. Certain statements we make on this call could be constituted as forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Current and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance but involve known and unknown risk and uncertainties. Factors that could cause these differences include, but are not limited to, pandemics, variations of the company's assets, businesses, cash flows, financial condition, prospects, and other results of operations. I would also like to add that during our call today, we will reference our fourth quarter earnings release and investor presentation, which were both filed yesterday. So please have those available to reference. And with that, I will turn the call over to our Chief Executive Officer, Heath Fountain.

Thanks, Brantley, and thank you to everyone for joining our fourth quarter earnings call today. We are pleased to report a fourth quarter with strong operating performance. Our team's done a great job of delivering results and executing on our strategic initiatives. We're really excited about the legal close of the TC federal merger, which occurred at the beginning of December, and we're on track to complete the systems conversion during the first quarter. Both teams have done a great job to get us to this point, and we're looking forward to the upcoming customer integration. We're also pleased to report that our financial targets for the deal are on track or better than expected, as Derek will discuss later on in the call. Operating earnings continue to improve with an increase in operating net income of $675,000 compared to the third quarter. This was driven by continued increase in our net interest margin as well as a strong quarter in terms of non-interest income. As we mentioned early last year, our projections indicated achieving a 1% ROA by the latter half of the year and maintaining 1% or better going forward. We were able to hit that target in the second quarter and maintain it through the rest of 25. I'm proud of our team's accomplishments in being able to do this and report that we've achieved a 1% operating ROA for the 2025 fiscal year. We now set our sights on our next goal of a 120 ROA and believe that we can achieve that on a quarterly basis starting in the second quarter of 2026 once we get the full benefit of the TC federal merger and expect to hit the 120 mark for the full year of 2026. In 2025, we saw core loan growth of 10.5% excluding the impact of the TC federal acquisition. Our outlook on loan growth for 2026 remains positive and our pipelines remain strong, but we are seeing a trend where we think we'll be closer to the 8% end of our 8% to 12% long-term target. We've seen an increased competition in lending across our footprints. However, we remain focused on growing core customer relationships. This strategy has allowed us to maintain a disciplined approach to pricing and credit while still achieving our growth goals. With expected loan growth and repricing opportunities, we project margin to increase at a modest pace throughout 2026, around mid-single digits each quarter. In addition, we feel good about the outlook on the non-interest income side and expect it to be slightly better in 2026 as we continue to see improvement in our lines of business and fee income. Deposits were up for the quarter and organically flat year over year, excluding the acquisition of TC Federal. We're driving deposit account growth and our teams focused on building the deposit first and relationship banking culture. At the same time, we're also focused on improving margin and have moved our interest-bearing accounts aggressively during the recent rate cuts this cycle, which has caused us to lose some non-relationship price-sensitive accounts. We carefully monitor this and believe we can grow the right kinds of deposit relationships, and as rates stabilize, we will become more competitive for interest-bearing deposits as well. In the fourth quarter, we executed a portfolio mortgage full sale of around $10 million with a gain of a little over $100,000. Our loan sale for sale balance also increased quarter over quarter, and we're expecting to sell another $30 million of portfolio mortgage loans in the first quarter of this year. There's a couple of reasons why we're doing this. First, the secondary market for non-agency loans has improved. and we're now able to push some previous quarters mortgage production into the secondary market. Second, with the addition of TC Federal, we knew we'd be expanding our one to four family portfolios. So, to manage that concentration, we feel it's prudent to trim some mortgage loan exposure. Operating expenses were higher in the fourth quarter, as we have not yet realized all of the expected cost saves from the TC Federal acquisition. As we complete the systems conversion in the first quarter, we anticipate a majority of those remaining cost savings to occur after the conversion and be realized in the second quarter and going forward. Charge-offs were lower in the fourth quarter, but still elevated slightly compared to earlier quarters. Charge-offs have primarily come from our SDSL division, and we provide a breakdown of the net charge-offs on slide 34. in our investor presentation. We saw some charge-offs from our marketplace loan partners in the fourth quarter, but do not expect that to be a long-term trend. SBSL and marketplace loans only represent about 5% of our total loan portfolio. And as you can see on that slide, bank net charge-offs remain at low levels and gives us confidence in the credit quality of our overall portfolio. We also outlined the yields in those categories, and it's important to note that both of these third-party marketplace loans and SBA loans provide higher yields, which offset charge-offs and provide for a nice risk-adjusted return. Additionally, of course, on the SBA loans, we've also generated significant gain-on-sale income on the guaranteed portion of those. Our performance in complimentary lines of business are highlighted on slide 19 on a pre-tax basis. SPSL and mortgage finished the year with a strong fourth quarter, and we continue to see improvement in marine RV lending as well as merchant services. We welcome the addition of two new proven financial advisors, financial advisors to the Colony team in the fourth quarter, Glenn Ware in the Grange and Tim Owens in Macon. and they have been successfully transitioning their client base to Colony. With the addition of Tim and Glenn, we've also begun the transition of our relationship with our broker-dealer Ameriprise from a managed program to a dual employee model where our financial advisors are employed by Colony and where we receive the majority of the revenue, but also bear the full expense load. As we more than doubled our assets under management from about $200 million at the end of 2024 to over $460 million at the end of 2025, we believe this transition will be beneficial for the long term and offers more flexibility for our advisors while maintaining the relationship with our broker-dealer. Overall, this structure will provide increased income opportunities going forward Some of the related expenses to that occurred in the fourth quarter, and we expect to be fully transitioned by the end of the first quarter of this year. The building out of this platform is an important piece of our long-term strategy, and we are actively recruiting to continue to grow this line of business. Slide 23 illustrates the year-on-year improvement with colony insurance. and shows significant increases in items and premiums in force. Bank referrals to insurance increased 20% in 2025. We've been in a very hard insurance market the last couple of years, facing significant rate increases from our carriers for our customers, which has had an impact on retention rates, but we are starting to see the market soften some and believe we will see improvements to retention and production in 2026. Yesterday, the board declared an increase to our quarterly dividend to 12 cents per share, which is an increase of two cents on an annualized basis. Dividends are important to many of our shareholders, and we're proud to increase the dividend for another consecutive year. I'd also like to recognize that Collin and Banks has been named one of American Bankers 2025 Best Banks to Work For. This is a tremendous accomplishment and reflects our commitment to culture and to our team members. I'm grateful for everything our team members do to support each other and the customers we serve. Colony was the only bank headquartered in Georgia to be recognized on this list in 2025. We continue to see opportunities to capitalize on the increased M&A activity in the industry and across our footprint. This includes opportunity for new customer acquisition, new talent acquisition, and expanded fee income as we develop deeper customer relationships across our existing markets. As I mentioned earlier, our team's focused on the integration and core conversion of TC Federal in the first quarter. At the same time, we continue to see an increased level of activity. from an M&A perspective, and we are actively having conversations with potential M&A targets. We're at a place where we feel comfortable moving forward with another opportunity, and we believe that given the level of conversations and activity we see in the industry, we'll have the opportunity to announce another transaction at some point in 2026. Slide 14 in our investor presentation laid out our approach to M&A opportunities. The strong momentum exiting 2025 positions us as well as we enter 2026. We remain optimistic about the opportunities ahead and are focused on continuing to enhance performance through discipline, execution, and ongoing improvement. With that, I'm going to turn it over to Derek to go over the financials in more detail.