Colony Bankcorp rises on Q4 beat, dividend hike, TC Federal merger
Georgia-based lender completes transformational acquisition while expanding shareholder returns
Colony Bankcorp shares advanced Tuesday after the Georgia-based community bank reported better-than-expected fourth quarter earnings, increased its dividend, and highlighted the immediate impact of its recently completed acquisition of TC Federal Bank.
The bank posted earnings per share of $0.48 for the fourth quarter of 2025, beating analyst estimates of $0.47 by one cent. Revenue of $36.9 million exceeded the consensus forecast of $33.7 million by 9.5%, according to the company's regulatory filing.
The lender's board approved a 4.3% dividend increase, raising the quarterly payout to $0.12 per share from $0.115. The move marks the bank's commitment to returning capital to shareholders amid improving profitability metrics.
The results come as Colony Bankcorp completes its integration of TC Federal Bank, a deal that closed on December 1. The merger immediately boosted the combined bank's loan portfolio, which grew 16.9% quarter-over-quarter. The expanded footprint also helped lift the net interest margin to 3.32%, a key profitability measure for banks that reflects the spread between what they earn on loans versus what they pay on deposits.
Chief Executive Officer Heather L. Peterson expressed optimism about the combined company's trajectory heading into 2026. "We see tremendous opportunities for growth in the year ahead as we leverage our expanded footprint and deepened relationships with customers across our markets," Peterson said in the earnings announcement.
Colony Bankcorp, which operates 27 branches throughout Georgia, has a market capitalization of approximately $395 million. The stock traded near $18.56 on Tuesday, well within its 52-week range of $13.69 to $19.80, and carries a dividend yield of roughly 2.5%. Analysts have set an average target price of $19.75, suggesting potential upside from current levels.
The TC Federal acquisition represents Colony's most significant expansion effort since becoming a publicly traded company. The merger adds 10 branches and approximately $800 million in assets, substantially increasing Colony's presence in southern Georgia and northern Florida. The transaction was structured as a stock-and-cash deal valued at roughly $100 million when announced.
Regional banks have pursued consolidation aggressively over the past two years as they seek scale to compete with larger national lenders and invest in digital banking capabilities. The banking sector has also benefited from higher interest rates, which typically boost net interest margins, though elevated loan loss provisions have tempered some of those gains.
Institutional investors hold approximately 52% of Colony Bankcorp's outstanding shares, providing the stock with a relatively stable shareholder base. The company's price-to-earnings ratio of 11.7 times trailing earnings represents a modest discount to the average regional bank multiple, suggesting investors may be pricing in some execution risk around the integration.
Looking ahead, investors will focus on management's ability to capture cost synergies from the TC Federal merger while maintaining credit quality. The bank's efficiency ratio—a measure of operating expenses as a percentage of revenue—will be closely monitored to gauge the success of integration efforts.
Colony Bankcorp's dividend increase marks the fourth consecutive year of payout growth, signaling management's confidence in sustainable earnings generation. The quarterly payment of $0.12 represents an annual dividend of $0.48 per share, yielding approximately 2.6% at the current share price.