CBAN

• M&A and Integration Progress • Announced a partnership/merger with First Reliance Bank, with integration planning already well underway for a planned legal close in Q4 of this year. • Merger regulatory applications have been submitted, and an S-4 filing is expected in the near term. • Completed the full post-merger systems conversion and customer integration for the previously closed TC Federal merger, and the company hit its targeted 1.20% operating ROA one quarter earlier than expected. • Perks for Lives (Pressure Alliance) reported in-line Q2 earnings with stronger-than-forecast loan growth, with no adjustments needed to prior pro forma merger projections.

• Core Financial Performance • Operating ROA reached the targeted 1.20% in Q2, with operating net income up more than $1.5 million quarter-over-quarter. • Annualized loan growth hit 8.5% in Q2, bringing year-to-date annualized growth to 7%. Weighted average pricing on new and renewed loans increased slightly to 7.14% QoQ, reflecting sustained pricing discipline. • Reported total deposits declined by $76.2 million in Q2, including a $13.4 million brokered deposit payoff, which management attributes to normal seasonal runoff; average deposit balances were stable with a slight sequential increase. • Operating non-interest income increased by $950,000 quarter-over-quarter to $11.6 million, up from $10.1 million in the year-ago quarter. • Operating non-interest expense declined by more than $550,000 quarter-over-quarter, driven by post-TC Federal merger cost savings. Tangible common equity increased to 8.99% from 8.49% last quarter, and tangible book value per share rose to $15.12 from $14.65.

• Organic Growth Strategy • Added several experienced senior bankers and market leaders across key growth markets (Columbus, Douglas, Savannah, Jacksonville MSA) to expand core customer relationships and market share in the company's existing Southeast footprint. First Reliance's markets will add additional attractive organic growth opportunities post-close.

• Management expects near-term annualized organic loan growth to come in slightly below the lower bound of its prior 8% to 12% target range, as the firm prioritizes disciplined pricing and strong underwriting over faster growth that could pressure balance sheet strength or financial performance. • Margin is expected to continue expanding at a pace of a few basis points per quarter over the coming several quarters, though the speed of expansion will depend on competitive conditions for loans and deposits. Even if new loan pricing moderates slightly, the company's existing asset repricing schedule will support margin expansion if funding costs remain stable. • Operating non-interest expenses are expected to stay near current Q2 levels in Q3, then increase after the First Reliance legal close, before trending back toward the long-term target of 1.45% or lower for operating net non-interest expense to average assets by 2027. • Most identified cost savings from the First Reliance merger will not be captured until the planned systems conversion in mid-2027, though the firm will capture as much expense efficiency as possible immediately after legal close. • Management maintains its long-term target of 1.45% or better for net non-interest expense to average assets, driven primarily by income growth.

1. Colony Financial Advisors: Pre-tax income increased quarter-over-quarter and year-over-year. This was the first full quarter operating under a new dual program structure, where Colony retains more commissions and fees while absorbing additional related expenses. Assets under management reached $637 million, up almost 15% quarter-over-quarter and up from $219 million in the year-ago quarter. 2. Mortgage: Pre-tax income improved quarter-over-quarter, driven by higher seasonal production and sales activity. 3. Quality Insurance: Reported a stronger quarter with higher in-force premiums and increased revenue. Pricing pressure across the insurance industry has eased, and bank referrals to the business are up year-over-year, creating upside for future sales growth. 4. SPSL: Pre-tax income improved quarter-over-quarter, but gain-on-sell revenue was softer than expected. Charge-offs stabilized at levels similar to the first quarter, and management expects further performance improvements in coming quarters. 5. Merchant Services: The business continues to generate consistent recurring revenue growth, and it serves as a key tool for acquiring new core deposit relationships. Growth has progressed as expected, with meaningful upside from First Reliance customer penetration post-merger.

• The lending and deposit environments remain highly competitive, which could slow margin expansion and hurt deposit gathering efforts. • A shifted outlook for rising interest rates has softened the loan pipeline, contributing to expectations for lower near-term growth. • SPSL segment performance has not yet reached desired levels, with softer-than-expected gain-on-sale revenue in Q2, though management expects improvement in coming quarters. • Full cost synergies from the First Reliance merger will be delayed until mid-2027 systems conversion, keeping expenses elevated in the interim after legal close.

Q: What priority does deposit generation hold in the company's Georgia and Florida market expansion strategy, compared to adding commercial lending teams?

A: Management states deposit generation is clearly the top priority across all new and existing markets. While both deposits and commercial lending are important, growing core deposit relationships is especially critical in the current high rate, high deposit competition environment. Adding private banking capacity is also framed primarily as a deposit growth play that also supports Colony Financial Advisors assets under management growth.

Q: Excluding First Reliance merger benefits, where will organic profitability improvements come from to grow operating ROA beyond the current 1.20% target?

A: Incremental improvements will come from three core areas: ongoing margin expansion from uncaptured asset side repricing, growth across fee income lines including SPSL, mortgage, insurance, Colony Financial Advisors, and account-based fees like deposit service charges. Management notes that broad-based momentum across these businesses creates a clear path to incremental ROA improvement without needing all segments to outperform to hit targets.

Q: Is there upside to First Reliance's organic loan growth beyond what is currently included in merger projections, and what opportunity does the merger create for the merchant services business?

A: First Reliance has delivered strong organic loan growth in line with Colony's existing performance, and there is upside to the conservative base projections from larger lending limits that will enable the combined company to pursue larger customer opportunities in First Reliance's markets. For merchant services, the business is performing well ahead of expectations for recurring revenue growth, and it also serves as a valuable customer acquisition tool to gain new core deposit accounts. First Reliance currently outsources merchant services with low customer penetration, creating significant upside for cross-selling post-merger.

Q: What is driving the expectation for near-term loan growth to come in below the prior 8-12% target range? Is it due to internal caution or shifts in borrower behavior?

A: The lower growth outlook is a combination of both shifts in borrower behavior from changed interest rate expectations, and intentional internal discipline on pricing. Borrowers are taking more time to evaluate loan decisions as expectations shifted from rate cuts to potential rate increases, which has softened the near-term pipeline. Management also prioritizes holding the line on strong loan pricing over chasing faster growth, as higher margins and stronger operating earnings create more capacity to reinvest in market share expansion and long-term growth, which is worth a small near-term trade-off in growth.