Oct 29, 2026 earnings call — Merger with First Reliance and Q3 results
Colony expects legal close of First Reliance on November 1, and reported operating ROA surpassed 1.25% this quarter.
Revenue $0.0B (est $0.0B) · EPS $0.54 (est $0.52)
Key quotes
"We previously announced that regulatory and shareholder approvals have been obtained for our partnership with First Reliance, and we are expecting legal close to occur on November 1."
"Yesterday, we also announced a sale-leaseback transaction for three of our retail branch locations with a lease agreement to lease back those branches for an initial 15-year term."
"We are pleased to have surpassed a 1.25% operating ROA this quarter and believe we are on a good long-term trajectory for continued growth and profitability."
Analyst Q&A 3
Loan growth and pricing
Q (David Bishop · Hovde Group): He asked why loan growth is settling around 5% and whether higher origination yields or pricing above the market are causing that. He also asked if margin will keep rising into 2027 and for details on the increased classified loan and whether it is isolated.
A: They said higher rates have softened many real estate projects and plenty of volume does not meet the bank’s pricing parameters, so they expect a pullback toward 5% loan growth while protecting margin. They added that repricing and removing lower-yield liquidity should modestly raise core margin (and First Reliance accretion helps), and that the classified loan appears isolated with good collateral and should be resolved over the next quarter or two.
"One is, we are seeing some softening of real estate projects overall, just in the higher rate environment." — Heath Fountain (CEO)
Mortgage, deposits, securities duration
Q (Chris Marinac · Brean Capital): He asked if a weak external mortgage market will hurt growth next year and whether the combined company can manage it while still growing the core bank. He also asked about deposit gathering for standalone versus combined bank and what a 5.5% reinvestment assumption implies for duration and AFS versus HTM mix.
A: They said they like the mortgage business long term but it is cyclical and volatile when rates move quickly; a larger combined mortgage platform gives more operating leverage and levers to manage expenses. They said both banks have strong deposit bases, lower loan growth lets bankers focus on deposits, South Carolina adds deposit opportunities, and investing in retail, wealth, and treasury tools should help. On securities, Derek said the 5.5% reinvestment assumption is primarily into loans (five years or less), which shortens duration; redeployment will take a couple of quarters, and they intend to bring First Reliance securities in as AFS so the mix should remain similar.
"On the 5.5% reinvest assumption, that's primarily into loans." — Derek Shelnutt
Share buybacks and SBSL outlook
Q (David Bishop · Hovde Group): He asked whether share repurchases will resume after the acquisition close and how the bank will approach buybacks. He also asked for expectations for the SBSL group heading into the final quarter and into 2027.
A: They said they expect to be active again on repurchases, becoming more systematic with some quarterly repurchases while remaining opportunistic if market pricing allows. On SBSL, they said the group shifted toward 7(a) and more real-estate-based business, production was lighter during the transition but is picking up, construction originations will build a revenue pipeline into next year, and adding South Carolina gives bankers another tool to drive activity.
"What I think you can expect to see is some systematic repurchases each quarter, and then being more opportunistic if overall macro market moves give us the opportunity to do that." — Heath Fountain (CEO)