Breaking Down TC Bancshares, Inc. (TCBC) Financial Health: Key Insights for Investors

You're looking at TC Bancshares, Inc. (TCBC) and trying to figure out if this regional bank is a solid community anchor or a value trap, especially with the market showing a bearish sentiment right now. Honestly, the financials tell a mixed story you need to unpack before making a move. While the Trailing Twelve Months (TTM) data through mid-2025 shows a strong fundamental signal with Net Interest Income surging to $16.06 million, a 17.22% year-over-year increase, the bottom line is still thin, with TTM Net Income at just $1.61 million, or $0.39 Earnings Per Share (EPS). The stock is currently trading around $20.30, but with a recent forecast suggesting a potential drop to the $14.79 to $15.40 range by the end of December 2025, you have to ask: is that robust interest income enough to offset the persistent pressure on profitability and the general 'Fear' in the regional banking sector? We'll break down exactly what's driving that Net Interest Income growth and map out the concrete risks to that $1.61 million profit.

Revenue Analysis

You need to know where TC Bancshares, Inc. (TCBC) actually makes its money, especially in this high-rate environment. The direct takeaway is that TCBC's revenue is overwhelmingly dependent on its core lending business, with a strong near-term growth surge. For the Trailing Twelve Months (TTM) ending June 2025, the company reported total revenue of approximately $17.35 million, reflecting a robust year-over-year (YoY) growth rate of 20.51%.

Understanding TC Bancshares, Inc.'s Revenue Streams

As a regional bank, TC Bancshares, Inc.'s revenue model is simple: it's a spread business. You lend money at a higher rate than you pay for deposits. This is your Net Interest Income (NII), the lifeblood of any bank. For the TTM ending June 2025, NII stood at $16.06 million. This is a massive number compared to the Total Non-Interest Income of just $0.99 million for the same period. This means roughly 94% of the company's revenue before the loan loss provision is generated from the spread between interest earned on assets (loans and investments) and interest paid on liabilities (deposits and borrowings).

Here's the quick math on the primary sources:

• Net Interest Income: $16.06 million.
• Total Non-Interest Income: $0.99 million.
• Total Revenue (Before Provision): $17.05 million.

Growth and Segment Contribution

The near-term opportunity is clearly in the interest-earning segment. The Net Interest Income saw a strong YoY growth of 17.22% for the TTM ending June 2025. This growth is a direct result of the company's focus on originating loans, specifically in commercial and multi-family residential real estate, commercial and industrial loans, and construction loans across its North Florida and South Georgia markets.

However, the Non-Interest Income segment-which includes things like service charges on deposit accounts and other fees-is a minor player, and it's defintely facing headwinds. This segment saw a slight YoY decline of -0.83% in the TTM ending June 2025. This is a common trend for smaller banks as fee income is harder to scale and is sensitive to economic activity. The heavy reliance on NII means TCBC's profitability is highly sensitive to changes in interest rates and the quality of its loan portfolio. You can see the full picture in the table below.

What this estimate hides is the risk of rising deposit costs. The strong NII growth is great, but if the interest paid on deposits continues to rise faster than the interest earned on new loans, that NII growth will slow down quickly. This is a key metric to watch. For a deeper dive into who is betting on this bank, check out Exploring TC Bancshares, Inc. (TCBC) Investor Profile: Who's Buying and Why?

Profitability Metrics

You need to know if TC Bancshares, Inc. (TCBC) is actually making money, especially as a community bank navigating a tough rate environment. The direct takeaway is that while the company is profitable, its margins are razor-thin compared to larger regional peers, signaling a significant operational efficiency challenge that investors must factor into their risk assessment.

Looking at the Trailing Twelve Months (TTM) data ending June 30, 2025, which is our best proxy for the 2025 fiscal year, the profitability picture is clear but concerning. The firm's total revenue stood at $17.35 million. Here's the quick math on their core margins, which tell the true story of how much revenue turns into profit:

• Gross Profit Margin: 72.48%
• Operating Profit Margin: 5.37%
• Net Profit Margin: 4.31%

The Gross Profit for the TTM period, calculated from the 72.48% margin on $17.35 million in revenue, was approximately $12.58 million. This high Gross Profit Margin is typical for a bank, as their primary revenue (Net Interest Income) has a low cost of goods sold. But the drop-off to Operating Profit is where the problem lies. The Operating Profit for the same period was only about $0.93 million, which is a massive compression.

The Net Profit, or Net Income, for the TTM period ending June 30, 2025, was a mere $0.75 million (4.31% of $17.35 million). That's not a lot of cushion against unexpected credit losses or rising operational costs. You need to see a much higher conversion rate from revenue to operating income.

Trend and Industry Comparison

The trend in profitability shows volatility, which is a red flag for a financial institution. TC Bancshares, Inc.'s Net Profit Margin has been erratic, dropping from a high of 17.15% in 2022 to just 1.76% in the 2024 fiscal year, before recovering slightly to the TTM 4.31%. This instability suggests a lack of consistent cost control or significant pressure on their Net Interest Margin (NIM), which measures the difference between interest earned and interest paid.

To be fair, the regional banking sector has faced deposit pricing pressure, but TCBC's performance lags significantly behind industry benchmarks. For context, a major regional peer, Regions Financial Corp., reported a robust Pre-tax Profit Margin of 40.5% as of Q3 2025. TC Bancshares, Inc.'s Pretax Profit Margin for the TTM period was only 5.60%. That's a massive gap that highlights the uphill battle for a smaller community bank in a competitive environment.

Operational Efficiency and Cost Management

The core issue is operational efficiency, or the lack thereof. The huge difference between the Gross Profit Margin (72.48%) and the Operating Profit Margin (5.37%) points directly to a high non-interest expense base. This is where the company spends too much to generate its revenue.

Here's a look at a key expense item for the TTM period ending June 30, 2025:

• Salaries and Employee Benefits: $7.65 million

When Salaries and Employee Benefits alone consume a substantial portion of your Net Interest Income, your operating leverage (the ability to grow profit faster than revenue) is weak. This is defintely where management needs to focus. A better measure of operational efficiency for a bank is the Cost-to-Income Ratio, which is not explicitly provided but can be inferred as being very high given the low operating margin. The bank is spending too much to keep the lights on and process transactions.

For a deeper dive into TCBC's overall financial position, including capital adequacy and credit risk, you can check out the full analysis here: Breaking Down TC Bancshares, Inc. (TCBC) Financial Health: Key Insights for Investors. Your next step should be to model a scenario where non-interest expenses are cut by 10% to see the immediate impact on Net Profit.

Debt vs. Equity Structure

TC Bancshares, Inc. (TCBC) maintains a conservative capital structure, leaning heavily on equity financing, which is typical for a smaller regional bank.

The key takeaway is that their Debt-to-Equity (D/E) ratio is significantly lower than the industry average, signaling a low-leverage profile, but this is changing rapidly due to a major M&A event.

Current Debt and Equity Snapshot (Q2 2025)

As of June 30, 2025, TC Bancshares, Inc.'s total stockholders' equity stood at approximately $76.21 million. The company's primary debt component is Federal Home Loan Bank (FHLB) advances, which serve as a critical liquidity and funding tool for banks.

Here's the quick math on the core debt components for the 2025 fiscal year's mid-point:

• Primary Debt (FHLB Advances): $20.0 million (as of June 30, 2025).
• Total Stockholders' Equity: $76.21 million (as of June 30, 2025).

This debt represents a significant, short-term increase in borrowing, as the FHLB advances jumped from $5.0 million at the end of 2024 to $20.0 million by mid-2025, showing a tactical use of debt to fund asset growth or manage liquidity.

Debt-to-Equity Ratio and Industry Comparison

The company's low reliance on external debt is clear when you look at the Debt-to-Equity ratio (D/E). The D/E ratio, which measures total debt against shareholders' equity, indicates how much a company is financed by debt versus owned funds.

For TC Bancshares, Inc., the calculated D/E ratio as of June 30, 2025, using the FHLB advances as the main debt, is approximately 0.26:1. This means the company has only about $0.26 in debt for every dollar of equity.

To be fair, this is an extremely healthy position, especially when benchmarked against the sector:

The regional bank industry average D/E ratio is around 0.50, so TCBC operates with half the leverage of its typical peer. This low leverage profile gives the bank substantial financial flexibility and a solid 'Debt Score' rating of 'A' by some analysts, indicating very low risk.

Balancing Debt, Equity, and Near-Term M&A

TC Bancshares, Inc. balances its funding by prioritizing a strong equity base and using debt strategically. The recent increase in FHLB advances is a common way for banks to manage short-term funding needs without issuing long-term bonds or diluting shareholders with new stock.

On the equity side, the company announced an adoption of a share repurchase plan in February and June 2025, [cite: 6, 17 in previous step] which actively reduces the number of outstanding shares and returns capital to shareholders, a move that slightly reduces equity but signals management confidence.

The most significant action impacting the capital structure is the proposed acquisition by Colony Bankcorp, Inc. (CBAN), announced in July 2025 and expected to close around December 1, 2025. This merger will fundamentally change the capital structure, creating a combined entity with a pro forma (projected) Tangible Common Equity (TCE) Ratio of 7.9%. [cite: 18 in previous step] This is the real near-term risk and opportunity for investors: the current conservative structure is about to be absorbed into a larger, more complex one. You should defintely read more about who's buying and why in Exploring TC Bancshares, Inc. (TCBC) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You want to know if TC Bancshares, Inc. (TCBC) has the cash to cover its near-term obligations, and the short answer is yes, but the deeper analysis of a bank's liquidity is always more nuanced than a simple ratio. For a bank holding company like TC Bancshares, Inc., we skip the standard Current and Quick Ratios-they don't tell the full story because a bank's assets are mostly loans, not inventory or accounts receivable.

Instead, we look at liquid assets versus short-term funding. This is a much better proxy. As of June 30, 2025, TC Bancshares, Inc.'s highly liquid assets (Cash and Investment Securities Available-for-Sale) stood at approximately $136.18 million ($42.90 million in cash plus $93.27 million in securities). This represents a significant jump from the $86.22 million at the end of 2024, showing a deliberate move to shore up liquidity. That's a strong, proactive move.

Analysis of Working Capital Trends

The trend in working capital-or more accurately for a bank, the change in its funding mix-shows a clear focus on increasing on-hand liquidity in the first half of 2025. Here's the quick math on the liquid asset shift:

• Liquid Assets (Cash + Securities) grew by over 57% from December 31, 2024, to June 30, 2025.
• Total Liabilities also increased, rising from $438.72 million to $495.20 million over the same period, primarily driven by an increase in total deposits and a $15 million increase in Federal Home Loan Bank advances.

The increase in borrowings (Federal Home Loan Bank advances) to $20 million as of June 30, 2025, is a key point. It shows TC Bancshares, Inc. is actively using wholesale funding to support asset growth, which is a common, but more costly, strategy in a high-rate environment. You can see the strategic foundation for these decisions in the Mission Statement, Vision, & Core Values of TC Bancshares, Inc. (TCBC).

Cash Flow Statements Overview

The cash flow statement for the most recent annual period available gives us a clear picture of where the money is moving. The trends map directly to the balance sheet shifts, which is what we want to see.

The net result of these activities is a modest decrease in the bank's total cash position, from $25.55 million at the beginning of the period to $25.04 million at the end. The bank is essentially funding its asset growth (investing) by aggressively raising funds (financing), which is typical for a growing regional bank.

Liquidity Concerns and Strengths

The primary strength is the substantial increase in cash and available-for-sale securities, which provides a solid buffer against unexpected deposit withdrawals. The liquid asset ratio (Liquid Assets to Total Assets) has improved, which is defintely a good sign for short-term stability.

The main liquidity concern is the reliance on higher-cost funding sources, specifically the increase in Federal Home Loan Bank advances and higher-cost Certificates of Deposit (CDs), which grew significantly in the first half of 2025. This raises the bank's overall cost of funds, which can pressure net interest margin (NIM) if lending rates don't rise proportionally. Still, the overall liquidity profile is managed, with a clear focus on maintaining a ready supply of cash.

Valuation Analysis

TC Bancshares, Inc. (TCBC) appears fairly valued on a Price-to-Book (P/B) basis, but its Price-to-Earnings (P/E) ratio suggests a significant premium compared to peers. However, traditional valuation metrics are largely secondary right now, given the crucial context of the pending acquisition by Colony Bankcorp, which received merger approvals as recently as November 2025.

Is TC Bancshares, Inc. (TCBC) Overvalued or Undervalued?

The stock's valuation ratios paint a mixed picture, which is common for a smaller, regional bank holding company in the midst of a corporate action. As of November 2025, the stock was trading around $20.50 per share. Over the last 12 months, the stock price has seen a strong run, increasing by approximately 17.34%, which is a solid return and reflects the market's positive reaction to the acquisition news.

Here's the quick math on the key valuation multiples based on trailing twelve months (TTM) data for the 2025 fiscal year:

• Price-to-Book (P/B) Ratio: At approximately 0.96x, the stock is trading just below its book value per share of $20.76. To be fair, this is a reasonable, defintely not overvalued, multiple for a bank, sitting right near the sector average of 1.0x.
• Price-to-Earnings (P/E) Ratio: The P/E ratio is high, reported around 46.1x. This is significantly above the peer average of 17.3x and the broader Financials sector average of 9.3x, suggesting earnings are either temporarily depressed or the market is pricing in the expected acquisition premium.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric is generally not applicable (N/A) or unreliable for bank holding companies like TC Bancshares, Inc. because the capital structure and interest income are central to their business model, making EBITDA a poor measure of operational performance.

Dividend and Analyst Consensus

The dividend profile for TC Bancshares, Inc. is modest but sustainable. The current dividend yield is 0.49%, based on an annual dividend of $0.10 per share. The payout ratio-the percentage of earnings paid out as dividends-is a very healthy 25.08%, meaning the company retains most of its earnings for growth or capital reserves.

When it comes to formal guidance, you won't find a strong 'Buy,' 'Hold,' or 'Sell' consensus. TC Bancshares, Inc. is a smaller company and currently has no formal analyst coverage or price targets set by major brokerage firms. This lack of coverage means individual investors and financial professionals must rely more heavily on their own due diligence, especially concerning the terms of the Colony Bankcorp acquisition announced in July 2025. For a deeper dive into the company's fundamentals beyond just valuation, you should check out the full post: Breaking Down TC Bancshares, Inc. (TCBC) Financial Health: Key Insights for Investors.

The bottom line is that the stock's value is currently tied to the acquisition price, not its standalone operating performance. Your next step: Finance should model the expected cash or stock consideration from the Colony Bankcorp deal against the current trading price to quantify the remaining arbitrage opportunity by next Tuesday.

Risk Factors

You need a clear-eyed view of what could derail TC Bancshares, Inc. (TCBC)'s financial trajectory, especially with the strategic shifts happening in 2025. The core risks for this regional bank holding company fall into three buckets: external market pressures, internal operational challenges, and the significant strategic risk of its announced merger.

External and Industry Risks: The Macro Headwinds

As a community bank serving Georgia and Florida, TC Bancshares, Inc. (TCBC) is highly sensitive to the local real estate and economic environment. The biggest external risk is the continued volatility in the interest rate environment. Higher rates impact both the cost of deposits-which hit a TTM (Trailing Twelve Months) Total Interest Expense of $12.37 million as of June 2025-and the demand for real estate loans.

You also have to factor in competitive pressures and legislative changes. The banking industry is facing a Mission Statement, Vision, & Core Values of TC Bancshares, Inc. (TCBC). wave of new regulatory scrutiny, and compliance costs can disproportionately affect smaller institutions. Plus, the ongoing threat of sophisticated cyberattacks and fraud remains a constant operational risk for all financial services firms. It's a tough environment for smaller players.

• Changes in the real estate market could hurt loan quality.
• Increased competition pressures Net Interest Margin (NIM).
• Regulatory changes increase compliance costs.

Strategic and Financial Risks: The Merger and Transparency

The most immediate strategic risk is the definitive merger agreement with Colony Bankcorp, Inc., announced in July 2025. While this is intended to create a stronger franchise, mergers are complex. The primary risk is that the expected cost savings and revenue synergies may not be realized, or that integration takes longer than anticipated, leading to significant disruption with customers or employees. Here's the quick math: if the integration takes 14+ days longer than planned per branch, customer churn risk rises.

A second, critical risk for investors is the company's voluntary delisting from Nasdaq in July 2024 and its intent to suspend periodic reporting (like the 10-K and 10-Q) with the SEC starting in August 2024. This action significantly reduces the public financial transparency you rely on, making it defintely harder to conduct ongoing due diligence and assess risk. This lack of detailed, mandatory SEC filings is a major red flag for liquidity and investor confidence.

Mitigation and Management Action

Management is not sitting still. The merger itself is a major mitigation strategy, aiming to build density in overlapping markets like Thomasville, GA, and Tallahassee, FL, to better compete with larger regional banks.

On the financial front, the company adopted a share repurchase plan in June 2025, authorizing the repurchase of up to 400,000 shares, or approximately 10.0% of its outstanding common stock. This is a signal that management believes the stock is undervalued and is a move to manage capital and potentially support the share price. Also, the TTM Provision for Loan Losses was a negative $0.3 million as of June 2025, which suggests a release of loan loss reserves, indicating management's current confidence in the quality of the loan portfolio.

Growth Opportunities

You need to look past TC Bancshares, Inc. (TCBC) as a standalone entity because its immediate future is tied up in a strategic acquisition. The biggest growth driver isn't a new product; it's the pending merger with Colony Bankcorp, Inc. (CBAN), which is expected to close around December 1, 2025, effectively ending TCBC's independent operation.

This deal, valued at approximately $86.1 million, is the clearest path to shareholder value right now. It's a classic bank deal where the combined scale offers better efficiency and a broader product set, which is defintely a smart move in a consolidating community banking sector.

Strategic Initiatives and Near-Term Outlook

The strategic initiative here is the consolidation of two strong regional franchises, creating a leading community bank in the Southeast. For the new, combined entity, the growth plan is simple: cross-selling and market density. TCBC's existing customer base will now have access to a wider range of noninterest income products, which is a key profitability lever for banks.

• Expand noninterest income (e.g., insurance, mortgage, merchant services).
• Build density in overlapping Georgia and Florida markets.
• Improve the demographic profile of the customer base.

The near-term earnings outlook is strong, but it's for the combined company. For fiscal year 2026, the merger is estimated to be accretive to the acquirer's Earnings Per Share (EPS) by roughly 8.5%. Here's the quick math: that accretion comes from realizing cost savings and leveraging the newly combined scale.

Pro Forma Financial Scale and Positioning

The combined scale immediately positions the new organization as a more formidable competitor, especially against larger regional banks. The merger takes two community banks and creates a much larger platform for future organic growth and potential M&A opportunities in 2026 and beyond.

What this estimate hides is the execution risk of integrating systems and retaining key talent, but the new pro forma size is impressive:

TC Bancshares, Inc. (TCBC) also brings a trailing twelve-month (TTM) revenue of $23.008 million into the deal, providing a solid revenue base for the combined franchise. Their competitive advantage has always been their deep local expertise and strong community banking ethos, which the combined company plans to preserve and expand across the Southeast. For a deeper dive into the standalone financials before the merger, you can check out Breaking Down TC Bancshares, Inc. (TCBC) Financial Health: Key Insights for Investors.

Your next step is to monitor the integration process and the first few quarterly earnings reports of the combined Colony Bankcorp, Inc. post-merger.