Colony Bankcorp Reports Second Quarter 2023 Results

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Declares Quarterly Cash Dividend of $0.11 Per Share

FITZGERALD, Ga., July 26, 2023--(BUSINESS WIRE)--Colony Bankcorp, Inc. (Nasdaq: CBAN) ("Colony" or the "Company") today reported financial results for the second quarter of 2023. Financial highlights are shown below.

Financial Highlights:

  • Net income increased to $5.3 million, or $0.30 per diluted share, for the second quarter of 2023, compared to $5.0 million, or $0.29 per diluted share, for the first quarter of 2023, and $3.4 million, or $0.19 per diluted share, for the second quarter of 2022.

  • Operating net income increased to $5.7 million, or $0.33 of adjusted earnings per diluted share, for the second quarter of 2023, compared to $5.5 million, or $0.31 of adjusted earnings per diluted share, for the first quarter of 2023, and an increase from $5.2 million, or $0.30 of adjusted earnings per diluted share, for the second quarter of 2022. (See Reconciliation of Non-GAAP Measures).

  • Continued controlling our noninterest expense through a reduction in force of 23 employees which decreases our fixed compensation expenses by $2.5 million per year going forward.

  • Strong liquidity with available sources of funding of approximately $1.4 billion at June 30, 2023. No overnight borrowings utilized or Federal Reserve Bank Term Funding program used as of June 30, 2023.

  • Estimated uninsured deposits of $817.8 million, or 30.73% of total Bank deposits at June 30, 2023. Adjusted uninsured deposit estimate (excluding deposits collateralized by public funds or internal accounts) of $489.9 million, or 18.41% of total Bank deposits at June 30, 2023.

  • Provision for credit losses of $200,000 was recorded in second quarter of 2023 compared to $900,000 in first quarter of 2023, and $1.1 million in second quarter of 2022.

  • Total loans were $1.84 billion at June 30, 2023, an increase of $39.0 million, or 2.17%, from the prior quarter.

  • Total deposits were $2.63 billion and $2.52 billion at June 30, 2023 and March 31, 2023, respectively, an increase of $111.1 million.

  • Mortgage production was $106.4 million, and mortgage sales totaled $66.4 million in the second quarter of 2023 compared to $62.0 million and $37.6 million, respectively, for the first quarter of 2023.

  • Small Business Specialty Lending ("SBSL") closed $26.0 million in Small Business Administration ("SBA") loans and sold $11.1 million in SBA loans in the second quarter of 2023 compared to $19.6 million and $11.5 million, respectively, for the first quarter of 2023.

The Company also announced that on July 26, 2023, the Board of Directors declared a quarterly cash dividend of $0.11 per share, to be paid on its common stock on August 23, 2023, to shareholders of record as of the close of business on August 9, 2023. The Company had 17,567,276 shares of its common stock outstanding as of July 25, 2023.

"We are pleased to announce improved quarter over quarter earnings. Non-interest income increased $1.3 million primarily related to higher volume in our mortgage division during the home buying season. Non-interest expenses increased slightly, but are trending lower when excluding variable commission-based expenses and severance costs."

"Despite the challenging environment for deposits, we saw strong growth in core deposits across our footprint during the quarter as Colony remains committed to building our long-term customer relationships. This growth enhanced our already robust liquidity position and is a testament to the proactivity of our team and the confidence our customers place in Colony Bank," said Heath Fountain, Chief Executive Officer and Acting Chief Financial Officer.

"Net interest margin declined 32 basis points from the previous quarter. This reduction is a product of the interest rate environment and the pressure of cost of funds that is being experienced industry wide. We continue to remain focused on managing our funding costs effectively relative to our growth outlook. At the end of this quarter, we entered into $50 million of cash flow hedges on our wholesale funding that will help protect funding costs in future quarters."

"Although we did see a slight increase in non-performing loans, asset quality remains high, especially in our commercial real estate portfolio where the number of nonperforming loans remains low. The provision for credit losses was $200,000 for the quarter which is related to lower loan growth of 2.27%, down from 3.6% in the prior quarter, and a portion of that loan growth being the funding of loan commitments that were previously reserved for under the Current Expected Credit Losses (CECL) methodology."

Balance Sheet

  • Total assets were $3.10 billion at June 30, 2023, an increase of $104.1 million from March 31, 2023.

  • Total loans, including loans held for sale, were at $1.87 billion at June 30, 2023, an increase of $53.6 million from the quarter ended March 31, 2023.

  • Total deposits were $2.63 billion and $2.52 billion at June 30, 2023 and March 31, 2023, respectively, an increase of $111.1 million. Time deposits increased $91.5 million and savings and money market deposits increased $46.7 million, which was partially offset by a decrease in interest bearing demand deposits of $30.4 million from March 31, 2023 to June 30, 2023.

  • Total borrowings at June 30, 2023 totaled $218.4 million, a decrease of $10.0 million or, 4.4%, compared to March 31, 2023 related to decreases in Federal Home Loan Bank advances.

Capital

  • Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be considered as "well-capitalized."

  • Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 8.85%, 12.22%, 14.86%, and 11.12%, respectively, at June 30, 2023.

  • Colony repurchased 41,481 shares of its common stock during the quarter at a weighted average price of $9.78.

Second Quarter and June 30, 2023 Year to Date Results of Operations

  • Net interest income, on a tax-equivalent basis, totaled $19.3 million for the second quarter ended June 30, 2023 and 2022. Net interest income, on a tax-equivalent basis, for the six months ended June 30, 2023 totaled $40.1 million, compared to $38.6 million for the six months ended June 30, 2022. Although there was no change overall for the comparable quarterly periods and only a moderate increase in year to date comparisons, increases can be seen in both income on interest earning assets offset by expenses on interest bearing liabilities due to the significant rise in interest rates period over period. Income on interest earning assets increased $9.6 million, to $30.9 million for the second quarter of 2023 and $17.8 million, to $59.4 million for the six month period ended June 30, 2023, each compared to the respective period in 2022. Expense on interest bearing liabilities increased $9.6 million, to $11.6 million for the second quarter of 2023 and $16.3 million, to $19.4 million for the six month period ended June 30, 2023, each compared to the respective period in 2022.

  • Net interest margin for the second quarter of 2023 was 2.77% compared to 3.15% for the second quarter of 2022. Net interest margin was 2.92% for the six months ended June 30, 2023 compared to 3.15% for the six months ended June 30, 2022. The decrease for both comparisons is the result of an increase in deposit rates along with an increase in borrowings, offset by higher yielding investment securities, an increase in rates paid on deposits with the Federal Reserve and an increase in loan rates.

  • Noninterest income totaled $9.0 million for the second quarter ended June 30, 2023, a decrease of $1.1 million, or 10.88%, compared to the same period in 2022. Noninterest income totaled $16.6 million for the six months ended June 30, 2023, a decrease of $2.6 million, or 13.46%, compared to the same period in 2022. These decreases were primarily attributable to decreases in mortgage fee income and SBSL loan sales.

  • Noninterest expense totaled $21.4 million for the second quarter ended June 30, 2023, compared to $24.5 million for the same period in 2022. Noninterest expense totaled $42.6 million for the six months ended June 30, 2023, compared to $46.3 million for the same period in 2022. These decreases were a result of overall decreases in salaries and employee benefits related to lower commissions and bonus expenses as well as a decreases in data processing expense as a result of cost savings upon renewal of the core processing contract.

Asset Quality

  • Nonperforming assets totaled $11.9 million and $7.8 million at June 30, 2023 and March 31, 2023, respectively, an increase of $4.1 million. This increase was primarily due to the repurchase of the government guaranteed portion of $2.3 million in nonperforming loans.

  • Other real estate owned and repossessed assets totaled $792,000 at June 30, 2023 and $651,000 at March 31, 2023.

  • Net loans charged-off were $200,000, or 0.04% of average loans for the second quarter of 2023, compared to net charge-offs of $237,000 or 0.05% for the first quarter of 2023.

  • The credit loss reserve was $17.1 million, or 0.93% of total loans, at June 30, 2023, compared to $16.6 million, or 0.92% of total loans at March 31, 2023.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, July 27, 2023, to discuss the recent results and answer appropriate questions. The conference call can be accessed by dialing 1-888-259-6580 (or 1-416-764-8624 for international participants). The conference call access code is 03803040. A replay of the call will be available until Thursday, August 3, 2023. To listen to the replay, dial 1-877-674-7070 and enter the access code 803040#.

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in 1975 and headquartered in Fitzgerald, Georgia, Colony operates 38 locations throughout Georgia and is now serving Alabama. At Colony Bank, we offer a range of banking solutions for personal and business customers. In addition to traditional banking services, Colony provides specialized solutions including mortgage, government guaranteed lending, consumer insurance, wealth management and merchant services. Colony’s common stock is traded on the NASDAQ Global Market under the symbol "CBAN." For more information, please visit www.colony.bank. You can also follow the Company on social media.

Forward-Looking Statements

Certain statements contained in this press release that are not statements of historical fact constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, certain statements may be contained in the Company’s future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to: (i) projections and/or expectations of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; (iv) statements regarding growth strategy, capital management, liquidity and funding, and future profitability; and (v) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: the impact of current and economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; potential impacts of the recent adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; the risks of changes in interest rates and their effects on the level, cost, and composition of, and competition for, deposits, loan demand and timing of payments, the values of loan collateral, securities, and interest sensitive assets and liabilities; the ability to attract new or retain existing deposits, to retain or grow loans or additional interest and fee income, or to control noninterest expense; the effect of pricing pressures on the Company’s net interest margin; the failure of assumptions underlying the establishment of reserves for possible credit losses, fair value for loans and other real estate owned; changes in real estate values; the Company’s ability to implement its various strategic and growth initiatives; increased competition in the financial services industry, particularly from regional and national institutions, as well as from fintech companies; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; changes in the prices, values and sales volumes of residential and commercial real estate; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs; potential impact of the phase-out of the London Interbank Offered Rate ("LIBOR") or other changes involving LIBOR; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in the stock market prices on our investment securities; the effects of war or other conflicts including the impacts related to or resulting from Russia’s military action in Ukraine; risks related to the Company’s recently completed acquisitions, including that the anticipated benefits from the recently completed acquisitions are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events; the risks associated with the Company’s pursuit of future acquisitions; and general competitive, economic, political and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict.

Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, under the captions "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," and in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.

Explanation of Certain Unaudited Non-GAAP Financial Measures

The measures entitled operating noninterest income, operating noninterest expense, operating net income, adjusted earnings per diluted share, tangible book value per common share, tangible equity to tangible assets, operating efficiency ratio, operating net noninterest expense to average assets and pre-provision net revenue are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are noninterest income, noninterest expense, net income, diluted earnings per share, book value per common share, total equity to total assets, efficiency ratio, net noninterest expense to average assets and net interest income before provision for credit losses, respectively. Operating noninterest income excludes gain on sale of bank premises. Operating noninterest expense excludes acquisition-related expenses and severance costs. Operating net income and operating efficiency ratio both exclude acquisition-related expenses, severance costs and FHLB mark from called borrowings from net income and efficiency ratio, respectively. Operating net noninterest expense to average assets ratio excludes from net noninterest expense, severance costs, acquisition-related expenses and gain on sale of bank premises. Acquisition-related expenses includes fees associated with acquisitions and vendor contract buyouts. Severance costs includes costs associated with termination and retirement of employees. Adjusted earnings per diluted share includes the adjustments to operating net income. Tangible book value per common share and tangible equity to tangible assets exclude goodwill and other intangibles from book value per common share and total equity to total assets, respectively. Pre-provision net revenue is calculated by adding noninterest income to net interest income before provision for credit losses, and subtracting noninterest expense.

Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance, and if not provided would be requested by the investor community. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently.

These disclosures should not be considered an alternative to GAAP. The computations of operating noninterest income, operating noninterest expense, operating net income, adjusted earnings per diluted share, tangible book value per common share, tangible equity to tangible assets, operating efficiency ratio, operating net noninterest expense to average assets and pre-provision net revenue and the reconciliation of these measures to net income, diluted earnings per share, book value per common share, total equity to total assets, efficiency ratio, and net interest income before provision for credit losses are set forth in the table below.

Colony Bankcorp, Inc.

Reconciliation of Non-GAAP Measures

2023

2022

(dollars in thousands, except per share data)

Second
Quarter

First Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Operating noninterest income reconciliation

Noninterest income (GAAP)

$

8,952

$

7,659

$

7,688

$

8,145

$

10,045

Gain on sale of bank premises

(125

)

—

—

—

—

Operating noninterest income

$

8,827

$

7,659

$

7,688

$

8,145

$

10,045

Operating noninterest expense reconciliation

Noninterest expense (GAAP)

$

21,432

$

21,165

$

21,826

$

21,367

$

24,476

Severance costs

(635

)

(431

)

—

—

(1,346

)

Acquisition-related expenses

—

(161

)

—

(2

)

(1

)

Operating noninterest expense

$

20,797

$

20,573

$

21,826

$

21,365

$

23,129

Operating net income reconciliation

Net income (GAAP)

$

5,302

$

5,043

$

5,551

$

5,252

$

3,415

FHLB mark from called borrowings

—

—

—

—

751

Severance costs

635

431

—

—

1,346

Acquisition-related expenses

—

161

—

2

1

Gain on sale of bank premises

(125

)

—

—

—

—

Income tax benefit

(93

)

(107

)

—

—

(272

)

Operating net income

$

5,719

$

5,528

$

5,551

$

5,254

$

5,241

Weighted average diluted shares

17,580,557

17,595,688

17,630,971

17,645,119

17,586,276

Adjusted earnings per diluted share

$

0.33

$

0.31

$

0.31

$

0.30

$

0.30

Tangible book value per common share reconciliation

Book value per common share (GAAP)

$

13.65

$

13.57

$

13.08

$

12.81

$

13.34

Effect of goodwill and other intangibles

(3.07

)

(3.08

)

(3.10

)

(3.12

)

(3.44

)

Tangible book value per common share

$

10.58

$

10.49

$

9.98

$

9.69

$

9.90

Tangible equity to tangible assets reconciliation

Equity to assets (GAAP)

7.72

%

7.97

%

7.84

%

8.06

%

8.60

%

Effect of goodwill and other intangibles

(1.63

)

(1.70

)

(1.74

)

(1.84

)

(2.08

)

Tangible equity to tangible assets

6.09

%

6.27

%

6.10

%

6.22

%

6.52

%

Operating efficiency ratio calculation

Efficiency ratio (GAAP)

76.18

%

74.98

%

75.03

%

73.57

%

83.75

%

Severance costs

(2.26

)

(1.53

)

—

—

(4.61

)

Acquisition-related expenses

—

(0.57

)

—

(0.01

)

—

FHLB mark from called borrowing

—

—

—

—

(0.65

)

Gain on sale of bank premises

0.44

—

—

—

—

Operating efficiency ratio

74.36

%

72.88

%

75.03

%

73.56

%

78.49

%

Operating net noninterest expense(1) to average assets calculation

Net noninterest expense to average assets

1.65

%

1.86

%

1.96

%

1.89

%

2.16

%

Severance Costs

(0.09

)

(0.06

)

—

—

(0.20

)

Acquisition-related expenses

—

(0.02

)

—

—

—

Gain on Sale of bank premises

0.02

—

—

—

—

Operating net noninterest expense to average assets

1.58

%

1.78

%

1.96

%

1.89

%

1.96

%

Pre-provision net revenue

Net interest income before provision for credit losses

$

19,181

$

20,568

$

21,400

$

20,899

$

19,180

Noninterest income

8,952

7,659

7,688

8,145

10,045

Total income

28,133

28,227

29,088

29,044

29,225

Noninterest expense

21,432

21,165

21,826

21,367

24,476

Pre-provision net revenue

$

6,701

$

7,062

$

7,262

$

7,677

$

4,749

(1) Net noninterest expense is defined as noninterest expense less noninterest income

Colony Bankcorp, Inc.

Selected Financial Information

2023

2022

(dollars in thousands, except per share data)

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

EARNINGS SUMMARY

Net interest income

$

19,181

$

20,568

$

21,400

$

20,899

$

19,180

Provision for credit losses

200

900

900

1,320

1,100

Noninterest income

8,952

7,659

7,688

8,145

10,045

Noninterest expense

21,432

21,165

21,826

21,367

24,476

Income taxes

1,199

1,119

811

1,105

234

Net income

5,302

5,043

5,551

5,252

3,415

PERFORMANCE MEASURES

Per common share:

Common shares outstanding

17,541,661

17,593,879

17,598,123

17,641,123

17,581,212

Weighted average basic shares

17,580,557

17,595,688

17,630,971

17,645,119

17,586,276

Weighted average diluted shares

17,580,557

17,595,688

17,630,971

...

17,645,119

17,586,276

Earnings per basic share

$

0.30

$

0.29

$

0.31

$

0.30

$

0.19

Earnings per diluted share

0.30

0.29

0.31

0.30

0.19

Adjusted earnings per diluted share(b)

0.33

0.31

0.31

0.30

0.30

Cash dividends declared per share

0.11

0.11

0.1075

0.1075

0.1075

Common book value per share

13.65

13.57

13.08

12.81

13.34

Tangible book value per common share(b)

10.58

10.49

9.98

9.69

9.90

Pre-provision net revenue(b)

$

6,701

$

7,062

$

7,262

$

7,677

$

4,749

Performance ratios:

Net interest margin (a)

2.77

%

3.08

%

3.23

%

3.25

%

3.15

%

Return on average assets

0.70

0.69

0.77

0.75

0.51

Return on average total equity

8.88

8.73

9.76

8.85

5.68

Efficiency ratio

76.18

74.98

75.03

73.57

83.75

Operating efficiency ratio (b)

74.36

72.88

75.03

73.56

78.49

Net noninterest expense to average assets

1.65

1.86

1.96

1.89

2.16

Operating net noninterest expense to average assets(b)

1.58

1.78

1.96

1.89

1.96

ASSET QUALITY

Nonperforming portfolio loans

$

6,716

$

5,636

$

5,693

$

5,292

$

4,910

Nonperforming government guaranteed loans

4,369

1,529

17

10

38

Total nonperforming loans (NPLs)

11,085

7,165

5,710

5,302

4,948

Other real estate owned

792

651

651

246

246

Repossessed assets

—

—

—

—

47

Total nonperforming assets (NPAs)

11,877

7,816

6,361

5,548

5,241

Classified loans

19,267

18,747

15,105

18,310

19,612

Criticized loans

48,074

43,281

41,293

43,933

49,569

Net loan charge-offs

200

237

154

198

58

Allowance for credit losses to total loans

0.93

%

0.92

%

0.93

%

0.96

%

0.96

%

Allowance for credit losses to total NPLs

153.96

231.67

282.45

286.34

282.19

Allowance for credit losses to total NPAs

143.69

212.37

253.55

273.65

266.42

Net charge-offs to average loans

0.04

0.05

0.04

0.05

0.02

NPLs to total loans

0.60

0.40

0.33

0.33

0.34

NPAs to total assets

0.38

0.26

0.22

0.20

0.19

NPAs to total loans and foreclosed assets

0.65

0.43

0.37

0.35

0.36

AVERAGE BALANCES

Total assets

3,030,044

2,949,986

2,863,046

2,777,390

2,676,612

Loans, net

1,814,172

1,765,845

1,637,034

1,509,202

1,384,795

Loans, held for sale

21,237

14,007

22,644

30,238

29,843

Deposits

2,524,949

2,473,464

2,460,664

2,366,710

2,325,756

Total stockholders’ equity

239,579

234,147

225,639

235,557

241,281

(a) Computed using fully taxable-equivalent net income.

(b) Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and reconciliation to GAAP.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

Three Months Ended June 30,

2023

2022

(dollars in thousands)

Average

Balances

Income/

Expense

Yields/

Rates

Average

Balances

Income/

Expense

Yields/

Rates

Assets

Interest-earning assets:

Loans, net of unearned income 1

$

1,835,409

$

24,113

5.27

%

$

1,427,563

$

16,330

4.59

%

Investment securities, taxable

777,133

5,498

2.84

%

842,481

4,332

2.06

%

Investment securities, tax-exempt 2

113,931

592

2.08

%

114,658

542

1.90

%

Deposits in banks and short term investments

73,988

708

3.84

%

73,189

103

0.56

%

Total interest-earning assets

2,800,461

30,911

4.43

%

2,457,891

21,307

3.48

%

Noninterest-earning assets

229,583

218,721

Total assets

$

3,030,044

$

2,676,612

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

1,372,569

$

3,422

1.00

%

$

1,429,331

$

307

0.09

%

Other time

651,426

5,134

3.16

%

328,355

319

0.39

%

Total interest-bearing deposits

2,023,995

8,556

1.70

%

1,757,686

626

0.14

%

Federal funds purchased

3,402

47

5.49

%

7,916

19

0.96

%

Federal Home Loan Bank advances3

178,132

1,947

4.38

%

46,550

943

8.13

%

Other borrowings

68,385

1,033

6.06

%

44,729

417

3.74

%

Total other interest-bearing liabilities

249,919

3,027

4.86

%

99,195

1,379

5.58

%

Total interest-bearing liabilities

2,273,914

11,583

2.04

%

1,856,881

2,005

0.43

%

Noninterest-bearing liabilities:

Demand deposits

500,954

$

568,070

Other liabilities

15,597

10,380

Stockholders' equity

239,579

241,281

Total noninterest-bearing liabilities and stockholders' equity

756,130

819,731

Total liabilities and stockholders' equity

$

3,030,044

$

2,676,612

Interest rate spread

2.38

%

3.04

%

Net interest income

$

19,328

$

19,302

Net interest margin

2.77

%

3.15

%

1 The average balance of loans includes the average balance of nonaccrual loans. Income on such loans is recognized and recorded on the cash basis. Taxable-equivalent adjustments totaling $45,000 and $31,000 for the quarters ended June 30, 2023 and 2022, respectively, are included in income and fees on loans. Accretion income of $53,000 and $269,000 for the quarters ended June 30, 2023 and 2022 are also included in income and fees on loans.

2 Taxable-equivalent adjustments totaling $108,000 and $70,000 for the quarters ended June 30, 2023 and 2022, respectively, are included in tax-exempt interest on investment securities.

3 Federal Home Loan Bank advances interest expense includes $751,000 for the quarter ended June 30, 2022 and is the recognized mark on two advances that were acquired in the SouthCrest acquisition that were called early.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

Six months ended June 30,

2023

2022

(dollars in thousands)

Average

Balances

Income/

Expense

Yields/

Rates

Average

Balances

Income/

Expense

Yields/

Rates

Assets

Interest-earning assets:

Loans, net of unearned income 4

$

1,807,784

$

46,313

5.17

%

$

1,395,179

$

32,353

4.68

%

Investment securities, taxable

781,989

10,872

2.80

%

842,491

8,084

1.93

%

Investment securities, tax-exempt 5

114,137

1,187

2.10

%

112,843

1,022

1.83

%

Deposits in banks and short term investments

62,507

1,066

3.44

%

117,176

159

0.27

%

Total interest-earning assets

2,766,417

59,438

4.33

%

2,467,689

41,618

3.40

%

Noninterest-earning assets

223,818

210,625

Total assets

$

2,990,235

$

2,678,314

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

1,391,099

$

5,746

0.83

%

$

1,437,325

$

568

0.08

%

Other time

579,818

7,809

2.72

%

335,744

657

0.39

%

Total interest-bearing deposits

1,970,917

13,555

1.39

%

1,773,069

1,225

0.14

%

Federal funds purchased

5,197

135

5.24

%

3,978

19

0.96

%

Federal Home Loan Bank advances6

163,867

3,572

4.40

%

49,100

1,192

4.90

%

Other borrowings

72,213

2,123

5.93

%

38,492

619

3.24

%

Total other interest-bearing liabilities

241,277

5,830

4.87

%

91,570

1,830

4.03

%

Total interest-bearing liabilities

2,212,194

19,385

1.77

%

1,864,639

3,055

0.33

%

Noninterest-bearing liabilities:

Demand deposits

$

528,432

$

560,444

Other liabilities

12,731

11,035

Stockholders' equity

236,878

242,196

Total noninterest-bearing liabilities and stockholders' equity

778,041

813,675

Total liabilities and stockholders' equity

$

2,990,235

$

2,678,314

Interest rate spread

2.57

%

3.08

%

Net interest income

$

40,053

$

38,563

Net interest margin

2.92

%

3.15

%

4The average balance of loans includes the average balance of nonaccrual loans. Income on such loans is recognized and recorded on the cash basis. Taxable-equivalent adjustments totaling $91,000 and $62,000 for the six months ended June 30, 2023 and 2022, respectively, are included in income and fees on loans. Accretion income of $124,000 and $429,000 for the six months ended June 30, 2023 and 2022 are also included in income and fees on loans.

5Taxable-equivalent adjustments totaling $217,000 and $133,000 for the six months ended June 30, 2023 and 2022, respectively, are included in tax-exempt interest on investment securities.

6Federal Home Loan Bank advances interest expense includes $751,000 for the six months ended June 30, 2022 and is the recognized mark on two advances that were acquired in the SouthCrest acquisition that were called early.

Colony Bankcorp, Inc.

Segment Reporting

2023

2022

(dollars in thousands)

Second Quarter

First Quarter

Fourth
Quarter

Third Quarter

Second
Quarter

Banking Division

Net interest income

$

18,562

$

20,141

$

21,037

$

20,508

$

18,819

Provision for credit losses

60

900

900

1,320

1,100

Noninterest income

5,433

4,915

4,312

4,288

5,187

Noninterest expenses

17,650

17,812

18,038

17,537

19,504

Income taxes

1,157

1,155

837

1,047

227

Segment income

$

5,128

$

5,189

$

5,574

$

4,892

$

3,175

Total segment assets

$

3,013,689

$

2,930,421

$

2,857,893

$

2,738,082

$

2,664,966

Full time employees

383

407

427

396

396

Mortgage Banking Division

Net interest income

$

31

$

3

$

(43

)

$

17

$

57

Provision for credit losses

—

—

—

—

—

Noninterest income

2,015

1,277

1,637

2,345

2,736

Noninterest expenses

1,971

1,712

1,936

2,289

2,799

Income taxes

14

(86

)

(6

)

10

(7

)

Segment income

$

61

$

(346

)

$

(336

)

$

63

$

1

Total segment assets

$

15,984

$

7,895

$

18,221

$

16,905

$

20,183

Variable noninterest expense(1)

$

1,149

$

890

$

1,193

$

1,388

$

1,611

Fixed noninterest expense

822

822

743

901

1,188

Full time employees

51

59

65

61

59

Small Business Specialty Lending Division

Net interest income

$

588

$

427

$

406

$

340

$

291

Provision for credit losses

140

—

—

—

—

Noninterest income

1,504

1,464

1,739

1,546

2,135

Noninterest expenses

1,811

1,641

1,852

1,541

2,173

Income taxes

28

50

(20

)

48

14

Segment income

$

113

$

200

$

313

$

297

$

239

Total segment assets

$

71,398

$

58,625

$

60,456

$

50,925

$

43,553

Full time employees

32

30

30

29

28

Total Consolidated

Net interest income

$

19,181

$

20,568

$

21,400

$

20,865

$

19,167

Provision for credit losses

200

900

900

1,320

1,100

Noninterest income

8,952

7,659

7,688

8,179

10,058

Noninterest expenses

21,432

21,165

21,826

21,367

24,476

Income taxes

1,199

1,119

811

1,105

234

Segment income

$

5,302

$

5,043

$

5,551

$

5,252

$

3,415

Total segment assets

$

3,101,071

$

2,996,941

$

2,936,570

$

2,805,912

$

2,728,702

Full time employees

466

496

522

486

483

(1) Variable noninterest expense includes commission based salary expenses and volume based loan related fees.

Colony Bankcorp, Inc.

Consolidated Balance Sheets

June 30, 2023

December 31, 2022

(dollars in thousands)

(unaudited)

(audited)

ASSETS

Cash and due from banks

$

26,823

$

20,584

Interest-bearing deposits in banks and federal funds sold

128,025

60,094

Cash and cash equivalents

154,848

80,678

Investment securities available for sale, at fair value

421,248

432,553

Investment securities held to maturity, at amortized cost

453,912

465,858

Other investments, at cost

14,483

13,793

Loans held for sale

28,268

17,743

Loans, net of unearned income

1,838,842

1,737,106

Allowance for credit losses

(17,066

)

(16,128

)

Loans, net

1,821,776

1,720,978

Premises and equipment

42,448

41,606

Other real estate

792

651

Goodwill

48,923

48,923

Other intangible assets

4,880

5,664

Bank owned life insurance

56,206

55,504

Deferred income taxes, net

27,948

28,199

Other assets

25,339

24,420

Total assets

$

3,101,071

$

2,936,570

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Deposits:

Noninterest-bearing

$

541,119

$

569,170

Interest-bearing

2,086,092

1,921,827

Total deposits

2,627,211

2,490,997

Federal Home Loan Bank advances

155,000

125,000

Other borrowed money

63,399

78,352

Accrued expenses and other liabilities

16,006

11,953

Total liabilities

$

2,861,616

$

2,706,302

Stockholders’ equity

Common stock, $1 par value; 50,000,000 shares authorized, 17,541,661 and
17,598,123 issued and outstanding, respectively

$

17,542

$

17,598

Paid in capital

167,971

167,537

Retained earnings

116,857

111,573

Accumulated other comprehensive loss, net of tax

(62,915

)

(66,440

)

Total stockholders’ equity

239,455

230,268

Total liabilities and stockholders’ equity

$

3,101,071

$

2,936,570

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended June 30,

Six months ended June 30,

2023

2022

2023

2022

(dollars in thousands, except per share data)

Interest income:

Loans, including fees

$

24,067

$

16,279

$

46,222

$

32,295

Investment securities

5,989

4,803

11,849

8,974

Deposits in banks and short term investments

708

103

1,066

159

Total interest income

30,764

21,185

59,137

41,428

Interest expense:

Deposits

8,556

626

13,555

1,225

Federal funds purchased

47

19

135

19

Federal Home Loan Bank advances

1,947

943

3,572

1,192

Other borrowings

1,033

417

2,123

619

Total interest expense

11,583

2,005

19,385

3,055

Net interest income

19,181

19,180

39,752

38,373

Provision for credit losses

200

1,100

1,100

1,150

Net interest income after provision for credit losses

18,981

18,080

38,652

37,223

Noninterest income:

Service charges on deposits

2,027

1,895

3,941

3,720

Mortgage fee income

2,014

2,736

3,198

5,648

Gain on sales of SBA loans

1,105

1,863

2,162

3,589

Gain on sales of securities

—

—

—

24

Interchange fees

2,131

2,159

4,198

4,159

BOLI income

358

353

689

665

Other

1,317

1,039

2,420

1,386

Total noninterest income

8,952

10,045

16,608

19,191

Noninterest expense:

Salaries and employee benefits

13,348

15,072

25,956

28,344

Occupancy and equipment

1,499

1,608

3,121

3,227

Information technology expenses

2,001

2,549

4,342

4,903

Professional fees

881

1,073

1,596

1,946

Advertising and public relations

673

695

1,666

1,464

Communications

192

417

486

854

Other

2,838

3,062

5,430

5,544

Total noninterest expense

21,432

24,476

42,597

46,282

Income before income taxes

6,501

3,649

12,663

10,132

Income taxes

1,199

234

2,318

1,395

Net income

$

5,302

$

3,415

$

10,345

$

8,737

Earnings per common share:

Basic

$

0.30

$

0.19

$

0.59

$

0.52

Diluted

0.30

0.19

0.59

0.52

Dividends declared per share

0.11

0.1075

0.22

0.2150

Weighted average common shares outstanding:

Basic

17,580,557

17,586,276

17,588,081

16,731,986

Diluted

17,580,557

17,586,276

17,588,081

16,731,986

Colony Bankcorp, Inc.

Quarterly Comparison

2023

2022

(dollars in thousands, except per share data)

Second Quarter

First Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Assets

$

3,101,071

$

2,996,941

$

2,936,570

$

2,805,912

$

2,728,702

Loans, net

1,821,776

1,783,254

1,720,978

1,571,431

1,438,842

Deposits

2,627,211

2,516,129

2,490,997

2,409,662

2,331,511

Total equity

239,455

238,777

230,268

226,067

234,595

Net income

5,302

5,043

5,551

5,252

3,415

Earnings per basic share

$

0.30

$

0.29

$

0.31

$

0.30

$

0.19

Key Performance Ratios:

Return on average assets

0.70

%

0.69

%

0.77

%

0.75

%

0.51

%

Return on average total equity

8.88

%

8.73

%

9.76

%

8.85

%

5.68

%

Total equity to total assets

7.72

%

7.97

%

7.84

%

8.06

%

8.60

%

Tangible equity to tangible assets (a)

6.09

%

6.27

%

6.10

%

6.22

%

6.52

%

Net interest margin

2.77

%

3.08

%

3.23

%

3.25

%

3.15

%

(a) Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP Financial Measures" for more information and reconciliation to GAAP.

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2023

2022

(dollars in thousands)

Second

Quarter

First Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Core

$

1,664,855

$

1,614,216

$

1,540,561

$

1,372,257

$

1,217,626

Purchased

173,987

185,637

196,545

214,356

235,179

Total

$

1,838,842

$

1,799,853

$

1,737,106

$

1,586,613

$

1,452,805

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2023

2022

(dollars in thousands)

Second
Quarter

First Quarter

Fourth
Quarter

Third
Quarter

Second
Quarter

Alabama

$

44,301

$

41,118

$

21,122

$

7,291

$

2,255

Augusta

55,124

53,415

52,226

42,079

31,576

Coastal Georgia

242,249

248,253

259,730

252,083

246,187

Middle Georgia

119,041

119,720

115,504

114,630

99,827

Atlanta and North Georgia

420,231

419,480

375,106

356,421

299,901

South Georgia

463,558

448,558

457,283

449,684

445,309

West Georgia

192,348

204,664

210,676

177,431

170,847

Small Business Specialty Lending

56,908

50,513

45,944

35,267

23,539

Consumer Portfolio Mortgages

226,755

211,225

197,672

149,945

131,550

Marine/RV Lending

17,137

2,060

—

—

—

Other

1,190

847

1,843

1,782

1,814

Total

$

1,838,842

$

1,799,853

$

1,737,106

$

1,586,613

$

1,452,805

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726800824/en/

Contacts

T. Heath Fountain
Chief Executive Officer and Acting Chief Financial Officer
229-426-6000, extension 6012

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