Colony Bankcorp Reports Third Quarter 2023 Results

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Declares Quarterly Cash Dividend of $0.11 Per Share

FITZGERALD, Ga., October 25, 2023--(BUSINESS WIRE)--Colony Bankcorp, Inc. (Nasdaq: CBAN) ("Colony" or the "Company") today reported financial results for the third quarter of 2023. Financial highlights are shown below.

Financial Highlights:

  • Net income increased to $5.8 million, or $0.33 per diluted share, for the third quarter of 2023, compared to $5.3 million, or $0.30 per diluted share, for the second quarter of 2023, and $5.3 million, or $0.30 per diluted share, for the third quarter of 2022.

  • Operating net income increased to $6.0 million, or $0.34 of adjusted earnings per diluted share, for the third quarter of 2023, compared to $5.7 million, or $0.33 of adjusted earnings per diluted share, for the second quarter of 2023, and $5.3 million, or $0.30 of adjusted earnings per diluted share, for the third quarter of 2022. (See Reconciliation of Non-GAAP Measures).

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

  • Estimated uninsured deposits of $740.0 million, or 28.21% of total Bank deposits at September 30, 2023. Adjusted uninsured deposit estimate (excluding deposits collateralized by public funds or internal accounts) of $451.9 million, or 17.22% of total Bank deposits at September 30, 2023.

  • Provision for credit losses of $1.0 million was recorded in third quarter of 2023 compared to $200,000 in second quarter of 2023, and $1.3 million in third quarter of 2022.

  • Total loans were $1.86 billion at September 30, 2023, an increase of $26.1 million, or 1.42%, from the prior quarter.

  • Total deposits were $2.59 billion and $2.63 billion at September 30, 2023 and June 30, 2023, respectively, a decrease of $35.9 million.

  • Mortgage production was $78.4 million, and mortgage sales totaled $53.3 million in the third quarter of 2023 compared to $106.4 million and $66.4 million, respectively, for the second quarter of 2023.

  • Small Business Specialty Lending ("SBSL") closed $34.5 million in Small Business Administration ("SBA") loans and sold $14.6 million in SBA loans in the third quarter of 2023 compared to $26.0 million and $11.1 million, respectively, for the second quarter of 2023.

The Company also announced that on October 25, 2023, the Board of Directors declared a quarterly cash dividend of $0.11 per share, to be paid on its common stock on November 22, 2023, to shareholders of record as of the close of business on November 8, 2023. The Company had 17,567,983 shares of its common stock outstanding as of October 24, 2023.

"We continue to be pleased with our performance in the current environment. Our quarter over quarter earnings improved as we remain focused on enhancing our operational efficiency, even in the face of persistent industry-wide challenges. Noninterest expenses decreased as we diligently maintained our disciplined approach to expense control and saw the results of our previous quarter's efforts come to fruition.

"In light of the evolving economic landscape, we anticipate a more conservative approach to loan growth in the coming quarters. This outlook aligns with our commitment to prudent risk management and achieving appropriate returns with the current increased cost of funds. We prioritize the long-term financial health of our institution and the well-being of our customers as we navigate these market conditions," said Heath Fountain, Chief Executive Officer and Acting Chief Financial Officer.

"Total deposits declined slightly from the previous quarter resulting from the seasonality of a small portion of our deposit base, however, we have seen total deposits increase on a year-to-date basis. Additionally, net-interest margin increased 1 basis point from the prior quarter, but we maintain our outlook of flat to slightly down over the next quarter as we continue to see mix and rate changes along with competition on deposit pricing.

"Asset quality remains strong as non-performing loans decreased from the previous quarter and non-performing loans in our commercial real estate portfolio continue to remain at low levels. The uptick in loan charge-offs pertains to the non-government guaranteed portion of a limited number of loans within our Small Business Specialty Lending Division."

Balance Sheet

  • Total assets were $3.09 billion at September 30, 2023, a decrease of $7.2 million from June 30, 2023.

  • Total loans, including loans held for sale, were at $1.89 billion at September 30, 2023, an increase of $25.1 million from the quarter ended June 30, 2023.

  • Total deposits were $2.59 billion and $2.63 billion at September 30, 2023 and June 30, 2023, respectively, a decrease of $35.9 million. Interest bearing demand deposits increased $7.0 million and savings and money market deposits increased $22.1 million, which was partially offset by a decrease in time deposits of $18.0 million from June 30, 2023 to September 30, 2023.

  • Total borrowings at September 30, 2023 totaled $248.4 million, an increase of $30.0 million or, 13.7%, compared to June 30, 2023 related to increases 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 8.93%, 12.46%, 15.11%, and 11.36%, respectively, at September 30, 2023.

Third Quarter and September 30, 2023 Year to Date Results of Operations

  • Net interest income, on a tax-equivalent basis, totaled $19.8 million for the third quarter ended September 30, 2023 compared to $21.0 million for the same period in 2022. Net interest income, on a tax-equivalent basis, for the nine months ended September 30, 2023 totaled $59.9 million, compared to $59.6 million for the nine months ended September 30, 2022. Quarter over quarter there was a decrease of $1.2 million and only a slight 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 along with increases in FHLB advances. Income on interest earning assets increased $8.9 million, to $32.8 million for the third quarter of 2023 and $26.8 million, to $92.3 million for the nine month period ended September 30, 2023, each compared to the respective period in 2022. Expense on interest bearing liabilities increased $10.1 million, to $13.0 million for the third quarter of 2023 and $26.5 million, to $32.3 million for the nine month period ended September 30, 2023, each compared to the respective period in 2022.

  • Net interest margin for the third quarter of 2023 was 2.78% compared to 3.26% for the third quarter of 2022. Net interest margin was 2.87% for the nine months ended September 30, 2023 compared to 3.19% for the nine months ended September 30, 2022. The decrease for each period is the result of rate increases in interest earning liabilities outpacing the rate increases in interest bearing assets.

  • Noninterest income totaled $9.7 million for the third quarter ended September 30, 2023, an increase of $1.6 million, or 19.30%, compared to the same period in 2022. This increase was related to increases in insurance commissions, equity investment income and income on wealth advisory services which are included in other noninterest income. Noninterest income totaled $26.3 million for the nine months ended September 30, 2023, a decrease of $1.0 million, or 3.68%, compared to the same period in 2022. This decrease was primarily attributable to decreases in mortgage fee income and SBSL loan sales offset by increases in insurance commissions, equity investment income and income on wealth advisory services which are included in other noninterest income.

  • Noninterest expense totaled $20.9 million for the third quarter ended September 30, 2023, compared to $21.4 million for the same period in 2022. Noninterest expense totaled $63.5 million for the nine months ended September 30, 2023, compared to $67.6 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 partially offset by an increase in other loan related fees.

Asset Quality

  • Nonperforming assets totaled $10.1 million and $11.9 million at September 30, 2023 and June 30, 2023, respectively, a decrease of $1.8 million due to charge offs and paid off loans during the quarter.

  • Other real estate owned and repossessed assets totaled $812,000 at September 30, 2023 and $792,000 at June 30, 2023.

  • Net loans charged-off were $898,000, or 0.19% of average loans for the third quarter of 2023, compared to net charge-offs of $200,000 or 0.04% for the second quarter of 2023.

  • The credit loss reserve was $17.4 million, or 0.93% of total loans, at September 30, 2023, compared to $17.1 million, or 0.93% of total loans at June 30, 2023.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, October 26, 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 97884160. A replay of the call will be available until Thursday, November 2, 2023. To listen to the replay, dial 1-877-674-7070 and enter the access code 884160#.

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 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 or the conflict in Israel and surrounding areas; 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; the impact of generative artificial intelligence; fraud or misconduct by internal or external actors, and system failures, cybersecurity threats or security breaches and the cost of defending against them; 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 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 are set forth in the table below.

Colony Bankcorp, Inc.

Reconciliation of Non-GAAP Measures

2023

2022

(dollars in thousands, except per share data)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Operating noninterest income reconciliation

Noninterest income (GAAP)

$

9,718

$

8,952

$

7,659

$

7,688

$

8,145

Gain on sale of bank premises

—

(125

)

—

—

—

Operating noninterest income

$

9,718

$

8,827

$

7,659

$

7,688

$

8,145

Operating noninterest expense reconciliation

Noninterest expense (GAAP)

$

20,881

$

21,432

$

21,165

$

21,826

$

21,367

Severance costs

(220

)

(635

)

(431

)

—

—

Acquisition-related expenses

—

—

(161

)

—

(2

)

Operating noninterest expense

$

20,661

$

20,797

$

20,573

$

21,826

$

21,365

Operating net income reconciliation

Net income (GAAP)

$

5,804

$

5,302

$

5,043

$

5,551

$

5,252

Severance costs

220

635

431

—

—

Acquisition-related expenses

—

—

161

—

2

Gain on sale of bank premises

—

(125

)

—

—

—

Income tax benefit

(48

)

(93

)

(107

)

—

—

Operating net income

$

5,976

$

5,719

$

5,528

$

5,551

$

5,254

Weighted average diluted shares

17,569,493

17,580,557

17,595,688

17,630,971

17,645,119

Adjusted earnings per diluted share

$

0.34

$

0.33

$

0.31

$

0.31

$

0.30

Tangible book value per common share reconciliation

Book value per common share (GAAP)

$

13.59

$

13.65

$

13.57

$

13.08

$

12.81

Effect of goodwill and other intangibles

(3.04

)

(3.07

)

(3.08

)

(3.10

)

(3.12

)

Tangible book value per common share

$

10.55

$

10.58

$

10.49

$

9.98

$

9.69

Tangible equity to tangible assets reconciliation

Equity to assets (GAAP)

7.72

%

7.72

%

7.97

%

7.84

%

8.06

%

Effect of goodwill and other intangibles

(1.63

)

(1.63

)

(1.70

)

(1.74

)

(1.84

)

Tangible equity to tangible assets

6.09

%

6.09

%

6.27

%

6.10

%

6.22

%

Operating efficiency ratio calculation

Efficiency ratio (GAAP)

71.17

%

76.18

%

74.98

%

75.03

%

73.57

%

Severance costs

(0.75

)

(2.26

)

(1.53

)

—

—

Acquisition-related expenses

—

—

(0.57

)

—

(0.01

)

Gain on sale of bank premises

—

0.44

—

—

—

Operating efficiency ratio

70.42

%

74.36

%

72.88

%

75.03

%

73.56

%

Operating net noninterest expense(1) to average assets calculation

Net noninterest expense to average assets

1.45

%

1.65

%

1.86

%

1.96

%

1.89

%

Severance Costs

(0.03

)

(0.09

)

(0.06

)

—

—

Acquisition-related expenses

—

—

(0.02

)

—

—

Gain on Sale of bank premises

—

0.02

—

—

—

Operating net noninterest expense to average assets

1.42

%

1.58

%

1.78

%

1.96

%

1.89

%

Pre-provision net revenue

Net interest income before provision for credit losses

$

19,621

$

19,181

$

20,568

$

21,400

$

20,898

Noninterest income

9,718

8,952

7,659

7,688

8,146

Total income

29,339

28,133

28,227

29,088

29,044

Noninterest expense

20,881

21,432

21,165

21,826

21,367

Pre-provision net revenue

$

8,458

$

6,701

$

7,062

$

7,262

$

7,677

(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)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

EARNINGS SUMMARY

Net interest income

$

19,621

$

19,181

$

20,568

$

21,400

$

20,898

Provision for credit losses

1,000

200

900

900

1,320

Noninterest income

9,718

8,952

7,659

7,688

8,146

Noninterest expense

20,881

21,432

21,165

21,826

21,367

Income taxes

1,654

1,199

1,119

811

1,105

Net income

$

5,804

$

5,302

$

5,043

$

5,551

$

5,252

PERFORMANCE MEASURES

Per common share:

Common shares outstanding

17,567,983

17,541,661

17,593,879

17,598,123

17,641,123

Weighted average basic shares

17,569,493

17,580,557

17,595,688

17,630,971

17,645,119

Weighted average diluted shares

17,569,493

17,580,557

17,595,688

17,630,971

17,645,119

Earnings per basic share

$

0.33

$

0.30

$

0.29

$

0.31

$

0.30

Earnings per diluted share

0.33

0.30

0.29

0.31

0.30

Adjusted earnings per diluted share(b)

0.34

0.33

0.31

0.31

0.30

Cash dividends declared per share

0.11

0.11

0.11

0.1075

0.1075

Common book value per share

13.59

13.65

13.57

13.08

12.81

Tangible book value per common share(b)

10.55

10.58

10.49

9.98

9.69

Pre-provision net revenue(b)

$

8,458

$

6,701

$

7,062

$

7,262

$

7,677

Performance ratios:

Net interest margin (a)

2.78

%

2.77

%

3.08

%

3.23

%

3.25

%

Return on average assets

0.75

0.70

0.69

0.77

0.75

Return on average total equity

9.61

8.88

8.73

9.76

8.85

Efficiency ratio

71.17

76.18

74.98

75.03

73.57

Operating efficiency ratio (b)

70.42

74.36

72.88

75.03

73.56

Net noninterest expense to average assets

1.45

1.65

1.86

1.96

1.89

Operating net noninterest expense to average assets(b)

1.42

1.58

1.78

1.96

1.89

ASSET QUALITY

Nonperforming portfolio loans

$

5,625

$

6,716

$

5,636

$

5,693

$

5,292

Nonperforming government guaranteed loans

3,641

4,369

1,529

17

10

Total nonperforming loans (NPLs)

9,266

11,085

7,165

5,710

5,302

Other real estate owned

812

792

651

651

246

Total nonperforming assets (NPAs)

10,078

11,877

7,816

6,361

5,548

Classified loans

20,704

19,267

18,747

15,105

18,310

Criticized loans

50,741

48,074

43,281

41,293

43,933

Net loan charge-offs

898

200

237

154

198

Allowance for credit losses to total loans

0.93

%

0.93

%

0.92

%

0.93

%

0.96

%

Allowance for credit losses to total NPLs

187.44

153.96

231.67

282.45

286.34

Allowance for credit losses to total NPAs

172.34

143.69

212.37

253.55

273.65

Net charge-offs to average loans

0.19

0.04

0.05

0.04

0.05

NPLs to total loans

0.50

0.60

0.40

0.33

0.33

NPAs to total assets

0.33

0.38

0.26

0.22

0.20

NPAs to total loans and foreclosed assets

0.54

0.65

0.43

0.37

0.35

AVERAGE BALANCES

Total assets

$

3,058,485

$

3,030,044

$

2,949,986

$

2,863,046

$

2,777,390

Loans, net

1,854,367

1,814,172

1,765,845

1,637,034

1,509,202

Loans, held for sale

29,444

21,237

14,007

22,644

30,238

Deposits

2,565,026

2,524,949

2,473,464

2,460,664

2,366,710

Total stockholders’ equity

239,571

239,579

234,147

225,639

235,557

(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 September 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

$

1,883,811

$

26,075

5.49

%

$

1,553,882

$

18,216

4.65

%

Investment securities, taxable

761,540

5,288

2.75

%

818,362

4,711

2.28

%

Investment securities, tax-exempt 2

106,136

610

2.28

%

115,368

638

2.19

%

Deposits in banks and short term investments

78,295

787

3.99

%

70,455

278

1.56

%

Total interest-earning assets

2,829,782

32,760

4.59

%

2,558,067

23,843

3.70

%

Noninterest-earning assets

228,702

219,323

Total assets

$

3,058,485

$

2,777,390

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

1,382,638

$

4,455

1.28

%

$

1,424,171

$

772

0.21

%

Other time

672,442

5,883

3.47

%

370,282

677

0.72

%

Total interest-bearing deposits

2,055,080

10,338

2.00

%

1,794,453

1,449

0.32

%

Federal funds purchased

764

11

5.93

%

541

3

2.20

%

Federal Home Loan Bank advances

155,652

1,569

4.00

%

96,848

555

2.27

%

Other borrowings

66,342

1,041

6.22

%

65,741

822

4.96

%

Total other interest-bearing liabilities

222,758

2,621

4.67

%

163,130

1,380

3.36

%

Total interest-bearing liabilities

2,277,838

12,959

2.26

%

1,957,583

2,829

0.57

%

Noninterest-bearing liabilities:

Demand deposits

509,946

$

572,257

Other liabilities

31,130

11,993

Stockholders' equity

239,571

235,557

Total noninterest-bearing liabilities and stockholders' equity

780,647

819,807

Total liabilities and stockholders' equity

$

3,058,485

$

2,777,390

Interest rate spread

2.34

%

3.13

%

Net interest income

$

19,801

$

21,014

Net interest margin

2.78

%

3.26

%

________________________________________

1The 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 $54,000 and $33,000 for the quarters ended September 30, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $36,000 and $122,000 for the quarters ended September 30, 2023 and 2022 are also included in income and fees on loans.

2Taxable-equivalent adjustments totaling $128,000 and $83,000 for the quarters ended September 30, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in tax-exempt interest on investment securities.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

Nine months ended September 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 3

$

1,833,405

$

72,403

5.28

%

$

1,448,661

$

50,573

4.67

%

Investment securities, taxable

779,940

16,167

2.77

%

837,492

12,795

2.04

%

Investment securities, tax-exempt 4

106,599

1,837

2.30

%

110,561

1,661

2.01

%

Deposits in banks and short term investments

67,828

1,853

3.65

%

101,432

437

0.58

%

Total interest-earning assets

2,787,772

92,260

4.42

%

2,498,146

65,466

3.50

%

Noninterest-earning assets

224,985

213,556

Total assets

$

3,012,757

$

2,711,702

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

1,388,248

$

10,201

0.98

%

$

1,432,892

$

1,340

0.13

%

Other time

611,032

13,692

3.00

%

347,383

1,334

0.51

%

Total interest-bearing deposits

1,999,280

23,893

1.60

%

1,780,275

2,674

0.20

%

Federal funds purchased

3,703

146

5.29

%

2,820

22

1.04

%

Federal Home Loan Bank advances5

161,099

5,140

4.27

%

65,191

1,746

3.58

%

Other borrowings

70,234

3,164

6.02

%

47,675

1,441

4.04

%

Total other interest-bearing liabilities

235,036

8,450

4.81

%

115,686

3,209

3.71

%

Total interest-bearing liabilities

2,234,316

32,343

1.94

%

1,895,961

5,883

0.41

%

Noninterest-bearing liabilities:

Demand deposits

$

526,469

$

564,425

Other liabilities

13,897

11,357

Stockholders' equity

238,075

239,959

Total noninterest-bearing liabilities and stockholders' equity

778,441

815,741

Total liabilities and stockholders' equity

$

3,012,757

$

2,711,702

Interest rate spread

2.49

%

3.09

%

Net interest income

$

59,917

$

59,583

Net interest margin

2.87

%

3.19

%

________________________________________

3The 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 $162,000 and $95,000 for the nine months ended September 30, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $160,000 and $550,000 for the nine months ended September 30, 2023 and 2022 are also included in income and fees on loans.

4Taxable-equivalent adjustments totaling $386,000 and $216,000 for the nine months ended September 30, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in tax-exempt interest on investment securities.

5Federal Home Loan Bank advances interest expense includes $751,000 for the nine months ended September 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)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Banking Division

Net interest income

$

18,778

$

18,562

$

20,141

$

21,037

$

20,508

Provision for credit losses

286

60

900

900

1,320

Noninterest income

6,233

5,433

4,915

4,312

4,288

Noninterest expenses

16,653

17,650

17,812

18,038

17,537

Income taxes

1,777

1,157

1,155

837

1,047

Segment income

$

6,295

$

5,128

$

5,189

$

5,574

$

4,892

Total segment assets

$

2,999,071

$

3,013,689

$

2,930,421

$

2,857,893

$

2,738,082

Full time employees

382

383

407

427

396

Mortgage Banking Division

Net interest income

$

52

$

31

$

3

$

(43

)

$

17

Provision for credit losses

—

—

—

—

—

Noninterest income

1,725

2,015

1,277

1,637

2,345

Noninterest expenses

2,040

1,971

1,712

1,936

2,289

Income taxes

(53

)

14

(86

)

(6

)

10

Segment income

$

(210

)

$

61

$

(346

)

$

(336

)

$

63

Total segment assets

$

9,991

$

15,984

$

7,895

$

18,221

$

16,905

Variable noninterest expense(1)

$

1,245

$

1,149

$

890

$

1,193

$

1,388

Fixed noninterest expense

795

822

822

743

901

Full time employees

45

51

59

65

61

Small Business Specialty Lending Division

Net interest income

$

791

$

588

$

427

$

406

$

340

Provision for credit losses

714

140

—

—

—

Noninterest income

1,760

1,504

1,464

1,739

1,546

Noninterest expenses

2,188

1,811

1,641

1,852

1,541

Income taxes

(70

)

28

50

(20

)

48

Segment income

$

(281

)

$

113

$

200

$

313

$

297

Total segment assets

$

84,761

$

71,398

$

58,625

$

60,456

$

50,925

Full time employees

33

32

30

30

29

Total Consolidated

Net interest income

$

19,621

$

19,181

$

20,571

$

21,400

$

20,865

Provision for credit losses

1,000

200

900

900

1,320

Noninterest income

9,718

8,952

7,656

7,688

8,179

Noninterest expenses

20,881

21,432

21,165

21,826

21,367

Income taxes

1,654

1,199

1,119

811

1,105

Segment income

$

5,804

$

5,302

$

5,043

$

5,551

$

5,252

Total segment assets

$

3,093,823

$

3,101,071

$

2,996,941

$

2,936,570

$

2,805,912

Full time employees

460

466

496

522

486

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

Colony Bankcorp, Inc.

Consolidated Balance Sheets

September 30, 2023

December 31, 2022

(dollars in thousands)

(unaudited)

(audited)

ASSETS

Cash and due from banks

$

23,010

$

20,584

Interest-bearing deposits in banks and federal funds sold

118,330

60,094

Cash and cash equivalents

141,340

80,678

Investment securities available for sale, at fair value

399,547

432,553

Investment securities held to maturity, at amortized cost

451,056

465,858

Other investments, at cost

17,323

13,793

Loans held for sale

27,246

17,743

Loans, net of unearned income

1,864,971

1,737,106

Allowance for credit losses

(17,368

)

(16,128

)

Loans, net

1,847,603

1,720,978

Premises and equipment

42,544

41,606

Other real estate

812

651

Goodwill

48,923

48,923

Other intangible assets

4,530

5,664

Bank owned life insurance

56,541

55,504

Deferred income taxes, net

28,934

28,199

Other assets

27,424

24,420

Total assets

$

3,093,823

$

2,936,570

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Deposits:

Noninterest-bearing

$

494,221

$

569,170

Interest-bearing

2,097,111

1,921,827

Total deposits

2,591,332

2,490,997

Federal Home Loan Bank advances

185,000

125,000

Other borrowed money

63,422

78,352

Accrued expenses and other liabilities

15,377

11,953

Total liabilities

$

2,855,131

$

2,706,302

Stockholders’ equity

Common stock, $1 par value; 50,000,000 shares authorized, 17,567,983 and 17,598,123 issued and outstanding, respectively

$

17,568

$

17,598

Paid in capital

168,211

167,537

Retained earnings

120,732

111,573

Accumulated other comprehensive loss, net of tax

(67,819

)

(66,440

)

Total stockholders’ equity

238,692

230,268

Total liabilities and stockholders’ equity

$

3,093,823

$

2,936,570

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended September 30,

Nine months ended September 30,

2023

2022

2023

2022

(dollars in thousands, except per share data)

Interest income:

Loans, including fees

$

26,022

$

18,183

$

72,241

$

50,478

Investment securities

5,770

5,266

17,619

14,240

Deposits in banks and short term investments

787

278

1,853

437

Total interest income

32,579

23,727

91,713

65,155

Interest expense:

Deposits

10,338

1,449

23,893

2,674

Federal funds purchased

11

3

146

22

Federal Home Loan Bank advances

1,568

555

5,140

1,746

Other borrowings

1,041

822

3,164

1,441

Total interest expense

12,958

2,829

32,343

5,883

Net interest income

19,621

20,898

59,370

59,272

Provision for credit losses

1,000

1,320

2,100

2,470

Net interest income after provision for credit losses

18,621

19,578

57,270

56,802

Noninterest income:

Service charges on deposits

2,200

2,104

6,141

5,823

Mortgage fee income

1,730

1,708

4,928

7,356

Gain on sales of SBA loans

1,268

1,215

3,429

4,805

Gain on sales of securities

—

(96

)

—

(72

)

Interchange fees

2,202

2,179

6,400

6,338

BOLI income

335

312

1,024

977

Other

1,983

724

4,407

2,110

Total noninterest income

9,718

8,146

26,329

27,337

Noninterest expense:

Salaries and employee benefits

11,973

12,154

37,929

40,498

Occupancy and equipment

1,620

1,645

4,741

4,872

Information technology expenses

2,064

2,491

6,406

7,394

Professional fees

752

881

2,348

2,773

Advertising and public relations

766

876

2,432

2,406

Communications

224

471

710

1,325

Other

3,482

2,849

8,912

8,380

Total noninterest expense

20,881

21,367

63,478

67,648

Income before income taxes

7,458

6,357

20,121

16,491

Income taxes

1,654

1,105

3,972

2,500

Net income

$

5,804

$

5,252

$

16,149

$

13,991

Earnings per common share:

Basic

$

0.33

$

0.30

$

0.92

$

0.82

Diluted

0.33

0.30

0.92

0.82

Dividends declared per share

0.11

0.1075

0.33

0.3225

Weighted average common shares outstanding:

Basic

17,569,493

17,645,119

17,581,817

17,042,838

Diluted

17,569,493

17,645,119

17,581,817

17,042,838

Colony Bankcorp, Inc.

Quarterly Comparison

2023

2022

(dollars in thousands, except per share data)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Assets

$

3,093,823

$

3,101,071

$

2,996,941

$

2,936,570

$

2,805,912

Loans, net

1,847,603

1,821,776

1,783,254

1,720,978

1,571,431

Deposits

2,591,332

2,627,211

2,516,129

2,490,997

2,409,662

Total equity

238,692

239,455

238,777

230,268

226,067

Net income

5,804

5,302

5,043

5,551

5,252

Earnings per basic share

$

0.33

$

0.30

$

0.29

$

0.31

$

0.30

Key Performance Ratios:

Return on average assets

0.75

%

0.70

%

0.69

%

0.77

%

0.75

%

Return on average total equity

9.61

%

8.88

%

8.73

%

9.76

%

8.85

%

Total equity to total assets

7.72

%

7.72

%

7.97

%

7.84

%

8.06

%

Tangible equity to tangible assets (a)

6.09

%

6.09

%

6.27

%

6.10

%

6.22

%

Net interest margin

2.78

%

2.77

%

3.08

%

3.23

%

3.26

%

(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)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Core

$

1,698,219

$

1,664,855

$

1,614,216

$

1,540,561

$

1,372,257

Purchased

166,752

173,987

185,637

196,545

214,356

Total

$

1,864,971

$

1,838,842

$

1,799,853

$

1,737,106

$

1,586,613

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2023

2022

(dollars in thousands)

Third
Quarter

Second
Quarter

First
Quarter

Fourth
Quarter

Third
Quarter

Alabama

$

45,135

$

44,301

$

41,118

$

21,122

$

7,291

Augusta

55,508

55,124

53,415

52,226

42,079

Coastal Georgia

239,281

242,249

248,253

259,730

252,083

Middle Georgia

116,776

119,041

119,720

115,504

114,630

Atlanta and North Georgia

431,632

420,231

419,480

375,106

356,421

South Georgia

446,221

463,558

448,558

457,283

449,684

West Georgia

188,208

192,348

204,664

210,676

177,431

Small Business Specialty Lending

65,187

56,908

50,513

45,944

35,267

Consumer Portfolio Mortgages

245,057

226,755

211,225

197,672

149,945

Marine/RV Lending

31,009

17,137

2,060

—

—

Other

957

1,190

847

1,843

1,782

Total

$

1,864,971

$

1,838,842

$

1,799,853

$

1,737,106

$

1,586,613

View source version on businesswire.com: https://www.businesswire.com/news/home/20231025803981/en/

Contacts

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

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