Colony Bankcorp Reports Second Quarter 2024 Results

Declares Quarterly Cash Dividend of $0.1125 Per Share

Colony Bankcorp, Inc. (Nasdaq: CBAN) (“Colony” or the “Company”) today reported financial results for the second quarter of 2024. Financial highlights are shown below.

Financial Highlights:

Net income increased to $5.5 million, or $0.31 per diluted share, for the second quarter of 2024, compared to $5.3 million, or $0.30 per diluted share, for the first quarter of 2024, and $5.3 million, or $0.30 per diluted share, for the second quarter of 2023.
Operating net income increased to $6.0 million, or $0.34 of adjusted earnings per diluted share, for the second quarter of 2024, compared to $5.8 million, or $0.33 of adjusted earnings per diluted share, for the first quarter of 2024, and $5.7 million, or $0.33 of adjusted earnings per diluted share, for the second quarter of 2023. (See Reconciliation of Non-GAAP Measures).
Provision for credit losses of $650,000 was recorded in second quarter of 2024 compared to $1.0 million in first quarter of 2024, and $200,000 in second quarter of 2023.
Total loans were $1.87 billion at June 30, 2024, an increase of $6.6 million, or 0.35%, from the prior quarter.
Total deposits were $2.46 billion and $2.52 billion at June 30, 2024 and March 31, 2024, respectively, a decrease of $62.5 million.
Mortgage production was $65.1 million, and mortgage sales totaled $45.2 million in the second quarter of 2024 compared to $50.1 million and $36.6 million, respectively, for the first quarter of 2024.
Small Business Specialty Lending (“SBSL”) closed $25.8 million in Small Business Administration (“SBA”) loans and sold $27.0 million in SBA loans in the second quarter of 2024 compared to $35.6 million and $24.0 million, respectively, for the first quarter of 2024.

The Company also announced that on July 24, 2024, the Board of Directors declared a quarterly cash dividend of $0.1125 per share, to be paid on its common stock on August 21, 2024, to shareholders of record as of the close of business on August 7, 2024. The Company had 17,538,611 shares of its common stock outstanding as of July 23, 2024.

“We are excited to announce our improved operating results in the second quarter as we continue to see the impacts of our team’s progress toward our strategic goals. Our ongoing efforts of improving noninterest income by diversifying revenue streams through our complementary lines of business, creating efficiency alongside expense discipline, and enhancing the banking experience to better serve our customers have allowed us to continue down the path of strengthening our financial performance,” said Heath Fountain, Chief Executive Officer.

“Our credit quality remains solid, with both classified and criticized loans decreasing from the prior quarter and total nonperforming loans declining from the end of last year. Furthermore, our past dues at the end of the quarter were at remarkably low levels which we believe demonstrates the strength of our borrowers and quality of our credit underwriting.”

“Historically, we’ve seen some seasonality in deposits during the second quarter as our customers manage their cash flow needs and we saw some of that seasonality this quarter. However, we remain confident in the underlying strength of our deposit base and anticipate a return to growth in the coming quarters. While we did experience a decline in our net interest margin, the decrease was less pronounced than expected. The resilience in our margin performance highlights the effectiveness of our strategic initiatives aimed at optimizing our balance sheet and managing interest rate risks.”

"We are proud of what we have achieved this quarter and look forward to ongoing improvement as we strive for even greater success."

Balance Sheet

Total assets were $3.01 billion at June 30, 2024, a decrease of $7.6 million from March 31, 2024.
Total loans, including loans held for sale, were at $1.91 billion at June 30, 2024, an increase of $15.6 million from the quarter ended March 31, 2024.
Total deposits were $2.46 billion and $2.52 billion at June 30, 2024 and March 31, 2024, respectively, a decrease of $62.5 million. Savings and money market deposits increased $20.7 million which was offset by decreases in interest bearing demand deposits of $15.2 million and time deposits of $29.2 million from March 31, 2024 to June 30, 2024.
Total borrowings at June 30, 2024 totaled $268.0 million, an increase of $50.0 million or, 22.9%, compared to March 31, 2024, 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.”
Under the Company’s approved stock repurchase program, a total of 20,000 shares were repurchased during the quarter at an average price of $11.90 per share and a total value of $237,909 thousand.
Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.44%, 13.39%, 16.17%, and 12.25%, respectively, at June 30, 2024.

Second Quarter and June 30, 2024 Year to Date Results of Operations

Net interest income, on a tax-equivalent basis, totaled $18.6 million for the second quarter ended June 30, 2024 compared to $19.3 million for the same period in 2023. Net interest income, on a tax-equivalent basis, for the six months ended June 30, 2024 totaled $37.4 million, compared to $40.1 million for the six months ended June 30, 2023. For both periods, increases can be seen in income on interest earning assets which is more than offset by increases in 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 $2.6 million, to $33.5 million for the second quarter of 2024 compared to the respective period in 2023. Expense on interest bearing liabilities increased $3.3 million, to $14.9 million for the second quarter of 2024 compared to the respective period in 2023. Income on interest earning assets increased $7.6 million to $67.0 million for the six month period ended June 30, 2024 compared to the respective period in 2023. Expense on interest bearing liabilities increased $10.2 million, to $29.6 million for the six month period ended June 30, 2024 compared to the respective period in 2023.
Net interest margin for the second quarter of 2024 was 2.68% compared to 2.77% for the second quarter of 2023. Net interest margin was 2.69% for the six months ended June 30, 2024 compared to 2.92% for the six months ended June 30, 2023. The decrease for both periods is the result of rate increases in interest bearing liabilities outpacing the rate increases in interest earning assets.
Noninterest income totaled $9.5 million for the second quarter ended June 30, 2024, an increase of $545,000, or 6.09%, compared to the same period in 2023. Noninterest income totaled $19.0 million for the six months ended June 30, 2024, an increase of $2.4 million, or 14.28%, compared to the same period in 2023. These increases were primarily related to increases in service charges on deposit accounts, gains on sales of SBA loans and income on wealth advisory services which is included in other noninterest income which were partially offset by decreases in mortgage fee income, interchange fee income and losses on the sales of investment securities.
Noninterest expense totaled $20.3 million for the second quarter ended June 30, 2024, compared to $21.4 million for the same period in 2023. Noninterest expense totaled $40.7 million for the six months ended June 30, 2024, compared to $42.6 million for the same period in 2023. These decreases were a result of overall decreases in salaries and employee benefits primarily related to the expense initiative in 2023 which lowered total number of employees period over period.

Asset Quality

Nonperforming assets totaled $7.3 million and $7.0 million at June 30, 2024 and March 31, 2024, respectively, an increase of $312,000.
Other real estate owned and repossessed assets totaled $595,000 at June 30, 2024 and $562,000 at March 31, 2024.
Net loans charged-off were $667,000, or 0.14% of average loans for the second quarter of 2024, compared to $664,000 or 0.14% for the first quarter of 2024.
The credit loss reserve was $18.8 million, or 1.01% of total loans, at June 30, 2024, compared to $18.7 million, or 1.00% of total loans at March 31, 2024.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, July 25, 2024, to discuss the recent results and answer appropriate questions. The conference call can be accessed by dialing 800-267-6316 and using the Conference ID: COLONY2Q. A replay of the call will be available until Thursday, August 1, 2024. To listen to the replay, dial 800-938-2796.

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in Fitzgerald, Georgia in 1975, Colony operates locations throughout Georgia and has expanded to serve Birmingham, Alabama, as well as Tallahassee and the Florida Panhandle. 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 “may”, “will”, “anticipate”, “assume”, “should”, “support”, “indicate”, “would”, “believe”, “contemplate”, “expect”, “estimate”, “continue”, “further”, “plan”, “point to”, “project”, “could”, “intend”, “target” 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 (including the impact of prolonged elevated interest rates on our financial projections and models) and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; the risk of potential reductions in benchmark interest rates and the resulting impacts on net interest income; 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; 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; general risks related to the Company’s merger and acquisition activity, including 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; a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding debt ceiling and the federal budget; a potential U.S. federal government shutdown and the resulting impacts; 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, 2023, 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, operating return on average assets, operating return on average equity, 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, return on average assets, return on average equity, 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 and loss on sales of securities. Operating noninterest expense excludes acquisition-related expenses and severance costs. Operating net income, operating return on average assets, operating return on average equity and operating efficiency ratio all exclude acquisition-related expenses, severance costs, gain on sale of bank premises and loss on sales of securities from net income, return on average assets, return on average equity and efficiency ratio, respectively. Operating net noninterest expense to average assets ratio excludes from net noninterest expense, severance costs, acquisition-related expenses, gain on sale of bank premises and loss on sales of securities. 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, operating return on average assets, operating return on average equity, 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, return on average assets, return on average equity, 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

2024

2023

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Operating noninterest income reconciliation

Noninterest income (GAAP)

9,497

9,487

9,305

9,718

8,952

Gain on sale of bank premises

—

(236

)

—

(125

)

Writedown of bank premises

197

—

Loss on sales of securities

425

555

—

Operating noninterest income

10,119

10,042

9,069

9,718

8,827

Operating noninterest expense reconciliation

Noninterest expense (GAAP)

20,330

20,397

19,587

20,881

21,432

Severance costs

—

(23

)

—

(220

)

(635

)

Operating noninterest expense

20,330

20,374

19,587

20,661

20,797

Operating net income reconciliation

Net income (GAAP)

5,474

5,333

5,598

5,804

5,302

Severance costs

—

220

635

Gain on sale of bank premises

—

(236

)

—

(125

)

Writedown of bank premises

197

—

Loss on sales of securities

425

555

—

Income tax benefit

(129

)

(121

)

(48

)

(93

)

Operating net income

5,967

5,790

5,414

5,976

5,719

Weighted average diluted shares

17,551,007

17,560,210

17,567,839

17,569,493

17,580,557

Adjusted earnings per diluted share

0.34

0.33

0.31

0.34

0.33

Operating return on average assets reconciliation

Return on average assets (GAAP)

0.73

0.71

0.73

0.75

0.70

Severance costs

—

0.03

0.08

Gain on sale of bank premises

—

(0.03

)

—

(0.02

)

Writedown of bank premises

0.03

—

Loss on sales of securities

0.06

0.07

—

Tax effect of adjustment items

(0.02

)

(0.02

)

0.01

(0.01

)

(0.01

)

Operating return on average assets

0.80

0.76

0.71

0.77

0.75

Operating return on average equity reconciliation

Return on average equity (GAAP)

8.46

8.38

9.20

9.61

8.88

Severance costs

—

0.04

—

0.36

1.06

Gain on sale of bank premises

—

(0.39

)

—

(0.21

)

Writedown of bank premises

0.30

—

Loss on sales of securities

0.66

0.87

—

Tax effect of adjustment items

(0.20

)

(0.19

)

0.09

(0.08

)

(0.16

)

Operating return on average equity

9.22

9.10

8.90

9.89

9.57

Tangible book value per common share reconciliation

Book value per common share (GAAP)

15.09

14.80

14.51

13.59

13.65

Effect of goodwill and other intangibles

(2.99

)

(3.01

)

(3.02

)

(3.04

)

(3.07

)

Tangible book value per common share

12.10

11.79

11.49

10.55

10.58

Tangible equity to tangible assets reconciliation

Equity to assets (GAAP)

8.80

8.62

8.35

7.72

Effect of goodwill and other intangibles

(1.62

)

(1.63

)

(1.62

)

(1.63

)

(1.63

)

Tangible equity to tangible assets

7.18

6.99

6.73

6.09

Operating efficiency ratio calculation

Efficiency ratio (GAAP)

72.85

72.48

69.51

71.17

76.18

Severance costs

—

(0.08

)

—

(0.75

)

(2.26

)

Gain on sale of bank premises

—

0.84

—

0.44

Writedown of bank premises

(0.71

)

—

Loss on sales of securities

(1.52

)

(1.97

)

—

Operating efficiency ratio

70.62

70.43

70.35

70.42

74.36

Operating net noninterest expense(1) to average assets calculation

Net noninterest expense to average assets

1.45

1.35

1.45

1.65

Severance costs

—

(0.03

)

(0.09

)

Acquisition-related expenses

—

Gain on sale of bank premises

—

0.03

—

0.02

Writedown of bank premises

(0.03

)

—

Loss on sales of securities

(0.06

)

(0.07

)

—

Operating net noninterest expense to average assets

1.36

1.38

1.42

1.58

Pre-provision net revenue

Net interest income before provision for credit losses

18,409

18,654

18,874

19,621

19,181

Noninterest income

9,497

9,487

9,305

9,718

8,952

Total income

27,906

28,141

28,179

29,339

28,133

Noninterest expense

20,330

20,397

19,587

20,881

21,432

Pre-provision net revenue

7,576

7,744

8,592

8,458

6,701

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

Colony Bankcorp, Inc.

Selected Financial Information

2024

2023

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

EARNINGS SUMMARY

Net interest income

18,409

18,654

18,874

19,621

19,181

Provision for credit losses

650

1,000

1,500

1,000

200

Noninterest income

9,497

9,487

9,305

9,718

8,952

Noninterest expense

20,330

20,397

19,587

20,881

21,432

Income taxes

1,452

1,411

1,494

1,654

1,199

Net income

5,474

5,333

5,598

5,804

5,302

PERFORMANCE MEASURES

Per common share:

Common shares outstanding

17,538,611

17,558,611

17,564,182

17,567,983

17,541,661

Weighted average basic shares

17,551,007

17,560,210

17,567,839

17,569,493

17,580,557

Weighted average diluted shares

17,551,007

17,560,210

17,567,839

17,569,493

17,580,557

Earnings per basic share

0.31

0.30

0.32

0.33

0.30

Earnings per diluted share

0.31

0.30

0.32

0.33

0.30

Adjusted earnings per diluted share(b)

0.34

0.33

0.31

0.34

0.33

Cash dividends declared per share

0.1125

0.1100

Common book value per share

15.09

14.80

14.51

13.59

13.65

Tangible book value per common share(b)

12.10

11.79

11.49

10.55

10.58

Pre-provision net revenue(b)

7,576

7,744

8,592

8,458

6,701

Performance ratios:

Net interest margin (a)

2.68

2.69

2.70

2.78

2.77

Return on average assets

0.73

0.71

0.73

0.75

0.70

Operating return on average assets (b)

0.80

0.76

0.71

0.77

0.75

Return on average total equity

8.46

8.38

9.20

9.61

8.88

Operating return on average total equity (b)

9.22

9.10

8.90

9.89

9.57

Efficiency ratio

72.85

72.48

69.51

71.17

76.18

Operating efficiency ratio (b)

70.62

70.43

70.35

70.42

74.36

Net noninterest expense to average assets

1.45

1.35

1.45

1.65

Operating net noninterest expense to average assets(b)

1.36

1.38

1.42

1.58

ASSET QUALITY

Nonperforming portfolio loans

3,653

3,674

7,804

5,625

6,716

Nonperforming government guaranteed loans

3,016

2,757

2,035

3,641

4,369

Loans 90 days past due and still accruing

—

370

—

Total nonperforming loans (NPLs)

6,710

6,431

10,209

9,275

11,085

Other real estate owned

582

562

448

812

792

Repossessed assets

—

Total nonperforming assets (NPAs)

7,305

6,993

10,657

10,087

11,877

Classified loans

22,355

25,965

23,754

20,704

19,267

Criticized loans

44,850

55,065

56,879

50,741

48,074

Net loan charge-offs (recoveries)

667

664

692

698

(37

)

Allowance for credit losses to total loans

1.01

1.00

0.98

0.93

Allowance for credit losses to total NPLs

280.27

290.11

179.95

187.26

153.96

Allowance for credit losses to total NPAs

257.44

266.80

172.38

172.18

143.69

Net charge-offs (recoveries) to average loans, net

0.14

0.15

(0.01

)

NPLs to total loans

0.36

0.35

0.54

0.50

0.60

NPAs to total assets

0.24

0.23

0.35

0.33

0.38

NPAs to total loans and foreclosed assets

0.39

0.38

0.57

0.54

0.65

AVERAGE BALANCES

Total assets

3,010,486

3,036,093

3,027,812

3,058,485

3,030,044

Loans, net

1,850,451

1,853,077

1,860,652

1,854,367

1,814,172

Loans, held for sale

33,024

24,612

21,251

29,444

21,237

Deposits

2,492,479

2,543,259

2,538,500

2,565,026

2,524,949

Total stockholders’ equity

260,162

255,927

241,392

239,571

239,579

(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,

2024

2023

(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

1,902,202

27,661

5.85

1,835,409

24,113

5.27

Investment securities, taxable

722,535

4,616

2.57

777,133

5,498

2.84

Investment securities, tax-exempt 2

100,143

547

2.20

113,931

592

2.08

Deposits in banks and short term investments

62,614

684

4.39

73,988

708

3.84

Total interest-earning assets

2,787,494

33,508

4.83

2,800,461

30,911

4.43

Noninterest-earning assets

222,992

229,583

Total assets

3,010,486

3,030,044

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-bearing demand and savings

1,451,300

6,784

1.88

1,372,569

3,422

1.00

Other time

577,173

5,322

3.71

651,426

5,134

3.16

Total interest-bearing deposits

2,028,473

12,106

2.40

2,023,995

8,556

1.70

Federal funds purchased

—

5.94

3,402

5.49

Federal Home Loan Bank advances

178,516

1,821

4.10

178,132

1,947

4.38

Other borrowings

63,638

1,000

6.32

68,385

1,033

6.06

Total other interest-bearing liabilities

242,154

2,821

4.69

249,919

3,027

4.86

Total interest-bearing liabilities

2,270,627

14,927

2.64

2,273,914

11,583

2.04

Noninterest-bearing liabilities:

Demand deposits

464,007

500,954

Other liabilities

15,690

15,597

Stockholders' equity

260,162

239,579

Total noninterest-bearing liabilities and stockholders' equity

739,859

756,130

Total liabilities and stockholders' equity

3,010,486

3,030,044

Interest rate spread

2.19

2.39

Net interest income

18,581

19,328

Net interest margin

2.68

2.77

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 $56,000 and $45,000 for the quarters ended June 30, 2024 and 2023, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $15,000 and $53,000 for the quarters ended June 30, 2024 and 2023, respectively, are also included in income and fees on loans.

2Taxable-equivalent adjustments totaling $115,000 and $108,000 for the quarters ended June 30, 2024 and 2023, 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

Six Months Ended June 30,

2024

2023

(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

1,899,108

54,804

5.80

1,807,784

46,313

5.17

Investment securities, taxable

729,896

9,658

2.66

781,989

10,872

2.80

Investment securities, tax-exempt 4

103,481

1,152

2.24

114,137

1,187

2.10

Deposits in banks and short term investments

67,023

1,376

4.13

62,507

1,066

3.44

Total interest-earning assets

2,799,508

66,990

4.81

2,766,417

59,438

4.33

Noninterest-earning assets

223,781

223,818

Total assets

3,023,289

2,990,235

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-bearing demand and savings

1,451,395

13,193

1.83

1,391,099

5,746

0.83

Other time

594,707

11,005

3.72

579,818

7,809

2.72

Total interest-bearing deposits

2,046,102

24,198

2.38

1,970,917

13,555

1.39

Federal funds purchased

—

5.95

5,197

135

5.24

Federal Home Loan Bank advances

167,747

3,392

4.07

163,867

3,572

4.40

Other borrowings

63,362

1,993

6.33

72,213

2,123

5.93

Total other interest-bearing liabilities

231,115

5,385

4.69

241,277

5,830

4.87

Total interest-bearing liabilities

2,277,217

29,583

2.61

2,212,194

19,385

1.77

Noninterest-bearing liabilities:

Demand deposits

471,768

528,432

Other liabilities

16,259

12,731

Stockholders' equity

258,045

236,878

Total noninterest-bearing liabilities and stockholders' equity

746,072

778,041

Total liabilities and stockholders' equity

3,023,289

2,990,235

Interest rate spread

2.20

2.56

Net interest income

37,407

40,053

Net interest margin

2.69

2.92

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 $103,000 and $91,000 for the six months ended June 30, 2024 and 2023, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $10,000 and $124,000 for the six months ended June 30, 2024 and 2023, respectively, are also included in income and fees on loans.

4Taxable-equivalent adjustments totaling $242,000 and $217,000 for the six months ended June 30, 2024 and 2023, respectively, are included in tax-exempt interest on investment securities.

Colony Bankcorp, Inc.

Segment Reporting

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Banking Division

Net interest income

17,217

17,552

17,986

18,778

18,562

Provision for credit losses

455

979

286

Noninterest income

5,086

5,680

5,992

6,233

5,433

Noninterest expenses

17,135

17,129

16,619

16,653

17,650

Income taxes

1,060

1,166

1,365

1,777

1,157

Segment income

4,012

4,482

5,015

6,295

5,128

Total segment assets

2,889,013

2,910,102

2,956,121

2,999,071

3,013,689

Full time employees

385

377

378

382

383

Mortgage Banking Division

Net interest income

Provision for credit losses

—

Noninterest income

1,456

1,165

1,206

1,725

2,015

Noninterest expenses

1,326

1,218

1,203

2,040

1,971

Income taxes

(53

)

Segment income

138

(14

)

(210

)

Total segment assets

19,004

8,011

7,890

9,991

15,984

Variable noninterest expense(1)

807

603

597

1,245

1,149

Fixed noninterest expense

519

615

606

795

822

Full time employees

Small Business Specialty Lending Division

Net interest income

1,142

1,062

865

791

588

Provision for credit losses

554

545

521

714

140

Noninterest income

2,955

2,642

2,107

1,760

1,504

Noninterest expenses

1,869

2,050

1,765

2,188

1,811

Income taxes

350

244

121

(70

)

Segment income

1,324

865

565

(281

)

113

Total segment assets

99,890

97,396

89,411

84,761

71,398

Full time employees

Total Consolidated

Net interest income

18,409

18,654

18,874

19,621

19,181

Provision for credit losses

650

1,000

1,500

1,000

200

Noninterest income

9,497

9,487

9,305

9,718

8,952

Noninterest expenses

20,330

20,397

19,587

20,881

21,432

Income taxes

1,452

1,411

1,494

1,654

1,199

Segment income

5,474

5,333

5,598

5,804

5,302

Total segment assets

3,007,907

3,015,509

3,053,422

3,093,823

3,101,071

Full time employees

460

451

453

460

466

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

Colony Bankcorp, Inc.

Consolidated Balance Sheets

June 30, 2024

December 31, 2023

(dollars in thousands)

(unaudited)

(audited)

ASSETS

Cash and due from banks

22,404

25,339

Interest-bearing deposits in banks and federal funds sold

59,598

57,983

Cash and cash equivalents

82,002

83,322

Investment securities available for sale, at fair value

376,580

407,382

Investment securities held to maturity, at amortized cost

442,945

449,031

Other investments

18,491

16,868

Loans held for sale

40,132

27,958

Loans, net of unearned income

1,865,574

1,883,470

Allowance for credit losses

(18,806

)

(18,371

)

Loans, net

1,846,768

1,865,099

Premises and equipment

38,343

39,870

Other real estate

582

448

Goodwill

48,923

Other intangible assets

3,535

4,192

Bank owned life insurance

57,173

56,925

Deferred income taxes, net

24,164

25,405

Other assets

28,269

27,999

Total assets

3,007,907

3,053,422

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Deposits:

Noninterest-bearing

437,623

498,992

Interest-bearing

2,022,602

2,045,798

Total deposits

2,460,225

2,544,790

Federal Home Loan Bank advances

205,000

175,000

Other borrowed money

62,992

63,445

Accrued expenses and other liabilities

14,947

15,252

Total liabilities

2,743,164

2,798,487

Stockholders’ equity

Common stock, $1 par value; 50,000,000 shares authorized, 17,538,611 and 17,564,182 issued and outstanding, respectively

17,539

17,564

Paid in capital

169,132

168,614

Retained earnings

131,256

124,400

Accumulated other comprehensive loss, net of tax

(53,184

)

(55,643

)

Total stockholders’ equity

264,743

254,935

Total liabilities and stockholders’ equity

3,007,907

3,053,422

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

(dollars in thousands, except per share data)

Interest income:

Loans, including fees

27,604

24,067

54,701

46,220

Investment securities

5,048

5,989

10,569

11,849

Deposits in banks and short term investments

684

708

1,376

1,065

Total interest income

33,336

30,764

66,646

59,134

Interest expense:

Deposits

12,106

8,556

24,198

13,555

Federal funds purchased

—

135

Federal Home Loan Bank advances

1,821

1,947

3,392

3,573

Other borrowings

1,000

1,033

1,993

2,122

Total interest expense

14,927

11,583

29,583

19,385

Net interest income

18,409

19,181

37,063

39,749

Provision for credit losses

650

200

1,650

1,100

Net interest income after provision for credit losses

17,759

18,981

35,413

38,649

Noninterest income:

Service charges on deposits

2,288

2,027

4,662

3,941

Mortgage fee income

1,442

2,014

2,691

3,197

Gain on sales of SBA loans

2,347

1,105

4,393

2,162

Loss on sales of securities

(425

)

—

(980

)

—

Interchange fees

2,078

2,131

4,105

4,199

BOLI income

398

358

931

689

Insurance commissions

420

449

886

909

Other

949

868

2,296

1,514

Total noninterest income

9,497

8,952

18,984

16,611

Noninterest expense:

Salaries and employee benefits

12,277

13,348

24,296

25,957

Occupancy and equipment

1,475

1,499

2,982

3,121

Information technology expenses

2,227

2,001

4,338

4,342

Professional fees

704

881

1,537

1,596

Advertising and public relations

967

673

1,927

1,666

Communications

216

192

442

486

Other

2,464

2,838

5,205

5,429

Total noninterest expense

20,330

21,432

40,727

42,597

Income before income taxes

6,926

6,501

13,670

12,663

Income taxes

1,452

1,199

2,863

2,318

Net income

5,474

5,302

10,807

10,345

Earnings per common share:

Basic

0.31

0.30

0.62

0.59

Diluted

0.31

0.30

0.62

0.59

Dividends declared per share

0.1125

0.1100

0.2250

0.2200

Weighted average common shares outstanding:

Basic

17,551,007

17,580,557

17,555,609

17,588,081

Diluted

17,551,007

17,580,557

17,555,609

17,588,081

Colony Bankcorp, Inc.

Quarterly Consolidated Statements of Income

2024

2023

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

(dollars in thousands, except per share data)

(unaudited)

(audited)

(unaudited)

Interest income:

Loans, including fees

27,604

27,097

27,014

26,022

24,067

Investment securities

5,048

5,520

5,700

5,770

5,989

Deposits in banks and short term investments

684

693

489

787

708

Total interest income

33,336

33,310

33,203

32,579

30,764

Interest expense:

Deposits

12,106

12,091

11,571

10,338

8,556

Federal funds purchased

—

Federal Home Loan Bank advances

1,821

1,572

1,623

1,568

1,947

Other borrowings

1,000

993

1,134

1,041

1,033

Total interest expense

14,927

14,656

14,329

12,958

11,583

Net interest income

18,409

18,654

18,874

19,621

19,181

Provision for credit losses

650

1,000

1,500

1,000

200

Net interest income after provision for credit losses

17,759

17,654

17,374

18,621

18,981

Noninterest income:

Service charges on deposits

2,288

2,373

2,595

2,200

2,027

Mortgage fee income

1,442

1,249

1,203

1,730

2,014

Gain on sales of SBA loans

2,347

2,046

1,634

1,268

1,105

Loss on sales of securities

(425

)

(555

)

—

Interchange fees

2,078

2,028

2,059

2,202

2,131

BOLI income

398

533

372

335

358

Insurance commissions

420

465

452

509

449

Other

949

1,348

990

1,474

868

Total noninterest income

9,497

9,487

9,305

9,718

8,952

Noninterest expense:

Salaries and employee benefits

12,277

12,018

11,304

11,973

13,348

Occupancy and equipment

1,475

1,507

1,543

1,620

1,499

Information technology expenses

2,227

2,110

2,147

2,064

2,001

Professional fees

704

834

749

752

881

Advertising and public relations

967

960

1,054

766

673

Communications

216

226

237

224

192

Other

2,464

2,742

2,553

3,482

2,838

Total noninterest expense

20,330

20,397

19,587

20,881

21,432

Income before income taxes

6,926

6,744

7,092

7,458

6,501

Income taxes

1,452

1,411

1,494

1,654

1,199

Net income

5,474

5,333

5,598

5,804

5,302

Earnings per common share:

Basic

0.31

0.30

0.32

0.33

0.30

Diluted

0.31

0.30

0.32

0.33

0.30

Dividends declared per share

0.1125

0.1100

Weighted average common shares outstanding:

Basic

17,551,007

17,560,210

17,567,839

17,569,493

17,580,557

Diluted

17,551,007

17,560,210

17,567,839

17,569,493

17,580,557

Colony Bankcorp, Inc.

Quarterly Comparison

2024

2023

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Assets

3,007,907

3,015,509

3,053,422

3,093,823

3,101,071

Loans, net

1,846,768

1,840,361

1,865,099

1,847,603

1,821,776

Deposits

2,460,225

2,522,748

2,544,790

2,591,332

2,627,211

Total equity

264,743

259,914

254,935

238,692

239,455

Net income

5,474

5,333

5,598

5,804

5,302

Earnings per basic share

0.31

0.30

0.32

0.33

0.30

Key Performance Ratios:

Return on average assets

0.73

0.71

0.73

0.75

0.70

Operating return on average assets (a)

0.80

0.76

0.71

0.77

0.75

Return on average total equity

8.46

8.38

9.20

9.61

8.88

Operating return on average total equity (a)

9.22

9.10

8.90

9.89

9.57

Total equity to total assets

8.80

8.62

8.35

7.72

Tangible equity to tangible assets (a)

7.18

6.99

6.73

6.09

Net interest margin

2.68

2.69

2.70

2.78

2.77

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

Colony Bankcorp, Inc.

Quarterly Deposits Composition Comparison

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Noninterest-bearing demand

437,623

476,413

498,992

494,221

541,119

Interest-bearing demand

788,674

802,596

759,299

740,672

733,708

Savings

670,848

650,188

660,311

681,229

659,137

Time, $250,000 and over

168,856

173,386

167,680

187,218

184,459

Other time

394,224

420,165

458,508

487,992

508,788

Total

2,460,225

2,522,748

2,544,790

2,591,332

2,627,211

Colony Bankcorp, Inc.

Quarterly Deposits by Location Comparison

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Coastal Georgia

144,021

138,103

137,398

133,888

133,536

Middle Georgia

275,758

286,697

265,788

262,352

265,615

Atlanta and North Georgia

336,338

333,856

334,003

345,179

341,664

South Georgia

1,110,049

1,132,701

1,134,662

1,132,545

1,197,545

West Georgia

365,380

378,764

384,750

389,269

402,665

Brokered deposits

39,240

59,019

93,561

148,707

112,372

Reciprocal deposits

189,439

193,608

194,628

179,392

173,814

Total

2,460,225

2,522,748

2,544,790

2,591,332

2,627,211

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Core

1,732,843

1,718,284

1,729,866

1,698,219

1,664,855

Purchased

132,731

140,734

153,604

166,752

173,987

Total

1,865,574

1,859,018

1,883,470

1,864,971

1,838,842

Colony Bankcorp, Inc.

Quarterly Loans by Composition Comparison

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Construction, land & land development

199,916

234,000

247,146

245,268

249,423

Other commercial real estate

985,102

971,205

974,649

969,168

979,509

Total commercial real estate

1,185,018

1,205,205

1,221,795

1,214,436

1,228,932

Residential real estate

360,847

347,277

355,973

339,501

325,407

Commercial, financial & agricultural

242,205

239,837

242,743

252,725

243,458

Consumer and other

77,504

66,699

62,959

58,309

41,045

Total

1,865,574

1,859,018

1,883,470

1,864,971

1,838,842

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Alabama

44,575

44,806

45,594

45,135

44,301

Florida

2,753

1,579

—

Augusta

64,465

71,483

65,284

55,508

55,124

Coastal Georgia

228,844

232,557

243,492

239,281

242,249

Middle Georgia

124,268

121,131

118,806

116,776

119,041

Atlanta and North Georgia

427,568

425,753

426,724

431,632

420,231

South Georgia

413,098

409,681

436,728

446,221

463,558

West Georgia

184,365

183,679

187,751

188,208

192,348

Small Business Specialty Lending

75,182

71,196

68,637

65,187

56,908

Consumer Portfolio Mortgages

257,772

261,204

255,771

245,057

226,755

Marine/RV Lending

41,922

35,017

33,191

31,009

17,137

Other

762

932

1,452

957

1,190

Total

1,865,574

1,859,018

1,883,470

1,864,971

1,838,842

Colony Bankcorp, Inc.

Classified Loans

2024

2023

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Construction, land & land development

572

1,063

1,180

570

Other commercial real estate

13,990

13,918

10,219

7,726

5,954

Residential real estate

2,168

104

5,896

183

7,103

187

6,633

184

7,186

193

Commercial, financial & agricultural

6,075

5,487

5,284

5,102

5,465

Consumer and other

TOTAL

22,355

219

25,965

377

23,754

374

20,704

367

19,267

364

Classified loans to total loans

1.20

1.40

1.26

1.11

1.05

Colony Bankcorp, Inc.

Criticized Loans

2024

2023

(dollars in thousands)

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Second Quarter

Construction, land & land development

626

1,543

2,192

1,238

817

Other commercial real estate

31,544

31,498

27,445

20,356

25,577

Residential real estate

5,431

107

13,050

249

14,275

253

13,212

245

14,211

269

Commercial, financial & agricultural

7,181

8,609

114

12,686

106

15,701

7,285

Consumer and other

365

281

234

184

TOTAL

44,850

255

55,065

512

56,879

549

50,741

513

48,074

530

Criticized loans to total loans

2.40

2.96

3.02

2.72

2.61

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724223432/en/

Derek Shelnutt EVP & Chief Financial Officer 229-426-6000, extension 6119

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