Colony Bankcorp Reports Fourth Quarter 2023 Results

Rhea-AI Summary

Colony Bankcorp, Inc. (CBAN) declared a quarterly cash dividend of $0.1125 per share. The financial results for the fourth quarter of 2023 showed a slight decrease in net income compared to the previous quarter, with strong liquidity and available funding of approximately $1.3 billion. Total loans increased by $18.5 million, while total deposits decreased by $46.5 million. The company also reported a decrease in mortgage production and sales, as well as a slowdown in small business lending. The Board of Directors declared a quarterly cash dividend, and the company's CEO expressed confidence in the business's resilience amidst industry challenges.

Insights

Financial Analyst

The reported decrease in net income for Colony Bankcorp in Q4 2023, when compared to the previous quarter, suggests a marginal contraction in profitability, which could be indicative of operational challenges or an evolving competitive landscape. However, the year-over-year stability in net income highlights a level of resilience. Investors should consider the implications of the increased provision for credit losses, which reflects management's anticipation of potential loan defaults, possibly due to economic headwinds or sector-specific vulnerabilities.

Furthermore, the reduction in total deposits, particularly the pay-off of wholesale deposits, may signal a strategic shift in the bank's funding structure or a response to changing market conditions. The growth in customer deposits, however, can be seen as a positive indicator of customer loyalty and trust. The shift in deposit types, with an increase in interest bearing demand deposits and a decrease in savings and time deposits, could affect the bank's interest expense and liquidity management.

The decline in mortgage production and SBSL loan closures, compared to the previous quarter, could reflect broader market trends such as rising interest rates or a cooling housing market. This reduced activity in key revenue-generating areas may impact the bank's performance in upcoming quarters.

Market Research Analyst

An analysis of Colony Bankcorp's capital ratios, which remain above the regulatory minimums for a 'well-capitalized' institution, provides assurance about the bank's capital adequacy and its ability to absorb potential losses. This is a crucial factor for investors, as it speaks to the bank's financial health and stability. The bank's strategy to maintain strong liquidity without resorting to overnight borrowings or Federal Reserve Bank Term Funding programs is a testament to prudent liquidity management, which is especially relevant in the current economic environment characterized by rate hikes and inflation concerns.

The reported increase in noninterest income, driven by diverse sources such as service charges, SBA loan sales and wealth advisory services, suggests a strategic pivot towards revenue diversification. This could mitigate the impact of reduced interest income due to the contracting net interest margin, which has been squeezed by the faster rise in rates on interest-bearing liabilities compared to interest-earning assets. Investors should note this shift, as it may affect the bank's revenue mix and profitability in the context of rising interest rates.

Credit Analyst

The increase in the provision for credit losses and the slight uptick in nonperforming assets are indicators of the bank's asset quality and risk management practices. The credit loss reserve ratio's increase to 0.98% of total loans suggests a cautious approach to potential credit deterioration. This conservative stance could be a response to specific loan portfolio vulnerabilities or a broader anticipation of economic downturn impacts. Stakeholders should monitor these metrics closely, as they are key indicators of the bank's credit risk profile and could signal future financial performance.

While the CEO's statement emphasizes no systemic issues across the loan portfolio, the observed loan downgrades and charge-offs warrant attention. The bank's ability to manage asset quality and maintain strong credit standards will be critical for its long-term health, especially if the economic environment becomes more challenging.

Declares Quarterly Cash Dividend of $0.1125 Per Share

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

Financial Highlights:

• Net income decreased to $5.6 million, or $0.32 per diluted share, for the fourth quarter of 2023, compared to $5.8 million, or $0.33 per diluted share, for the third quarter of 2023, but saw a slight increase from the fourth quarter of 2022 with net income of $5.6 million, or $0.31 per diluted share.
• Operating net income decreased to $5.4 million, or $0.31 of adjusted earnings per diluted share, for the fourth quarter of 2023, compared to $6.0 million, or $0.34 of adjusted earnings per diluted share, for the third quarter of 2023, and $5.6 million, or $0.31 of adjusted earnings per diluted share, for the fourth quarter of 2022. (See Reconciliation of Non-GAAP Measures).
• Strong liquidity with available sources of funding of approximately $1.3 billion at December 31, 2023. No overnight borrowings utilized or Federal Reserve Bank Term Funding program used as of December 31, 2023.
• Estimated uninsured deposits of $777.8 million, or 30.22% of total Bank deposits at December 31, 2023. Adjusted uninsured deposit estimate (excluding deposits collateralized by public funds or internal accounts) of $453.1 million, or 17.60% of total Bank deposits at December 31, 2023.
• Provision for credit losses of $1.5 million was recorded in fourth quarter of 2023 compared to $1.0 million in third quarter of 2023, and $900,000 in fourth quarter of 2022.
• Total loans were $1.88 billion at December 31, 2023, an increase of $18.5 million, or 0.99%, from the prior quarter.
• Total deposits were $2.54 billion and $2.59 billion at December 31, 2023 and September 30, 2023, respectively, a decrease of $46.5 million.
• Mortgage production was $45.3 million, and mortgage sales totaled $40.1 million in the fourth quarter of 2023 compared to $78.4 million and $53.3 million, respectively, for the third quarter of 2023.
• Small Business Specialty Lending (“SBSL”) closed $24.0 million in Small Business Administration (“SBA”) loans and sold $18.0 million in SBA loans in the fourth quarter of 2023 compared to $34.5 million and $14.6 million, respectively, for the third quarter of 2023.

The Company also announced that on January 24, 2024, the Board of Directors declared a quarterly cash dividend of $0.1125 per share, to be paid on its common stock on February 21, 2024, to shareholders of record as of the close of business on February 7, 2024. The Company had 17,561,341 shares of its common stock outstanding as of January 23, 2024.

"We made significant progress in the fourth quarter and throughout the year in meeting many of our internal objectives, despite the challenging operating environment. While our earnings for this quarter were slightly lower than the previous quarter, we are proud to emphasize the resilience of our business amidst industry challenges and are confident in our ability to navigate dynamic market conditions successfully.”

“Although there was an overall decline in total deposits during the fourth quarter, we successfully increased customer deposits by $8.6 million. The quarter-over-quarter reduction in total deposits is primarily attributed to the payoff of wholesale deposits. Additionally, this quarter we continued to see a slowdown in loan growth and expect a trend of moderate growth for the next few quarters,” said Heath Fountain, Chief Executive Officer.

“We remain confident in the strength of our credit quality in the overall loan portfolio. During the quarter, a few loans faced downgrades and charge-offs, leading to increased provision expense. These represented a small number of loans and circumstances, and we have no concerns of systemic issues across our portfolio.”

“Our team has adapted to the changing economic conditions over the past year, particularly in increasing noninterest income and lowering noninterest expense, and we believe we are in a position to make meaningful progress toward achieving our goals over the next several quarters.”

Balance Sheet

• Total assets were $3.05 billion at December 31, 2023, a decrease of $40.4 million from September 30, 2023.
• Total loans, including loans held for sale, were at $1.91 billion at December 31, 2023, an increase of $19.2 million from the quarter ended September 30, 2023.
• Total deposits were $2.54 billion and $2.59 billion at December 31, 2023 and September 30, 2023, respectively, a decrease of $46.5 million. Interest bearing demand deposits increased $18.6 million which was offset by decreases in savings and money market deposits of $20.9 million and time deposits of $49.0 million from September 30, 2023 to December 31, 2023.
• Total borrowings at December 31, 2023 totaled $238.4 million, a decrease of $10.0 million or, 4.0%, compared to September 30, 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 9.17%, 12.74%, 15.44%, and 11.63%, respectively, at December 31, 2023.

Fourth Quarter and December 31, 2023 Year to Date Results of Operations

• Net interest income, on a tax-equivalent basis, totaled $19.1 million for the fourth quarter ended December 31, 2023 compared to $21.5 million for the same period in 2022. Net interest income, on a tax-equivalent basis, for the twelve months ended December 31, 2023 totaled $79.0 million, compared to $81.1 million for the twelve months ended December 31, 2022. 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 $6.9 million, to $33.4 million for the fourth quarter of 2023 and $33.7 million, to $125.6 million for the twelve month period ended December 31, 2023, each compared to the respective period in 2022. Expense on interest bearing liabilities increased $9.3 million, to $14.3 million for the fourth quarter of 2023 and $35.8 million, to $46.7 million for the twelve month period ended December 31, 2023, each compared to the respective period in 2022.
• Net interest margin for the fourth quarter of 2023 was 2.70% compared to 3.23% for the fourth quarter of 2022. Net interest margin was 2.83% for the twelve months ended December 31, 2023 compared to 3.20% for the twelve months ended December 31, 2022. The decrease for each period is the result of rate increases in interest bearing liabilities outpacing the rate increases in interest earning assets.
• Noninterest income totaled $9.3 million for the fourth quarter ended December 31, 2023, an increase of $1.6 million, or 21.03%, compared to the same period in 2022. This increase was primarily related to increases in service charges on deposit accounts, gains on sales of SBA loans, insurance commissions, and equity investment income and income on wealth advisory services which are included in other noninterest income. Noninterest income totaled $35.6 million for the twelve months ended December 31, 2023, an increase of $610,000, or 1.74%, compared to the same period in 2022. This increase can be attributed to increases in service charges on deposit accounts, insurance commissions and equity investment income and income on wealth advisory services which are included in other noninterest income, which were partially offset by decreases in mortgage fee income and SBSL loan sales.
• Noninterest expense totaled $19.6 million for the fourth quarter ended December 31, 2023, compared to $21.8 million for the same period in 2022. Noninterest expense totaled $83.1 million for the twelve months ended December 31, 2023, compared to $89.5 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 decrease in data processing expense as a result of cost savings upon renewal of the core processing contract.

Asset Quality

• Nonperforming assets totaled $10.7 million and $10.1 million at December 31, 2023 and September 30, 2023, respectively, an increase of $570,000.
• Other real estate owned and repossessed assets totaled $448,000 at December 31, 2023 and $812,000 at September 30, 2023.
• Net loans charged-off were $692,000, or 0.15% of average loans for the fourth quarter of 2023, compared to $698,000 or 0.15% for the third quarter of 2023.
• The credit loss reserve was $18.4 million, or 0.98% of total loans, at December 31, 2023, compared to $17.4 million, or 0.93% of total loans at September 30, 2023.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, January 25, 2024, 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 13175412. A replay of the call will be available until Thursday, February 1, 2024. To listen to the replay, dial 1-877-674-7070 and enter the access code 175412#.

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 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; 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; 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, 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)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter
Operating noninterest income reconciliation
Noninterest income (GAAP)		$	9,305			$	9,718			$	8,952			$	7,659			$	7,688
Gain on sale of bank premises			(236	)			—				(125	)			—				—
Operating noninterest income		$	9,069			$	9,718			$	8,827			$	7,659			$	7,688
Operating noninterest expense reconciliation
Noninterest expense (GAAP)		$	19,589			$	20,881			$	21,432			$	21,165			$	21,826
Severance costs			—				(220	)			(635	)			(431	)			—
Acquisition-related expenses			—				—				—				(161	)			—
Operating noninterest expense		$	19,589			$	20,661			$	20,797			$	20,573			$	21,826
Operating net income reconciliation
Net income (GAAP)		$	5,598			$	5,804			$	5,302			$	5,043			$	5,551
Severance costs			—				220				635				431				—
Acquisition-related expenses			—				—				—				161				—
Gain on sale of bank premises			(236	)			—				(125	)			—				—
Income tax benefit			52				(48	)			(93	)			(107	)			—
Operating net income		$	5,414			$	5,976			$	5,719			$	5,528			$	5,551
Weighted average diluted shares			17,567,839				17,569,493				17,580,557				17,595,688				17,630,971
Adjusted earnings per diluted share		$	0.31			$	0.34			$	0.33			$	0.31			$	0.31
Tangible book value per common share reconciliation
Book value per common share (GAAP)		$	14.51			$	13.59			$	13.65			$	13.57			$	13.08
Effect of goodwill and other intangibles			(3.02	)			(3.04	)			(3.07	)			(3.08	)			(3.10	)
Tangible book value per common share		$	11.49			$	10.55			$	10.58			$	10.49			$	9.98
Tangible equity to tangible assets reconciliation
Equity to assets (GAAP)			8.35	%			7.72	%			7.72	%			7.97	%			7.84	%
Effect of goodwill and other intangibles			(1.62	)			(1.63	)			(1.63	)			(1.70	)			(1.74	)
Tangible equity to tangible assets			6.73	%			6.09	%			6.09	%			6.27	%			6.10	%
Operating efficiency ratio calculation
Efficiency ratio (GAAP)			69.51	%			71.17	%			76.18	%			74.98	%			75.03	%
Severance costs			—				(0.75	)			(2.26	)			(1.53	)			—
Acquisition-related expenses			—				—				—				(0.57	)			—
Gain on sale of bank premises			0.84				—				0.44				—				—
Operating efficiency ratio			70.35	%			70.42	%			74.36	%			72.88	%			75.03	%
Operating net noninterest expense(1) to average assets calculation
Net noninterest expense to average assets			1.35	%			1.45	%			1.65	%			1.86	%			1.96	%
Severance Costs			—				(0.03	)			(0.09	)			(0.06	)			—
Acquisition-related expenses			—				—				—				(0.02	)			—
Gain on Sale of bank premises			0.03				—				0.02				—				—
Operating net noninterest expense to average assets			1.38	%			1.42	%			1.58	%			1.78	%			1.96	%
Pre-provision net revenue
Net interest income before provision for credit losses		$	18,876			$	19,621			$	19,181			$	20,568			$	21,400
Noninterest income			9,305				9,718				8,952				7,659				7,688
Total income			28,181				29,339				28,133				28,227				29,088
Noninterest expense			19,589				20,881				21,432				21,165				21,826
Pre-provision net revenue		$	8,593			$	8,458			$	6,701			$	7,062			$	7,262
(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)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter
EARNINGS SUMMARY
Net interest income		$	18,876			$	19,621			$	19,181			$	20,568			$	21,400
Provision for credit losses			1,500				1,000				200				900				900
Noninterest income			9,305				9,718				8,952				7,659				7,688
Noninterest expense			19,589				20,881				21,432				21,165				21,826
Income taxes			1,494				1,654				1,199				1,119				811
Net income		$	5,598			$	5,804			$	5,302			$	5,043			$	5,551
PERFORMANCE MEASURES
Per common share:
Common shares outstanding			17,564,182				17,567,983				17,541,661				17,593,879				17,598,123
Weighted average basic shares			17,567,839				17,569,493				17,580,557				17,595,688				17,630,971
Weighted average diluted shares			17,567,839				17,569,493				17,580,557				17,595,688				17,630,971
Earnings per basic share		$	0.32			$	0.33			$	0.30			$	0.29			$	0.31
Earnings per diluted share			0.32				0.33				0.30				0.29				0.31
Adjusted earnings per diluted share(b)			0.31				0.34				0.33				0.31				0.31
Cash dividends declared per share			0.11				0.11				0.11				0.11				0.1075
Common book value per share			14.51				13.59				13.65				13.57				13.08
Tangible book value per common share(b)			11.49				10.55				10.58				10.49				9.98
Pre-provision net revenue(b)		$	8,593			$	8,458			$	6,701			$	7,062			$	7,262
Performance ratios:
Net interest margin (a)			2.70	%			2.78	%			2.77	%			3.08	%			3.23	%
Return on average assets			0.73				0.75				0.70				0.69				0.77
Return on average total equity			9.20				9.61				8.88				8.73				9.76
Efficiency ratio			69.51				71.17				76.18				74.98				75.03
Operating efficiency ratio (b)			70.35				70.42				74.36				72.88				75.03
Net noninterest expense to average assets			1.35				1.45				1.65				1.86				1.96
Operating net noninterest expense to average assets(b)			1.38				1.42				1.58				1.78				1.96
ASSET QUALITY
Nonperforming portfolio loans		$	7,804			$	5,625			$	6,716			$	5,636			$	5,693
Nonperforming government guaranteed loans			2,035				3,641				4,369				1,529				17
Loans 90 days past due and still accruing			370				9				—				—				—
Total nonperforming loans (NPLs)			10,209				9,275				11,085				7,165				5,710
Other real estate owned			448				812				792				651				651
Total nonperforming assets (NPAs)			10,657				10,087				11,877				7,816				6,361
Classified loans			23,754				20,704				19,267				18,747				15,105
Criticized loans			56,879				50,741				48,074				43,281				41,293
Net loan charge-offs (recoveries)			692				698				(37	)			237				(46	)
Allowance for credit losses to total loans			0.98	%			0.93	%			0.93	%			0.92	%			0.93	%
Allowance for credit losses to total NPLs			179.95				187.26				153.96				231.67				282.45
Allowance for credit losses to total NPAs			172.38				172.18				143.69				212.37				253.55
Net charge-offs (recoveries) to average loans, net			0.15				0.15				(0.01	)			0.05				(0.01	)
NPLs to total loans			0.54				0.50				0.60				0.40				0.33
NPAs to total assets			0.35				0.33				0.38				0.26				0.22
NPAs to total loans and foreclosed assets			0.57				0.54				0.65				0.43				0.37
AVERAGE BALANCES
Total assets		$	3,027,812			$	3,058,485			$	3,030,044			$	2,949,986			$	2,863,046
Loans, net			1,860,652				1,854,367				1,814,172				1,765,845				1,637,034
Loans, held for sale			21,251				29,444				21,237				14,007				22,644
Deposits			2,538,500				2,565,026				2,524,949				2,473,464				2,460,664
Total stockholders’ equity			241,392				239,571				239,579				234,147				225,639
(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 December 31,
	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	$	1,899,413		$	27,069		5.65	%		$	1,675,324		$	20,320		4.81	%
Investment securities, taxable		743,308			5,221		2.79	%			797,403			5,160		2.57	%
Investment securities, tax-exempt 2		103,418			607		2.33	%			104,853			567		2.15	%
Deposits in banks and short term investments		51,874			489		3.74	%			63,320			450		2.82	%
Total interest-earning assets		2,798,013			33,386		4.73	%			2,640,900			26,497		3.98	%
Noninterest-earning assets		229,800									222,146
Total assets	$	3,027,812								$	2,863,046
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand and savings	$	1,396,932		$	5,632		1.60	%		$	1,458,051		$	1,706		0.46	%
Other time		643,841			5,939		3.66	%			438,599			1,496		1.35	%
Total interest-bearing deposits		2,040,773			11,571		2.25	%			1,896,650			3,202		0.67	%
Federal funds purchased		53			1		6.28	%			2,878			32		4.34	%
Federal Home Loan Bank advances		158,913			1,624		4.06	%			90,978			818		3.57	%
Other borrowings		72,508			1,134		6.20	%			68,295			930		5.40	%
Total other interest-bearing liabilities		231,474			2,759		4.73	%			162,151			1,780		4.35	%
Total interest-bearing liabilities		2,272,247			14,330		2.50	%			2,058,801			4,982		0.96	%
Noninterest-bearing liabilities:
Demand deposits		497,727								$	564,014
Other liabilities		16,446									14,592
Stockholders' equity		241,392									225,639
Total noninterest-bearing liabilities and stockholders' equity		755,565									804,245
Total liabilities and stockholders' equity	$	3,027,812								$	2,863,046
Interest rate spread							2.23	%								3.02	%
Net interest income				$	19,056								$	21,515
Net interest margin							2.70	%								3.23	%
_______________________________
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 $54,000 and $35,000 for the quarters ended December 31, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $5,000 and $40,000 for the quarters ended December 31, 2023 and 2022 are also included in income and fees on loans.
2 Taxable-equivalent adjustments totaling $127,000 and $79,000 for the quarters ended December 31, 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
	Twelve months ended December 31,
	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	$	1,850,043		$	99,472		5.38	%		$	1,505,792		$	70,903		4.71	%
Investment securities, taxable		770,707			21,388		2.78	%			827,388			17,954		2.17	%
Investment securities, tax-exempt 4		105,797			2,444		2.31	%			109,122			2,247		2.06	%
Deposits in banks and short term investments		63,806			2,341		3.67	%			91,825			887		0.97	%
Total interest-earning assets		2,790,353			125,645		4.50	%			2,534,127			91,991		3.63	%
Noninterest-earning assets		226,198									215,723
Total assets	$	3,016,551								$	2,749,850
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing demand and savings	$	1,390,247		$	15,833		1.14	%		$	1,439,234		$	3,047		0.21	%
Other time		619,083			19,632		3.17	%			370,375			2,829		0.76	%
Total interest-bearing deposits		2,009,330			35,465		1.76	%			1,809,609			5,876		0.32	%
Federal funds purchased		2,783			147		5.29	%			2,835			54		1.89	%
Federal Home Loan Bank advances 5		160,548			6,763		4.21	%			71,690			2,564		3.58	%
Other borrowings		70,807			4,298		6.07	%			52,872			2,371		4.48	%
Total other interest-bearing liabilities		234,138			11,208		4.79	%			127,397			4,989		3.92	%
Total interest-bearing liabilities		2,243,468			46,673		2.08	%			1,937,006			10,865		0.56	%
Noninterest-bearing liabilities:
Demand deposits	$	519,225								$	564,322
Other liabilities		14,947									12,173
Stockholders' equity		238,911									236,349
Total noninterest-bearing liabilities and stockholders' equity		773,083									812,844
Total liabilities and stockholders' equity	$	3,016,551								$	2,749,850
Interest rate spread							2.42	%								3.07	%
Net interest income				$	78,972								$	81,126
Net interest margin							2.83	%								3.20	%
_______________________________
3 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 $216,000 and $139,000 for the twelve months ended December 31, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in income and fees on loans. Accretion income of $165,000 and $590,000 for the twelve months ended December 31, 2023 and 2022 are also included in income and fees on loans.
4 Taxable-equivalent adjustments totaling $513,000 and $315,000 for the twelve months ended December 31, 2023 and 2022, respectively, are calculated using the statutory federal tax rate and are included in tax-exempt interest on investment securities.
5 Federal Home Loan Bank advances interest expense includes $751,000 for the twelve months ended December 31, 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)		Fourth Quarter			Third Quarter				Second Quarter			First Quarter				Fourth Quarter
Banking Division
Net interest income		$	17,988		$	18,778			$	18,562		$	20,141			$	21,037
Provision for credit losses			979			286				60			900				900
Noninterest income			5,992			6,233				5,433			4,915				4,312
Noninterest expenses			16,621			16,653				17,650			17,812				18,038
Income taxes			1,365			1,777				1,157			1,155				837
Segment income		$	5,015		$	6,295			$	5,128		$	5,189			$	5,574
Total segment assets		$	2,956,121		$	2,999,071			$	3,013,689		$	2,930,421			$	2,857,893
Full time employees			378			382				383			407				427
Mortgage Banking Division
Net interest income		$	23		$	52			$	31		$	3			$	(43	)
Provision for credit losses			—			—				—			—				—
Noninterest income			1,206			1,725				2,015			1,277				1,637
Noninterest expenses			1,203			2,040				1,971			1,712				1,936
Income taxes			8			(53	)			14			(86	)			(6	)
Segment income		$	18		$	(210	)		$	61		$	(346	)		$	(336	)
Total segment assets		$	7,890		$	9,991			$	15,984		$	7,895			$	18,221
Variable noninterest expense(1)		$	597		$	1,245			$	1,149		$	890			$	1,193
Fixed noninterest expense			606			795				822			822				743
Full time employees			42			45				51			59				65
Small Business Specialty Lending Division
Net interest income		$	865		$	791			$	588		$	427			$	406
Provision for credit losses			521			714				140			—				—
Noninterest income			2,107			1,760				1,504			1,464				1,739
Noninterest expenses			1,765			2,188				1,811			1,641				1,852
Income taxes			121			(70	)			28			50				(20	)
Segment income		$	565		$	(281	)		$	113		$	200			$	313
Total segment assets		$	89,411		$	84,761			$	71,398		$	58,625			$	60,456
Full time employees			33			33				32			30				30
Total Consolidated
Net interest income		$	18,876		$	19,621			$	19,181		$	20,571			$	21,400
Provision for credit losses			1,500			1,000				200			900				900
Noninterest income			9,305			9,718				8,952			7,656				7,688
Noninterest expenses			19,589			20,881				21,432			21,165				21,826
Income taxes			1,494			1,654				1,199			1,119				811
Segment income		$	5,598		$	5,804			$	5,302		$	5,043			$	5,551
Total segment assets		$	3,053,422		$	3,093,823			$	3,101,071		$	2,996,941			$	2,936,570
Full time employees			453			460				466			496				522
(1) Variable noninterest expense includes commission based salary expenses and volume based loan related fees.

Colony Bankcorp, Inc.
Consolidated Balance Sheets
		December 31, 2023				December 31, 2022
(dollars in thousands)		(unaudited)				(audited)
ASSETS
Cash and due from banks		$	25,339			$	20,584
Interest-bearing deposits in banks and federal funds sold			57,983				60,094
Cash and cash equivalents			83,322				80,678
Investment securities available for sale, at fair value			407,382				432,553
Investment securities held to maturity, at amortized cost			449,031				465,858
Other investments, at cost			16,868				13,793
Loans held for sale			27,958				17,743
Loans, net of unearned income			1,883,470				1,737,106
Allowance for credit losses			(18,371	)			(16,128	)
Loans, net			1,865,099				1,720,978
Premises and equipment			39,870				41,606
Other real estate			448				651
Goodwill			48,923				48,923
Other intangible assets			4,192				5,664
Bank owned life insurance			56,925				55,504
Deferred income taxes, net			25,405				28,199
Other assets			27,999				24,420
Total assets		$	3,053,422			$	2,936,570
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Noninterest-bearing		$	498,992			$	569,170
Interest-bearing			2,045,798				1,921,827
Total deposits			2,544,790				2,490,997
Federal Home Loan Bank advances			175,000				125,000
Other borrowed money			63,445				78,352
Accrued expenses and other liabilities			15,252				11,953
Total liabilities		$	2,798,487			$	2,706,302
Stockholders’ equity
Common stock, $1 par value; 50,000,000 shares authorized, 17,564,182 and 17,598,123 issued and outstanding, respectively		$	17,564			$	17,598
Paid in capital			168,614				167,537
Retained earnings			124,400				111,573
Accumulated other comprehensive loss, net of tax			(55,643	)			(66,440	)
Total stockholders’ equity			254,935				230,268
Total liabilities and stockholders’ equity		$	3,053,422			$	2,936,570

Colony Bankcorp, Inc.
Consolidated Statements of Income (unaudited)
		Three months ended December 31,							Twelve months ended December 31,
		2023			2022				2023			2022
(dollars in thousands, except per share data)
Interest income:
Loans, including fees		$	27,016		$	20,285			$	99,256		$	70,764
Investment securities			5,700			5,647				23,319			19,887
Deposits in banks and short term investments			489			450				2,341			886
Total interest income			33,205			26,382				124,916			91,537
Interest expense:
Deposits			11,571			3,202				35,464			5,876
Federal funds purchased			1			32				147			54
Federal Home Loan Bank advances			1,623			818				6,763			2,564
Other borrowings			1,134			930				4,298			2,371
Total interest expense			14,329			4,982				46,672			10,865
Net interest income			18,876			21,400				78,244			80,672
Provision for credit losses			1,500			900				3,600			3,370
Net interest income after provision for credit losses			17,376			20,500				74,644			77,302
Noninterest income:
Service charges on deposits			2,595			2,052				8,735			7,875
Mortgage fee income			1,203			1,194				6,131			8,550
Gain on sales of SBA loans			1,634			1,411				5,063			6,216
Loss on sales of securities			—			(10	)			—			(82	)
Interchange fees			2,059			2,043				8,460			8,381
BOLI income			372			336				1,396			1,313
Insurance commissions			452			393				1,873			1,777
Other			990			269				3,976			995
Total noninterest income			9,305			7,688				35,634			35,025
Noninterest expense:
Salaries and employee benefits			11,304			12,311				49,233			52,809
Occupancy and equipment			1,543			1,663				6,283			6,534
Information technology expenses			2,147			2,552				8,553			9,947
Professional fees			749			659				3,097			3,432
Advertising and public relations			1,054			1,259				3,486			3,664
Communications			237			277				947			1,602
Other			2,555			3,105				11,466			11,487
Total noninterest expense			19,589			21,826				83,065			89,475
Income before income taxes			7,092			6,362				27,213			22,852
Income taxes			1,494			811				5,466			3,310
Net income		$	5,598		$	5,551			$	21,747		$	19,542
Earnings per common share:
Basic		$	0.32		$	0.31			$	1.24		$	1.14
Diluted			0.32			0.31				1.24			1.14
Dividends declared per share			0.11			0.1075				0.44			0.43
Weighted average common shares outstanding:
Basic			17,567,839			17,630,971				17,578,294			17,191,079
Diluted			17,567,839			17,630,971				17,578,294			17,191,079

Colony Bankcorp, Inc.
Quarterly Comparison
		2023																2022
(dollars in thousands, except per share data)		Fourth Quarter				Third Quarter				Second Quarter				First Quarter				Fourth Quarter
Assets		$	3,053,422			$	3,093,823			$	3,101,071			$	2,996,941			$	2,936,570
Loans, net			1,865,099				1,847,603				1,821,776				1,783,254				1,720,978
Deposits			2,544,790				2,591,332				2,627,211				2,516,129				2,490,997
Total equity			254,935				238,692				239,455				238,777				230,268
Net income			5,598				5,804				5,302				5,043				5,551
Earnings per basic share		$	0.32			$	0.33			$	0.30			$	0.29			$	0.31
Key Performance Ratios:
Return on average assets			0.73	%			0.75	%			0.70	%			0.69	%			0.77	%
Return on average total equity			9.20	%			9.61	%			8.88	%			8.73	%			9.76	%
Total equity to total assets			8.35	%			7.72	%			7.72	%			7.97	%			7.84	%
Tangible equity to tangible assets (a)			6.73	%			6.09	%			6.09	%			6.27	%			6.10	%
Net interest margin			2.70	%			2.78	%			2.77	%			3.08	%			3.23	%
(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)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Core		$	1,729,866		$	1,698,219		$	1,664,855		$	1,614,216		$	1,540,561
Purchased			153,604			166,752			173,987			185,637			196,545
Total		$	1,883,470		$	1,864,971		$	1,838,842		$	1,799,853		$	1,737,106

Colony Bankcorp, Inc.
Quarterly Loans by Composition Comparison
		2023												2022
(dollars in thousands)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Construction, land & land development		$	247,146		$	245,268		$	249,423		$	249,720		$	229,435
Other commercial real estate			974,649			969,168			979,509			985,627			975,447
Total commercial real estate			1,221,795			1,214,436			1,228,932			1,235,347			1,204,882
Residential real estate			355,973			339,501			325,407			316,415			290,054
Commercial, financial & agricultural			242,743			252,725			243,458			225,269			223,923
Consumer and other			62,959			58,309			41,045			22,822			18,247
Total		$	1,883,470		$	1,864,971		$	1,838,842		$	1,799,853		$	1,737,106

Colony Bankcorp, Inc.
Quarterly Loans by Location Comparison
		2023												2022
(dollars in thousands)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Alabama		$	45,594		$	45,135		$	44,301		$	41,118		$	21,122
Florida			40			—			—			—			—
Augusta			65,284			55,508			55,124			53,415			52,226
Coastal Georgia			243,492			239,281			242,249			248,253			259,730
Middle Georgia			118,806			116,776			119,041			119,720			115,504
Atlanta and North Georgia			426,724			431,632			420,231			419,480			375,106
South Georgia			436,728			446,221			463,558			448,558			457,283
West Georgia			187,751			188,208			192,348			204,664			210,676
Small Business Specialty Lending			68,637			65,187			56,908			50,513			45,944
Consumer Portfolio Mortgages			255,771			245,057			226,755			211,225			197,672
Marine/RV Lending			33,191			31,009			17,137			2,060			—
Other			1,452			957			1,190			847			1,843
Total		$	1,883,470		$	1,864,971		$	1,838,842		$	1,799,853		$	1,737,106

Colony Bankcorp, Inc.
Quarterly Deposits Comparison
		2023												2022
(dollars in thousands)		Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Noninterest-bearing demand		$	498,992		$	494,221		$	541,119		$	537,928		$	569,170
Interest-bearing demand			759,299			740,672			733,708			764,070			831,152
Savings			660,311			681,229			659,137			612,397			617,135
Time, $250,000 and over			167,680			187,218			184,459			152,914			114,780
Other time			458,508			487,992			508,788			448,820			358,760
Total		$	2,544,790		$	2,591,332		$	2,627,211		$	2,516,129		$	2,490,997

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124386222/en/

Derek Shelnutt

EVP & Chief Financial Officer

229-426-6000, extension 6119

Source: Colony Bankcorp, Inc.

FAQ

What is the quarterly cash dividend declared by Colony Bankcorp, Inc.?

Colony Bankcorp, Inc. declared a quarterly cash dividend of $0.1125 per share.

What were the financial highlights for the fourth quarter of 2023?

Net income decreased to $5.6 million, with slight decreases in operating net income. The company reported strong liquidity and available funding of approximately $1.3 billion.

What were the changes in total loans and total deposits for Colony Bankcorp, Inc.?

Total loans increased by $18.5 million, while total deposits decreased by $46.5 million.

What did the CEO of Colony Bankcorp, Inc. say about the business's performance?

The CEO expressed confidence in the business's resilience amidst industry challenges and emphasized the strength of the credit quality in the overall loan portfolio.

When will Colony Bankcorp, Inc. host an earnings conference call?

The company will host an earnings conference call at 9:00 a.m. ET on Thursday, January 25, 2024, to discuss the recent results and answer appropriate questions.