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		—			23			—			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	)		52			(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	%		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	%		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	%		1.45	%		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	%		1.38	%		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			0.1125			0.1100			0.1100			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			1.45			1.35			1.45			1.65
Operating net noninterest expense to average assets^(b)		1.36			1.38			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		41			—			370			9			—
Total nonperforming loans (NPLs)		6,710			6,431			10,209

Colony Bankcorp Reports Second Quarter 2024 Results