Colony Bankcorp, Inc. 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.