Colony Bank(CBAN) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights & Overview Financial Highlights Colony Bankcorp reported strong Q2 2025 results, featuring significant growth in net income and EPS, expanded net interest margin, and a strategic acquisition Q2 2025 Key Financial Results | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $8.0 million | $6.6 million | $5.5 million | | Diluted EPS | $0.46 | $0.38 | $0.31 | | Operating Net Income | $8.0 million | $6.6 million | $6.0 million | | Adjusted Diluted EPS | $0.46 | $0.38 | $0.34 | | Provision for Credit Losses | $450,000 | $1.5 million | $650,000 | - The Board of Directors declared a quarterly cash dividend of $0.1150 per share, payable on August 20, 2025, to shareholders of record as of August 6, 2025[4] - Total loans (excluding held for sale) increased by $72.3 million (3.76%) from the previous quarter to $1.99 billion, while total deposits decreased by $66.3 million to $2.56 billion[7] - The company announced a strategic acquisition of TC Bancshares, Inc., aimed at strengthening its franchise and expanding its market reach[6] - CEO Heath Fountain highlighted the meaningful expansion of the net interest margin, supported by a well-positioned balance sheet and stable funding costs[5] Financial Condition and Results of Operations Balance Sheet Total assets slightly decreased to $3.12 billion as of June 30, 2025, with robust loan growth offset by a decline in total deposits Balance Sheet Summary (as of June 30, 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $3.12 billion | $3.17 billion | -$56.2 million | | Total Loans (excl. HFS) | $1.99 billion | $1.92 billion | +$72.3 million | | Total Deposits | $2.56 billion | $2.62 billion | -$66.3 million | - The decrease in deposits was driven by a $34.6 million fall in interest-bearing demand deposits and a $22.3 million drop in savings and money market deposits, partially offset by a $5.7 million rise in time deposits compared to Q1 2025[11] - Year-over-year, total deposits increased by $96.0 million from June 30, 2024[11] Capital The company maintained a strong capital position, with all regulatory capital ratios exceeding 'well-capitalized' minimums, and repurchased common stock Preliminary Capital Ratios (as of June 30, 2025) | Ratio | Percentage | | :--- | :--- | | Tier One Leverage Ratio | 9.61% | | Tier One Capital Ratio | 13.42% | | Total Risk-Based Capital Ratio | 16.06% | | Common Equity Tier One Capital Ratio | 12.34% | - A total of $959,092 was spent on repurchasing 62,017 shares of common stock in Q2 2025 under the approved stock repurchase program[11] Results of Operations Q2 2025 profitability significantly improved, driven by higher net interest income and a wider net interest margin, despite increased noninterest expenses Q2 2025 vs. Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income (tax-equivalent) | $22.6 million | $18.6 million | +$4.0 million | | Net Interest Margin | 3.12% | 2.68% | +44 bps | | Noninterest Income | $10.1 million | $9.5 million | +6.33% | | Noninterest Expense | $22.0 million | $20.3 million | +$1.7 million | - The increase in net interest income was primarily due to a $3.5 million rise in income on interest-earning assets, while expense on interest-bearing liabilities decreased by $477,000 compared to Q2 2024[11] Asset Quality Asset quality remained solid with decreased nonperforming assets and a lower credit loss reserve, though net loans charged-off increased Asset Quality Metrics | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Nonperforming Assets | $11.4 million | $13.0 million | | Credit Loss Reserve / Total Loans | 0.96% | 1.04% | | Net Loans Charged-off (Q2'25 vs Q1'25) | $1.0 million (0.21%) | $606,000 (0.13%) | - The credit loss reserve stood at $19.2 million at the end of Q2 2025, down from $20.0 million at the end of Q1 2025[16] Financial Tables Reconciliation of Non-GAAP Measures Non-GAAP measures like operating net income and adjusted EPS are used to provide a clearer understanding of core performance by excluding specific items Q2 2025 Non-GAAP Reconciliation Highlights (in thousands) | Metric | GAAP | Adjustments | Non-GAAP (Operating) | | :--- | :--- | :--- | :--- | | Net Income | $7,978 | $0 | $7,978 | | Diluted EPS | $0.46 | $0.00 | $0.46 | | Return on Average Assets | 1.02% | 0.00% | 1.02% | | Efficiency Ratio | 67.74% | 0.00% | 67.74% | Selected Financial Information This section summarizes key earnings, performance ratios, and balance sheet data, showing improved profitability and tangible book value per share in Q2 2025 Quarterly Performance Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.12% | 2.93% | 2.68% | | Return on Average Assets | 1.02% | 0.85% | 0.73% | | Return on Average Equity | 11.14% | 9.63% | 8.46% | | Tangible Book Value/Share | $13.73 | $13.46 | $12.10 | Quarterly Asset Quality Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | NPAs to Total Assets | 0.37% | 0.41% | 0.24% | | NPLs to Total Loans | 0.54% | 0.65% | 0.36% | | Net Charge-offs to Avg. Loans | 0.21% | 0.13% | 0.14% | Average Balance Sheet and Net Interest Analysis Net interest margin significantly expanded in Q2 2025, driven by higher asset yields and lower liability costs, with average interest-earning assets growing YoY Net Interest Margin Analysis (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Yield on Interest-Earning Assets | 5.11% | 4.83% | | Cost of Interest-Bearing Liabilities | 2.42% | 2.64% | | Interest Rate Spread | 2.69% | 2.19% | | Net Interest Margin | 3.12% | 2.68% | Segment Reporting The company operates through Banking, Mortgage Banking, and SBSL segments, with Banking as the primary income contributor and Mortgage Banking showing significant growth Segment Income (in thousands) | Segment | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Banking Division | $7,441 | $6,201 | $4,012 | | Mortgage Banking Division | $249 | $21 | $138 | | Small Business Specialty Lending | $288 | $391 | $1,324 | Consolidated Financial Statements Consolidated financial statements show total assets of $3.12 billion, net loans of $1.97 billion, and total deposits of $2.56 billion, with Q2 2025 net income up 46% YoY Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $3,115,617 | $3,109,782 | | Loans, net | $1,974,427 | $1,824,000 | | Total Deposits | $2,556,230 | $2,567,943 | | Total Stockholders' Equity | $293,857 | $278,675 | Consolidated Income Statement Highlights (Three Months Ended June 30, in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | $22,385 | $18,409 | | Noninterest Income | $10,098 | $9,497 | | Noninterest Expense | $22,004 | $20,330 | | Net Income | $7,978 | $5,474 | Loan and Deposit Analysis Loan and deposit schedules detail a QoQ decrease in deposits to $2.56 billion and an increase in loans to $1.99 billion, with regional concentrations - Total deposits decreased by $66.3 million QoQ, with declines in interest-bearing demand and savings accounts, and reciprocal deposits also decreased by $13.2 million[37][38] - Total loans increased by $72.3 million QoQ, led by a $29.2 million increase in Construction, land & land development loans and a $21.4 million increase in Consumer and other loans[39][40] - By location, the Atlanta and North Georgia loan portfolio is the largest at $445.9 million, while the South Georgia region holds the most deposits at $1.20 billion[38][41] Credit Quality Details Detailed tables show total classified loans decreased to $25.1 million and criticized loans to $54.8 million in Q2 2025, with commercial real estate as the largest portion Classified and Criticized Loans (in thousands) | Category | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Classified Loans | $25,112 | $26,453 | $22,355 | | Criticized Loans | $54,814 | $55,823 | $44,850 | - Other commercial real estate loans constitute the largest portion of both classified ($16.7 million) and criticized ($30.0 million) loans[42][43] Company Information & Disclosures About Colony Bankcorp Colony Bankcorp, founded in 1975, is a bank holding company operating across Georgia, Alabama, and Florida, offering diverse personal and business banking services - Colony Bankcorp operates locations in Georgia, Birmingham (Alabama), Tallahassee (Florida), and the Florida Panhandle[13] - Specialized services include mortgage lending, government guaranteed lending, consumer insurance, wealth management, credit cards, and merchant services[13] Forward-Looking Statements This section cautions that forward-looking statements are subject to risks and uncertainties, including economic conditions, interest rate changes, and competition - The document cautions investors that forward-looking statements are subject to risks and uncertainties and are not guarantees of future performance[14][15] - Key risk factors mentioned include economic conditions, interest rate volatility, competition from regional institutions and fintechs, and risks related to integrating acquisitions[15][17] Explanation of Non-GAAP Financial Measures Non-GAAP financial measures are used to provide supplemental information and enhance investors' understanding by excluding certain non-recurring or non-operational items - Non-GAAP measures are used by management to analyze company performance and are believed to provide a clearer understanding for investors[21] - Examples of non-GAAP measures used include operating net income, adjusted earnings per diluted share, tangible book value per common share, and operating efficiency ratio[20]