Colony Bank(CBAN) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Earnings Release Highlights Colony Bankcorp announced its Q3 2025 financial results, declared a dividend, and provided CEO commentary on strong performance and merger progress Announcement and Dividend Declaration Colony Bankcorp, Inc. reported its third quarter 2025 financial results and declared a quarterly cash dividend of $0.1150 per share, payable on November 19, 2025 - The Board of Directors declared a quarterly cash dividend of $0.1150 per share, to be paid on November 19, 2025, to shareholders of record as of November 5, 2025[4] - The Company had 17,461,284 shares of its common stock outstanding as of October 20, 2025[4] CEO Commentary CEO Heath Fountain highlighted strong third-quarter performance driven by increased operating revenue, net interest margin expansion, and robust noninterest income. He noted strong loan growth, which is now moderating, and confirmed the smooth progress of the planned merger with TC Federal Bank - The Company's financial performance was highlighted by an increase in operating revenue, driven by consecutive net interest margin expansion and strong noninterest income[5] - Loan growth has been strong this year, reflecting healthy customer demand, and is now moderating to a normalized pace consistent with the Company's growth strategy[5] - The planned merger with TC Federal Bank is progressing smoothly, with an anticipated closing in the fourth quarter of 2025 and systems conversion in the first quarter of next year[5] - Strategic investment in talent, including the addition of experienced bankers, is expected to deliver significant long-term value to shareholders[7] Financial Highlights Summary Key financial metrics for Q3 2025 showed a decrease in GAAP net income and diluted EPS quarter-over-quarter, but an increase in operating net income and adjusted diluted EPS. Loan and deposit balances grew, while mortgage production slightly decreased, and Small Business Specialty Lending (SBSL) loan originations significantly increased Key Financial Metrics | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Net income | $5.8 million | $8.0 million | $5.6 million | | Diluted EPS | $0.33 | $0.46 | $0.32 | | Operating net income | $8.2 million | $8.0 million | $6.2 million | | Adjusted diluted EPS | $0.47 | $0.46 | $0.35 | | Provision for credit losses | $900,000 | $450,000 | $750,000 | | Total loans (excl. HFS) | $2.04 billion | N/A | N/A | | Total deposits | $2.58 billion | $2.56 billion | N/A | | Mortgage production | $87.3 million | $94.9 million | N/A | | Mortgage sales | $65.1 million | $65.3 million | N/A | | SBSL loans closed | $28.4 million | $15.8 million | N/A | | SBSL loans sold | $18.2 million | $17.9 million | N/A | - Total loans, excluding loans held for sale, increased by $43.5 million (2.18%) from the prior quarter to $2.04 billion at September 30, 2025[6] - Total deposits increased by $28.1 million from the prior quarter, reaching $2.58 billion at September 30, 2025[6] Detailed Financial Review This section provides an in-depth analysis of the company's balance sheet, capital position, operational results, and asset quality for the third quarter of 2025 Balance Sheet Overview Colony Bankcorp's balance sheet at September 30, 2025, showed growth in total assets, loans, and deposits compared to the prior quarter. Deposit composition shifted, with an increase in time deposits offsetting decreases in interest-bearing demand and savings/money market deposits Balance Sheet Summary | Metric | Sep 30, 2025 | Jun 30, 2025 | Change QoQ | | :-------------------------- | :----------- | :----------- | :--------- | | Total assets | $3.15 billion | $3.11 billion | +$37.1 million | | Total loans (excl. HFS) | $2.04 billion | $1.99 billion | +$43.5 million | | Total deposits | $2.58 billion | $2.56 billion | +$28.1 million | | Total borrowings | $248.1 million | $248.077 million | +$23,000 | - From June 30, 2025, to September 30, 2025, interest-bearing demand deposits decreased by $27.5 million, and savings and money market deposits decreased by $22.8 million, while time deposits increased by $71.1 million[9] - Total deposits increased by $59.4 million from September 30, 2024, driven by increases in interest-bearing demand deposits ($41.9 million) and time deposits ($55.3 million), partially offset by a decrease in savings and money market deposits ($40.1 million)[9] Capital Position Colony Bankcorp maintained a strong capital position in Q3 2025, with all preliminary capital ratios exceeding regulatory minimums for a 'well-capitalized' institution - Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be considered as 'well-capitalized'[9] Capital Ratios | Capital Ratio | Sep 30, 2025 (Preliminary) | | :-------------------------- | :------------------------- | | Tier one leverage ratio | 9.91% | | Tier one capital ratio | 13.44% | | Total risk-based capital ratio | 16.00% | | Common equity tier one capital ratio | 12.37% | Results of Operations Net interest income and net interest margin significantly expanded year-over-year for both the third quarter and the nine months ended September 30, 2025, primarily due to increased income on interest-earning assets and decreased expense on interest-bearing liabilities. Noninterest income remained stable, while noninterest expenses increased due to higher personnel, IT, and acquisition-related costs, along with a wire fraud loss Net Interest Income and Margin (Q3) | Metric (Tax-Equivalent Basis) | Q3 2025 | Q3 2024 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Net interest income | $22.9 million | $18.7 million | +$4.2 million | | Net interest margin | 3.17% | 2.64% | +0.53% | Net Interest Income and Margin (9M) | Metric (Tax-Equivalent Basis) | 9M 2025 | 9M 2024 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Net interest income | $66.6 million | $56.1 million | +$10.5 million | | Net interest margin | 3.07% | 2.67% | +0.40% | - Noninterest income for Q3 2025 totaled $10.1 million, a slight increase of $9,000 (0.09%) compared to Q3 2024, driven by increases in service charges on deposits, mortgage fee income, and insurance commissions, partially offset by decreases in gains on SBA loan sales and increased losses on investment securities sales[9] - Noninterest expense for Q3 2025 totaled $24.6 million, an increase of $3.8 million compared to Q3 2024, primarily due to higher salaries and employee benefits, occupancy and equipment, information technology expenses, professional fees, acquisition-related expenses, and a loss from a wire fraud incident[9] Asset Quality Asset quality metrics showed an increase in nonperforming assets and net loan charge-offs in Q3 2025 compared to the prior quarter, while the credit loss reserve slightly decreased Asset Quality Metrics | Metric | Sep 30, 2025 | Jun 30, 2025 | Change QoQ | | :-------------------------- | :----------- | :----------- | :--------- | | Nonperforming assets (NPAs) | $15.2 million | $11.4 million | +$3.8 million | | Other real estate owned and repossessed assets | $870,000 | $731,000 | +$139,000 | | Net loans charged-off | $1.8 million (0.36% of avg loans) | $1.0 million (0.21% of avg loans) | +$0.8 million | | Credit loss reserve | $18.1 million (0.89% of total loans) | $19.2 million (0.96% of total loans) | -$1.1 million | Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures, offering supplemental insights into the company's core operating performance by excluding specific non-recurring items Definition and Purpose This section defines various non-GAAP financial measures used by management, such as operating net income and adjusted earnings per diluted share, which exclude specific non-recurring or non-core items. These measures are intended to provide supplemental information for a clearer understanding of the Company's performance and facilitate comparisons, but are not a substitute for GAAP - Non-GAAP financial measures like operating noninterest income, operating net income, and adjusted earnings per diluted share are used by management to analyze performance and provide useful supplemental information to investors[21][22] - These measures exclude items such as acquisition-related expenses, severance costs, losses on sales of securities, and losses related to wire fraud incidents to better reflect core operating performance[21] - While enhancing understanding of business and performance trends, these non-GAAP disclosures should not be considered an alternative to GAAP[22][23] Reconciliation of Non-GAAP Measures Detailed reconciliations are provided for various non-GAAP measures, illustrating the adjustments made from their GAAP counterparts. These adjustments primarily involve adding back or subtracting non-recurring items like losses on securities sales, acquisition-related expenses, and wire fraud losses to derive operating metrics Operating Noninterest Income Reconciliation ($ thousands) | Metric | Q3 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | | Noninterest income (GAAP) | $10,091 | $10,082 | | Loss on sales of securities | 1,039 | 454 | | Operating noninterest income | $11,130 | $10,536 | Operating Net Income and Adjusted EPS Reconciliation ($ thousands) | Metric | Q3 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | | Net income (GAAP) | $5,819 | $5,629 | | Acquisition-related expenses | 732 | — | | Loss related to wire fraud incident | 1,252 | — | | Loss on sales of securities | 1,039 | 454 | | Income tax benefit | (612) | (143) | | Operating net income | $8,230 | $6,205 | | Adjusted earnings per diluted share | $0.47 | $0.35 | Operating Efficiency Ratio Reconciliation | Metric | Q3 2025 | Q3 2024 | | :------------------------ | :------ | :------ | | Efficiency ratio (GAAP) | 75.06% | 72.79% | | Acquisition-related expenses | (1.98)% | — | | Loss related to wire fraud incident | (3.38)% | — | | Loss on sales of securities | (2.81)% | (1.59)% | | Operating efficiency ratio | 66.89% | 70.27% | Supplemental Financial Tables This section presents comprehensive financial tables, including selected information, average balance sheets, segment performance, and consolidated statements, detailing the company's financial position and results Selected Financial Information (Summary) This section provides a summary of key earnings, performance measures, asset quality, and balance sheet actual and average balances for recent quarters, highlighting trends in profitability, efficiency, and asset health Key Earnings and Performance Measures ($ thousands) | Metric | Q3 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | | Net interest income | $22,699 | $18,541 | | Provision for credit losses | 900 | 750 | | Noninterest income | 10,091 | 10,082 | | Noninterest expense | 24,612 | 20,835 | | Net income | $5,819 | $5,629 | Key Performance Ratios | Metric | Q3 2025 | Q3 2024 | | :------------------------ | :------ | :------ | | Diluted EPS | $0.33 | $0.32 | | Adjusted diluted EPS | $0.47 | $0.35 | | Net interest margin | 3.17% | 2.64% | | Operating efficiency ratio | 66.89% | 70.27% | Asset Quality and Balance Sheet Highlights ($ thousands) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | | Total nonperforming assets (NPAs) | $15,236 | $12,495 | | Net loan charge-offs (recoveries) | $1,827 | $139 | | Allowance for credit losses to total loans | 0.89% | 1.04% | | Total assets | $3,152,746 | $3,065,103 | | Loans, net of unearned income | $2,037,056 | $1,886,037 | | Total stockholders' equity | $302,332 | $276,052 | Average Balance Sheet and Net Interest Analysis This analysis details the average balances of interest-earning assets and interest-bearing liabilities, along with their corresponding income, expense, yields, and rates for the three and nine months ended September 30, 2025, compared to the same periods in 2024. It highlights the drivers behind changes in net interest income and net interest margin Average Balance Sheet and Net Interest Analysis (Q3) ($ thousands) | Metric | Q3 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | | Total interest-earning assets (Avg Balances) | $2,864,190 | $2,820,071 | | Total interest income | $37,080 | $34,768 | | Total interest-bearing liabilities (Avg Balances) | $2,349,474 | $2,311,405 | | Total interest expense | $14,193 | $16,063 | | Net interest income | $22,887 | $18,705 | | Net interest margin | 3.17% | 2.64% | Average Balance Sheet and Net Interest Analysis (9M) ($ thousands) | Metric | 9M 2025 | 9M 2024 | | :-------------------------------- | :-------- | :-------- | | Total interest-earning assets (Avg Balances) | $2,899,583 | $2,806,412 | | Total interest income | $109,816 | $101,760 | | Total interest-bearing liabilities (Avg Balances) | $2,380,461 | $2,288,696 | | Total interest expense | $43,216 | $45,646 | | Net interest income | $66,600 | $56,114 | | Net interest margin | 3.07% | 2.67% | Segment Reporting The segment reporting provides a breakdown of financial performance for the Banking, Mortgage Banking, and Small Business Specialty Lending divisions. The Banking Division showed strong growth in net interest income and segment income, while Mortgage Banking experienced a loss in Q3 2025. The SBSL Division saw a decrease in net interest income and segment income year-over-year Banking Division Performance ($ thousands) | Metric | Banking Division Q3 2025 | Banking Division Q3 2024 | | :------------------------ | :----------------------- | :----------------------- | | Net interest income | $21,629 | $17,152 | | Segment income | $5,656 | $3,856 | | Total segment assets | $3,046,699 | $2,955,145 | Mortgage Banking Division Performance ($ thousands) | Metric | Mortgage Banking Division Q3 2025 | Mortgage Banking Division Q3 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Net interest income | $62 | $67 | | Segment income | $(126) | $275 | | Total segment assets | $12,959 | $9,300 | Small Business Specialty Lending Division Performance ($ thousands) | Metric | Small Business Specialty Lending Division Q3 2025 | Small Business Specialty Lending Division Q3 2024 | | :------------------------ | :---------------------------------------- | :---------------------------------------- | | Net interest income | $1,008 | $1,322 | | Segment income | $289 | $1,498 | | Total segment assets | $93,088 | $100,658 | Consolidated Balance Sheets The consolidated balance sheet shows an increase in total assets, loans (net), and total stockholders' equity at September 30, 2025, compared to December 31, 2024. Total deposits also increased, while investment securities (available for sale and held to maturity) decreased Consolidated Balance Sheet Summary ($ thousands) | Asset/Liability/Equity | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | | Total assets | $3,152,746 | $3,109,782 | | Loans, net | $2,018,970 | $1,824,000 | | Total deposits | $2,584,329 | $2,567,943 | | Total liabilities | $2,850,414 | $2,831,107 | | Total stockholders' equity | $302,332 | $278,675 | Consolidated Statements of Income The consolidated statements of income show an increase in net interest income and net income for both the three and nine months ended September 30, 2025, compared to the prior year. Total interest income increased while total interest expense decreased. Noninterest income remained relatively stable, but noninterest expenses rose Consolidated Income Statement (Q3) ($ thousands) | Metric | Q3 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | | Total interest income | $36,892 | $34,604 | | Total interest expense | $14,193 | $16,063 | | Net interest income | $22,699 | $18,541 | | Net income | $5,819 | $5,629 | | Diluted EPS | $0.33 | $0.32 | Consolidated Income Statement (9M) ($ thousands) | Metric | 9M 2025 | 9M 2024 | | :------------------------ | :-------- | :-------- | | Total interest income | $109,252 | $101,250 | | Total interest expense | $43,216 | $45,646 | | Net interest income | $66,036 | $55,604 | | Net income | $20,410 | $16,436 | | Diluted EPS | $1.17 | $0.94 | Quarterly Net Income and EPS ($ thousands) | Metric | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | | :------------------------ | :-------- | :-------- | :-------- | :-------- | :-------- | | Net income | $5,819 | $7,978 | $6,613 | $7,432 | $5,629 | | Diluted EPS | $0.33 | $0.46 | $0.38 | $0.42 | $0.32 | Quarterly Deposits Comparison Quarterly deposit data shows a slight increase in total deposits from Q2 2025 to Q3 2025, primarily driven by a significant increase in 'Other time' deposits and brokered deposits, while interest-bearing demand and savings/money market deposits decreased Deposit Composition by Type ($ thousands) | Deposit Type | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------- | :-------- | :-------- | :-------- | | Noninterest-bearing demand | $442,142 | $434,785 | $439,892 | | Interest-bearing demand | $811,031 | $838,540 | $769,123 | | Savings and money markets | $644,312 | $667,135 | $684,371 | | Time over $250,000 | $192,545 | $193,427 | $198,942 | | Other time | $494,299 | $422,343 | $432,642 | | Total | $2,584,329 | $2,556,230 | $2,524,970 | Deposit Composition by Location ($ thousands) | Location | Q3 2025 | Q2 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | :-------- | | South Georgia | $1,205,891 | $1,203,732 | $1,165,529 | | Brokered deposits | $130,000 | $59,494 | $70,999 | | Reciprocal deposits | $204,039 | $206,011 | $197,460 | Quarterly Loans Comparison Total loans, net of unearned income, continued to grow quarter-over-quarter and year-over-year. Growth was notable in construction, land & land development, residential real estate, and consumer and other loans, particularly in Florida and Marine/RV Lending segments Loan Portfolio Summary ($ thousands) | Loan Type | Q3 2025 | Q2 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | :-------- | | Core | $1,935,648 | $1,887,456 | $1,759,600 | | Purchased | $101,408 | $106,124 | $126,437 | | Loans, net of unearned income | $2,037,056 | $1,993,580 | $1,886,037 | Loan Composition by Type ($ thousands) | Loan Composition | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Construction, land & land development | $240,819 | $238,078 | $196,390 | | Residential real estate | $377,058 | $356,515 | $349,777 | | Consumer and other | $140,921 | $126,966 | $85,015 | Loan Composition by Location ($ thousands) | Location | Q3 2025 | Q2 2025 | Q3 2024 | | :------------------------ | :-------- | :-------- | :-------- | | Florida | $26,061 | $24,562 | $12,280 | | Marine/RV Lending | $88,968 | $75,649 | $45,785 | Classified and Criticized Loans Classified loans decreased slightly quarter-over-quarter but increased year-over-year, with a notable rise in construction, land & land development classified loans. Criticized loans increased both quarter-over-quarter and year-over-year, with significant increases in construction, land & land development and commercial, financial & agricultural categories Classified Loans Summary ($ thousands) | Loan Type | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Construction, land & land development | $1,644 | $126 | $0 | | Commercial, financial & agricultural | $7,947 | $7,071 | $6,005 | | TOTAL Classified Loans | $24,183 | $25,112 | $20,918 | | Classified loans to total loans | 1.19% | 1.26% | 1.11% | Criticized Loans Summary ($ thousands) | Loan Type | Q3 2025 | Q2 2025 | Q3 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | | Construction, land & land development | $14,393 | $2,207 | $4,418 | | Commercial, financial & agricultural | $14,403 | $15,212 | $9,444 | | TOTAL Criticized Loans | $60,505 | $54,814 | $52,062 | | Criticized loans to total loans | 2.97% | 2.75% | 2.76% | Corporate Information and Disclosures This section provides details on the earnings call, company background, cautionary forward-looking statements, and additional information regarding the proposed merger Earnings Call Information Details for the upcoming earnings conference call to discuss Q3 2025 results are provided, including dial-in information and replay availability - An earnings conference call is scheduled for 9:00 a.m. ET on Thursday, October 23, 2025, with a replay available until October 30, 2025[11] About Colony Bankcorp Colony Bankcorp, Inc. is the holding company for Colony Bank, a Georgia-founded institution operating across multiple states, offering a broad range of personal and business banking solutions, including specialized services - Colony Bankcorp, Inc. (NYSE: CBAN) is the bank holding company for Colony Bank, founded in Fitzgerald, Georgia in 1975[12] - The bank operates locations throughout Georgia, as well as in Birmingham, Alabama; Tallahassee, Florida; and the Florida Panhandle[12] - Colony Bank offers a range of banking solutions including mortgage lending, government guaranteed lending, consumer insurance, wealth management, credit cards, and merchant services[12] Forward-Looking Statements This section serves as a cautionary note regarding forward-looking statements, emphasizing that they are not guarantees of future performance and involve inherent risks and uncertainties. It lists various factors that could cause actual results to differ materially, including economic conditions, interest rate changes, regulatory actions, and risks associated with the proposed merger - Statements in the press release that are not historical facts are considered 'forward-looking statements' under federal securities laws[13] - These statements are not guarantees of future performance and involve known and unknown risks and uncertainties, including economic conditions, interest rate changes, and banking industry developments[14] - Specific risks related to the proposed merger with TC Bancshares include the realization of cost savings and synergies, integration challenges, and the ability to obtain necessary approvals[16] - 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, except as required by applicable law[17] Additional Information About the Proposed Merger This section advises investors to review SEC filings, particularly the Form S-4 registration statement and joint proxy statement/prospectus, for comprehensive information regarding the proposed merger with TC Bancshares. It also identifies potential participants in the proxy solicitation - Investors and security holders are urged to read the registration statement on Form S-4, including the joint proxy statement/prospectus, and other relevant documents filed with the SEC concerning the proposed merger[18][19] - Free copies of these documents are available through the SEC's website (www.sec.gov) and on Colony Bankcorp's investor relations website (colony.bank)[19] - Colony, TC Bancshares, and certain of their respective directors and executive officers may be deemed participants in the solicitation of proxies related to the Proposed Merger[20]