Colony Bankcorp, Inc. reported financial results for the third quarter of 2024. Financial highlights are shown below.

Financial Highlights:

• Net income increased to $5.6 million, or $0.32 per diluted share, for the third quarter of 2024, compared to $5.5 million, or $0.31 per diluted share, for the second quarter of 2024, and decreased as compared to $5.8 million, or $0.33 per diluted share, for the third quarter of 2023.

• Operating net income increased to $6.2 million, or $0.35 of adjusted earnings per diluted share, for the third quarter of 2024, compared to $6.0 million, or $0.34 of adjusted earnings per diluted share, for the second quarter of 2024, and $6.0 million, or $0.34 of adjusted earnings per diluted share, for the third quarter of 2023. (See Reconciliation of Non-GAAP Measures).

• Provision for credit losses of $750,000 was recorded in third quarter of 2024 compared to $650,000 in second quarter of 2024, and $1.0 million in third quarter of 2023.

• Total loans were $1.89 billion at September 30, 2024, an increase of $20.5 million, or 1.10%, from the prior quarter.

• Total deposits were $2.52 billion and $2.46 billion at September 30, 2024 and June 30, 2024, respectively, an increase of $64.7 million.

• Mortgage production was $66.6 million, and mortgage sales totaled $57.8 million in the third quarter of 2024 compared to $65.1 million and $45.2 million, respectively, for the second quarter of 2024.

• Small Business Specialty Lending (“SBSL”) closed $30.1 million in Small Business Administration (“SBA”) loans and sold $27.2 million in SBA loans in the third quarter of 2024 compared to $25.8 million and $27.0 million, respectively, for the second quarter of 2024.

The Company also announced that on October 23, 2024, the Board of Directors declared a quarterly cash dividend of $0.1125 per share, to be paid on its common stock on November 20, 2024, to shareholders of record as of the close of business on November 6, 2024. The Company had 17,554,884 shares of its common stock outstanding as of October 21, 2024.

“We are pleased with the improvement in operating results during the third quarter of 2024 and to see the continued progression in the performance of our complementary business lines alongside ongoing efficiency and expense discipline. We are also excited about our new digital banking platform rollout that occurred during the quarter. This enhanced platform will provide our customers with a state-of-the-art online banking experience which we believe will enable us to deliver solutions for all our customer’s needs in today’s digital environment,” said Heath Fountain, Chief Executive Officer.

"We had anticipated margin expansion in the second half of the year, but it did not materialize in the third quarter of 2024. However, we are pleased to report increased net interest income this quarter, and we believe that the margin has now reached its lowest point. We are optimistic about seeing improvement going forward as changes in the rate environment and easing from the Federal Reserve have allowed us to relieve pressure on our funding costs.”

“Loan growth picked up slightly in the third quarter and overall asset quality remains strong. Our pipelines for both loans and deposits remain strong and our team has done a fantastic job of continuing to grow and build customer relationships.”

Balance Sheet

• Total assets were $3.07 billion at September 30, 2024, an increase of $57.2 million from June 30, 2024.

• Total loans, including loans held for sale, were at $1.91 billion at September 30, 2024, an increase of $8.1 million from the quarter ended June 30, 2024.

• Total deposits were $2.52 billion and $2.46 billion at September 30, 2024 and June 30, 2024, respectively, an increase of $64.7 million. Savings and money market deposits increased $13.5 million and time deposits increased $67.3 million which were partially offset by a decrease in interest bearing demand deposits of $18.3 million from June 30, 2024 to September 30, 2024.

• Total borrowings at September 30, 2024 totaled $248.0 million, a decrease of $20.0 million or, 7.5%, compared to June 30, 2024, 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.”

• Under the Company’s approved stock repurchase program, a total of 35,000 shares of Company common stock were repurchased during the third quarter of 2024 at an average price of $15.02 per share and a total value of $525,817 thousand.

• Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.51%, 13.66%, 16.48%, and 12.51%, respectively, at September 30, 2024.

Third Quarter and September 30, 2024 Year to Date Results of Operations

• Net interest income, on a tax-equivalent basis, totaled $18.7 million for the third quarter ended September 30, 2024 compared to $19.8 million for the same period in 2023. Net interest income, on a tax-equivalent basis, for the nine months ended September 30, 2024 totaled $56.1 million, compared to $59.9 million for the nine months ended September 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 $2.0 million, to $34.8 million for the third quarter of 2024 compared to the respective period in 2023. Expense on interest bearing liabilities increased $3.1 million, to $16.1 million for the third quarter of 2024 compared to the respective period in 2023. Income on interest earning assets increased $9.5 million to $101.8 million for the nine month period ended September 30, 2024 compared to the respective period in 2023. Expense on interest bearing liabilities increased $13.3 million, to $45.6 million for the nine month period ended September 30, 2024 compared to the respective period in 2023.

• Net interest margin for the third quarter of 2024 was 2.64% compared to 2.78% for the third quarter of 2023. Net interest margin was 2.67% for the nine months ended September 30, 2024 compared to 2.87% for the nine months ended September 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 $10.1 million for the third quarter ended September 30, 2024, an increase of $364,000, or 3.75%, compared to the same period in 2023. Noninterest income totaled $29.1 million for the nine months ended September 30, 2024, an increase of $2.7 million, or 10.39%, 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 merchant and wealth advisory services which is included in other noninterest income, which were partially offset by decreases in interchange fee income and losses on the sales of investment securities.

• Noninterest expense totaled $20.8 million for the third quarter ended September 30, 2024, compared to $20.9 million for the same period in 2023. Noninterest expense totaled $61.6 million for the nine months ended September 30, 2024, compared to $63.5 million for the same period in 2023. The decrease for the third quarter ended September 30, 2024 was primarily related to decreases in loan related expenses and miscellaneous other losses. The decrease for the nine months ended September 30, 2024 was a result of the decrease 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 $12.5 million and $7.3 million at September 30, 2024 and June 30, 2024, respectively, an increase of $5.2 million.

• Other real estate owned and repossessed assets totaled $236,000 at September 30, 2024 and $595,000 at June 30, 2024.

• Net loans charged-off were $139,000, or 0.03% of average loans for the third quarter of 2024, compared to $667,000 or 0.14% for the second quarter of 2024.

• The credit loss reserve was $19.7 million, or 1.04% of total loans, at September 30, 2024, compared to $18.8 million, or 1.01% of total loans at June 30, 2024.