Colony Bankcorp Reports First Quarter 2025 Results

Declares Quarterly Cash Dividend of $0.1150 Per Share

Colony Bankcorp, Inc. (NYSE:CBAN) ("Colony" or the "Company") today reported financial results for the first quarter of 2025. Financial highlights are shown below.

Financial Highlights:

• Net income was $6.6 million, or $0.38 per diluted share, for the first quarter of 2025, compared to $7.4 million, or $0.42 per diluted share, for the fourth quarter of 2024, and $5.3 million, or $0.30 per diluted share, for the first quarter of 2024.

• Operating net income was $6.6 million, or $0.38 of adjusted earnings per diluted share, for the first quarter of 2025, compared to $7.8 million, or $0.44 of adjusted earnings per diluted share, for the fourth quarter of 2024, and $5.8 million, or $0.33 of adjusted earnings per diluted share, for the first quarter of 2024. (See Reconciliation of Non-GAAP Measures).

• Provision for credit losses of $1.5 million was recorded in first quarter of 2025 compared to $650,000 in fourth quarter of 2024, and $1.0 million in first quarter of 2024.

• Total loans, excluding loans held for sale, were $1.92 billion at March 31, 2025, an increase of $78.3 million, or 4.25%, from the prior quarter.

• Total deposits were $2.62 billion and $2.57 billion at March 31, 2025 and December 31, 2024, respectively, an increase of $54.6 million.

• Mortgage production was $72.0 million, and mortgage sales totaled $55.9 million in the first quarter of 2025 compared to $76.9 million and $51.4 million, respectively, for the fourth quarter of 2024.

• Small Business Specialty Lending ("SBSL") closed $15.4 million in Small Business Administration ("SBA") loans and sold $12.1 million in SBA loans in the first quarter of 2025 compared to $22.2 million and $30.0 million, respectively, for the fourth quarter of 2024.

The Company also announced that on April 23, 2025, the Board of Directors declared a quarterly cash dividend of $0.1150 per share, to be paid on its common stock on May 21, 2025, to shareholders of record as of the close of business on May 7, 2025. The Company had 17,481,709 shares of its common stock outstanding as of April 21, 2025.

"We are pleased to report strong financial results for the first quarter along with continued improvement in our margin and better than expected loan growth. We also had a great quarter for low cost deposit growth which contributed to a lower cost of funds as we continue building customer deposit relationships. We believe our growth in both loans and deposits in the first quarter sets a solid foundation for us to perform well in the future." said Heath Fountain, Chief Executive Officer.

"Noninterest income came in lighter during the first quarter, which is consistent with the seasonal trends we typically see early in the year. This is a normal pattern for our business, and we remain optimistic in our outlook, expecting revenue to strengthen in the coming quarters as seasonal activity picks up. We are also excited about the acquisition of the Ellerbee Agency, which was announced and closed in April, and look forward to their success as part of Colony Insurance."

"While recent market volatility has created a more dynamic environment, we remain confident in the strength and resilience of our operations, as well as those of our customers. Our long-term fundamentals are solid, we continue to make progress on strategic initiatives and we are well-positioned to navigate changing market conditions."

Balance Sheet

• Total assets were $3.17 billion at March 31, 2025, an increase of $62.0 million from December 31, 2024.

• Total loans, excluding loans held for sale, were at $1.92 billion at March 31, 2025, an increase of $78.3 million from the quarter ended December 31, 2024.

• Total deposits were $2.62 billion and $2.57 billion at March 31, 2025 and December 31, 2024, respectively, an increase of $54.6 million. Increases were seen in interest bearing demand deposits of $59.4 million, savings and money market deposits of $1.8 million and time deposits of $5.8 million, from December 31, 2024 to March 31, 2025.

• Total borrowings at March 31, 2025 totaled $248.1 million, an increase of $23,000 compared to December 31, 2024, related to a minimal increase in other borrowed money.

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 38,307 shares of Company common stock were repurchased during the first quarter of 2025 at an average price of $16.45 per share and a total value of $629,983.

• Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.43%, 13.75%, 16.52%, and 12.62%, respectively, at March 31, 2025.

First Quarter 2025 Results of Operations

• Net interest income, on a tax-equivalent basis, totaled $21.1 million for the first quarter ended March 31, 2025 compared to $18.8 million for the same period in 2024. Income on interest earning assets increased while expenses on interest bearing liabilities decreased slightly due to the decrease in rates in the latter part of 2024. Income on interest earning assets increased $2.2 million, to $35.7 million for the first quarter of 2025 compared to the respective period in 2024. Expense on interest bearing liabilities decreased $83,143, to $14.6 million for the first quarter of 2025 compared to the respective period in 2024.

• Net interest margin for the first quarter of 2025 was 2.93% compared to 2.69% for the first quarter of 2024. This increase was primarily related to an increase in interest earning assets and period over period, partially offset by the rate decreases in interest bearing liabilities.

• Noninterest income totaled $9.0 million for the first quarter ended March 31, 2025, a decrease of $443,000, or 4.67%, compared to the same period in 2024. This decrease was primarily related to decreases 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 increases in mortgage fee income and decreases on losses on the sales of investment securities.

• Noninterest expense totaled $20.2 million for the first quarter ended March 31, 2025, compared to $20.4 million for the same period in 2024. This slight decrease was a result of decreases in salaries and employee benefits, professional fees and advertising and public relations expenses partially offset by increases in occupancy and equipment and information technology expenses.

Asset Quality

• Nonperforming assets totaled $13.0 million and $11.3 million at March 31, 2025 and December 31, 2024, respectively, an increase of $1.7 million.

• Other real estate owned and repossessed assets totaled $528,000 at March 31, 2025 and $530,000 at December 31, 2024.

• Net loans charged-off were $606,000, or 0.13% of average loans for the first quarter of 2025, compared to $1.5 million or 0.33% for the fourth quarter of 2024.

• The credit loss reserve was $20.0 million, or 1.04% of total loans, at March 31, 2025, compared to $19.0 million, or 1.03% of total loans at December 31, 2024.

Earnings call information

The Company will host an earnings conference call at 9:00 a.m. ET on Thursday, April 24, 2025, to discuss the recent results and answer appropriate questions. The conference call can be accessed by dialing 1-800-549-8228 and using the Conference ID: 68027. A replay of the call will be available until Thursday, May 1, 2025. To listen to the replay, dial 1-888-660-6264 and entering the passcode 68027#.

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 as well as in Birmingham, Alabama; Tallahassee, Florida; and the Florida Panhandle. Colony Bank offers a range of banking solutions for personal and business customers. In addition to traditional banking services, Colony provides specialized solutions including mortgage lending, government guaranteed lending, consumer insurance, wealth management, credit cards and merchant services. Colony's common stock is traded on the New York Stock Exchange ("NYSE") 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 future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, tariffs or trade wars (including the resulting reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), high unemployment rates, inflationary pressures, changes in 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 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; general risks related to the Company's merger and acquisition activity, including risks associated with integrating and realizing the expected financial benefits of previous acquisitions, and 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, 2024, 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.