Colony Bankcorp, Inc. · NYSE:CBAN
Colony Bankcorp — Q4 2022 Earnings Presentation
38 slides from Colony Bankcorp's earnings presentation, Jan 26, 2023
Slide 1: Investor Presentation Fourth Quarter 2022
1 INVESTOR PRESENTATION FOURTH QUARTER - 2022
Slide 2: Forward-looking statements
2 This presentation contains "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 Colony Ba
Slide 3: Non-GAAP financial measures
3 Statements included in this presentation include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measure to GAAP financial measures. The non-GAAP financial measures used in this presentation include the followi
Slide 4: Company Profile
4 Colony Banking Branches Colony LPOs Franchise Footprint COMPANY PROFILE Statesboro Savannah Augusta Fayetteville Rochelle Chickamauga DouglasSylvester Rockmart Athens Moultrie Valdosta Quitman Atlanta Cedartown MaconLaGrange CentervilleThomaston Columbus WarnerRobins Manchester ◦ Founded in 1975 ◦
Slide 5: Value Proposition to Our Customers
5 • Since our founding in 1975, our mission is to provide an alternative to traditional banking that our customers deserve • Focus on relationships that are beneficial to the customer and the Bank – one-sided relationships and transactions do not create value • Strive to be trusted advisors and give
Slide 6: Executive Leadership Team
6 Name Position Years In Banking Years With Colony T. Heath Fountain Chief Executive Officer, Acting Chief Financial Officer 22 4 R. Dallis "D" Copeland, Jr. President 30 1 Brian D. Schmitt Executive Vice Chairman 40 1 Edward "Lee" Bagwell EVP, Chief Risk Officer and General Counsel 19 19 Leonard H.
Slide 7: Recent Management Additions
7 RECENT MANAGEMENT ADDITIONS • Added significant depth to our bank management ◦ Ed Canup, Chief Revenue Officer (November 2022) ◦ Barry Blevins, Treasury Solutions Manager (October 2022) ◦ Christian Ruppe, Chief Innovation Officer (August 2022) ◦ Market executives ▪ Statesboro (September 2022) ▪ Bi
Slide 8: Franchise Enhancement Track Record
8 $1,251.9 $1,515.3 $1,763.9 $2,691.7 $2,936.6 2018 2019 2020 2021 2022 2018 – 2022 Total Assets (Dollars in millions) FRANCHISE ENHANCEMENT TRACK RECORD $1,232,755 $1,251,878 $1,515,313 2,691,715 5-Year CAGR : 18.6% Acquired East Georgia Homebuilder loan portfolio ($47M in loans) Acquired SouthCres
Slide 9: Driving High Performance
9 DRIVING HIGH PERFORMANCE •Achieve strong organic growth • Proactive business development system • Increased accountability for loan and deposit production • Created incentive plans to motivate bankers • Retail marketing plan to grow deposits • Streamlined our consumer and commercial deposits produ
Slide 10: Driving High Performance
10 DRIVING HIGH PERFORMANCE •Achieve strong organic growth • Increase noninterest income • Hired an experienced Chief Revenue Officer to focus on profitably growing the bank's ancillary lines of business • Shift mortgage production back to the secondary market as the rate environment has improved •
Slide 11: Driving High Performance
11 DRIVING HIGH PERFORMANCE • Focus on internal opportunities • Driving internal referrals through bankwide incentive plans • Utilize CRM system to leverage core customer base • Focus on profitability of business units as revenue increases • Capture operating efficiencies from technology investments
Slide 12: Path to High Performance
12 PATH TO HIGH PERFORMANCE • 4Q2022 ROA = 0.77% • Adverse impacts to 4Q2022 ROA ◦ Provision driven by above targeted loan growth ▪ Assuming 10% annualized loan growth and similar NCOs, additional provision is approximately $500,000 - 0.06% impact to ROA ◦ 4Q2022 pre-tax investment in recently added
Slide 13: Path to High Performance
13 PATH TO HIGH PERFORMANCE (Dollars in thousands) Segment Profit Consolidated QTD Net Income Banking SBSL Mortgage 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $(1,000) $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
Slide 14: Path to High Performance: Startup Lines of Business
14 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 Pre-tax loss Alabama LPO $ (22) $ (41) $ (139) $ (298) $ (304) Marine/RV Lending — — (13) (70) (109) Merchant (42) (91) (120) (141) (130) TOTAL $ (64) $ (132) $ (272) $ (509) $ (543) PATH TO HIGH PERFORMANCE (Dollars in thousands) STARTUP LINES OF BUSINESS
Slide 15: Small Business Specialty Lending Group
15 SMALL BUSINESS SPECIALTY LENDING GROUP $41.6 $5.8 $21.0 $19.4 $29.0 $24.2 $13.5 $18.2 $14.8 $18.0 Production Sales 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $— $10.0 $20.0 $30.0 $40.0 $50.0 (Dollars in millions) Production and Sales Volume
Slide 16: Mortgage Division
16 MORTGAGE DIVISION Production and Sales Volume $99.5 $97.2 $113.7 $99.4 $92.6$92.5 $91.2 $82.3 $68.5 $38.1 Production Sales 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 $— $25.0 $50.0 $75.0 $100.0 $125.0 (Dollars in millions)
Slide 17: Mortgage Division
17 •Mortgage production remained strong despite the challenging rate environment • $405.0 million in production in 2021 • $402.9 million in production in 2022 • $92.6 million in production in fourth quarter 2022 • Recruited a mortgage origination team in Birmingham in the fourth quarter • Added seas
Slide 18: Technology Strategy
18 TECHNOLOGY STRATEGY • Recently hired Christian Ruppe as Chief Innovation Officer ◦ Improving the digital customer experience ◦ Research and develop all potential technology-based opportunities • Increase customer wallet share through data gathering and analytics ◦ Full implementation of Salesforc
Slide 19: Financial Highlights
19 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 Diluted earnings per share $ 0.30 $ 0.34 $ 0.19 $ 0.30 $ 0.31 Adjusted earnings per diluted share (1) 0.40 0.37 0.30 0.30 $ 0.31 Dividends per share 0.1025 0.1075 0.1075 0.1075 0.1075 Return on average assets 0.64% 0.81 % 0.51 % 0.75 % 0.77 % Return on average t
Slide 20: Annual Financial Highlights
20 2018 2019 2020 2021 2022 Diluted earnings per share $ 1.40 $ 1.12 $ 1.24 $ 1.66 $ 1.14 Dividends per share $ 0.20 $ 0.30 $ 0.40 $ 0.41 $ 0.43 Return on average assets 0.99 % 0.72 % 0.70 % 0.89 % 0.71 % Return on average total equity 13.32 % 8.72 % 8.56 % 10.60 % 8.27 % Net interest margin 3.56 %
Slide 21: Balance Sheet Financial Highlights
21 4Q2021 1Q2022 2Q2022 3Q2022 4Q2022 Total assets $ 2,691.7 $ 2,686.8 $ 2,728.4 $ 2,805.9 $ 2,936.6 Loans 1,339.4 1,354.2 1,452.8 1,586.6 1,737.4 (Unearned income)/ deferred cost (0.4) 0.6 0.6 0.4 0.2 Unamortized discount on acquired loans (1.0) (0.8) (0.6) (0.5) (0.5) Allowance for loan losses (12
Slide 22: Balance Sheet Financial Highlights Annual
22 2018 2019 2020 2021 2022 Total assets $ 1,251.9 $ 1,515.3 $ 1,763.9 $ 2,691.7 $ 2,936.6 Loans 782.4 971.2 1,062.8 1,339.4 1,737.4 (Unearned income)/ deferred cost (0.5) (0.6) (2.4) (0.4) 0.2 Unamortized discount on acquired loans (0.3) (1.7) (0.9) (1.0) (0.5) Allowance for loan losses (7.3) (6.9)
Slide 23: Shareholder Focused Dividend Policy
23 The current indicated annual rate is $0.44 per share, equating to a yield of 3.4%.(2) SHAREHOLDER FOCUSED DIVIDEND POLICY (1) The Board of Directors declared a dividend to be paid on its common stock on February 23, 2023, to shareholders of record as of the close of business on February 9, 2023.
Slide 24: Capital Ratios
24 CAPITAL RATIOS 10.2% 9.0% 9.6% 7.5% 9.2% 15.0% 12.5% 14.3% 11.9% 12.5% 15.9% 13.2% 15.4% 12.7% 15.2% 12.2% 10.3% 10.3% 10.5% 11.4% Tier One Leverage Ratio Tier One Ratio Total Risk-based Capital Ratio Common Equity Tier One Capital Ratio 2018 2019 2020 2021 2022
Slide 25: Solid Core Deposit Franchise
25 SOLID CORE DEPOSIT FRANCHISE As of December 31, 2022 Total Deposits: $2.5 billion MRQ Cost of Interest Bearing Deposits: 0.67% Interest Bearing Demand, 33% Noninterest bearing demand, 23% Time deposits, 19% Savings and Money- markets, 25%
Slide 26: Loan Portfolio Breakdown
26 LOAN PORTFOLIO BREAKDOWN As of December 31, 2022 $1,737.1 million Real Estate 86% Consumer and Other 1.0% Commercial 12% Agriculture 1.3% $1,492.9 million Multifamily real estate 4% Residential real estate 20% Construction 16% Farmland 4% Nonowner occupied real estate 34% Owner occupied real esta
Slide 27: Loan Portfolio
27 LOAN PORTFOLIO (Dollars in millions) Organic Loan Growth $1,338 $1,354 $1,453 $1,587 $1,737 Organic Purchased Loans 12/31/2021 03/31/2022 06/30/2022 09/30/2022 12/31/2022 $— $500 $1,000 $1,500 $2,000
Slide 28: Loan Portfolio: Commercial Real Estate Production
28 LOAN PORTFOLIO (Dollars in millions) Commercial Real Estate Production $25.7 $33.4 $47.2 $60.5 $39.3 $25.2 $77.9 $36.9$34.7 $72.9 $80.6 $57.0 Residential Construction Commercial, Construction and Development Permanent NOO CRE 1Q2022 2Q2022 3Q2022 4Q2022 $0 $50 $100 $150 $200 $250 Represents total
Slide 29: Loan Portfolio: Residential Construction Loan Commitments
29 LOAN PORTFOLIO (Dollars in millions) Residential Construction Loan Commitments by Quarter $6.9 $9.5 $16.6 $26.0 $18.8 $23.8 $30.6 $34.5 Consumer as of 12/31/22 Commercial as of 12/31/22 1Q2022 ORIGINATIONS 2Q2022 ORIGINATIONS 3Q2022 ORIGINATIONS 4Q2022 ORIGINATIONS $0 $10 $20 $30 $40 $50 $60
Slide 30: Loan Portfolio: Weighted Average Loan to Values
30 LOAN PORTFOLIO Weighted Average Loan to Values 70.81% 71.78% 74.10% 72.69% 58.52% 53.81% 46.63% 57.50% Residential Construction Non Owner Occupied Commercial Real Estate 1Q2022 2Q2022 3Q2022 4Q2022 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%
Slide 31: Investment Securities Portfolio Composition
31 Investment Securities Description Book Value Percentage U.S. Agency MBS/CMO $ 382,481 39 % Municipal 275,139 28 % Private Label MBS 122,119 12 % U.S. Treasuries 98,229 10 % Corporates 54,741 6 % SBA and Asset-Backed Securities 34,503 4 % U.S. Government Agencies 17,719 2 % (Dollars in thousands)
Slide 32: Investment Securities Portfolio Metrics
32 Investment Securities As of: Average Life Effective Duration Book Yield 12/31/2021 6.53 5.61 1.87% 3/31/2022 7.31 5.67 2.02% 6/30/2022 8.05 5.95 2.27% 9/30/2022 8.39 5.76 2.47% 12/31/2022 8.10 5.64 2.56% Other Portfolio Metrics AFS/HTM Available for Sale HTM Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 202
Slide 33: Unrealized Losses on AFS Securities
33 Investment Securities (Dollars in millions) $0.87 $6.54 $10.15 $30.95 $44.25 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $— $10.00 $20.00 $30.00 $40.00 $50.00 Unrealized Losses on AFS Securities Greater than 12 months
Slide 34: Municipal Securities
34 Investment Securities (Dollars in thousands) With a rating of at least: Number of Securities Book Value Market Value (HTM and AFS) Unrealized Loss AAA/Aaa 42 $ 61,508 $ 48,866 $ (12,642) AA+/Aa1 57 73,981 59,680 (14,301) AA/Aa2 39 79,577 63,719 (15,858) AA-/Aa3 32 59,167 48,328 (10,839) A+/A1 1 6
Slide 35: Private Label MBS and Corporate Securities
35 Investment Securities (Dollars in thousands) Rating: Number of Securities Book Value Market Value Unrealized Loss AAA 23 $ 85,099 $ 72,796 $ (12,303) NR 16 37,020 35,821 (1,199) TOTAL 39 $ 122,119 $ 108,617 $ (13,151) Private Label MBS December 31, 2022 Type Book Value Market Value Unrealized Los
Slide 36: Investment Considerations
36 • Premier Georgia community bank franchise • Focus on growing the core deposit base • Improving earnings outlook as new business lines mature • Upside to tangible book value as unrealized losses improve • Deep leadership bench with a proven track record • Ability to manage expenses in an uncertai
Slide 37: Reconciliation of Non-GAAP Measures
37 RECONCILIATION OF NON-GAAP MEASURES (Dollars in thousands, except per share data) 2022 2021 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Operating net income reconciliation Net income (GAAP) 5,551 5,252 3,415 5,324 4,160 FHLB mark from called borrowings — — 751 — — Sev
Slide 38: Colony Bankcorp, Inc.
st COLONY BANKCORP, INC. Right here with Hou. NASDAQ: CBAN