Colony Bankcorp, Inc. · NYSE:CBAN
Colony Bankcorp — Q3 2022 Earnings Presentation
28 slides from Colony Bankcorp's earnings presentation, Oct 21, 2022
Slide 1: Investor Presentation Third Quarter 2022
1 INVESTOR PRESENTATION THIRD 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 and Franchise Footprint
4 Colony Banking Branches Colony LPOs Acquired with SouthCrest Financial Group, Inc. merger closed 8/1/2021 Franchise Footprint COMPANY PROFILE Statesboro Savannah Augusta Fayetteville Rochelle Chickamauga DouglasSylvester Rockmart Athens Moultrie Valdosta Quitman Atlanta Cedartown MaconLaGrange Cen
Slide 5: Leadership Team
5 Name Position Years In Banking Years With Colony T. Heath Fountain Chief Executive Officer 21 3 R. Dallis "D" Copeland, Jr. President 30 1 Brian D. Schmitt Executive Vice Chairman 39 1 Edward "Lee" Bagwell EVP, Chief Risk Officer and General Counsel 18 18 Leonard H. "Lenny" Bateman EVP, Chief Cred
Slide 6: Driving High Performance: Strong Organic Growth
6 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year • 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 depo
Slide 7: Driving High Performance: Expansion Opportunities
7 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year • Seize on expansion opportunities • Completed the acquisition of SouthCrest Financial Group, Inc. ("SouthCrest") and the Barnes Agency in August 2021 • One of the best positioned banks to take advantage of highly fractured market s
Slide 8: Proven Track Record of Franchise Enhancement
8 2020 2021 August 2021 Acquired SouthCrest Financial Group, Inc. ($729.71M in assets) February 2020 Acquired East Georgia Homebuilder loan portfolio ($47M in loans) May 2019 Acquired LBC Bancshares ($207M in assets) Acquired PFB Mortgage (>$100M in loan production in 2019) October 2018 Acquired 1 B
Slide 9: Driving High Performance: Increase Operating Efficiency
9 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year • Seize on expansion opportunities • Increase operating efficiency • Cost efficiency initiative with anticipated savings of $3.0 million per year starting in late third quarter 2022 • Closed two branches (Soperton and Luthersville)
Slide 10: Increase Operating Efficiency - Technology
10 DRIVING HIGH PERFORMANCE • Increase operating efficiency - Technology • Recently hired Christian Ruppe as Chief Innovation Officer ◦ Will research and develop all potential technology-based opportunities • Increase customer wallet share through data gathering and analytics ◦ Full implementation o
Slide 11: Increase Non-Interest Income
11 DRIVING HIGH PERFORMANCE • Increase non-interest income • Acquisition of The Barnes Agency completed on August 1, 2021 - formed Colony Insurance to offer consumer insurance solutions • Growing our deposit account customer base increases service charge and interchange revenue • Started a Small Bus
Slide 12: Path to High Performance
12 PATH TO HIGH PERFORMANCE 3 YEAR ROA GOAL OF 1.20% DECEMBER 31, 2024 • 3Q2022 ROA = 0.75% • Adverse impacts to 3Q2022 ROA ◦ Provision driven by above budget loan growth ▪ Assuming 10% annualized loan growth and similar NCOs, additional provision is approximately $960,000 ◦ 3Q2022 Pre-tax investmen
Slide 13: Small Business Specialty Lending Group
13 SMALL BUSINESS SPECIALTY LENDING GROUP Production and Sales Volume $26,060 $41,645 $5,756 $20,977 $19,358 $12,860 $24,236 $13,526 $18,219 $14,844 Production Sales 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 $— $10,000 $20,000 $30,000 $40,000 $50,000 (Dollars in thousands)
Slide 14: Mortgage Division
14 • Increased volume capacity in Mortgage division production: • $405.0 million in production in 2021 • $97.2 million production in first quarter 2022 • $113.7 million production in second quarter 2022 • $99.4 million production in third quarter 2022 • Added purchase-focused, experienced originatio
Slide 15: Create a Culture of High Performance
15 DRIVING HIGH PERFORMANCE • Increase non-interest income •Create a culture of high performance • Instill behaviors and habits that lead to great results • Coaching team members to improve performance • Increase incentive and performance based compensation • Pursue open communication and honest fee
Slide 16: Value Proposition to Our Customers
16 • 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 giv
Slide 17: Annual Financial Highlights
17 2017 2018 2019 2020 2021 Diluted earnings per share $ 0.87 $ 1.40 $ 1.12 $ 1.24 $ 1.66 Dividends per share $ 0.10 $ 0.20 $ 0.30 $ 0.40 $ 0.41 Return on average assets 0.63 % 0.99 % 0.72 % 0.7 % 0.89 % Return on average total equity 8.28 % 13.32 % 8.72 % 8.56 % 10.6 % Net interest margin 3.46 % 3.
Slide 18: Financial Highlights
18 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 Diluted earnings per share $ 0.45 $ 0.30 $ 0.34 $ 0.19 $ 0.30 Adjusted earnings per diluted share (1) 0.57 0.40 0.37 0.30 0.30 Dividends per share 0.1025 0.1025 0.1075 0.1075 0.1075 Return on average assets 1.00% 0.64% 0.81 % 0.51 % 0.75 % Return on average tota
Slide 19: Annual Balance Sheet Financial Highlights
19 2017 2018 2019 2020 2021 Total assets $1,232.8 $1,251.9 $1,515.3 $1,763.9 $2,691.7 Loans 765.3 782.4 971.2 1,062.8 1,339.4 Unearned income (0.5) (0.5) (0.6) (2.4) (0.4) Unamortized discount on acquired loans — (0.3) (1.7) (0.9) (1.0) Allowance for loan losses (7.5) (7.3) (6.9) (12.1) (12.9) Total
Slide 20: Balance Sheet Financial Highlights
20 3Q2021 4Q2021 1Q2022 2Q2022 3Q2022 Total assets $2,512.6 $2,691.7 $2,686.8 $2,728.4 $2,805.9 Loans 1,311.9 1,339.4 1,354.2 1,452.8 1,586.6 (Unearned income)/ Deferred Costs (0.9) (0.4) 0.6 0.6 0.4 Unamortized discount on acquired loans (1.1) (1.0) (0.8) (0.6) (0.5) Allowance for loan losses (12.9
Slide 21: Shareholder Focused Dividend Policy
21 The current indicated annual rate is $0.43 per share, equating to a yield of 3.0%.(2) SHAREHOLDER FOCUSED DIVIDEND POLICY (1) The Board of Directors declared a dividend to be paid on its common stock on November 18, 2022, to shareholders of record as of the close of business on November 4, 2022.
Slide 22: Capital Ratios
22 CAPITAL RATIOS 9.0% 9.6% 7.5% 8.5% 9.3% 12.5% 14.3% 11.9% 12.1% 13.0%13.2% 15.4% 12.7% 12.9% 15.8% 10.3% 10.3% 10.5% 10.6% 11.8% Tier One Leverage Ratio Tier One Ratio Total Risk-based Capital Ratio Common Equity Tier One Capital Ratio 2019 2020 2021 09/30/21 9/30/2022
Slide 23: Solid Core Deposit Franchise
23 SOLID CORE DEPOSIT FRANCHISE As of September 30, 2022 Total Deposits: $2.4 billion MRQ Cost of Deposits: 0.20% Interest Bearing Demand, 34% Noninterest bearing demand, 23% Time deposits, 17% Savings and Money- markets, 26%
Slide 24: Loan Portfolio Breakdown
24 LOAN PORTFOLIO BREAKDOWN As of September 30, 2022 $1,586.6 million Real Estate 84% Consumer and Other 1.1% Commercial 13% Agriculture 1.8% $1,362.7 million Multifamily real estate 4% Residential real estate 18% Construction 17% Farmland 4% Nonowner occupied real estate 34% Owner occupied real est
Slide 25: Loan Portfolio
25 LOAN PORTFOLIO (Dollars in millions) Organic Loan Growth $1,310 $1,338 $1,354 $1,453 $1,587 Organic PPP Loans Purchased Loans 09/30/21 12/31/2021 03/31/2022 06/30/2022 09/30/2022 $0 $500 $1,000 $1,500 $2,000
Slide 26: Investment Considerations
26 • Premier Georgia community bank franchise •Well positioned for organic growth • Improving earnings outlook • Significant M&A opportunities and market dislocation • Seasoned leadership with a proven track record INVESTMENT CONSIDERATIONS
Slide 27: Reconciliation of Non-GAAP Measures
27 RECONCILIATION OF NON-GAAP MEASURES (Dollars in thousands, except per share data) 2022 2021 Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Operating net income reconciliation Net income (GAAP) 5,252 3,415 5,324 4,160 5,583 FHLB mark from called borrowings — — — — — Severa
Slide 28: Colony Bankcorp, Inc.
st COLONY BANKCORP, INC. Right here with Hou. NASDAQ: CBAN