Colony Bankcorp, Inc. Stock price
Is Colony Bankcorp, Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $433.97m | Revenue (TTM) = $151.62m
Market Cap = $433.97m | Estimated Revenue = $169.93m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $497.15m | Revenue (TTM) = $151.62m
Enterprise Value = $497.15m | Forward Revenue = $169.93m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Colony Bankcorp, Inc. Stock Analysis
Analyst Opinions
8 Analysts have issued a Colony Bankcorp, Inc. forecast:
Analyst Opinions
8 Analysts have issued a Colony Bankcorp, Inc. forecast:
Colony Bankcorp, Inc. Events
Upcoming Event
Past Events
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JUL
23
Q2 2026 Earnings Call
2 months ago
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APR
23
Q1 2026 Earnings Call
6 months ago
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JAN
29
Q4 2025 Earnings Call
8 months ago
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OCT
23
Q3 2025 Earnings Call
12 months ago
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StocksGuide Free
Colony Bankcorp, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Thank you for standing by. My name is Prilla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Colony Bank Second Quarter 2026 Conference Call. [Operator Instructions]
I would now like to turn the conference over to Brantley Collins, Communications Manager. You may begin.
Thanks, Prilla. Before we get started, I would like to go through our standard disclosures. Certain statements we make on this call could be constituted as forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Current and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance but involve known and unknown risks and uncertainties. Factors that could cause these differences include, but are not limited to, pandemics, variations of the company's assets, businesses, cash flows, financial condition, prospects and other results of operations.
Additional cautionary statements related to the First Reliance merger are located in our merger press release, merger investor presentation and SEC filings, all of which are available on our website. I would also like to add that during our call today, we will reference our second quarter earnings release and investor presentation, which were both filed yesterday, so please have those available to reference.
Turn the call over to our Chief Executive Officer, Heath Fountain.
Thanks, Brantley, and thank you to everyone for joining our second quarter earnings call today. We are pleased to report continued improvement in our financial performance for the quarter, and I'm proud of our team members for all the work they are doing to help us achieve our objectives.
A major highlight from the quarter was the announcement of our partnership with First Reliance Bank. Integration planning is already well underway with both management teams working closely together to ensure we remain on track for a legal close in the fourth quarter. On the regulatory front, our merger applications have been submitted, and we expect to file the S-4 in the near future.
The second quarter also marked our first full period of performance following the successful TC Federal systems conversion and customer integration in Q1. Our expectation was to achieve a 1.20% operating ROA after fully realizing our targeted cost saves, and we were able to hit that 1.20% operating ROA this quarter. We believe this puts us in a good position to improve on that operating ROA going forward. Operating net income increased over $1.5 million from last quarter. The primary drivers of the increase were continued margin expansion, improved operating noninterest income as well as decreased operating noninterest expense.
Loan growth during the quarter was about 8.5% annualized as we saw an increase in production compared to the first quarter. This brings us up to 7% annualized loan growth year-to-date. The weighted average pricing on new and renewed loans remained steady, actually increasing slightly from the first quarter as we keep pricing discipline a priority. I'm proud of our team's efforts on pricing, which is one of the key factors that drives our continued margin growth.
The lending environment is competitive and a rising rate outlook has resulted in some softening pipeline. While we previously expected loan growth to track towards the lower end of our 8% to 12% target, our commitment to disciplined pricing and strong underwriting standards means near-term growth could land slightly below our 8% threshold. We believe in the short-term that achieving our financial objectives is important and achieving organic growth near the low end of our range helps us achieve our long-term financial goals rather than growing in a way that puts pressure on our financial performance or diminishes the strength of our balance sheet. We saw a slight decline in total deposits this quarter. While this is a normal seasonal trend for us, the deposit landscape across our footprint does remain competitive. We have managed to maintain a steady cost of funds and our team members continue to focus on building deposit-first relationships with a focus on operating accounts and primary consumer account relationships.
Operating noninterest income increased by about $950,000 from the first quarter, which was led by increased revenue from many of our business lines and operating noninterest expense declined more than $500,000. Our SBSL division had improvement on a pretax basis, as shown on Slide 19. However, we still have a lot of opportunity for more improvement and expect that to start to show over the next few quarters. In addition to finding the right partners to grow with through M&A, organic growth is also a key part of our long-term strategy. We operate in some of the best markets in the Southeast, and we'll continue to focus on growth across our existing footprint. Our upcoming merger with First Reliance will add even more markets that are ideally suited for organic growth.
During the quarter, we added several experienced bankers to our team that will help us continue our focus on organic growth. In our Columbus market, we added Colby Cardin as a private banker. In our Douglas market, we added Lee Taylor as Market President. In our Savannah market, we added Phillip Anderson as Market President. And in our Jacksonville MSA, we've recently added Jeff Oody as Regional President with a focus on building core customer relationships in the suburban growth markets west of Jacksonville. These additions represent our commitment to organic growth by building core relationships in existing markets and further expand our market share.
As we work towards reaching our M&A milestones with First Reliance over the next several quarters, our focus remains both on a seamless integration and driving organic growth across our core footprint. The First Reliance team is incredibly excited about our partnership. They see the clear value in what we can build together, and their leadership is fully energized by the operational scale and broader opportunities the combined company brings to both our customers and our team members.
With that, I'll turn it over to Derek to go over the financials in more detail.
Thank you, Heath. Operating net income increased to $11 million in the first quarter and operating pre-provision net revenue increased approximately $2.2 million to over $16 million in the quarter. Earning asset yields continue to increase, driving margin higher quarter-over-quarter to 3.52% last quarter. Net interest income increased approximately $700,000 during the quarter and is attributable to an earning asset yield increase of 6 basis points, driven by loan growth and pricing on both new and renewed loans.
On Slide 36, we show the weighted average rate on new and renewed loans by quarter. That rate for the second quarter was 7.14%, and that's up from 7.11% in the first quarter. To Heath's point earlier, pricing discipline is a key focus of ours, and that will continue to help with us gaining ground on margin. Our overall cost of funds for the second quarter was 1.95%, which is up 1 basis point from the first quarter, so relatively flat overall. We still expect to see modest increases in margin of a few basis points per quarter for the next several quarters. However, the competitive environment for both loans and deposits will really determine how much increase we see and could potentially slow that increase down. If our cost of funds remain stable on the liability side, we still have some upward repricing on the asset side that we will be able to capture to improve margin.
The repricing schedule is shown on Slide 38 in the deck. Operating noninterest income increased to $11.6 million, and that's up from $10.1 million from the same quarter of last year.
On Slide 19, we show pretax income by business line, an improvement in both quarter-over-quarter and compared to the same quarter last year. Colony Financial Advisors pretax income increased in the second quarter, and the second quarter was the first full quarter after our transition from a managed program to a dual program where Colony receives more of the commissions and fees, but also takes on additional related expenses. Assets under management are up almost 15% quarter-over-quarter and are currently at $637 million, and that's up from $555 million in the prior quarter and up from $219 million in the second quarter of last year. Mortgage pretax income improvement was driven by higher production and sales in the second quarter as we enter a period of more seasonal activity. Colony Insurance had a better quarter with more premiums in force and higher revenue.
Pricing on policy premiums has been a challenge for the insurance industry. We've seen that ease some and remain optimistic for continued improvement and positive impact on both customer retention and acquisition. Bank referrals are up year-over-year, and we see that as good potential for increased sales revenue. Our SBSL division improved from the prior quarter on a pretax income basis. However, revenue from gain on sale activity was softer. As Heath mentioned, we expect to see improvement there in the coming quarters. Charge-offs at SBSL were similar to the first quarter, and we're seeing those stabilize with expected improvement on the horizon. There was an outsized BOLI death benefit during the quarter of about $700,000, and that was an adjustment to our operating earnings.
Operating noninterest expenses declined about $550,000 from the prior quarter. This is largely a result of post-merger integration cost savings, and we expect expenses to stay around this level for the third quarter and then increase after legal close with First Reliance. Operating net noninterest expense to average assets was 1.51% in the second quarter, an improvement from the first quarter. We're still targeting a 1.45% or better net NIE for the long-term and getting to that 1.45% will be driven primarily on the income side. We do expect that metric to increase again post legal close with First Reliance and then trend back towards our target later in 2027 after we complete systems conversion and customer integration.
We'll be working to capture as much expense efficiency as possible immediately following the legal close with First Reliance in the fourth quarter. However, there are a lot of our identified cost savings that we will not be able to capture until we get through the systems conversion in mid-2027. Provision expense totaled $1.9 million and was a slight increase from the prior quarter. Net charge-offs were similar to last quarter and were primarily from SBSL.
Criticized loans remained stable and classified loans declined by about 14% or $5.6 million. Loans held for investment increased $51.4 million or about 8.5% annualized. And although we saw growth across several markets in our footprint, the Columbus and Tallahassee markets were the top 2 in terms of loan growth in the second quarter and growth in our Valdosta market has been strong year-to-date. Total deposits declined $76.2 million and included in that reported number was the payoff of about $13.4 million of brokered deposits. It is not unusual for us to see seasonal deposit runoff this time of the year, and some of that was right around the end of the quarter.
If you look at our average balance of total deposits on Page 9 in the earnings release, you can see that the average was stable with a slight increase during the quarter. This week, the Board declared a quarterly cash dividend of $0.12 per share. TCE at the end of the quarter was 8.99% compared to 8.49% in the first quarter. Tangible book value per share also increased to $15.12, and that's up from $14.65 in the prior quarter. We did not purchase any shares in our stock buyback plan during the quarter. However, we view our buyback plan as an important tool to managing capital and look to be consistently buying back shares over time as well as being opportunistic during market pullbacks.
Yesterday, First Reliance also reported their earnings for the quarter. Their release is available on their website. And overall, they had a solid quarter. They reported operating EPS of $0.38, operating ROA of 1.10% and operating earnings of $3.1 million, which is a meaningful improvement compared to the same period last year. They also had a quarter of good loan growth, and that came in a little higher than our forecast. First Reliance has a strong lending team in great markets that will help drive organic loan growth going forward as a combined company. Their results were largely in line with our model or forecast, and so we do not expect any adjustments to the pro forma information we previously released.
That concludes my overview, and now I'll turn it back over to Heath before we take questions.
Thanks, Derek, and thanks to everyone for being on this call today. We're pleased with our performance this quarter, which met our internal expectations for performance and exceeded external expectations. I'm proud of how our team executed on achieving our desired results from the TC Federal merger, which positions us well for our upcoming merger with First Reliance and demonstrates the strength of our M&A strategy to gain scale and improve operating performance. Further, our expense and pricing discipline set us up well to finish the year strong. That wraps up our prepared comments.
With that, I would like to call on Prilla to open up the line for questions.
[Operator Instructions] Our first question comes from the line of David Bishop with Hovde Group.
2. Question Answer
Heath, just curious, you mentioned some of the seasonality on the funding side and on the deposit side. Just curious, where does sort of the deposit generation rank in terms of priorities and you're looking to lift out new bankers within your Georgia and Florida markets. Is that sort of a key priority there? Are you still looking for primarily commercial asset generators? Just curious how you're thinking holistically about the deposit generation engine.
Yes, Dave, great question. And while they're both important, our team clearly recognizes that deposits are priority one. That's been our major focus, and that will continue to be our major focus. I think that it's important for us to go out and secure the key commercial relationships, but also to have the ancillary consumer business that comes along with those. So that's a priority. We mentioned or I mentioned in the comments about adding a private banker in Columbus. We look to add some private banking resources in other markets as well, and that is primarily a deposit play and looking to grow assets under management for Colony Financial Advisors.
So it's a real focus. We've got a lot of great wins in that area. And I think that's really important, especially in an environment where there's a lot of rate sensitivity on the deposit side. So I would just say going after key deposit relationships is priority one.
Got it. And then you recognized achieving the 1.20% operating ROA target. Just putting aside the benefits from the First Reliance deal, just organically, where would the incremental improvements in terms of profitability come from here? Is it generating more from the fee income platform? It sounds like expenses are probably leveled out. Just curious where the organic improvement comes from a profitability standpoint.
Yes. So definitely, we think we have opportunity to improve margin. I think as we've indicated and as we show in our deck, we still got a lot of asset repricing that is going to be beneficial to us. And so that plus the growth provides opportunity on the asset side. As you mentioned, as we mentioned in the call, on the liability side, we've about hit where we are. On the fee income side, there's a lot of opportunity. I mentioned our SBSL being down a little bit. I think we have a big opportunity there. And I think you'll see that pipeline and those revenues increasing opportunity on -- again, on all the fee income businesses.
This second half of the year is usually better for mortgage than the first half of the year. Of course, as we get to the end of the year, we have the opportunity to add the First Reliance Mortgage and Colony together, which will create some greater opportunity for scale. So we're excited about that. We continue to see assets grow -- assets under management grow with our financial advisers team, and I think we'll see that continue. Of course, insurance, we talked about a lot of good momentum in that area as well. And then in terms of other account generated fees, deposit service charges, debit our merchant, those are all continuing to do well and continuing to grow. So I feel like we're in a position where not all of those things have to hit just right to create improvements in ROA, but I think we'll see continued improvement across the fee side.
And your next question comes from the line of Christopher Marinac with Brean Capital.
I wanted to go back to the First Reliance merger and just better understand kind of how much of their loan growth is going to impact earnings in terms of taking existing clients and doing more with them. Is any of that in your numbers? Or would that be upside as next year comes into focus?
Yes. Chris, that's a good question. We looked at really -- and if you look like at this quarter, the organic loan growth that the First Reliance team had, it was strong and similar to our loan growth. So I think that they have the opportunity even without adding additional capacity for growth at similar levels and within the range of our organic growth forecast of 8% to 12% a year. So there is upside opportunity. I think just given the larger balance sheet of the combined company, larger lending limits will be effective in a number of those larger markets that they're in.
So I think there is upside to what we forecasted. I think we tried to be conservative and -- but I think there is upside to generate assets at a little bit faster level over time than what we projected.
Sounds good. And then if we go back to the merchant servicing business or services business as you've been expanding there for several quarters. Is that ahead of schedule? And then what is the opportunity as you bring in First Reliance for that business line, too?
Yes. The merchant services is going well. The great thing about that business is it's a lot of recurring revenue, and we just continue to see that build. Our team does a great job with servicing on that. And that's where we get a real advantage, I think, over our competition. There's a lot of moving around in that business. So other providers, the clients see their primary contact change a lot. And with Colony, it's very consistent. So we do have the opportunity that's been an outsourced product at First Reliance, and there's not a lot of customer penetration into that.
So we think that is a big opportunity to grow. And then as well, this has been a great deposit account acquisition tool to us being able to go in. It's really very easy for us. A lot of our prospects are disenfranchised with their current merchant provider, and we're able to go in and start the relationship with that and then continue to grow the relationship, open a deposit account for settlement when we go in with that business. So that's a real positive, both just from the fee income side, but also as a primary deposit relationship acquisition tool. And it's been even better last year, we put our whole banking solutions group together where we have -- it's what I would call the payments group.
It's the group focused on treasury, merchant, card, any way customers get -- commercial customers get money into their account from their customers and out of their account to pay their vendors and their employees. And so as we put that group together, we found it's easier for our bankers to go calling on customers and prospects, have one point of contact internally. And then our advisers in that group are really looking to solve the problems that the customers are having and not just sell a product or service. And so that consultative approach, I think, has shown well. And I look forward to that whole group being able to further support that.
We'll have First Reliance team members become part of that group that are doing treasury services now and -- but being able to serve that already know those customers and then being able to serve more products and service to them. So I think there's a lot of upside opportunity there.
Great. And my last question just goes back to kind of the progress you keep making in towns like Columbus. And I wanted to kind of understand, is the opportunity in Columbus as great as it is in Savannah and perhaps as you've been realizing in Augusta, just using those kind of [indiscernible] examples of footprint expanding.
Sure. Yes. No, that's a great question. And there is a lot of opportunity in Columbus. Obviously, our President, D Copeland is in that market. We've added to that team in that market. Of course, you have the Synovus and Pinnacle deal, which is creating disruption, and they have an unbelievably outsized share of the market there in Columbus. And so whether it's them or other larger regional banks, we see that as one of our primary opportunities for growth and one of the ways that we can go out and acquire customers. And so you look at markets like that, you look at markets like Valdosta and Tifton and Albany as well, where some of these regional banks have large market share.
It's an opportunity for us to grow faster than those markets or growing those -- some of those markets are not historically high-growth markets like Savannah or Charleston or in Atlanta, but the market share is heavily shifted due to the M&A over time to some of these regional banks, and there's a real opportunity for us to grow faster than the markets grow in those markets.
And we do have a follow-up question coming from David Bishop with Hovde Group.
Heath, Derek, just wanted to circle back on the loan guidance. Just curious, does that reflect more sort of a cautiousness, you think, in your outlook? Or does that reflect, you think, more borrower behavior in terms of maybe what's happening from a geopolitical standpoint? Just curious maybe what you're seeing out there in terms of demand and how that sort of comports with the outlook.
Yes. Thanks, Dave. I think it's a little bit of both. We're in this place where the expectations have been until recently rates going down. And now we're in a time where the expectation is that rates may go up a little bit. And so I think that's changing the customers' thoughts a little bit, and it's changing their ideas on whether they need to go with floating or fixed rate loans. And so you are seeing just, I think, some more consideration to that as they look at deals going forward and cash flows from expansions or CRE opportunities or things like that.
And then I think a little bit of that as well is our pricing discipline. I've been really proud of what we've been able to do on new and renewed loans with keeping that new and renewed loan rate in the low 7%s. When you look at just our core commercial business out of that, it's probably -- it's around 6.80%. And so -- which is above prime, which is a great place, I think, to be. So it's really a combination of that. I do feel like over the last couple of quarters, as the rate expectations change from down rates to flat or up rates, our spread between some of our competition that has been more aggressive has been narrowing. I feel like competitively, it felt like there were some folks out there sort of betting heavily that rates were going to go down and then they didn't. And so they pulled their pricing up some.
So I feel like we're more competitive on rates now than maybe where we were a couple of quarters ago. But there's just a lot of factors that go into that. And as I mentioned, for us, with the amount of balance sheet repricing that we have that's going to help improve margin and then still getting good pricing and getting growth rates either at the lower end of our range or year-to-date just below it, if we can still get a growth rate up to that point by maintaining pricing, I think that improving margin, improving operating earnings opens up more opportunities for us to reinvest in the business, to reinvest in technology, to reinvest in hiring and deepening our market share in some of our really good markets and invest back in the business. So we're willing to give up a little bit of organic growth to keep getting that higher margin. And I think that's the right thing for us to do at this point.
And I would just add to that, too, if you look at our new and renewed pricing last quarter, 7.14%. I mean, we -- even if that were to come down a little bit, given our repricing and that's laid out in the repricing schedule on the deck, I mean, there's still room there to capture that repricing. And if we keep this stabilized funding costs kind of in line going forward, then we still have the opportunity to see an increase in margin even if that 7.14% comes down a little bit. And so that may slow down the increase in margin some, but there's still a lot of opportunity to capture that and continue to see margin expansion.
And Dave, one other thing, a little bit lower growth gives opportunity to focus more on deposits.
And I'm showing no further questions at this time. I would like to turn it back to Mr. Heath Fountain for closing remarks.
Thanks, Prilla. And again, thanks to all of you for being on the call today and for your support of Colony Bank. We're excited about the opportunities ahead and appreciate you all being here today. Look forward to speaking with you soon.
Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
Colony Bankcorp, Inc. — Q2 2026 Earnings Call
Colony Bankcorp, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Thank you for standing by. My name is J.L, and I will be your conference operator today. At this time, I would like to welcome everyone to the Colony Bank First Quarter 2026 Conference Call. [Operator Instructions] I would now like to turn the conference over to Brantley Collins, Communications Manager. You may begin.
Thanks, J.L. Before we get started, I would like to go through our standard disclosures. Certain statements we make on this call could be constituted as forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Current and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance but involve known and unknown risks and uncertainties.
Factors that could cause these differences include, but are not limited to, pandemics, variations of the company's assets, businesses, cash flows, financial condition, prospects and other results of operations. I would also like to add that during our call today, we will reference our first quarter earnings release and investor presentation, which were both filed yesterday, so please have those available to reference. And with that, I will turn the call over to our Chief Executive Officer, Heath Fountain.
Thanks, Brantley, and thank you to everyone for joining our first quarter earnings call today. We're pleased to report a solid start to the year with our first quarter operating performance. This quarter marked a pivotal operational milestone as we successfully finalized our core systems conversion and completed the customer integration following the TC Federal merger. We're proud of our team's execution and are now fully positioned to deliver a premier service experience to our new Colony customers.
Operating income increased $580,000 from the prior quarter as we begin to see the impacts of the combined company post merger. We expect to see this continue to improve post conversion as we begin to realize operational efficiencies and additional cost savings moving into next quarter. With the primary integration milestones behind us, we're confident in our ability to scale toward a 1.20% ROA benchmark in Q2.
Margin continues to expand, and we ended the quarter at 3.48%, which was a little better than our internal projections. This was driven by an acceleration of accretion income on acquired loans from the TC Federal merger. This acceleration was driven by early payoff of loans, several of which were participations that we acquired in the merger. Core margin continues to steadily increase, and Derek will talk more about the projections, but we do expect that margin may be a few basis points lower next quarter without the additional lift of the pull-forward loan accretion.
Loan growth in the first quarter was lower than what we realized in 2025. And we mentioned last quarter that we expected 2026 to trend closer to the 8% end of our 8% to 12% growth target. The payoffs in the first quarter impacted loan growth along with lighter demand, which was driven partially by the volatile rate environment driven by the conflict in the Middle East. We are starting to see more activity in our loan pipeline and are having more discussions with customers about loan opportunities. We still feel that a good growth number for 2026 is around that 8% mark.
Turning to credit quality. We observed a quarter-over-quarter contraction in NPLs and the decline in criticized loans. Our credit team continues to demonstrate efficiency in resolving identified issues, preventing any buildup or stagnant criticized or classified loans. We provided an overview of our credit migration activity on Slide 33, which shows that we are actively resolving problem loans.
The first quarter was a strong quarter for many of our complementary business lines. These are highlighted on Slide 17, and you can see the past quarter showed meaningful improvement on a combined pretax basis compared to the first quarter of last year. Loan production and sales were higher in our mortgage division compared to the same period last year. Pretax income was significantly higher than Q1 2025, driven by more volume and slightly better margins. We believe this sets mortgage up to have a good year, although interest rate fluctuations and housing inventory continue to be challenges that will likely impact mortgage throughout 2026.
Marine and RV lending and merchant services continue to show progress, and we expect that to continue, particularly in marine and RV lending as we head into a period of higher seasonal activity. This past quarter was the best quarter to date for Colony Financial Advisors, and we are proud of the progress the division continues to make. Recruiting has been strong with the addition of several new advisers over the past few quarters. These additions, along with the transition of our broker-dealer relationship from a managed to a dual program where we get a larger revenue share, but also bear the expenses has led to meaningful improvement. This has allowed for higher profitability that will continue to scale as we increase assets under management.
Slide 20 illustrates that growth in AUM, showing us at $555 million at the end of the quarter, up from $198 million at the end of the first quarter in 2025. This represents significant growth since the formation of Colony Financial Advisors in late 2022. Colony Insurance also had their best quarter to date in Q1 for pretax income. Referrals to insurance from the bank were strong in the first quarter, and we feel we have a lot of opportunity to capture more.
Items in force and premiums in force are shown on Slide 21. The premium rate increases in 2025 presented some challenges last year, but there have been recent rate reductions that we think will drive additional policy volume as we go throughout this year. Our SBSL division had a lighter quarter driven by lower sales revenue and variability in charge-offs. The loan pipeline has shown positive improvement and with a shift towards real estate secured loans versus the small dollar loans, we see this as an opportunity for steady volume and improved revenues.
Past dues for SBSL were down about 30% and nonaccruals were down around 24% during the quarter. We're likely to see more variability in charge-offs this year. And while some quarters could be around these same levels, we are not seeing anything to indicate significant increases.
Also during the quarter, we added a National Sales Manager, John Kay in SBSL and look forward to seeing the expertise he will bring to the division. We've been without a person in that role for a little while, and we believe we found the right person to help us lead our sales team.
Last month, we announced that the Kroll Bond Rating Agency affirmed the credit ratings for both the company and the bank with a stable outlook. This independent validation reflects the disciplined execution of our long-term strategy. We believe these ratings serve as a confirmation of our capital strength and the overall stability of our platform.
As industry consolidation accelerates, we are seeing significant M&A-related disruptions across our footprint. This environment creates a unique tailwind for us, and our team is focused on capturing high-quality customer relationships that are seeking the stability and high-touch service that our model provides. We are well positioned to capitalize on these market shifts to drive organic growth, and we are seeing positive growth tied directly to this disruption.
We remain encouraged by the M&A landscape. Our recent integration success has enhanced our capacity at scale, and we are actively evaluating opportunities that align with our strategic and cultural criteria. We feel very good about our current position and are confident in our ability to execute another accretive transaction as the right opportunities emerge.
We're proud of our overall performance in the quarter, and our team has done a great job through our post-merger systems conversion as well as continuing to execute on many of our strategic objectives. We believe this leaves us well positioned to provide consistent execution as we continue on the path of building a sustainable, high-performing independent bank.
With that, I'll turn it over to Derek to go over the financials in more detail.
Thank you, Heath. Operating net income increased to $9.5 million in the first quarter and operating pre-provision net revenue increased approximately $1.3 million to $13.9 million in the quarter. Net interest income increased approximately $3.3 million during the quarter and is reflective of a full quarter post-merger, and that's in addition to continued repricing benefits from both sides of the balance sheet. Net interest margin increased 16 basis points to 3.48% with the interest-earning assets component increasing 13 basis points to 5.33% and interest-bearing liabilities decreasing 3 basis points to 2.28%.
Our overall cost of funds remained relatively stable, decreasing 2 basis points quarter-over-quarter to 1.94% and we expect that our cost of funds will remain around this level unless we see changes to short-term interest rates. Heath mentioned the accelerated accretion income in the first quarter, and that drove margin above our initial forecast. From a core margin perspective, so excluding the accelerated accretion, we are around 3.41%. Our projections indicate modest increases in margin of a few basis points each quarter and we should see margin trend closer to the core margin in the second quarter under our base case assumptions, which means we are likely to see margin a few basis points lower in the second quarter.
Operating noninterest income in the first quarter was $10.7 million. The first quarter is shorter in the number of days and is seasonally lighter for us in terms of activity in our complementary business lines. Compared to the same quarter last year, operating noninterest income increased $1.7 million from $9 million in the first quarter of '25.
On Slide 17, we illustrate pretax income by business line. Mortgage pretax income was $222,000 compared with $31,000 in the first quarter of last year. Slide 19 overviews production and sales volume by quarter with the first quarter of 2026 showing meaningful increases in both production and sales compared to Q1 of last year. We're seeing a good start to the year and expect a better mortgage trend this year compared to what we saw in 2025. Over the past several quarters, we've recruited MLOs in key markets and adjusted our products to meet customers' needs and drive increased profitability.
Heath mentioned the growth in Colony Financial Advisors and on a pretax income basis, this was their best quarter to date. The AUM growth has been solid, and we see lots of potential to grow that organically in several key markets, and that's in addition to also recruiting new advisers.
Colony Insurance had a great start to the year in the first quarter. Heath mentioned challenges on pricing last year and how those have recently been scaled back. We believe these changes will help both customer retention and new customer acquisition and in turn, drive better profitability for that division. SBSL pretax income decreased to $95,000 in the quarter. This was driven by lower revenue and higher charge-offs.
Slide 18 shows the production and sales volume by quarter. Seasonally, the first quarter is lighter, but we're starting to see a stronger loan pipeline in both volume and credit quality. Charge-offs with SBSL have variability, and we may see similar levels next quarter with a trend toward improvement in the following quarters.
Also during the quarter, approximately $30 million of portfolio mortgages were sold for a gain of about $110,000. We mentioned this on last quarter's call and noted the increase in the held-for-sale classification at the end of the year. We do not anticipate any other pool sales in the near term.
Operating noninterest expenses were $26 million in the quarter. This includes the cost and personnel expenses that were needed to get us through the systems conversion and customer integration following the merger. Now we are positioned to begin seeing additional cost savings beginning in the second quarter. However, this is expected to be offset by seasonally higher activity in our business lines that will drive some higher variable expenses. But we expect that to be outpaced by additional revenue, which should generate positive operating leverage across our business lines.
Operating net noninterest expense to average assets was 1.68% for the quarter, and this is reflective of seasonally lower activity in our business line as well as the additional expenses through systems conversion. We expect this to trend towards our target of 1.45% over the next several quarters. And merger-related expenses in the quarter were approximately $1.6 million.
Provision expense totaled $1.75 million and was a slight increase of $100,000 for the prior quarter. Net charge-offs by type on Slide 32. And while there was a slight increase in core bank loan charge-offs, it only represents $315,000 or about 5 basis points of average loans. Both nonperforming loans and classified loans decreased quarter-over-quarter. The allowance for credit losses was 0.90% of total loans and 122% of nonperforming loans. As you may remember from last quarter call, a large percentage of the increase in classified and criticized loans starting in the fourth quarter was a result of the TC Federal merger.
Loans held for investment increased $32.2 million or around 5.4% annualized. There were early payoffs on acquired TC Federal loans and a portion of those were related to legacy participation loans. And then the weighted average rate on new and renewed loans is shown on Slide 34, and that was 7.11% for the quarter. Total deposits declined slightly during the quarter by $19 million and was a result of repositioning of municipal funds after year-end tax collection. Municipal deposit balances declined approximately $30 million in the first quarter.
Our deposit pipeline still see many opportunities to develop strong customer deposit relationships across our footprint. We've developed a deposit strategy to target customer relationships as well as take advantage of M&A disruption in our markets. Deposits remain a key focus in our strategic growth plan.
Total share repurchases during the quarter were about 89,000 at an average price of $19.78. This week, the Board also declared a quarterly cash dividend of $0.12 per share. Our AOCI slightly improved quarter-over-quarter despite an increase to interest rates along the curve. This reflects the continued strengthening of our balance sheet health. TCE at the end of the quarter was 8.49%, an increase from 8.30% in the prior quarter and tangible book value per share also increased to $14.65, up from $14.31 at the end of the year and $13.46 a year ago. That concludes my overview. And now I will turn it back over to Heath before we take questions.
Thanks, Derek, and thanks again, everyone, for being on the call today. We're very pleased with our performance this quarter. That wraps up our prepared comments. And with that, I will call on J.L. to open up the line for any questions we have.
[Operator Instructions]
Your first question comes from the line of David Bishop of Hovde Group.
2. Question Answer
I'm just curious from the Small Business SBSL segment, is that sort of the key driver of this sort of recent uptick in the loan loss provisioning level this quarter and last? And is this something we should maybe get used to a run rate close to -- closer to $2 million per quarter? You see -- I think you said last quarter, you're trying to migrate away from maybe the Express and Lightning type credits. Do you see maybe some of the credit headwinds sort of abating the latter half of the year as we sort of roll off the books?
Yes, Dave, I think what I would expect to see is volumes pick back up and the overall profitability of that division and revenues get back closer to levels we saw in the middle of last year. On the provisioning and charge-off levels, I think going forward, where our allowance is, we're going to generally see backfilling any charge-offs. And then I think in future quarters, we should see a little more loan growth than we saw this quarter. So we'll keep up with that. So somewhere around the current level, maybe down a little, up a little, just depending on the charge-off activity. So even though it's small in relative dollars, we're replenishing those reserves.
Got it. And then I think I heard you say, Heath, at the start of the call, I feel good about the loan pipeline replenishing here. Still talking about 8% loan growth rate. I'm just curious where you're seeing the best opportunity to grow the portfolio and where you're seeing current pricing?
Yes. No. So Derek mentioned, start off with pricing, we were around 7 -- a little over 7% for the quarter. Of course, prime around 6.75%. It's looking like that will be stable. We are seeing more competitive pricing out there. And so I would expect our yields to come down a little bit as volume goes up there. We are committed to good solid pricing. We think that's important. Relationship pricing, we will look to be as competitive as we can be there, but just kind of measuring and monitoring that growth versus pricing because we like what we're seeing in terms of continuing to improve our margin and our asset yields.
So -- but it is competitive out there. I think we're seeing it geographically across the board. And I would say there's -- it would look like our current portfolio. So obviously, commercial real estate, we're seeing good opportunities there, but also on the commercial business side, C&I, we're seeing good opportunities there as well. So I think we'd see it track similar to the breakdown of our portfolio today, and we are seeing it pretty good across our footprint.
Got it. And then one final question, I guess, I'll before I hop in the queue. The insurance group, you recognize their contribution here. Do you think pricing and conditions can improve that market, you can continue to see an uptick in pretax profitability there this year?
Yes. I do think we will -- last year, we've added the LOB agency to that team. And we got through that integration at a time where we were seeing rate increases and it was a tougher environment. We're now starting to see some rate decreases. Plus we also had the time to integrate a better sales platform, better sales training, better integration of working with the bankers to get referrals. So we've seen a big uptick in those referrals, and we expect to continue to see that grow. So I think we'll continue to see good things out of the insurance group.
Your next question comes from the line of Christopher Marinac of Brean Research.
Can you talk a little bit about the Merchant Services business and how that can not only further grow, but also impact deposits and pricing for the overall spread business going forward?
Yes, Chris, that's a great question. And we see this as a really good deposit acquisition part of our business. So we have taken our Merchant, our Treasury and our Credit Card group and moved that all into what we call banking solutions. And because of doing that, we've made it simpler for how we interact with the customers. We made it simpler for how we interact with the bankers. And there's a ton of opportunity to lead with the right product.
And so we find Merchant Services to be one where in that field, there's a lot of turnover with other companies. There's a lot of ambiguity into the rates charged. So we find that customers really are happy to meet with us on our first call and turn over their merchant statements to us and give us an opportunity. And of course, when we do that, if we're able to win that business, we establish a deposit relationship for settling there, and then we just continue to work on that relationship to bring over deposit business.
So it's really a great customer acquisition tool to bring in core commercial small business deposit relationships, and we're seeing really good success. And then as you see that just incrementally grow, that's very much a recurring revenue business. So we just keep building that, and we don't really have to add much level of expense there as we grow. So we're excited about that business. They're doing a great job in the banking solutions team altogether, how that's integrated and made it simpler for us. It leads to a quicker time to win a relationship. And so we're very pleased with how that group has performed.
Great. And my follow-up was about just loan pricing in general. With the loan yields this quarter, I know TC impacted that to some extent. But is there opportunity for that loan yield to rise with the repricing and the details that you had repeated again this morning?
Yes, I think so. I mean if you look at our new and renewed loan rate in the past quarter at 7.11% relative to where our overall loan yields are, I think that we could see some incremental increases there. I don't expect anything drastic. I mean, obviously, that depends on the level of growth that we see. And as Heath mentioned earlier, we're starting to see some competition there on loan pricing. So that will have some impact there as well.
But I do think that we have the possibility to see that continue to kind of chug along and increase over time outside of the impact of any accelerated accretion that will see the impact overall loan yield.
And Chris, if you think about it, even if we pull back a little bit on our new and renewed rate yield, there's still a delta there between where our portfolio yields. I think for the quarter, it was 6.35%. Now some of that is some of that accelerated accretion. But even if we pull back some, there's opportunity to be originating new and renewed above our current yield and then plus the amortization that's running off any payoffs that we get that are at those lower yields that were -- previously that are starting to renew and amortize. So we feel like that place on the asset side, there's really -- we should see continued improvement there.
Great. And last one for me just has to do with the overall expense efficiency in general. I mean, should we continue to see that progress as this year plays out? And any, I guess, just general goals on next year?
Yes. Very much so. We're very focused on that. And again, we look at that from the standpoint of our net NIE, which was 1.68%, and we should start seeing that trend towards that 1.45%. We'll have merger expenses or additional staffing and contract expenses from TC that were in Q1 that will have rolled off many of them, the staffing side is done and most of the contract expenses are done now or will be done during the quarter. And so you'll see improvement there.
Where we will see -- we expect some of the variable expenses in our business lines to increase a little bit as we go through Q2 and Q3, which are seasonally higher plus the return of SBSL. And I just point out, we saw year-over-year increases in our complementary lines really in the quarter that our SBSL was down a little bit, and it's a significant driver. So as it returns, to a higher level of revenues, mortgage improvement for seasonality. You can look on our mortgage slide and see how that Q1 is always a light quarter, but a much more profitable this quarter. So we'll see that net NIE start to improve in the second quarter, both from the revenue side on the complementary lines, but also from the expense side in the core bank.
And we have a follow-up question from David Bishop of Hovde Group.
Maybe just curious, now that you have TC Federal behind. From an acquisition perspective, just curious what might be in your target sights here? There's been a lot of consolidation within your markets. Just curious where you're focusing your efforts these days on potential acquisitions?
Yes. Thanks, Dave. Good question. And we do believe we're in a place we've gotten the TC Federal integration complete, and we are actively having conversations. It's an area of focus for our team, but particularly for me. And so we're out being very active throughout our footprint.
On Slide 14, we laid out kind of our target area, which is really Georgia and the contiguous states. So we're out in -- both in Georgia and in these other states actively having conversations with other management teams that we think will be a good fit. The TC merger, I think, just shows how a good cultural fit is important. It made the integration much easier both from the team member side, but also from the customer side. And so our focus is really on strategic deals where we can have alignment with the other bank's management team, and they view it as an opportunity to continue their investment and see that the combined company can be more profitable, have more scale and also have additional products and services and larger lending limit to be able to grow better as a combined company than either could on their own.
And we think those opportunities are out there. It takes time in developing relationships and it's something that we're spending our time on and particularly my time. And we are at the place now where we feel good about being able to start the process with another one. So hopefully, we'll keep having good success there like we have with this last one and just keep the momentum going forward.
There are no further questions at this time. That's concluding our Q&A session. I will now turn the conference back over to Heath Fountain, CEO, for closing remarks.
Thanks, J.L., and thanks again, everyone, for being on the call today and for your support of Colony Bancorp. We're excited about the opportunities ahead and appreciate you being on the call today.
This concludes today's conference call. You may now disconnect.
Colony Bankcorp, Inc. — Q1 2026 Earnings Call
Colony Bankcorp, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the Colony Bank Fourth Quarter 2025 Conference Call. [Operator Instructions] This call is being recorded on Thursday, January 29, 2026. I would now like to turn the conference over to Brantley Collins. Please go ahead.
Thanks, Danny. Before we get started, I would like to go through our standard disclosures. Certain statements we make on this call could be constituted as forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Current and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance but involve known and unknown risks and uncertainties. Factors that could cause these differences include, but are not limited to, pandemics, variations of the company's assets, businesses, cash flows, financial condition, prospects and other results of operations.
I would also like to add that during our call today, we will reference our fourth quarter earnings release and investor presentation, which were both filed yesterday. So please have those available to reference.
And with that, I will turn the call over to our Chief Executive Officer, Heath Fountain.
Thanks, Brantley, and thank you to everyone for joining our fourth quarter earnings call today. We are pleased to report our fourth quarter with strong operating performance. Our team has done a great job of delivering results and executing on our strategic initiatives. We're really excited about the legal close of the TC Federal merger, which occurred at the beginning of December, and we're on track to complete the systems conversion during the first quarter. Both teams have done a great job to get us to this point, and we're looking forward to the upcoming customer integration.
We're also pleased to report that our financial targets for the deal are on track or better than expected, as Derek will discuss later on the call. Operating earnings continued to improve with an increase in operating net income of $675,000 compared to the third quarter. This was driven by continued increase in our net interest margin as well as a strong quarter in terms of noninterest income.
As we mentioned early last year, our projections indicated achieving a 1% ROA latter half of the year and maintaining 1% or better going forward. We were able to hit that target in the second quarter and maintain it through the rest of '25. I'm proud of our team's accomplishments in being able to do this and report that we've achieved a 1% operating ROA for the 2025 fiscal year. We now set our sights on our next goal of a 1.20% ROA and believe that we can achieve that on a quarterly basis starting in the second quarter of 2026 once we get the full benefit of the TC Federal merger and expect to hit the 120 mark for the full year of 2026.
In 2025, we saw core loan growth of 10.5%, excluding the impact of the TC Federal acquisition. Our outlook on loan growth for 2026 remains positive and our pipelines remain strong, but we are seeing a trend where we think we'll be closer to the 8% end of our 8% to 12% long-term target. We've seen an increased competition in lending across our footprint. However, we remain focused on growing core customer relationships. This strategy has allowed us to maintain a disciplined approach to pricing and credit while still achieving our growth goals.
With expected loan growth and repricing opportunities, we project margin to increase at a modest pace throughout 2026 around mid-single digits each quarter. In addition, we feel good about the outlook on the noninterest income side and expect it to be slightly better in 2026 as we continue to see improvement in our lines of business and fee income. Deposits were up for the quarter and organically flat year-over-year, excluding the acquisition of TC Federal. We are driving deposit account growth and our team is focused on building the deposit first and relationship banking culture.
At the same time, we're also focused on improving margin and have moved our interest-bearing accounts aggressively during the recent rate cuts this cycle, which has caused us to lose some non-relationship price-sensitive accounts. We carefully monitor this and believe we can grow the right kinds of deposit relationships. And as rates stabilize, we will become more competitive for interest-bearing deposits as well.
In the fourth quarter, we executed a portfolio mortgage pool sale of around $10 million with a gain of a little over $100,000. Our loans held for sale balance also increased quarter-over-quarter, and we're expecting to sell another $30 million of portfolio mortgage loans in the first quarter of this year. There's a couple of reasons why we're doing this. First, the secondary market for non-agency loans has improved, and we're now able to push some previous quarter's mortgage production into the secondary market. Second, with the addition of TC Federal, we knew we'd be expanding our 1-4 family portfolio. So to manage that concentration, we feel it's prudent to trim some mortgage loan exposure.
Operating expenses were higher in the fourth quarter as we have not yet realized all of the expected cost saves from the TC Federal acquisition. As we complete the systems conversion in the first quarter, we anticipate a majority of those remaining cost savings to occur after the conversion and be realized in the second quarter and going forward. Charge-offs were lower in the fourth quarter, but still elevated slightly compared to earlier quarters. Charge-offs have primarily come from our SBSL division, and we provide a breakdown of the net charge-offs on Slide 34 in our investor presentation. We saw some charge-offs from our marketplace loan partners in the fourth quarter, but do not expect that to be a long-term trend.
SBSL and marketplace loans only represent about 5% of our total loan portfolio. And as you can see on that slide, bank net charge-offs remain at low levels and gives us confidence in the credit quality of our overall portfolio. We also outlined the yields in those categories, and it's important to note that both of these third-party marketplace loans and SBA loans provide higher yields, which offset charge-offs and provide for a nice risk-adjusted return.
Additionally, of course, on the SBA loans, we've also generated significant gain on sale income on the guaranteed portion of those. Our performance in complementary lines of business are highlighted on Slide 19 on a pretax basis. SBSL and mortgage finished the year with a strong fourth quarter, and we continue to see improvement in Marine/RV-Lending as well as Merchant Services. We welcome the addition of 2 new proven financial advisers -- financial advisers to the Colony team in the fourth quarter, Glenn Ware in LaGrange and Tim Owens in Macon, and they have been successfully transitioning their client base to Colony.
With the addition of Tim and Glenn, we've also begun the transition of our relationship with our broker-dealer, Ameriprise from a managed program to a dual employee model, where our financial advisers are employed by Colony and where we receive the majority of the revenue, but also bear the full expense load. As we more than doubled our assets under management from about $200 million at the end of 2024 to over $460 million at the end of 2025, we believe this transition will be beneficial for the long term and offers more flexibility for our advisers while maintaining the relationship with our broker-dealer.
Overall, this structure will provide increased income opportunities going forward. Some of the related expenses to that occurred in the fourth quarter, and we expect to be fully transitioned by the end of the first quarter of this year. The building out of this platform is an important piece of our long-term strategy, and we are actively recruiting to continue to grow this line of business.
Slide 23 illustrates the year-over-year improvement with Colony Insurance and shows significant increases in Items and Premium in Force. Bank referrals to insurance increased 20% in 2025. We've been in a very hard insurance market the last couple of years, facing significant rate increases from our carriers for our customers, which has had an impact on retention rates, but we are starting to see the market soften some and believe we will see improvements to retention and production in 2026.
Yesterday, the Board declared an increase to our quarterly dividend to $0.12 per share, which is an increase of $0.02 on an annualized basis. Dividends are important to many of our shareholders, and we're proud to increase the dividend for another consecutive year. I'd also like to recognize that Colony Bank has been named one of American Bankers 2025 Best Banks to Work for. This is a tremendous accomplishment and reflects our commitment to culture and to our team members. I'm grateful for everything our team members do to support each other and the customers we serve. Colony was the only bank headquartered in Georgia to be recognized on this list in 2025.
We continue to see opportunities to capitalize on the increased M&A activity in the industry and across our footprint. This includes opportunity for new customer acquisition, new talent acquisition and expanded fee income as we develop deeper customer relationships across our existing markets. As I mentioned earlier, our team is focused on the integration and core conversion with TC Federal in the first quarter. At the same time, we continue to see an increased level of activity from an M&A perspective, and we are actively having conversations with potential M&A targets. We're at a place where we feel comfortable moving forward with another opportunity, and we believe that given the level of conversations and activity we see in the industry, we'll have the opportunity to announce another transaction at some point in 2026.
Slide 14 in our investor presentation lays out our approach to M&A opportunities. The strong momentum exiting 2025 positions us well as we enter 2026. We remain optimistic about the opportunities ahead and are focused on continuing to enhance performance through disciplined execution and ongoing improvement.
With that, I'm going to turn it over to Derek to go over the financials in more detail.
Thank you, Heath. From an operating income perspective, we saw net income increase $675,000 in the fourth quarter, driven by the completion of the TC Federal acquisition as of December 1 as well as continued increase in margin and solid results from many of our complementary lines of business. Operating pre-provision net revenue improved again in the fourth quarter and was a significant improvement over the fourth quarter of 2024. We continue to see positive improvement in our core earnings.
Net interest income increased approximately $3.2 million compared to the prior quarter and was a product of continued improvement in earning asset yields, a reduction in cost of funds and the addition of TC Federal in December. Net interest margin increased 15 basis points to 3.32% in the quarter. Loan yields increased to 6.19%, up from 6.15% in the previous quarter and reflects continued positive loan repricing, the addition of 1 month of TC Federal loans and the related accretion income, which was slightly offset by the reset on variable rate loans due to the short-term rate cuts.
The impact of the short-term rate cuts was captured in our overall cost of funds, which decreased to 1.96% for the quarter, and that is down from 2.03% in the third quarter. The short-term rate cuts from the Fed helped drive those fund costs lower in addition to the seasonal inflow of the lower cost deposits that we typically see later in the year. We may see some slight variability in accretion income depending on the timing of payoffs and paydowns from the acquired TCF loans.
Going forward, as we receive payoffs of acquired loans that were marked to fair value, we are then able to deploy those funds at current market rates, resulting in minimal impact to overall interest income. We're still projecting a modest increase in net interest margin each quarter throughout 2026 as we continue to see repricing of cash flows from lower earning assets.
Fourth quarter operating noninterest income was $11.1 million, reflective of a good quarter from many of our complementary business lines, particularly mortgage and SBSL. Slide 19 gives an overview of the pretax performance of our complementary lines with a noticeable improvement overall from the third quarter. Mortgage-related noninterest revenue increased $270,000 from the prior quarter. And as Heath mentioned, we did have a $108,000 gain from a sale of portfolio mortgage pool of about $10 million during the quarter. Marine/RV-Lending continues to improve on a quarterly basis in addition to improvement in our Merchant Services division.
Heath also mentioned the conversion with Colony Financial advisers from a managed program to a dual program, along with the addition of 2 financial advisers. There are some upfront expenses associated with that strategy. And although we will see expenses increase with that change, the dual program will allow us to receive a larger share of dealer commissions, which will outweigh the increase in expense and ultimately improve the earnings power of that division, leading to increased net income.
Typically, the fourth quarter is a lower volume quarter for Colony Insurance based on the timing of policy renewals and seasonality. We expect this to revert back to normal in the first quarter and improve into the rest of 2026. Operating noninterest expenses were $24.4 million, and the increase is attributable to the TC Federal acquisition. We're still carrying some TC Federal-related expenses until the systems conversion in mid-first quarter and then expect those expenses to drop off for the second quarter of 2026. This led to a higher net noninterest expense to average assets of 1.58% for the quarter and a little higher than our historical average. We expect that to be closer to our target of 1.45% in the second quarter as we capture the remaining cost savings for the merger.
The focus of disciplined expense management relative to our growth and earnings remains a priority for us as we continue to execute on our strategic initiatives that improve operating efficiency across the organization. Merger-related expenses totaled $1.3 billion for the quarter and were an adjustment to operating earnings. Provision expense totaled $1.65 million for the quarter. That's an increase from $900,000 in the prior quarter. Net charge-offs for the quarter were $1.6 million, a slight decrease from the prior quarter.
Charge-offs were primarily driven by SBA loans as well as some marketplace loans from our third-party partners. As Heath mentioned, SBA and marketplace loans represent about 5% of the portfolio. Slide 34 shows a breakout of charge-offs between those product types and the bank portfolio. And in addition, Slide 34 also provides a breakout of loan yields in those categories.
As we look forward to 2026 in regards to SBA charge-offs, we feel that we will see improvement compared to the trends that we saw in 2025. That expectation is supported by the underlying collateral of classified SBA loans. Classified and criticized loans increased from the prior quarter and 68% of that increase came from TC Federal for criticized loans and 93% for classified loans. Nonperforming loans increased quarter-over-quarter. $6 million of the $9 million increase in nonperforming loans was due to the acquisition of TC Federal and any anticipated losses were captured through acquisition accounting.
We early adopted the new CECL-related accounting standard, and this resulted in no CECL double count as part of the acquisition. The credit quality of TC Federal's loans were reflected in the adjustment to the allowance for credit losses as part of the purchase accounting. Loans held for investment increased in the quarter due to acquired loans from the TC Federal merger. Organic loan growth for the quarter was flat, but was due to fourth quarter payoffs of both Colony loans as well as some legacy TC Federal loan payoffs in December. There was also $50 million in mortgage loans reclassified from held for investment to held for sale as we continue to market those loans for a pool sale. Organic loan growth for 2025 was around 10.5%, and we anticipate organic loan growth for 2026 to be slightly less towards the lower end of our 8% to 12% target.
Slide 35 shows the weighted average rate on new and renewed loans of 7.33%, a decrease from the previous quarter due to rate cuts and changes in the rate environment. We expect to see that yield fall closer to the prime rate. However, that still leaves room for loan yields to improve from loan repricing. Fixed rate loan roll-off for 2026 is below 6% and noted on Slide 28.
Slide 35 highlights loans acquired through the TCF merger as of the acquisition date and also notes the early adoption of the new accounting standard related to CECL. Total deposits increased from the prior quarter, also a result of the merger. Excluding acquired deposits, total deposit growth was around $24.3 million in the fourth quarter and flat for the overall year. As Heath mentioned, when the Fed started cutting rates in 2024, we began to lower our higher cost deposit rates aggressively, and that continued with the rate cuts in 2025. This is reflected in our cost of funds, which was 1.96% last quarter compared to a high of 2.32% in the third quarter of 2024.
We believe we have a lot of opportunity in both current markets as well as the legacy TC Federal markets to continue to develop core customer relationships that will drive deposit growth. We acquired the TC Federal investments during the quarter, which were marked at fair value. A small portion was sold at the acquisition date and did not generate an earnings gain or loss. We didn't sell any other securities during the quarter. We'll continue to evaluate the need for future sales based on market conditions and balance sheet needs. The fair value of the portfolio improved quarter-over-quarter and resulted in a positive impact to AOCI of around $2.5 million. Total share repurchases during the quarter were 47,000 at an average price of $16.50.
And as Heath mentioned, this week, the Board declared an increase to our quarterly dividend of $0.12 per share. Our TCE ratio at the end of the quarter was 8.30% compared to 8% even in the prior quarter. Tangible book value per share increased to $14.31 from $14.24 in the prior quarter due to better AOCI position, favorable purchase accounting and the early adoption of the new accounting standard that removes the CECL double count.
Slide 16 illustrates some of the highlights from the merger with TC Federal. We're on track to achieve our projected cost savings, and we'll see more impact from that in the second quarter. The deal economics remain strong and forecasts are better compared to what we projected in our earlier modeling. Tangible book value dilution was less than expected, and our original forecast for earn-back was less than 3 years. We now expect that earn-back to be less than 2.5 years. We've also provided projections on expected 2026 base case earnings impact from the accounting treatment on acquired assets and liabilities.
That concludes my overview, and now I'll turn it back over to Heath before we take questions.
Thanks, Derek. And again, thanks for everyone to be on the call today. We're really pleased with the quarter we had and the performance, both for the quarter and the overall year. This wraps up our prepared remarks. And with that, I'll call on Danny to open up the line for any questions.
[Operator Instructions] Your first question comes from Christopher Marinac of Janney.
2. Question Answer
Thank you for all the details in the presentation and in the press release. I wanted to look at the small business lending line and just sort of think out loud with you about -- does that business become a higher risk-adjusted business for you and perhaps you have a little higher charge-off going forward, but it has a better return. Is that how we should think about that? And then do you see that business being a bigger contributor as the next year or 2 unfold?
Yes. Great question, Chris. And I think if you look at the way that business operates, it's certainly higher risk lending and the team we have has done a great job. Going back a couple of years, we have the opportunity to do some higher volume of higher risk but higher return loans that have both high yields and low cost to originate with the Flash and Lightning programs. And then with some changes, those went down.
So I think a lot sort of depends on the opportunities that the programs may have and change. I think the general, I guess, bread and butter kind of 7(a) and the little USDA business kind of remains constant, not a super higher than normal, but the opportunity potentially with -- like we took advantage of with the Lightning and Flash programs that had a higher return, but also a higher loss rate. So it kind of depends and could vary. I mean the challenge with that business is that the income is not as steady, but it's such a good ROE contributor that it's a really great business to have and be in. I don't know that we'll go back to the level it was a couple of years ago when it was -- we were originating all those small dollar loans, but we expect it to improve sort of from the run rate we had this year.
Great. And as you look at M&A as a line of business these next several quarters and years ahead, do you think that you'll have competition for some of the banks you're looking at? Or do you think they're more negotiated transactions where you can kind of pick and choose really where you want to be in various markets and various companies?
Yes. So our hope is in as many cases as possible for us to have the opportunity to do negotiated or what I would call limited marketing type deals where much like on the TC Federal, where the seller is looking for a buyer with alignment to what they're doing, where it's more of a partnership than just a true sale. And I think just based on the conversations we have and what we're seeing in the market, there'll be opportunity to do that.
At the same time, there are bid situations that come up. Some of those look attractive to us. But I think our ability to execute on those will be fewer and further between because just from a pricing perspective, I think we're going to price those not as aggressively maybe as some others. So we may hit on some if the competition happens to be lighter because of capacity or market or whatever it may be. But I think the real opportunity and the way I would describe it is I think we're going to have opportunity to do plenty of M&A over the next several years. Our job is to make sure that it's the best possible deals that we can do for our shareholders, for our team for the combined companies.
And so that means as many as we can be involved in being more of a limited process where they see the value and the upside partnering with Colony. And I think there'll be other opportunities to do that. And I think that's what Greg and the TC team saw. But that means more work on our part hitting the streets and getting out there and having conversations and being involved in things and just courting other bank management teams.
Sounds good. And just last question for me just has to do with sort of new hires within your footprint on the lending and deposit side. How does the flow of that? And what would be the outlook in general?
Yes. So a couple of things there. I don't see us being on a very aggressive hiring spree in terms of trying to add a certain number over the next period of time. I think that our current team can -- with the opportunities we have, there is plenty of opportunity for organic growth with our current team. That being said, we will be opportunistic for hires within our footprint, particularly as it comes to displacement from other M&A activity. And so I think there's going to be opportunities for that. But I would say they would be more in the one-off areas than big massive teams or looking to hire large numbers across our footprint, more in the handful, I think, type area.
Your next question comes from David Bishop of Hovde Group.
A quick question. I think Heath or Derek, you touched on the organic growth profile maybe slipping a little bit towards the lower end of the longer-term guidance. And obviously, the Southeast, the regional economy remains very strong, always very healthy pricing competition. Maybe just talk about some of the puts and takes in terms of the growth you saw this quarter on an organic basis and what you are seeing in terms of the competitive environment on the commercial side?
Yes. So it's definitely getting more competitive. I think that what we've been trying to do and what we've been able to do is price things from a relationship perspective, be willing to be disciplined on that, walk away from deals that don't hit return objectives for us, be very focused on relationships. And so that's limited the growth a little bit, but it was important and continues to be important for us to expand our margin and our profitability.
And so we're just balancing those needs, I think, Dave, and trying to make sure that we continue to see margin improvement. We continue to price things attractive -- where it's attractive. But also, I think, reflective in our outlook and guidance and like what Derek talked about and what we think we're going to see loan yields come into, we're going to need to be a little more competitive on that front in order to get the kind of growth that we want from a pricing perspective, just given where the market is and where competition is.
So we'll see that. I think Derek indicated coming down off of the [ 7.33 yield ] closer to where prime is on lending. And I think that's sort of what it's going to take. I think as rates settle out and they get more stable, I think the competitive range of pricing is going to narrow again, it's pretty wide right now, and we see some pricing where we just aren't going to price things. And so -- but I think as expectations for rate cuts kind of stabilizes and I think the market thinks will get maybe one more cut now, that's more stable. I think that range of pricing that we see out there narrows in as well. And so I think that, that will help.
I also think another big positive is not just the economic environment is good in the Southeast, but also because of the M&A, I think we'll see some turnover of assets from some of the larger banks that are going through M&A. But at the same time, you've got a lot of banks wanting to participate in that. For us, if we can stay in that 8% to 12% and also see margin improvement, we think that's the sweet spot to where we'll drive the most value for our shareholders. If we have to start doing things that are going to stop the margin improvement to result in higher growth, we just don't see that as the right trade-off for the long-term benefit of our shareholders. So that's what we're trying to balance, and I think our team is doing a really good job of that, but it's just a constant push and pull.
Got it. Appreciate that color. Maybe sort of staying on the converse of that topic. Obviously, there's the puts on the loan side. On the funding side, I think, Heath, Derek, you mentioned that some opportunities, obviously, to grow some core relationships there. What is your sense that you can organically fund loan growth with deposits this year? And what sort of trends are you seeing on deposit pricing given the aggressiveness you've had this quarter?
Yes. And I'll share some thoughts and then, Derek, if you want to chime in anything else. But I think you'll see similar, Dave, like I was talking about with the rates on the deposits. We've been very aggressive trying to get the full amount of each rate cut out of our funding -- underlying funding and sometimes more than that with the rate cuts and I think others have been doing that, but I think some others have been trailing and lagging.
So I think, again, as we -- let's say, we're going to get more and more rate cut, I think you'll see the competition start to narrow their -- the range of the competition from market to above market will be slimmer. And so that will allow us to be more aggressive at a time when that spread from conservative to aggressive is less, which is better timing for us from a margin perspective. Our team is focused primarily on the noninterest-bearing and interest-bearing DDA that doesn't carry a high interest balance. And so that's where we're out trying to generate most of the relationships. But as those rates stabilize, our ability to use interest-bearing DDAs as a sweetener to go get relationships or to get our foot in the door with relationships. I think we'll be able to use that more in the future.
And so I think our deposit pipelines continue to grow. We have a lot of effort and focus on that. Our incentive for our bankers is based largely on that and less on lending than it has been historically. So we're getting the right kinds of behavior that we want to see from our bankers. And as that's picking up steam, our banking solutions group, which is how we've combined our treasury, our merchant services, our credit cards, all our payment functions together, they're picking up traction. We're getting good business development out of that area, and we think there's opportunity there.
In the meantime, as that's picking up steam, we've got a little time where we're continuing to see the roll-off in our investment portfolio, and we start to get that down to levels that we want it to be in the long term. So we can have some switching of assets on the balance sheet from investments to loans while deposit generation starts to pick up. We feel confident, we can bring that all together at the right time and grow organically deposits to fund loans over the next few years. That may not match up each quarter, but we think deposit generation is going to continue to be something that we find the ability to improve quarter after quarter.
I agree. And then on the funding front, we have about $65 million base case investments rolling off in 2026, and that's coming off at a [ 3.10 yield ]. So that's going to be able to reprice upwards coupled with the deposit growth. But as Heath mentioned, on the loan and deposit side, we're seeing a little bit more competition with the banks. The spreads are kind of coming together a little bit, but that ultimately translates back to our kind of forecast and projection of that modest margin increase throughout 2026.
And I assume that incorporates, Derek, the impact of purchase accounting accretion, correct?
That is correct.
Okay. Got it. And then finally, circling back to M&A, Heath, I appreciate the Slide 14. Just -- as you are obviously getting bigger in size, approaching the $4 billion to $5 billion asset range, do you get the sense that maybe the ideal target is moving close to that $6 billion to $1.2 billion range as opposed to the under $600 million range? And any -- would you look to seek to potentially go over state lines like in the South Carolina and Alabama and such? Just curious from a geographic perspective.
Yes. Dave, great question. And from a geographic perspective, let me tackle that one first. Basically, we look at it as Georgia and the contiguous states. South Carolina, given that we operate 2 markets, Savannah and Augusta that are right on the South Carolina line. We already do a lot of business in South Carolina. We would love to see the ability to expand that way. In Tennessee, we are right at the border of Tennessee. And so any opportunity to move in that direction will be a natural expansion. Alabama, same thing. We operate markets right along the Georgia, Alabama line and do business in that state. So we'd like there's opportunity there as well as in Florida, we operate in North Florida, and we'd love to see opportunities there.
Of course, saying all that, the sheer numbers of bank opportunities are much higher in Georgia than they are in those other states. So the number of opportunities is going to drive some of that. And I'd say same thing with size. We would love to do more sizable transaction just because it's going to drive more meaningful financial metrics. However, when you move up in size, the chances of more competition comes into play. And so it's just a -- I think if you just look at the numbers game, Dave, certainly, $1 billion and below or really even maybe $750 million and below. The numbers would tell you more likelihood at those sizes. But we continue to have conversations with banks above that and look for opportunities there as well, and we are prepared to execute on what opportunities may come about. And there's just so many factors in M&A that are timing that you can't control that's on the side of a seller and you've got to be willing to move and execute based on that.
The good news is in this environment, if you have an opportunity to do a smaller deal, and you don't have a larger deal pending, you can get that one in, get it done. Approvals are happening quickly, and we would not be opposed to lining up more than one at the same time. I think our team can handle that. I think from a regulatory perspective, we're in an environment where you can do a very close succession of deals. And so that gives you greater, I think, flexibility to create value by doing a smaller deal, whereas maybe a couple of years ago, we would have looked at that and said, well, we better not do that smaller deal because it may put you out of the game for 18 months.
And so I think this environment sets up nicely the ability to execute on some opportunities that I think will be great in building a great deposit franchise and great earnings and the ability to grow organically.
That's great color. And I got one final -- I promise last question. Derek, you said that net operating expense ratio, you're trying to get back to that mid-140s by second quarter or so. And then maybe just some thoughts on the effective tax rate. I know that can bounce around. I don't know if that's changed with the merger.
Yes. Great question, Dave. Yes, we try to -- we think we'll be able to get back to that 145 later in the year. We still have a lot of the expenses from TCF that we're carrying. And then after the first quarter, typically seasonality in our noninterest income business lines will increase. And with the addition of -- we have the [indiscernible] coming. And so there are several components we think that will drive getting us back to that number. So I think we feel pretty comfortable about moving back towards that rate later in the year after we get the systems conversion behind us.
And then on the tax rate, right now, we don't expect any changes from the prior year just with the merger and everything. We still expect to be around that 21-ish percent effective tax rate.
There are no further questions at this time. I will now turn the call back over to Heath Fountain. Please continue.
All right. Well, thank you, everybody, for being on the call. Thank you for the questions today, and thanks for all your support of Colony Bankcorp. We appreciate it, and that concludes our call for today.
Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.
Colony Bankcorp, Inc. — Q4 2025 Earnings Call
Colony Bankcorp, Inc. — Q3 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to the Colony Bank Third Quarter 2025 Conference Call. [Operator Instructions] This call is being recorded on Thursday, October 23, 2025. I would now like to turn the conference over to Brantley Collins, Communications Manager. Please go ahead.
Thanks, Joelle. Before we get started, I would like to go through our standard disclosures. Certain statements that we make on this call could be constituted as forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Current and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance but involve known and unknown risks and uncertainties. Factors that could cause these differences include, but are not limited to, pandemics, variations of the company's assets, businesses, cash flows, financial condition, prospects and other results of operations. I would also like to add that during our call today, we will reference our third quarter earnings release and investor presentation, which were both filed yesterday. So please have those available to reference. And with that, I will turn the call over to our Chief Executive Officer, Heath Fountain.
Thanks, Brantley, and thank you to everyone for joining our third quarter earnings call today. We are pleased to report another quarter of improved operating performance. This is a result of our team members' continued dedication to serve our customers and communities with excellence, and our team's efforts, are driving meaningful results. We continue to see improvement in operating earnings driven by net interest margin expansion for another consecutive quarter. We also saw improvement in our operating pre-provision net revenue, indicating continued improvement in core earnings. This earnings improvement, along with improvements in our unrealized losses led to a strong increase in tangible book value for the quarter. We believe we are going to benefit from the Fed rate cuts on the funding side, and that will help margin, but we do expect the rate of the expansion to be slower than what we saw in the earlier half of this year and to be more in line or slightly more than what we saw during the third quarter.
I want to take a moment to reflect on just how much we have improved our margin over the last year. Q3 of 2024 was the low point in our margin. And since then, we've seen our margin expand 53 basis points through disciplined relationship pricing, loan growth and the repricing of assets and deposits. I'm pleased that the majority of this increase after tax has fallen to the bottom line as operating ROA improved from 81 basis points in Q3 of last year to 1.06% this quarter. The team has done a great job of allowing margin improvement to increase our earnings while still making strategic investments for future growth. That will continue to be our plan as we move forward and margin expands. We've been very pleased to see meaningful loan growth throughout the first half of this year. While that pace was exceptionally strong, we're now observing that start to settle into a more normalized and sustainable growth rate, which aligns well with our long-term projections and capital planning.
This past quarter was around 9% annualized, which is lower than the first and second quarters of this year, but for the year, still around a 14% annualized loan growth rate. We're seeing customer demand pull back a little, some of which we think is customers being cautious about the economic outlook and some of which is customers waiting for rates to fall further before they borrow more money. Based on the pipeline, we think the fourth quarter loan growth is going to be lower than this past quarter, which for the year should put us right around our long-term target of 8% to 12% a year. Our bankers remain committed to serving our relationship customers and look to deepen our relationships with a consultative approach that can grow core deposits and increase fee opportunities.
Noninterest income remained solid despite a little slowdown in our SBSL and mortgage divisions. On an operating basis, noninterest income increased over $1 million from the prior quarter. In the third quarter, we saw a meaningful increase in fee income as well as interchange income. In addition, Colony Financial Advisors, Colony Insurance and Merchant all saw strong increases in revenues as those lines of business continue to grow and scale. Operating expenses were slightly higher this quarter as we expected and mentioned on the call last quarter. As we invest in talent and see more activity in various products and services, we expect to see some expense increase to go along with that. This additional expense was offset by additional noninterest income and our operating net NIE to average assets improved quarter-over-quarter by 4 basis points as we continue to focus on efficiency.
While recent headlines have focused on one-off credit events at some larger regional banks, our portfolio continues to perform well. Credit quality remains relatively stable overall. Past due and classified loans both improved quarter-over-quarter, reflecting continued strong credit discipline across our portfolio. While criticized loans and nonperforming assets increased, they remain at manageable levels relative to our overall portfolio. Charge-offs were a little higher this quarter, primarily due to variability in our SBA portfolio, which we've discussed previously. At the bank level, net charge-offs remain at acceptable levels and in line with our expectations.
With the federal government currently in a shutdown, we've been closely monitoring potential impacts on our business as well as the impacts to our customers and communities. Our teams are prepared to answer questions and provide guidance and assistance to our customers as needed. We reviewed our portfolio to identify customers who may be affected. And at this time, we do not expect any material adverse impacts or credit concerns as a result of the shutdown. We remain focused on staying proactive, supporting our customers and ensuring business continuity throughout this period. The area of our business that is most impacted by the shutdown is our SBSL group, which does government-guaranteed lending. In anticipation of a potential shutdown, we were able to seek approvals on a number of loans prior to that shutdown. Our team is currently focused on continuing to develop new business and process loans as far along as possible during this time.
Our ability to get final approvals and loans sold will be impacted, but we believe that as long as the government gets back open this quarter, the impact should be minimal. Turning to our pending merger with TC Bancshares and TC Federal Bank, I'm pleased to report that everything continues to progress as planned. We filed our regulatory applications in August, and our S-4 registration statement has been declared effective by the SEC. Both companies are well into the process of shareholder approval, which we expect to have at our meetings in November. We continue to expect the transaction to close in the fourth quarter with system conversion planned for the first quarter of next year. Coordination between our 2 organizations has been excellent. The teams are working closely together and integration planning is well underway.
We're very excited about bringing our companies together and leveraging the strengths of TC Federal's franchise to expand our market presence and create new opportunities for our combined organization. We have made and communicated employment decisions for the combined company post the merger, and we are on track to achieve the financial metrics of the deal that we laid out at the announcement. As we think about M&A going forward, we are optimistic that there will be opportunities for Colony to participate in further M&A next year. We continue to proactively have conversations with banks that we feel will be a good strategic fit with Colony. We also expect that a smooth integration with TC will be beneficial to those discussions. We are also being very strategic about opportunities to grow our customer base and talent pool from the disruption that is occurring in our footprint with the other bank M&A that we are seeing.
In terms of talent, we're very excited to welcome Mitch Watkins, a seasoned and well-respected banker to our Columbus, Georgia team. Mitch brings extensive experience and strong local relationships that will further strengthen our presence in this important market. We remain focused on investing in talent acquisition that supports our growth strategy and helps us solidify and expand our market position across our footprint. We look to make very strategic additions where it makes sense in commercial banking, wealth and mortgage.
Lastly, I'd like to take a moment and recognize one of our team members, Hugh Holler, our Director of Homebuilder Finance, who was recently inducted into the Homebuilders Association of Georgia Hall of Fame. This is a tremendous and well-deserved honor that reflects Hugh's deep commitment to this industry and the respect he's earned throughout the homebuilding community. We're fortunate to have Hugh on our team. He exemplifies exceptional customer service, servant leadership and strong relationship banking, and we congratulate him on this outstanding achievement. With that, I'm going to turn it over to Derek to go over the financials in more detail.
Thank you, Heath. Operating net income increased $252,000 from the prior quarter. This increase is attributed to higher net interest income and operating noninterest income, offset some by increased provision and operating noninterest expenses. Operating pre-provision net revenue, shown on Slide 11 and in our earnings release under non-GAAP measures, improved both quarter-over-quarter and year-over-year. This sustained growth highlights the continued momentum and strength of our core earnings power. Net interest income increased $314,000 compared to the prior quarter by continued asset repricing and loan growth. Our cost of funds for the quarter was 2.03% compared with 2.04% in the prior quarter.
As mentioned last quarter, we expected our overall funding costs to remain flat. The Fed cut late in the quarter will have more impact in the fourth quarter, and we expect to see that cost of funds number decline. Net interest margin increased 5 basis points from the prior quarter, which was a little slowdown from the increases we saw earlier in the year. We expected this and mentioned it on last quarter's call. Our margin stands to benefit from the September Fed cut and any other cuts we may get in the fourth quarter. With more normalized loan growth expectations, we don't believe it will be a huge jump in margin quarter-over-quarter, and we are anticipating that to be in the single digits going forward. Third quarter operating noninterest income increased just over $1 million. Service charge and fee income increased $425,000 with some of that being activity-based and some being a result of a process we went through late in the second quarter to evaluate and adjust our fees. Other noninterest income increased $788,000, driven by increased interchange fee income, improved income from wealth insurance and merchant services as well as a onetime gain from one of our fintech investment fund partnerships.
Slide 20 shows the improvement in third quarter for Wealth, Insurance and Merchant Services. Mortgage and SBSL activity has been a little slower this year, and mortgage was even slower in the third quarter. This is driven by changes in SBA lending guidelines on the SBA side and a slower housing market on the mortgage side. Operating noninterest expenses were up $624,000 quarter-over-quarter, reflecting continued investment in our people and growth initiatives. Compensation and benefit costs were higher in the quarter related to strategic hires to support our growth and business development strategy. A portion of those new hire expenses are short-term salary guarantees for commission-based employees, and those will end in the fourth quarter. Technology and innovation remains a focus for our long-term growth and technology expenses were higher quarter-over-quarter as we continue to invest in ways to improve long-term efficiency and provide for a state-of-the-art customer experience.
We remain very disciplined in managing expenses and maintaining our focus on efficiency. We are confident in our ability to balance cost control with the strategic investments that position us for long-term organic growth. On an operating basis, the increase in noninterest income more than offset the increase in noninterest expense. Our operating net noninterest expense to average assets improved 4 basis points from the prior quarter to 1.48%. On a go-forward basis, we still target a net NIE to assets of around 1.45%. Fourth quarter expenses will likely include at least 1 month of TC Federal expenses post merger. Our systems conversion is planned for the first quarter, and we plan to achieve our targeted cost saves in the second quarter and beyond. Onetime merger-related costs during the quarter were $732,000, and that was an adjustment to operating income.
Also during the quarter, in our 10-Q last quarter, we disclosed a wire fraud incident where the company was the target and losses totaled $2.9 million. Upon recent new information, a portion of that loss that we believe to have been fully covered by insurance has become disputed. And in accordance with accounting standards, this quarter, we recognized a $1.25 million loss related to the disputed coverage. This is reflected in our adjusted income. All other coverages remain undisputed. We do not expect any other losses related to this matter, and we'll continue to pursue all avenues for recovery. Any recovery will be recognized as nonoperating income in future periods.
Provision expense totaled $900,000 for the quarter, an increase from the prior quarter, driven by loan growth and charge-offs in our SBSL division. As we've mentioned before, SBSL charge-offs can have some variability, and that's what we experienced this quarter. Many of these SBSL charge-offs are related to older loans before we tighten credit requirements and often involve lower SBA guarantee percentages. This quarter represents the peak for charge-offs at SBSL. We do not expect them to increase from here. These are primarily variable rate loans, so a declining rate environment should provide some relief going forward. On the bank side, charge-offs remain low and past dues improved quarter-over-quarter. We've seen more activity in loans moving in and out of classified and criticized, and our team has done a good job of working these loans.
There's been a lot of recent media attention on credit challenges at some regional banks, particularly related to shared national credits. I want to note that we do not participate in any shared national credits and our exposure to participation loans is very limited. Our lending strategy remains focused on relationship-based locally originated credits where we know our customers and markets well. Loans held for investment increased $43.5 million from the prior quarter. As Heath mentioned, we are seeing that growth rate moderate some from the early half of the year, and that will put us near our long-term targeted growth rate.
Slide 34 shows our weighted average rate on new and renewed loans of 7.83% during the quarter. And when you compare that to our repricing schedule on Slide 36, we still have opportunity to gain yield on maturing fixed rate loans as well as investments cash flow even if rates move down some from here. Total deposits increased $28.1 million during the quarter. Part of that growth reflects our strategic use of brokered funding to replace seasonal municipal deposit runoff. We expect those municipal funds to return in the fourth quarter as tax revenues are collected, which is consistent with the historical seasonality we've typically experienced. We remain focused on building and deepening customer relationships that bring in high-quality, lower-cost deposits, which continue to be a core priority for our growth strategy. During the quarter, we sold securities for a pretax loss of around $1 million that netted close to $75 million in proceeds. Under the assumption of using half of those proceeds to fund loans and half to increase liquidity, our modeling indicated an earn-back of less than 1 year.
The book yield sold on those investments was close to 3.16%. So there's opportunity to pick up meaningful yield there and increase interest income. We will continue to evaluate the need for future sales as well as consider a larger transaction as part of those evaluations. We did not repurchase any shares during the quarter, but continue to review the need for any repurchases based on capital needs and market conditions. This week, the Board also declared a quarterly dividend to shareholders of $0.115 per share. We're still in the process of filing a new shelf registration as part of our capital management strategy and expect that to be filed very soon. Our TCE ratio at the end of the quarter was 8% compared to 7.43% for the same quarter last year. Tangible book value per share increased to $14.20 from $12.76 a year ago, reflecting consistent growth in tangible capital and our continued success in building long-term shareholder value.
Slide 20 highlights our quarter-over-quarter pretax profit for our complementary business lines. Mortgage had a slower quarter with production being down slightly compared to the second quarter. Expenses were a little higher due to some strategic hires of mortgage lending officers and the upfront cost and short-term salary guarantees associated with those hires. We believe these new MLOs will drive profitable growth for our mortgage division. The housing market and volatile interest rates have also caused some headwinds that contributed to the lower production during the quarter. SBSL was flat compared to pretax income in the prior quarter. The increased charge-offs were offset with decreased expenses. And as we see prime rate move lower, that should reduce some of the stress on the charge-off side.
Marine and RV lending has had a good year and continues to improve. Pretax income is up $100,000 quarter-over-quarter. Loan balances are now around $90 million and have increased $45 million year-over-year. We are looking into the potential for pool loan sales, which could provide a good source of noninterest income. Pretax income for both the Merchant Services and Colony Wealth Advisors increased meaningfully from the prior quarter as those business lines continue to grow and perform well. We are excited about the performance and the outlook of these 2 lines of business. Colony Insurance closed on the OE acquisition in May and the second quarter was a focus on integration. The team is now focused on growth, referrals and sales targets with income increasing in the third quarter and continuing to scale. And that concludes my overview. And now I'll turn it back over to Heath before we take questions.
Thanks, Derek. And again, thanks to everyone for being on the call today. We're very pleased with our performance this quarter. That's all of our prepared remarks. And with that, I'll call on Joelle to open up the line for questions.
[Operator Instructions] Your first question comes from Dave Bishop at Hovde. How about given the disruption in D.C. seeing any trickle down to your borrowers and local economy?
All right. Well, I appreciate Dave getting that question in. As I mentioned earlier, we are on the lookout for that. We really don't see a lot at this time. We have provided our team and our customers with resources to help out as we see things, and we scrub the portfolio to see if we have any exposures that we're concerned about. But at this time, we don't think there will be a material impact. We don't see any issues arising. Of course, I did mention the SBSL team and the government guaranteed loans and what -- that there could be a potential impact there just as if it drags out longer. But we think if we get a resolution within the next little bit, it shouldn't have too much of an impact on Q4. So we feel pretty good about where that is overall at this time.
Related to loan pricing, what is the average roll-on versus roll rate this quarter and how NIM outlook looks?
Yes, absolutely. I'll take that one. Great question. So when you look at the roll-off yields from our previous repricing schedule or our previous released investor presentation for the prior quarter, we had fourth quarter roll-off yields in the 5% range. And so our put-on yield for the new quarter is also in our investor presentation, and it was -- the new and renewed rate was 7.83% for this quarter. So you can see there we have some meaningful pickup in yield. And even with rates moving down a little bit, we'll continue to see that. That will drive some net interest margin growth. We expect that net interest margin growth to be both on the cost of fund side and the asset repricing side. But ultimately, going forward, we expect a modest growth in the single-digit range, but a little bit higher than what we saw this past quarter as we take advantage of some of those Fed rate cuts.
Any NDFI loan exposure as well?
No, that's a great question. I appreciate Dave getting that question in, and we do not have any meaningful exposure to that. And I know that's been another area that we've seen a lot of concerns about and seen some situations as some other banks, larger banks have reported. And back to our comments that we made earlier, our real focus in our organic growth strategy has been to bank customers that we know, that are in our footprint, that we have a relationship with or even that our bankers have maybe had relationships with at other banks in the past. So we really focus on the customers we know and the kinds of business that we think we can understand and adequately assess the credit risk.
There are no further questions at this time. I will now turn the call over to Heath for closing remarks.
Okay. Well, thanks again, everyone, for being on the call today. We're really pleased with how the quarter went and excited about the things happened in Q4 with TC and continued improvement in our margins. So we're very excited about where Colony is headed, and we appreciate you being on the call today. Thank you.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
Colony Bankcorp, Inc. — Q3 2025 Earnings Call
Financial data from Colony Bankcorp, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 152 152 |
24%
24%
100%
|
|
| - Interest Income | 108 108 |
31%
31%
71%
|
|
| - Non-Interest Income | 44 44 |
11%
11%
29%
|
|
| Interest Expense | 61 61 |
0%
0%
40%
|
|
| Non-Interest Expense | -104 -104 |
24%
24%
-69%
|
|
| Loan Loss Provisions | 6.20 6.20 |
85%
85%
4%
|
|
| Net Profit | 33 33 |
18%
18%
22%
|
|
In millions USD.
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Colony Bankcorp, Inc. Stock News
Company Profile
Colony Bankcorp, Inc. is a bank holding company, which engages in the stockholder and investor relations functions through its subsidiary, Colony Bank. It operates through the following segments: Banking Division; Mortgage Division; and Small Business Specialty Lending Division. The Banking Division segment offers full service financial services to include commercial loans, consumer loans and deposit accounts. The Mortgage Division segment comprises sales and servicing of one-to-four family residential mortgage loans. The Small Business Specialty Lending Division segment focuses in the selling and servicing of SBA and USDA government guaranteed loans. The company was founded on November 8, 1982 and is headquartered in Fitzgerald, GA.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Fountain |
| Employees | 506 |
| Founded | 1982 |
| Website | colony.bank |


