CBAN - Earnings call 1 2022 | Colony Bankcorp, Inc.

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Operator

Hello, and welcome to today's Colony Bankcorp, Inc.

First Quarter 2020 Earnings Call. My name is Bailey, and I will be the moderator for today's call. [Operator Instructions] I would now like to pass the conference over to Andy Borrmann, Chief Financial Officer. Andy, please go ahead.

David Borrmann

Bailey. Thanks, this keep started lawyers and morning get the to happy. To quick going disclosure. to just opening make I'm a statement

Certain and statements the of not we of cautioned constituted known 'XX as that make involve the future XXXX. on uncertainties. this statements and unknown forward-looking prospective and the performance call within any Current that meaning investors Exchange such guarantees of Securities Securities and of forward-looking Act risks Act could are be are statements

differences include, pandemic, I'll such of are not company's Factors businesses, COVID cause that that, financial turn results but limited to to you. and variations assets, Heath, could over operations. With other the of it condition, cash flows, prospects

T. Fountain

all of shareholders support. Thanks, we a of capital their everyone, added our course, joining And February. in morning. our of quarter, this completing for this thank new morning. raise shareholders number call for Good to our I want

the well interest in I investors our appreciate so as support. all and company And your new appreciate and

This have is and way put is have call guys that doing our investor release that you presentation handle we're earnings expect and to we we first the these press quarterly had out. in the that

over comments So brief make few turn and that question general a quickly and it we'll for answer. about

quarter below annual a loan That to growth. what production good a is due great in quarter We and slightly despite had what quarter We down rate of ended at X% on side of we're in headwinds. X% core ticking a is had the the up XX%. early loans to run payoff targeting loan continued

our average quarter. quarter, loans average our at ending loans you If the for our are last below balance actually look

growth of quarter, benefit revenue side for we end growth. quarter with not on get did the steady So the we up the did good but the loan

and X% XX% we'll the pipeline we've early range in in the indicated in about feel see what like we for quarter, course, to the so be of loan and we're, And confident year. we loan we growth but far, good second now our that full

of mortgage faces our side Our the business fee headwinds in some certainly income area.

little increases. in Obviously, last we've the some faced unprecedented while rate

the we And has. housing is that in what's immediate inventory. impact so see not to the easy obvious so maybe have challenge to that's But see that

is And things But had out, mortgage a -- that themselves also think continue playing so that, will we production mortgage our shape those that. to level despite quarter, into business. good and and we a this strong have we'll of

the lending, our side to lending that are In due our guaranteed production seeing the development business guarantee capacity keep government fee. added We've going. business that the changes and small guarantee specialty in we to ramp on there that terms up area, officers and lower demand some try of in to some

is the quarter a are good And of of quarter on on little income, fee always trends fee side course, area first a that the shorter well. but light we seeing as in banking and the banking side,

November. in Of on was year course, quarter that and was fully with completed X acquisition first was announced X, the core integrated is ago. SouthCrest August this the It conversion

continue We're that there. the how going pleased we're that synergies strong going. think is seeing company a to to with integration combined as we And we're see

and remains markets good. the outlook in is economic strong, Our quality our credit

X%. efficiency to goals. affects initiative read team for move banking a efficiency also our by This us about our of I'm we quarter, and release. reducing exclusively approach our our in proud workforce an division This our almost announced that taking you there towards is about proactive

rural smaller branches markets where we branches. X in have nearby closing We're

side expect and both the from changes. customer impact deposit We on loan attrition to the from be minimal the these

lines loan changes of staffing changes our these production any impacting are to expect in our see disruption income don't not And also in staffing. noninterest these from business. We

there. generation So we revenue don't to expect that affect

efficient it described pruning I to same so in our of can we way, this an at to continue and as grow you kind we tell team manner. look the I

going few With to a I'm who over turn that, it will to Andy comments. more Borrmann, make

David Borrmann

Heath. thanks, So

in the peers. surprise that our we've interest impacted first rate experienced by So the of everybody. been portfolio given than no sort in here of environment larger some quarter, in bond a is have experienced the unrealized what portfolio bond have Obviously, losses our little

portfolio We did X. move approximately maturity on HTM to January to XX% to of the held

than December HTM the OCI X. These on And moves March XX. did quarter million that it Another by [RCI] larger almost impact we XX% on $XX while was million. during $XX to the effectively reduce was had

X other with been there's been things pricing our changes we've of have loan to the handles our Customers dislocation used appropriately to side. of that seen of say I we're the Georgia And the sort a long a bit doing rates, rapid and in is growth confident in would loan Atlanta we're One in generate on throughout for growth, time. loan here still priced numbers. best and

there or days sort a remain impact that but pricing sort said, is number. get the our accustomed XX more seeing resolve XX Heath solid, lag next people X%, will of this we're over As pipelines XX-year itself as that hopefully of seeing to

slow expect remain we the the to be first did But income. benefit XX-K the income overall the to increase And our sensitive, end to spread numbers. in nonspread And quarter we asset of similar an in fourth the fee it quarter. in clearly, our do rates

of the to quarter saw benefit to the lower expense related numbers Some variable you in the slightly production. was of or that some that expense

work we that front. load feel expense where it have were we But our with more overall, came happy core a on -- we do on do in but to was like basis,

you. all have. To pass it Heath, I'll over So that's I really

T. Fountain

ask All open you Andy. it Bailey ahead if for go right. and And can that, you, Thank with I'll up questions.

Operator

Fitzsimmons D.A. Instructions] comes first [Operator today question The from Kevin Davidson. from

Kevin Fitzsimmons

guys helpful. a be quarterly doing So yes, appreciate This call. I you will

looking Or out in there something to the for guess First, it on it just I'm at you been some announced see? Is a is to on top pressures why you've while? initiative, curious, on efficiency -- the response now? that, #X, line I quite more it is

And line? being in Or bottom that fall is then it to used savings million elsewhere. the $X of to you're invest is mostly that to targeting, going

other words, of or to in it's other digital some expenses So kind areas? replacing another from like area there just

T. Fountain

Kevin. achieve That's efficiency question. some better good Thanks, important us it's for long-term a to numbers. Certainly,

We like large that that have of that. from branch process. noninterest other another the But we of network initiative a generate at constantly know looking had positives background. back at in in relative that to went size we end lot we're opportunities our our XXXX, to income rural beginning where of We the -- that to of terms come income. XXXX, like in through fee We that. due We a

rationalize so branch as And look network. we have we for to us just important it's to that to and continue at recognize our grow,

there's So have lot and of we that, time into special focus and went on. us a the of energy integration. other timing the SouthCrest needed We was this us, for of behind to just project no effort to logical kind this that than get next

with opportunity So pressure Obviously, we top any of nothing good do we're growth. on think to loan the terms in continue have line going that for feeling to to side there.

the to some technology things expense, of In the well. are those bottom on we there designed Certainly, doing but increase are that generate terms to are line. revenue are most going to spend dropping side that as of

bit the bottom a to see this hope we hit of line. good So

doing into are of commercial potentially we that thing be temporarily, adding that this some we bankers. we'll other think eat will additional The

of will we're but relatively themselves have from you so a And think those revenue in continue to time, and recruit. for to period will short actively added Obviously, see -- generate increase will some we pay that.

Kevin Fitzsimmons

fee the revenues. Great. question Okay. other on One

about quarter? a have off? -- business Or like wondering, more strong more Or and a You is that are mentioned seasonal just mortgage. bit. is slower the SBA this talked last demand. had It coming just line came at it that down looked is But -- quarter more a does very off room to fall we rate? you of run I'm level still quite

T. Fountain

fourth government-guaranteed lending for The strong quarter our question. Good a was quarter group. really

looking -- it that at was last high quarter-over-quarter, so it quarter. And unseasonably

said, shift. We are had a we've like -- I

no over into of evolution so bank having XX% a a and the year all the fee. not the guarantee in government-guaranteed lending era last through from PPP If or having of except working about lot you went guarantee opportunity of then think and that the others the our for

we're now USDA adjustment that making of kind to And back lending. SBA and sort normal of

change pipeline that, seeing that good still we're projects have impacted of we're are has it. a building bit so through coming that And back up. We of backlog and our

offs we're this going up second not see I fall now. see at quarter the important the to that we're year. think half second doing the back But So in levels of what from part the of building is we're we an -- -- and think you'll

Kevin Fitzsimmons

last Great. one Okay. me. for One

and SouthCrest of quarter full is first the you. that about behind earlier mentioned You now integration

seeing one and sounds Just seeing healthy growth. -- you're it you're you pretty expect hand, organic -- on like

would capital. -- would On the to that out up. you loan-to-deposit would other I think look be opportunistic want suspect I ratio opportunities raised if situations there's hand, for there. M&A can you get you're you guys that just looking

find the likelihood being guys is an So over do on opportunity said, next that marketplace you all you're might in out acquisition just hearing you like or what that based so? year the think what there the

T. Fountain

Yes. Good question.

something would grow There is our think that do we active plenty we over through for us on going significant front conversations. there definitely of out on We opportunity that are be year. and is the have to that continue We expectations there. having activity that to next M&A,

Operator

from Montgomery The from Janney Christopher today next Scott. question Marinac comes

Christopher Marinac

loan Andy more charging you -- it of can how get remarks, look Fed elaborate increases you kind your and Andy to further Heath, impact on his may rates about future know April you're that in in I touched that the want improvement? and on I how to periods? and just expect color yield the

T. Fountain

Yes.

benefit rates variable best new some thanks Clearly, hit We're rates and disciplined rate adjustable these and So repriced. loans I'll doing already loans. our for that, on get rate of stay our and of to have question. the the loan Chris, on

numbers Frankly, this yield. the forgiveness, see PPP any our will those be in those hitting quarter we benefit last

effectively overall It's yield a one ratios Georgia loan-to-deposit the XX% should averaging So still our I'm first range. hugely hopeful for be quarter quarters probably the of in in with that market loan competitive lowest overall.

trying So people are ramp. still hard to really

you if I to you're -- they're calls not X below starting see It's you're you're you're anymore, below anymore. but where we if going they're borrowers asking think professional get to asking do, truly from X the -- you do how phone we'll

yields. is our So that think, favorable, I to part future

David Borrmann

our just stable and to with that our We've that And that, such in customers on we're and a team coaching some customers. conversations add the having environment environment. while low rate rate both Chris, I as for a conversations the new some we going bankers with there's relatively our and our would been with all adjust

have we been the lot of that that think the room have didn't and seeing for and work is not good is the I or news for up to things our rates with borrowers. that for the marginal for deals a go to things projects

little a than it's that. -- working we bit more, and so it or sticker I that like And flow is cash through shock think, things deals go as

me has they happening ask place. able that But through they not or for X at while optimistic and obviously in be same borrower come that it X come months us something now, and the where that's on good back a are we and So And we and we'll move go anymore. a work would for to that. on were

just there. adjustment work to as through we get So some we have

well. thing of are that's as through the course, same Of our all competitors going

but we're longer-term loan-to-deposit loans trying we so realize low to grow value. to create need we to and pricing, And and disciplined got be ratio, also a

Christopher Marinac

external in time? Great. that did level as really Or as today, to you securities more a next see you I loans just the work? it the And put that over you changes for of of as kind other year mean, Heath, follow-up, perspective. Thank that materially think of result you changing do a expansion

T. Fountain

Yes.

is of to the So of to securities expect that portfolio We things terms to the the more on be of just we're a have certainly grow that running -- those off. side. in unknown that. the eat big deposit on loans committing and able The securities amount couple into sheet balance

don't quarters I is consecutive know some many we're quarter the I maybe of how these this start -- that deposits running entering guess thinking off.

seeing We're strong And not that. so seeing deposits. we're

see And start that is little so out that the thinking to of of of erosion I'm in control. bit a some we'll deposits. hopeful some our

deposit raise go rates certainly to as expect up. our We interest don't rates

sheet meaningful So to and I more opportunity the that number. ratio to right there's balance loan-to-deposit of think kind an size a increase

to And so at the same time, but relationships not -- out deposit the bank. we're push going of core

haul. deposit decreases think do long don't for in will it going to be And not we that either. closures, say to We're these we're from the branch like trying those I with meaningful are still that. And

And pricing our any out we're noninterest-bearing that's piece interest-bearing deposits. consumers that. of so trying gather from customers to control but And to we're deposits, another it be and on from still business going to going

to But to ratio we're loan continue we loan-to-deposit this if we're expecting move can growth the up, going that get year.

David Borrmann

Chris, on of cash. we bank I add real philosophically, think just X% to try the total X% to quick would I sort run

And size is whatever as so the drivers the backdoor the of that is sort portfolio of of well. of one

Operator

[Operator Instructions] The Bishop question David Group. today from Hovde next from comes

David Bishop

Question to for as the segment. it relates banking mortgage

the potentially some to to You banking rates mortgage continue curious see that slowdown segment if maintain efficiencies a more rates noted the even the market. on rise you segment get there. or in we and just or improve you're have continue in do rise we obviously trying on see housing the to view the ability if how efficiency But to

T. Fountain

thanks for David. that no, -- question, Yes

for purchase group have primarily of loan our just group from our originators to as mortgage everybody's our relationships and benefit, money So we that mortgage realtors. to driven builders a

see that closely. business, a there's Certainly, lot changes as of front. with in manage each our you on noninterest expense lines quarter that income We can of variable the

Our production, last that end manage of add not mortgage -- over our good net We incentive we on the of business. a -- division's originators towards did of is driver on important an President of year. income, bit how which

but a -- having And a market some lack of in we and of is prequalifications time their average inventory our our tight got production. they've markets. in that of XX%, probably our originators the getting a because are lot down a contracts hard Again, where look lot of lot the of of XX% or in

seeing line where and with take inventory got that to what of of a we've we're is is that lot The -- between group, have we that a homebuilding markets think this that close we do mortgage but we've plenty of finance there's business the entered despite finance rates. bigger that and eye -- capacity -- a our a continue business. And we we So such inventory. on strong of homebuilder where light to lot still market we have lot the of keep

capacity loans. seeing the size mentioning, on go to as we're and plenty up thing the in was again, like And same consumers side the consumer, in on commercial I have rate had of of

close ability, need certainly expense -- obviously, that's but -- So a standpoint as that business And scale on. we something back the we if do we an have to keep eye from operational to. fixed from well a

year. did We million $XXX last

We million are shortest of the quarter at $XXX year. in the

So quarter. we number actual guess, is did are XX%, we the we think this I

cycle what the model there's depending I to our But we looks to to economic through change. increase cycle, could like. to we think outlook. just certainly to, current a need grow that look we that. business mortgage for make on our us That's we continue if adjustments that think business would That still but opportunity

David Bishop

Got it.

I think maybe...

David Borrmann

of hard David. time hearing little We're bit having you, a a

David Bishop

better? Sorry, this a little is bit

David Borrmann

better. That's

David Bishop

Okay. Great.

I in the -- the curious talent profile with think, adding the I'm just real response commercial commercial of maybe the And acquisition you coming footprint? amount a -- on especially some and of some activity, targeting estate? the these of consolidation obviously, some are of that merger by of [indiscernible] there's [indiscernible] and the question about commercial to, what I bankers, this to potentially you're bankers think year. [indiscernible] targeting

T. Fountain

Yes.

are have. we targeting to very really we is similar what So what

estate, -- we've commercial occupied the and are both call I nonowner we a that to generalists occupied. and have So talking definitely more bankers would would owner that on what brought we're that real

some consolidation. those banks degree, a and, targeting of that national the regional of is to We the result primarily it are out larger

think like you when markets Savannah, and so Atlanta. Augusta And about

now these some roll-ups X cards over couple where last years, of times. seen X their business the of You've changed or

else. so the along with everything that, and And -- processes and

the having a we're portfolios $XX at, depending business million of there. larger markets larger on of Augusta, over $XX in the isn't that get We're generally be smaller we can to some and be we're the in period of as So much the time carry success Savannah, think million the Atlanta. $XX recruiting $XX size good of rural bring short where that to market trying of markets looking would and folks in cost more to million the would like million relatively size banker out

David Bishop

the it. you back color. then appreciate And I Got sensitivity the mentioned referring the XX-K. interest to

maybe hike XXX of curious, impact a be is period? basis hike Andy, over been in spread a Just on question there's the a if X-year for terms of would point sort rate what any of income update

David Borrmann

Yes.

got don't out that ready the quite David, to We've disclose some yet, be you in that we're to I give preliminary can't So Q. yet. quite I those numbers. think will

T. Fountain

say will think the numbers the that be it end similar I of to numbers. year, at those to the

stay we to still just outlook see range. as for to to quite see happy but [indiscernible] causes can maybe remains the But -- as get if a increasing. see and them adjusts can rise earlier risen in the up days marketplace it the hope quickly not rates higher as higher to last happy strong we're rates they've little in time, the if stabilize, bit the like dislocation happy So temporary to this XX, rates we each XX and We're it. a little them, go

David Borrmann

structural David, bit will the sensitivity lower overall that. of given can bit I I about immediate standpoint, just cash thing little we think little an fact basis, a can lower on that be a asset the one we've our just balance, is a obviously talk add from a allocated with

David Bishop

then of And questions. a it. housekeeping Got couple

half thinking be in about terms I securities there's have rate, stop curious of the monthly bumpiness heading we the flows cash the of into in that little you do the a of portfolio. I'll been -- bit the And know, of Just back portfolio, the year. should there. what of that don't tax effective

David Borrmann

Yes. Yes.

in second. little expecting it's bullet-like bumpy. portfolio, variable our to balance flows risk cash talk happy a me on the the We're So the -- sheet XX% going of said, to bond monthly relatively one overall. relatively don't tax the structure variable. forward. about bit then our be flows give cash to And We run those, since you We closer is on quick ton a a been to portfolio we like have XX% rate bond

millions the you best from of number single-digit flows et Obviously, And got high the cetera. maturities, depending is cash for I've in on portfolio.

Operator

[Operator additional questions further There this at There questions waiting registered. are are no currently Instructions] no time.

the So Heath closing I'll Fountain, for remarks. pass conference to CEO, over

T. Fountain

Thank you, Bailey, and being thank your and appreciate today. interest on We the look appreciate you, you. everyone, with call you the being call on forward to speaking for Thank you soon. in I Colony.

Operator

That concludes Bankcorp, Inc. Colony the

Quarter for your Earnings Thank First you Call. XXXX participation.

You disconnect lines. your may now

Colony Bankcorp (CBAN) 22 Apr 222022 Q1 Earnings call transcript