CBAN - Earnings call 2 2022 | Colony Bankcorp, Inc.

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Operator

Good afternoon. Thank you for attending today's Colony Bankcorp conference call. My name is Tamia, and I will be your moderator for today. [Operator Instructions] It is now my pleasure to pass the call over to our host, Andy Borrmann, CFO of Colony Bankcorp. Please proceed.

David Borrmann

Tamia. Thanks,

release thank for who's relatively -- today the all, and the quick to from you call. thank we earnings you of on everyone call, turnaround First the of recognize the

of cautioned statements we investors the limited it and such this other statements the unknown to to, happy. and quick call Heath, XXXX. constituted keep of XXXX the opening could COVID of you this include, make businesses, statements could Securities guarantees Certain forward-looking known going leaders uncertainties. that us. that, I'll get and and turn be I'm differences To Current So any that Exchange started pandemic, are flows, within appreciate and Securities Factors variations we are performance, of prospects afternoon, not assets, Act financial condition, risks statement. cause to Act just results company's involve not forward-looking the cash operations. With meaning a joining the are but make as of over on of prospective these future but you.

T. Fountain

certainly a on Andy, solid turnaround all But again for and thanks, it's on Appreciate quarter really walk it being call. noisy. time. let was like that us, through, us logistical you, just Andy issue I working a me know for with And you said, but think was Thank the everyone, quick there. it I

color like of we've of the would kind on to walk quarter some that for little laid you those. I So you pieces of some a give the for through of kind out moving and

completed announced our that was initiative initiative, to quarter, we the took During quarter. the and charge $X.XX million efficiency during personnel for expense previously a largely

that charges also that to rates rapid had quarter. have some increase saw this in interest are we the We related

on and of Those a then charge advances called during interest from write-down acquired portfolio. acquisition. quarter, SouthCrest So the the expense were to write-down government due noninterest due the expense we took servicing guaranteed the to FHLB to our $XXX,XXX loan assets came hit to $XXX,XXX that of

So to wanted we we during had those the things quarter. that highlight

loan annualized also added million XX% we quarter. growth growth a in a We $XXX rate. That's loans. had nearly -- nearly great We

was see running after it a that our good earlier bit that were loans be getting where led us to the we to $X.X to So providing to year. hoping traction us increase loan behind little in in million reserve. loss And

credit during loan to that's to million outlook So the put expecting allowance despite the we need experienced need to where the growth. $X.X remaining did we and And growth put we of quarter. improving to the were due in cover the to credit feel of course, metrics stable, in ahead

analysts follow And us I as think that certainly, lighter were that well. than numbers our projecting

think quarter. take we I into you when account, a items good really those So had

to the note business environment results really of of helped mortgage I'd for net performing guaranteed bank things of work and a government income. the government small couple lending, group, this driving quarter, we mortgage our lending, like for our quarter, or years, our drive other and we call the couple what SBSL last our really our specialty for on earnings. a challenging majority as we lower core And and for core the saw improving guaranteed with well bank our

we This PPP see also income. is so bank. saw And in core little good first it to very was the where the that quarter

we was million, about it not quarter, quarter. and that did $X.X previous the this in So have

I can happy a that all like think outlook. with noisy, earnings said, I about our quarter we're but why again, bit with So the see account, you and into taken it's positive

quarter, were also debt we've to results during $XX able, that operating a offering. In million addition to complete we the the detailed, subordinated

base capital perspective $XX done we've work first a in raise in the in really up year, from really, great there half out capital proud what this our us place really of million it a to QX, plus the any puts so, with through to capital of there. uncertainties And shore economic

of our accomplished. and been of quarter, team So proud we proud what's this what did

really the all prepared comments I that's So have.

up me, to time, if this you'd like do So to so. please for lines the open questions,

Operator

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

Kevin Fitzsimmons

that Apologies created if about just this looks just if noise it I haven't like or in could some talk if there release. X it, through went already linked the so the But quarter. release I whole yet know you've bps wondering covered the you made -- $XXX,XXX was probably debt it up but margin. in

think beyond, assuming to positioned? Fed us margin are is third How how the assuming market the going of If do? is forward can to in you guys going what about the do trajectory and help you quarter the

David Borrmann

Sure, the for clearly. question. $XXX,XXX Thanks a a bit impact. put points to math, way the it pencil out math, little does Yes, wrench we that basis be about of Kevin. XX of that The in looks

on change. into expect some margin -- depending you our quarter. We good probably that. going forward, the interest to realistically, a third going up mid-X.XXs, environment the the from continue so that's being say how think X.XX-ish, benefit the would rate do point both for I and NIM I So ended But asset X.XX, get starting mix annualize to

the this of have beginning on beginning at the and we As of end pretty as putting the quarter quarter, quarter loans you the the the we month look imagine. second pricing quarter, improve can the books, seen end meaningfully, second second of of first to the we've from been

there do we third quarter into still second some so And expect going the from the benefit quarter level.

Kevin Fitzsimmons

biggest might it off betas accelerate? say as then deposit that to is after Is [indiscernible] that this and quarter -- the it expansion third quarter of be fair

David Borrmann

Yes.

probably Kevin, not expectation. volatility that's try baseline here make that obviously, assumption. fair too assumptions, interest the I market, I be our think a many that that's rate in We recently. given to think our But baseline would position just

Kevin Fitzsimmons

everyone. if you guys that? constrained model good with taking strong Okay. just Then given the I'm curious that more looks credit I what you are still Or know up could loan question one such by and be out allowance for Great. the But just now, contemplated right don't see you growth, good doing there? it in -- on looks just

T. Fountain

Yes. Kevin, And for a to yet. we're remember that's thing question. one CECL not good us,

should an we we're think, metrics working incurred model. move us, good trends. some we of seeing did but I with through so credit other And around, be for loss improving, And our factors

We have adjustments seeing still loan even continued made those underwriting some underwriting adjustments. and with growth

about putting what we So we're feel good on.

feel to the cover quarter. so, like said, that didn't with growth to more really during need the add And than the being

Kevin Fitzsimmons

it up? and So in of those underwriting adjustments, on brakes is Or -- looking at certain in terms interest tapping is you're just the of tightening loans them? your you're like really that classes

T. Fountain

Yes.

We where I to get operate we us that see make as some of where sometimes versus slight adjustments certain advantage maybe and it's of the adjustments, out and for think we the important to banks bigger stay some our competitors in how swings nimble. larger they we go we larger classes. move try versus of

that have really ensuring tweaking looked careful, where and we on ensuring being we the concentrations we categories don't just I not so make are a our is stuff concentrated in would put that and then those underwriting we making in and that exceptions just in that we're just the at of say, And certain where sense may lot that categories. be areas

in we're anywhere, looking prudent being might be where especially the brakes around not that So making we sure slamming but and have, in what we areas concentrated. on really

Operator

next question comes David with from Group. The Bishop Hovde

David Bishop

But of of presentation thinking dovetailing funding loan office deposit loan -- deep probably either. chance second about of a I sort in the on dive how question of terms are the And seeing obviously, that year? apologize of the to I this the equation the Kevin's is assume on forward we the -- I rate sustainable, into into Sort side maybe you on what maybe growth not the are but funding if and quarter? growth side, how haven't the -- the had conversely, half XX%

David Borrmann

Yes. us. really now, the don't growth pick -- didn't I quarter. up was obviously to XX% we challenged first expected annualized It's a from loan standard right think David. I case for our we mean,

having juggle -- a bit. did was we are effectively growth we So little flat. to Deposit

back basically at you didn't touch, we up balances having the believe again. that we're of that If were the but relatively grow to start out pricing do deposit cusp a we pricing to look debt, We down the fact sub anywhere. those against increase given flat to

more going we'll for while X know what is to you're in funding, a folks of ramping back and quarter be months competitive the I see that at be juggling to with place deposit place. it shuffle for from us next down. to growth long, start up broker then don't probably small say, lot X think wholesale wholesale will growth position a I the we're least. look but, positions able be is let's again, hopefully, we'll that loan some this like us those third And maybe able some who then that pricing, as in to

So but even of hearing, right quarter -- to call first third given hints it right pretty just pipelines fourth in very fund think still bit we're starting -- slowing working now, to want very the down see our I which to looks bit the to just but don't the of fronts little have anecdotal hesitation, loan a us quarter, stuff going little We're now, look a I to on this of quarter all good. do sort potentially we you're get expect for third growth, strong. the

David Bishop

then, it. loan secondarily, And I guess to the discussion. Got back

that's drove Just the And various in this terms the curious markets curious what all quarter? and growth I'm hires. of breakdown that segments the

big a loan how from to curious Birmingham Huntsville the markets Just think growth you is and perspective. get

T. Fountain

from, fairly across from And I where growth was spread that No. loan Yes. footprint. came breakdown our out a think just geographically it

from and footprint little after more pretty market the good throughout our X/X roughly I than or X/X that. think came Atlanta then spread a

-- the quarter. of yet really was on Birmingham lenders That but we later the haven't Huntsville, in the in seen yet. not have that and We quarter in brought benefit

books see And so don't there, the we'll and growth have pipelines but had we think that on really strong we strong yet. there,

this really wasn't So of a quarter. that part

what as the a saw breakdown, the in similar of terms whole. As largely we far very lending as to really portfolio

of Obviously, So that we real estate growth. concentrations to nonowner-occupied manage commercial commercial pieces of that estate one our is that. continue have trying see particularly and we any real to

in up are some a real and, that and we And the consumer things in cautious being our terms non-owner especially we're where areas underwriting to like the probably areas sectors, more to of like related sure making the slowdown. cases estate so where that tightened a that, retail in underwriting or stick spending little occupied those cause

David Borrmann

the And was size of Birmingham your Huntsville? question that of part potential around last and

T. Fountain

In total.

David Borrmann

what from we to total those? would expect In

T. Fountain

Certainly, Atlanta, in a lot take That's and have got Atlanta think to now, expect, to need a would markets solid chain potential. that -- like all and to look about think we time, we to lenders we're period we a we've move X where and with we there would Columbus, I areas, while when portfolio, the Robins you opportunity And Savanna Yes. Savanna those but over in it. Warner start Birmingham Huntsville get markets Birmingham, mean good of then commercial the get up got we an in good in and larger at would -- don't markets markets. longer about just have we other of [indiscernible]. you banker right growth. have several upside lenders, if are that Georgia, X going our if we have would in the top and and Today, being

Operator

Christopher from Marinac Janney with is Montgomery. question Next

Christopher Marinac

over want just terms will those portfolio. securities? through changed how some to of a those maybe of of kind there Heath sense Andy, the I just and time? risk and in guess mature within And credit of go off Anything pay securities

David Borrmann

have change No, Chris. didn't there. any We really

our without get to than that where to We realistically, over haven't muni that X. sell we now of to if most duration we'll our of. sometimes. of in maturities spot portfolio X- -- that investors those right had early get years, treasury think as any no a right be treasury any most We of in it But a you now, makes something of I downgrades pocket bit 'XX. products, XX-year aware sort the have in window around our of right to rate through, out a portfolio might loss. of And get out small tend credit are sort sense look is And little have portfolios and longer our to or I our I'm discussed do earlier

Christopher Marinac

that X the And to some a level, it. years frame Got you've sort on I today? ago, of high is see of there's kind or is then a guess from relative what to greater transitioned you to of the much X loans where kind liquidity we the of you the -- sheet proportion mean, strategic I balance ago plan balance are sheet time the positions this years where of do

David Borrmann

Yes.

is about ratio that, after second gets would XX% little sometime expect stated if third an I be think -- it think funding it's I should but here XX%, a some to approaching to I in to juggling I in we're So for wholesale say X what to we're Chris, X like But is said realistically, XXXX. next X% be earlier realistically, targets loan fuzzy. able -- of good the would maintain I quarter, our loan-to-deposit over are, to which going to say to 'XX. we what question, feel half hard our going the next a I the months. growth be

expectation. that's probably reasonable think a I

we And juggling with somewhere so security loans and transitioning truly to funding. in half get 'XX, the in hard start of not the for wholesale first

Christopher Marinac

give on both transition year I And then, for see a presuming playing an team? Heath, it. Got out year merchant product big could and and of the that next us how that is business year kind you next update, guess, you

T. Fountain

to merchant in excited in We're board took place. infrastructure get and much really and months December processing in our our Yes. the on pretty agreement team team. of They place, get got several about kind

And we're out really couple only of and to being actually able a produce. into them so getting probably months

the say merchant now. I a what I that to we numbers on upside there. really But project and significant have opportunity So do you don't team have we would I'd can right

commercial tremendous some the ability just then that at the I good just side. to we commercial to to I strong and and And the there's income. might that. on We the some And and treasury opportunity. to slowdown grow deposits commercial really -- product way, have a also ability place focus think lead in I us is being use our other a opportunity on don't to and quarters for go from at a side, deposit And for think, fee to few -- we that see put bankers over use team last to some also a think, think as lending have after our realistic just produce the we point customers deposits

some So nice fee we've increases. got can some we income areas see where

Christopher Marinac

to do the months, guess to big continues for proportion me as Great. know the Atlanta. is growth as the the it's we've just guess, see that's in Georgia still, I forward Middle portfolio. trajectory And you like a seen then But what as not I one last Georgia company Middle another add year-to-date? being you more I take XX XX, of

T. Fountain

Yes.

add XX there, and And everything Macon, in That's Robins and added Warner would months some there. area a in to there, growth have or like the market that Georgia. Middle office have of with where going market. that the by market Cadence, that course, a then Middle gone -- our markets share many banks. Bank going Renasant, there's through having got State -- of the larger through bankers got is in large you've cycle. Georgia team held more on good happening probably Force love things We we're we're a significant place And good economy. That's market seeing The and Base that Air you particular, in lender in and putting in then vibrant a we you've and so to

for that in be well. So to I there's that significant moves think opportunity there pretty size up market a

Operator

further back queue, team will management in queue. Instructions] are for to the over any the closing further so I There There questions remarks. pass are no [Operator it no in questions the

T. Fountain

We everything again, of all the you Thank for appreciate you forward for look you thank again you. another soon. opportunity thank all today. support And call Thank you. you team it. And talk quarter. Colony. with being our to to to your to this and speaking Tami, for appreciate on Thanks, We the we

Operator

This participation. conference concludes call. Bankcorp the Thank you your for Colony

your disconnect now lines. may You

Colony Bankcorp (CBAN) 21 Jul 222022 Q2 Earnings call transcript