Colony Bankcorp Inc (CBAN) 2023 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Colony Bank three-quarter 2023 conference call. (Operator Instructions) This call is being recorded today, October 26, 2023. I will now like to turn the conference over to Derek Shelnutt, the Chief Financial Officer. Please go ahead.

早安，女士們、先生們，歡迎參加殖民地銀行 2023 年第三季電話會議。 （操作員說明）本次通話將於今天（2023 年 10 月 26 日）進行錄音。我現在將會議轉交給財務長 Derek Shelnutt。請繼續。

Thanks, Sergio. 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 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 asset, businesses, cash flows, financial condition, prospects, and other results of operations.

謝謝，塞爾吉奧。在我們開始之前，我想先回顧一下我們的標準揭露。我們在本次電話會議上所做的某些陳述可能構成1933 年《證券法》和1934 年《證券交易法》含義內的前瞻性陳述。目前的潛在投資者請注意，任何此類前瞻性陳述都不能保證未來業績，但涉及已知和未知的風險和不確定性。可能導致這些差異的因素包括但不限於流行病、公司資產、業務、現金流量、財務狀況、前景和其他經營績效的變化。

I would also like to add that during our call today, we will reference both our earnings release and our quarterly investor presentation, both of which were filed yesterday, so please have those available to refer. And with that, I will turn the call over to our Chief Executive Officer, Heath Fountain.

我還想補充一點，在今天的電話會議中，我們將參考我們昨天提交的收益報告和季度投資者演示文稿，因此請準備好這些內容以供參考。接下來，我會將電話轉給我們的執行長 Heath Fountain。

Thanks, Derek. I want to thank everyone for being on the call today and for your interest in Colony. We're pleased with our results for the third-quarter as we continue to navigate a challenging and changing economic environment. Our earnings increased over last quarter as we began to see the results of many strategic initiatives we've been working on over the past several quarters and will continue to work on in the quarters to come. I'm going to share an overview of the activity from the quarter and then hand it over to Derek, who's going to go into more detail on the results.

謝謝，德里克。我要感謝大家今天參加電話會議以及對 Colony 的興趣。我們對第三季的業績感到滿意，因為我們繼續應對充滿挑戰和不斷變化的經濟環境。我們的收入比上季度有所增長，因為我們開始看到過去幾季我們一直在努力並將在未來幾季繼續努力的許多策略舉措的結果。我將分享本季度活動的概述，然後將其交給德里克，他將詳細介紹結果。

Net interest income for the quarter increased as we continued to diligently navigate the way we priced loans and manage our customer relationships on the deposit side. We also saw a full impact of some earlier strategies such as the hedging we put in place in Q2, which has positively benefited our interest expense.

由於我們持續努力調整貸款定價方式和管理存款方面的客戶關係，本季的淨利息收入有所增加。我們也看到了一些早期策略的全面影響，例如我們在第二季實施的對沖，這對我們的利息支出產生了積極的影響。

We're glad to share that our non-interest incomes increase quarter-over-quarter, and it represents about 33% of our total revenue. We've seen increases in our newer complementary lines of business as well as increases in deposit related charges and fees. We remain focused on growing our complementary lines of business and feel it's important to diversify our non-interest income sources, especially with those that are less sensitive to the rate and economic environments.

我們很高興地告訴大家，我們的非利息收入較上季成長，約占我們總收入的 33%。我們看到新的互補業務範圍增加，以及存款相關費用和費用的增加。我們仍然專注於發展我們的互補業務線，並認為使我們的非利息收入來源多樣化非常重要，特別是那些對利率和經濟環境不太敏感的收入來源。

There's certainly been some slowdown in our mortgage division driven by the current rate environment. We continue to make changes there to our staffing and product mix and in order to achieve break-even there. Our we're really proud of our non-interest expense efforts. Non-interest expenses declined $0.5 million from last quarter. Our teams worked really hard over the past several quarters to reduce expenses in order to be more complementary to the moderate growth projections, and we're seeing the impact of those efforts.

在當前利率環境的推動下，我們的抵押貸款部門確實出現了一些放緩。我們繼續對人員配置和產品組合進行調整，以實現收支平衡。我們對我們的非利息支出努力感到非常自豪。非利息支出比上季減少了 50 萬美元。我們的團隊在過去幾季非常努力地減少開支，以便更好地補充溫和的成長預測，我們正在看到這些努力的影響。

And even though we're mindful of the expenses, and we do look at that alongside our long-term strategies and we've been able even with the expense initiatives to continue to invest in technology and infrastructure that will benefit our customers now and in the future.

儘管我們注意到費用，並且我們確實將其與我們的長期策略一起考慮，並且即使有費用計劃，我們仍然能夠繼續投資於技術和基礎設施，這將使我們的客戶現在和將來受益未來。

This past quarter, we went live with a new data warehouse and API technology that will allow us to better manage and use our data. It will also allow us to integrate other platforms and fintech products with our core. We think this is a big step forward in our long-term innovation strategy and is going to have positive impacts on how we serve our customers, how we market our products and enhance our operations and profitability.

上個季度，我們啟用了新的資料倉儲和 API 技術，這將使我們能夠更好地管理和使用資料。它還將使我們能夠將其他平台和金融科技產品與我們的核心整合。我們認為這是我們長期創新策略的一大進步，將對我們如何服務客戶、如何行銷產品以及增強我們的營運和盈利能力產生積極影響。

We also continue to look for opportunities to add to our team through strategic hires, where it will enhance long-term strategy, even while we have seen decreases in our overall staffing levels.

我們也繼續尋找機會透過策略招募來充實我們的團隊，這將增強長期策略，儘管我們的整體人員配置水準有所下降。

Asset quality remained strong. We saw a decrease in nonperforming loans from the prior quarter. Our provision was up this quarter. And our net charge-offs were primarily due to a few SBA loans from our SBSL. division, where the portion of the loan that's not government guarantee was charge-offs. We mentioned this last quarter that we were seeing some weakness there. And of course, our SBA portfolio is primarily variable rate loans. And so they see the most increases quickly in their payments.

資產品質依然強勁。我們看到不良貸款較上一季減少。我們的準備金本季有所增加。我們的淨沖銷主要是因為我們的 SBSL 提供了一些 SBA 貸款。部門，其中非政府擔保的貸款部分被沖銷。我們在上個季度提到過，我們看到了一些弱點。當然，我們的 SBA 投資組合主要是可變利率貸款。因此，他們的付款增長最快。

This is an area where we may see some small charge-offs going forward. But really it was a small number of loans impacted in our team's doing a good job of managing those. Our loan growth slowed from the previous quarter to an annualized rate of about 6%. A lot of the growth came from consumer, particularly marine RV during this season the summer buying season.

在這個領域，我們可能會看到一些小額沖銷。但實際上，我們團隊在管理這些貸款方面做得很好，但實際上是少數貸款受到了影響。我們的貸款成長較上季放緩至年化成長率約 6%。大部分成長來自消費者，特別是夏季購買季節的船用房車。

We expect that our loan portfolio growth for this and our overall portfolio to continue to slow for the next few quarters. Our total deposits were down a little from last quarter and historically, we've seen a slight dip in the third-quarter. Our deposit base is very diversified. We have a slide on that in the investor presentation.

我們預計，我們的貸款組合成長以及我們的整體投資組合在未來幾季將繼續放緩。我們的總存款比上季略有下降，從歷史上看，我們在第三季看到了小幅下降。我們的存款基礎非常多元化。我們在投資者介紹中有一張關於這一點的幻燈片。

But we do see some seasonality from municipalities as they spin down during the year and from our rural customer base and agriculture as we see that activity there, and we would generally expect both of those segments to increase in the fourth-quarter as agricultural producers sell crops and as municipalities see property tax payments come in. And our total deposits are still up for the whole year despite being down for the quarter, they're up about 4% for the whole year.

但我們確實看到了一些季節性因素，這些因素來自於市政當局，因為它們在這一年中停止運轉，來自我們的農村客戶群和農業，因為我們看到那裡的活動，並且我們通常預計，隨著農業生產者的銷售，這兩個部分在第四季度都會增加儘管本季度有所下降，但我們的存款總額全年仍然增長，但全年增長了約 4%。

Our margin was flat quarter-over-quarter actually increased 1 basis point, the repricing deposit has slowed, but the environment remains competitive and we will continue to see our overall cost of funds increase while we stayed flat, our modeling shows, we could see still a potential for another 5 basis points to 10 basis points of margin compression over the next quarter or two.

我們的利潤率環比持平，實際上增加了1 個基點，重新定價存款已經放緩，但環境仍然具有競爭力，我們將繼續看到我們的總體資金成本在保持持平的同時增加，我們的模型顯示，我們可以看到在接下來的一兩個季度，利潤率仍有可能再壓縮 5 個基點至 10 個基點。

So with that, I'm going to turn it over to Derek to go over the financials in a little more detail.

因此，我將把它交給德里克，讓他更詳細地檢查一下財務狀況。

Thanks, Heath. I'll begin with our earnings for the quarter. Net income increased about $502,000 quarter-over-quarter. And when we compare to the prior quarter, we saw net interest income increased $440,000, non-interest income increased $766,000 and non-interest expense declined by $551,000.

謝謝，希斯。我將從本季的收益開始。淨利潤環比增長約 502,000 美元。與上一季相比，我們看到淨利息收入增加了 440,000 美元，非利息收入增加了 766,000 美元，非利息支出下降了 551,000 美元。

Interest income increased during the quarter as we remain focused on loan pricing relative to our funding costs. While growth in some areas has slowed. We did see growth in consumer loans, especially in our marine RV division through the summer buying season. And as Heath mentioned, we do expect that Marine RV lending to slow as we move into the end of the year and out of that traditional buying season. And then we've also had some repricing on loans as they renew, which has also helped a little.

由於我們仍然關注相對於融資成本的貸款定價，利息收入在本季有所增加。雖然一些地區的成長有所放緩。我們確實看到了消費貸款的成長，特別是在夏季購買季節我們的船用房車部門。正如希思所提到的，我們確實預計隨著年底和傳統購買季節的結束，船用房車貸款將會放緩。然後，我們還在貸款續約時對其進行了一些重新定價，這也起到了一些作用。

Interest expense on deposits also increased during the quarter as competition on deposit pricing still remains strong, and we also continue to see some mix and rate changes on existing deposits. Where we saw improvement on the interest expense side, as with our FHLB borrowings. Average balances for the quarter were down compared with last quarter.

由於存款定價競爭仍然激烈，本季存款利息支出也有所增加，我們也繼續看到現有存款的一些組合和利率變化。我們看到利息支出方面有所改善，就像我們的 FHLB 借款一樣。本季的平均餘額較上季有所下降。

And we also had a full quarter of the hedging strategy we put into place at the end of Q2, which has helped us helped us both from the initial positive carry on the swaps and you know, to hedge against the increase in borrowing rates that we've seen recently. We did see an increase in the end of quarter FHLB balances, which I will discuss here in a minute. When I talk about deposits and funding.

我們還在第二季末實施了整整一個季​​度的對沖策略，這幫助我們從最初的掉期正利差中受益，你知道，對沖我們的借款利率上升。最近見過。我們確實看到季度末 FHLB 餘額有所增加，我稍後將在這裡討論這一點。當我談論存款和融資時。

With non-interest income, the increase in non-interest income during the quarter as a product of several different components on slides 16 and slides 17 in the investor presentation. We show a representation of how the mix as changed over the recent years and recent quarters.

對於非利息收入，本季非利息收入的成長是投資者簡報中投影片 16 和投影片 17 中幾個不同組成部分的結果。我們展示了近年來和最近幾季的組合變化。

From deposit relationship related income the net increase in service charges and interchange fees was about $244,000 for the quarter. The non-interest income component from our SBSL division increased about $163,000 during the quarter. Mortgage division income did decrease by $284,000 as we see slowing in that industry due to the rate environment.

從存款關係相關收入來看，本季服務費和交換費淨增加約為 244,000 美元。本季我們 SBSL 部門的非利息收入部分增加了約 163,000 美元。抵押貸款部門收入確實減少了 284,000 美元，因為我們看到利率環境導致該行業放緩。

The quality insurance division saw revenue increase of $66,000 and non-interest income from Colony wealth advisors increased $26,000 and merchant services income increased $10,000 during the quarter. All other non-interest income increase about $564,000, and some of that was one-time items.

本季度，品質保險部門的收入增加了 66,000 美元，來自 Colony 財富顧問的非利息收入增加了 26,000 美元，商業服務收入增加了 10,000 美元。所有其他非利息收入增加約 564,000 美元，其中一些是一次性項目。

So for the next quarter, and going forward, we don't expect quite the same level of increase. And really, we kind of see this non-interest income remaining flat or even slightly down in some areas. With non-interest expense we have been focused on operation more efficiency and managing expenses throughout the year. The decline in non-interest expenses quarter-over-quarter as a result of those efforts. Our net N8 assets was 1.96% in the fourth-quarter of 2022. And we've since seen that number decline with our third-quarter this year being at 1.42% on an operating basis. So a lot of improvement there.

因此，對於下個季度以及未來，我們預計不會出現同樣水準的成長。實際上，我們看到非利息收入在某些領域保持不變甚至略有下降。對於非利息費用，我們全年都專注於提高營運效率和管理費用。由於這些努力，非利息支出較上季下降。 2022 年第四季度，我們的 N8 淨資產為 1.96%。此後，我們看到這個數字有所下降，今年第三季度的營運基礎資產為 1.42%。所以有很多改進。

Total non-interest expenses for the quarter, we're $2,881,000 million, and $2,661,000 million excluding some final severance expenses from our reduction in fortune initiative. We still feel comfortable with our expected run rate around $20 million a quarter and remain focused on managing expenses to align with our strategy and the current environment.

本季的非利息支出總額為 28810 億美元，不包括我們削減財富計劃中的一些最終遣散費，則為 26610 億美元。我們仍然對每季約 2000 萬美元的預期運行率感到滿意，並繼續專注於管理費用，以符合我們的策略和當前環境。

Provision expense totaled $1 million for the quarter. Net loan charge-offs were $898,000, which is up from $200,000 in the prior quarter. On last quarter's call, we mentioned the possibility of seeing some charge-offs from SBA loans and these charge-offs were on the non-government guaranteed portion of a limited number of loans, and that totaled a net of $714,000. Non-performing loans decreased quarter-over-quarter by about 17% and we still feel good about the overall credit quality in the portfolio.

本季撥備費用總計 100 萬美元。淨貸款沖銷額為 898,000 美元，高於上一季的 200,000 美元。在上個季度的電話會議上，我們提到了 SBA 貸款可能被沖銷的可能性，這些被沖銷是針對有限數量貸款的非政府擔保部分，淨額總計 714,000 美元。不良貸款較上季下降約 17%，我們對投資組合的整體信貸品質仍然感覺良好。

Total loans increased about $25.1 million, which is less than the previous quarter as we continue to see a slowdown in overall growth there. As we previously mentioned, a lot of the growth came from the consumer loans and the marine RV division. We expect overall loan growth to continue to slow over the next few quarters.

貸款總額增加約 2510 萬美元，低於上一季度，因為我們繼續看到整體成長放緩。正如我們之前提到的，大部分成長來自消費貸款和船用房車部門。我們預計未來幾季整體貸款成長將繼續放緩。

Total deposits decreased $36 million during the quarter. This is related to the seasonality of a small portion of our deposits particularly the municipal and government deposits as well as some agricultural type deposits, as Heath mentioned earlier. And historically looking back, especially pre-COVID, we see a small depth in the third-quarter as these [need deposits and AG deposits] kind of run off, but then see increases in the fourth-quarter as property tax payments come in and as crops are sold by some of our rural agricultural type deposit.

本季存款總額減少了 3,600 萬美元。正如希思之前提到的，這與我們一小部分存款的季節性有關，特別是市政和政府存款以及一些農業類型存款。回顧歷史，特別是在新冠疫情之前，我們看到第三季度的深度較小，因為這些[需要存款和 AG 存款]有點流失，但隨著財產稅繳納和繳納，第四季度會出現增長。因為農作物是透過我們農村的一些農業型存款來出售的。

Our FHLB borrowings increased $30 million during the quarter, and this was really towards the end of the quarter. This was a short-term advance and we expect this to be repaid as we see those municipal funds come in during the fourth-quarter.

我們的 FHLB 借款在本季增加了 3000 萬美元，而且實際上是在本季末。這是短期預付款，我們預計將得到償還，因為我們看到這些市政資金將在第四季度到位。

Taking a look at the margin, we've seen some stability that has kept our increases and liability costs more aligned with our earning asset increases. This led to margin essentially being flat quarter-over-quarter. I don't think we're necessarily out of the woods yet and we remain disciplined on pricing, any new loans, or renewals relative to our current funding cost and the expectation of any increases in this cost of funds going forward. There are still many factors that could cause margin to decline a little more before we see it start to increase.

看看利潤率，我們發現了一些穩定性，使我們的成長和負債成本與我們的獲利資產的成長更加一致。這導致利潤率環比基本持平。我認為我們不一定走出困境，而且相對於我們當前的融資成本以及未來資金成本增加的預期，我們在定價、任何新貸款或續約方面仍然保持紀律。在我們看到利潤率開始增加之前，仍有許多因素可能導致利潤率進一步下降。

Overall, liquidity remains robust, and we outlined the various sources of liquidity on slide 15 in the presentation, we have over $1.3 billion in total liquidity and liquidity sources available. We didn't have any discount window or other Federal Reserve borrowings at the end of the quarter and did not have any outstanding borrowings from any of our Fed funds.

總體而言，流動性仍然強勁，我們在簡報的第 15 張投影片中概述了各種流動性來源，我們擁有超過 13 億美元的總流動性和可用流動性來源。截至本季末，我們沒有任何貼現窗口或其他聯準會借款，也沒有來自任何聯邦基金的任何未償還借款。

With investments we haven't seen a lot of that activity in the securities portfolio throughout the year. We've deployed the cash flow elsewhere on the balance sheet and primarily to fund our loan growth. We continue to evaluate the portfolio and market conditions to assess the possibility of some restructuring there in the securities portfolio and then redeploying some of those proceeds. These funds can be redeployed to achieve a better position from both an earnings and ALM perspective.

就投資而言，我們全年在證券投資組合中並沒有看到很多此類活動。我們已將現金流部署在資產負債表的其他地方，主要是為了為我們的貸款成長提供資金。我們繼續評估投資組合和市場狀況，以評估證券投資組合中進行某些重組的可能性，然後重新部署其中一些收益。這些資金可以重新部署，以從收益和 ALM 角度獲得更好的地位。

And some of the important factors that we consider or look at as part of, just evaluating any type of restructure in the securities portfolio, really the market conditions a reasonable earn back under a couple of years, no loss, then that's greater than a portion of our quarterly earnings as to not erode capital and then understanding the best use of those proceeds.

我們考慮或考慮的一些重要因素，只是評估證券投資組合中任何類型的重組，實際上市場條件是幾年內合理的盈利，沒有損失，那麼這就大於一部分我們的季度收益，以免侵蝕資本，然後了解這些收益的最佳用途。

One last comment about taxes for the quarter, there was a little increase in our tax rate from the prior quarters. We've been close to 18% to 19% ETR, and that moved up to around 22% for Q3. This is a result of increased [tempra disallowance] related to our tax-free municipals, which is driven by an increase in our overall cost of funds. So going forward, we expect a range of about 20% to 22% on that as we see that increased slightly just related to that tempered disallowance.

關於本季稅收的最後一個評論是，我們的稅率比前幾季略有增加。我們的 ETR 接近 18% 至 19%，第三季升至 22% 左右。這是與我們的免稅市政相關的[tempra disallowance]增加的結果，這是由我們整體資金成本的增加所推動的。因此，展望未來，我們預計這一範圍約為 20% 至 22%，因為我們看到這一比例略有增加，這與緩和的禁止有關。

And now, I will turn it over to D, to discuss our banking and business line.

現在，我將把它交給D，討論我們的銀行和業務線。

Thanks, Derek. First, I want to touch on a few things on the banking side of the house. Mr. Heath and Derek mentioned, we are seeing long growth slowed. We expect that to continue over the next several quarters. We really are seeing very little volume at all on the commercial real estate side. Really that's more of a result of the pricing in today's market to maintain to make sure that we can maintain a proper margin as well as there's just a generally slowing demand with the increase in borrowing costs in the marketplace.

謝謝，德里克。首先，我想談談銀行方面的一些事情。希思先生和德瑞克提到，我們看到長期成長放緩。我們預計這種情況將在未來幾季持續下去。我們確實看到商業房地產方面的成交量非常少。實際上，這更多是由於當今市場的定價需要維持，以確保我們能夠保持適當的利潤率，而且隨著市場借貸成本的增加，需求普遍放緩。

We have not really changed any of our underwriting standards there. We've been pretty consistent throughout the cycle. So I guess my point there would end up being it's not a credit driven slowdown is really more of an environment and pricing slowdown. Loan growth we are seeing is coming from RV marine, as Heath and Dereck both mentioned.

我們並沒有真正改變我們的承保標準。我們在整個週期中一直非常一致。因此，我想我的觀點最終是，這不是信用驅動的放緩，實際上更多的是環境和定價放緩。正如希思和德里克都提到的那樣，我們看到的貸款成長來自房車海洋。

And as well the funding up of consumer residential construction loans as those houses are continuing to be built. We have implemented a number of average to see our fee income increase some on the consumer side as well as some fees on the treasury side as well for the business customers.

隨著這些房屋的建設繼續進行，消費者住宅建設貸款也將融資。我們實施了一些平均措施，以確保我們的費用收入在消費者方面有所增加，在財務方面以及企業客戶方面也增加了一些費用。

We did see some of that benefit this quarter, but we would expect to see a greater benefit during the first fourth quarter in going forward. So I think that should be a positive for us going forward. We are having success in winning new business on the treasury side, we've actually reduced the overall team through three part of our expense initiatives, but we have been able to add back a couple of strong producers that have come from larger and more regional banks that have strong relationships and are giving us opportunities to get in front of some really good significant customers.

本季我們確實看到了一些好處，但我們預計在未來的第一個第四季會看到更大的好處。所以我認為這對我們未來的發展應該是正面的。我們在財務方面成功贏得了新業務，實際上，我們透過三部分費用計劃減少了整個團隊，但我們已經能夠重新增加一些來自更大、更區域性的強大生產商擁有牢固關係的銀行讓我們有機會接觸到一些真正優秀的重要客戶。

Our bankers are also focused on deepening their relationships, and this has helped us achieve as you've seen and I'll talk a little bit more on that on slide 7. That has helped us drive more revenue with merchant service business and also with our insurance business. And in addition to that, our branches are have made a lot of progress in the referral and sales activity, which we are very proud of.

我們的銀行家也致力於加深他們的關係，這幫助我們實現了您所看到的目標，我將在幻燈片 7 上對此進行更多討論。這有助於我們透過商業服務業務以及我們的保險業務。除此之外，我們的分店在推薦和銷售活動方面取得了很大進展，對此我們感到非常自豪。

Our bankers are also staying focused on staying in touch with our long customers, reviewing the business performance of all of our major relationships and proactively addressing any weaknesses that we see. But as Heath stated earlier, we feel we still feel confident about where we stand from the overall credit on portfolio.

我們的銀行家也專注於與我們的長期客戶保持聯繫，審查我們所有主要關係的業務績效，並積極解決我們發現的任何弱點。但正如希思之前所說，我們對投資組合的整體信用狀況仍然充滿信心。

As you can see on slide 7, we have continued to focus on getting our startup launch profitable RV Marine with the growth there has reached profitability this quarter. Our merchant team is very close and it's continuing to make progress there monthly as we have great additions to new customers on a daily and weekly basis. So that trajectory looks good going forward.

正如您在幻燈片 7 中看到的，我們繼續專注於讓我們的新創公司推出盈利的 RV Marine，其成長已在本季度實現盈利。我們的商家團隊非常緊密，每月都在繼續取得進展，因為我們每天和每週都會增加大量新客戶。因此，這個軌跡未來看起來不錯。

In addition, the Alabama team is making great progress on the environment, where the growth has been more limited on the profitability, there is either going to be driven through increasing loans deposits, of course, or as we continue to manage expenses diligently for the overall company.

此外，阿拉巴馬州團隊在環境方面取得了巨大進步，其中盈利能力的增長更加有限，當然，要么通過增加貸款存款來推動，要么我們繼續努力管理費用整體公司。

And if you look at the height of that investment, we have improved $500,000 on a quarterly improvement or $2 million on an annualized basis from the height of our investment in these start-up. We expect to see continued progress to the performance on all of these business lines. I do want to take a minute and touch on mortgage and SBSL.

如果你看看投資的高度，你會發現，與我們對這些新創公司的投資高度相比，我們每季提高了 50 萬美元，每年提高了 200 萬美元。我們預計所有這些業務線的業績將持續進步。我確實想花一點時間談談抵押貸款和 SBSL。

First, from the operational perspective, on mortgage, we continue to focus on break-even during this environment. As Derek touched on earlier, we did have a small loss for the quarter, but we are actively adjusting staffing levels to be in line with current demand.

首先，從營運角度來看，在抵押貸款方面，我們持續關注在此環境下的損益平衡。正如德里克早些時候提到的，我們本季確實出現了小額虧損，但我們正在積極調整人員配置水平，以符合當前的需求。

We've also changed several of our product offerings and removed a few as we continually evaluate what works in today's environment with the elevated interest rates for both our customers and for the bank. Pricing is important, our focus mainly today is on the secondary market and pricing, making sure we are pricing loans that can be sold to the secondary market.

我們也改變了一些產品，並刪除了一些產品，因為我們不斷評估在當今客戶和銀行利率上升的環境下哪些產品有效。定價很重要，我們今天的重點主要是二級市場和定價，確保我們對可以出售給二級市場的貸款進行定價。

We've pretty much eliminated the portfolio products and construction firm product at this point with the exception of very strong customer relationships, where we need to take care of those long-term Colony customers.

此時，我們幾乎已經消除了投資組合產品和建築公司產品，除了非常牢固的客戶關係，我們需要照顧那些長期的殖民地客戶。

We think mortgage is important to our long-term success as a community bank. So we are committed to we are just very actively managing it and today's environment to make sure there's not an overall drag on performance.

我們認為抵押貸款對於我們作為社區銀行的長期成功非常重要。因此，我們致力於非常積極地管理它和當今的環境，以確保整體性能不會受到拖累。

SBSL division, we're working on building and implementing a system to the smaller dollar 7(a) loans, now I hope is that should be in place during the fourth-quarter and will be on we will be able to see some positives in the fourth quarter, but really starting in the first-quarter of next year, we will see some good revenue generation from that.

SBSL 部門，我們正在致力於建立和實施一個針對較小美元 7(a) 貸款的系統，現在我希望該系統應該在第四季度到位，並且我們將能夠看到一些積極的方面從第四季度開始，但真正從明年第一季開始，我們將看到一些良好的收入產生。

We have seen slowing from the larger loan demand, as you can imagine with the floating rates that go with the SBSL portfolio it has slowed demand. So that is part of our moving focus to those smaller 7(a) loan as well.

我們已經看到較大的貸款需求放緩，正如您可以想像的那樣，SBSL 投資組合的浮動利率導致需求放緩。因此，這也是我們將重點轉向那些較小的 7(a) 貸款的一部分。

And we did see, as we stated earlier, a decrease in classified and criticized loans from the prior quarter in SBSL, and we had a decrease in non-performing loans on the prior quarter as well. And the one, as we talked about earlier from a charge-off standpoint, as we have it was from a few smaller loans that we had talked about last quarter. So, I think there was a good improvement there from a quarter-over-quarter, what we are seeing kind of negatively into the pipeline. So I'll stop there and hand it back over to Heath.

正如我們之前所說，我們確實看到 SBSL 的分類和批評貸款比上一季度有所減少，而且上一季的不良貸款也有所減少。正如我們之前從沖銷的角度討論的那樣，我們所擁有的貸款來自我們上季度討論過的幾筆較小的貸款。因此，我認為與上一季相比，情況有了很大的改善，我們看到了一些負面影響。所以我就到此為止並將其交還給 Heath。

Thanks, D. Appreciate those comments that it really wraps up our prepared remarks. And with that, we'll call on Sergio to open the line up for questions.

謝謝 D。感謝這些評論，它真正總結了我們準備好的發言。接下來，我們將請塞爾吉奧開始提問。

Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)

謝謝。女士們、先生們，我們現在開始問答環節。 （操作員說明）

Feddie Strickland, Janney Montgomery Scott.

費迪·斯特里克蘭，珍妮·蒙哥馬利·斯科特。

A good morning, gentlemen. -- Just wanted to start with the incremental cost of raising new deposits today? What are the deposits coming on at and how much variation do you see among different parts of the footprint?

早安，先生們。 -- 只是想從今天籌集新存款的增量成本開始嗎？沉積物出現在什麼地方？您發現足跡的不同部分之間有多少差異？

Yeah. That's a good question. I think, it's changed over the course of the quarter, I think, the beginning of the quarter, we were seeing a little bit less pressure on deposits and a little less competitive compared to the prior quarter.

是的。這是個好問題。我認為，在本季度中情況發生了變化，我認為，在本季度初，與上一季相比，我們看到存款壓力有所減輕，競爭也有所減弱。

But as we got towards the end of the quarter and I would say into the environment we're in today, it's moved probably from needing to be in the high forces to bring in new business to in the low fives and to bring in new business on the deposit side. So we have seen that move up a little bit towards the end of the quarter, but that's sort of the area we're at to bring in new money.

但當我們接近本季末時，我想說的是，在我們今天所處的環境中，它可能已經從需要高強度引進新業務轉變為低強度引進新業務在存款方面。因此，我們看到到本季末略有上升，但這就是我們要引入新資金的領域。

Understood. And along those same lines, as we appear to be near the end of a hiking cycle potentially, how are you thinking about cycle today? Total deposit betas? I think it pegged at around 29% today. Could we see that rise into the mid 30's, just there's a little bit of catch-up on deposits or do you think you're more or less near the peak on deposit costs?

明白了。沿著同樣的思路，由於我們似乎接近徒步旅行週期的結束，您今天如何看待騎行？總存款貝塔值？我認為今天的比率約為 29%。我們能否看到這種上升到30年代中期，只是存款有一點追趕，或者你認為你或多或少接近存款成本的峰值？

No, I think we're going to see that continue to rise. I mean, the unknown there right is what we may or may not see the Fed continuing to do, assuming we level out into this higher for longer and somewhere around now, I think that we could see rates stabilize, but if we get increases, we're going to see that continue to move up some.

不，我認為我們會看到這一數字繼續上升。我的意思是，未知的是我們可能會或可能不會看到聯準會繼續做什麼，假設我們在更長時間內保持在更高水平，我認為我們可能會看到利率穩定，但如果我們升息，我們將看到它繼續上升一些。

So pretty hard to predict, but I guess as we look at the beta, you know, we're when we look towards the end of the quarter were up to the high 30's, cycle today. And so I think we will see that creep up a little more, if rates stabilize just the catch-up of getting rates to where they need to be.

所以很難預測，但我想當我們查看測試版時，你知道，當我們展望本季末時，我們今天的週期將達到 30 多歲。因此，我認為，如果利率能夠穩定下來，並追趕利率達到所需的水平，我們將會看到這種情況進一步加劇。

That makes sense. Switching gears, I know you talked about expense initiatives, some technology investments, new hires, and you had some good information on the deck and it seems like there's some near term, expenses should stay flat or maybe come down a little bit, we'll see.

這就說得通了。換個話題，我知道你談到了費用計劃、一些技術投資、新員工，而且你有一些很好的信息，看起來短期內費用應該保持不變或者可能會下降一點，我們」會看到的。

But can you talk about longer term over the course of '24, what we should expect in terms of an expense growth rate for the year? Should we look at something low, low single digits, mid single digits. Just trying to think about net, how much we see expenses potentially rise over the course of the year?

但您能否談談 24 年的長期情況，我們對今年的費用成長率有何預期？我們該看看低、低個位數、中個位數的東西嗎？試想淨值，我們認為一年中的費用可能會增加多少？

Yes. Sure. And so obviously, expense management is really on our radar, the biggest piece there being the headcount piece of that, and we've seen good progress there. And as we go into next year in our budgeting and our discussions, you know, we've talked a lot about, we've got to manage the inflation costs on our current team, that we have in place relative to overall expenses and find ways to continue to improve that and managed that.

是的。當然。顯然，費用管理確實在我們的關注範圍內，其中最大的部分是人員數量部分，我們已經看到了這方面的良好進展。當我們進入明年的預算和討論時，你知道，我們已經討論了很多，我們必須管理我們當前團隊的通貨膨脹成本，我們相對於總體支出已經到位，並發現繼續改進並管理這一點的方法。

I think you'll see expenses flat now and then we'll look to continue to maintain. When they start going back up because they will at some point, right. You'll see of low single digit type increases. Except, we have the opportunity to generate revenue. And so we are really focused on that, net non-interest expense to average assets, which Derek mentioned that we drove down from.

我認為您現在會看到支出持平，然後我們將繼續維持下去。當他們開始回升時，因為他們會在某個時候回升，對吧。您會看到低個位數類型的增加。除此之外，我們還有機會創造收入。因此，我們真正關注的是淨非利息支出與平均資產的比率，德里克提到我們已經降低了這一點。

Should I think it actually at one point peaked a little over to under 142 on an operating basis. And so there are some moving pieces there that we have to consider right, like on the mortgage side, that could improve as we continue to adjust there. But we'd also look to add, on the any other revenue-generating lines of business we can if we can get an immediate pickup to net N8 assets. So with our non-interest side, our non-interest complementary lines of business, those are going to add non-interest expense obviously, but improve that net N8 asset.

我是否應該認為，在營運基礎上，它實際上曾經一度達到峰值，低於 142？因此，我們必須正確考慮一些動態因素，例如抵押貸款方面，隨著我們繼續調整，這些因素可能會有所改善。但我們也希望補充一點，如果我們能夠立即增加 N8 淨資產，我們就可以在任何其他創收業務領域實現這一目標。因此，對於我們的非利息方面，我們的非利息互補業務線，這些將顯著增加非利息費用，但會改善 N8 淨資產。

So on the expense side, I think you know, it will start creeping up a little bit at some point next year, but I think we can continue to improve that net NIE., the assets a little bit. And then at some point, we're going to get to a place where mortgage will level off in the environment. And you could see that improve it'll increase total expenses, but will help us improve that net N8 assets. So that's where we're really focused on that net N8 assets. So I hope that helps you trying to understand how we're thinking about it.

因此，在費用方面，我想你知道，它將在明年的某個時候開始略有上升，但我認為我們可以繼續改善淨資產 NIE。然後在某個時候，我們將達到抵押貸款在環境中趨於平穩的地步。您可以看到，改進會增加總支出，但會幫助我們改善 N8 淨值。這就是我們真正關注 N8 淨資產的地方。所以我希望這能幫助您理解我們是如何思考這個問題的。

No, that's very helpful. Just one last question for me. As you look to slow loan growth, do you think over the course of '24, you could potentially look at reducing the level of brokered over time and replace that with core deposits, maybe getting a little bit of tailwind in the back of the year and some deposit costs, assuming we have a Fed pause?

不，這非常有幫助。我還有最後一個問題。當您希望放慢貸款增長速度時，您是否認為在 24 年期間，您可能會考慮隨著時間的推移降低經紀水平，並用核心存款取而代之，也許會在今年晚些時候獲得一點推動力以及一些存款成本，假設我們暫停聯準會的行動？

Yes, we definitely, want to get work on that mixture. And so that's something as we look at, between loan growth slowing and the cash flow off the loan portfolio and off the investment portfolio and opportunities to knock out some higher cost funding. Anything we do on the high end, we tried to keep short as we can so that we can that we have opportunities to pay that off.

是的，我們當然希望研究這種混合物。因此，正如我們所看到的，貸款成長放緩、貸款組合和投資組合的現金流量以及淘汰一些成本較高的融資的機會之間的關係。我們在高端領域所做的任何事情，都盡量簡短，以便我們有機會獲得回報。

I guess the other thing to think about that, as Derek mentioned, we continue to look for opportunities to restructure and obviously with incremental borrowing costs where they are or any kind of restructure that we could look at doing a likely candidate for the proceeds of that would be borrowing costs.

我想考慮的另一件事是，正如德里克提到的，我們繼續尋找重組的機會，顯然是增加借貸成本，或者我們可以考慮進行任何類型的重組，以獲取可能的收益。將是藉貸成本。

Understood. Thanks for the color, guys.

明白了。謝謝你們的顏色。

Thank you, Feddie.

謝謝你，費迪。

David Bishop, Hovde Group.

大衛畢肖普，霍夫德集團。

Yeah. Thank you and good morning, gentlemen. -- Hey Dereck, just curious, I saw the slide deck in terms of some of the future initiatives to drive profitability. I know on the long-term objectives and maybe financial standpoint, but getting the five complementary lines of business to that $1 million and net income, is that going to be a function of just, for some of these just a volume to take advantage of scale in some of these segments. Just curious how what's the biggest driver to get you to or what has to happen to get to this $1 million level?

是的。謝謝你們，早安，先生們。 ——嘿，Dereck，只是好奇，我看到了幻燈片中有關未來推動獲利能力的一些舉措。我知道從長期目標和財務角度來看，但是將五個互補的業務線實現 100 萬美元和淨利潤，這將只是一個函數，對於其中一些來說，這只是一個可以利用的數量在其中一些細分市場中擴大規模。只是好奇讓您達到 100 萬美元水平的最大推動力是什麼？或者必須發生什麼才能達到 100 萬美元的水平？

Sure. So when you look at what we're doing on the merchant side, on the insurance side, on the wealth side, those three lines of business or those are more dependent on the referral network from the bank and those lines of business are what I would call infant stage at Colony.

當然。因此，當你看到我們在商家方面、保險方面、財富方面所做的事情時，這三個業務線或那些更依賴銀行推薦網絡的業務線，而這些業務線就是我所關注的。在殖民地被稱為嬰兒階段。

We've only really within the last quarter or two, had the ability from our CRM and data perspective to get information out in front of our bankers and going into the next few quarters, the ability to take that data and actually do proactive marketing with it.

我們只是在過去一兩個季度內，才有能力從 CRM 和數據的角度向銀行家提供信息，並在接下來的幾個季度中，有能力利用這些數據並實際上進行主動營銷它。

And so I mentioned like our data warehouse and our APR connections. So the ability to take our internal data and be able to use that to cross-sell and to market to our current customers is really been more on a manual basis than automated basis. So we haven't even really scratched the surface of opportunity there.

我提到了我們的資料倉儲和 APR 連線。因此，獲取我們的內部數據並能夠使用這些數據進行交叉銷售並向我們當前的客戶進行行銷的能力實際上更多地是手動的，而不是自動化的。所以我們甚至還沒有真正觸及那裡機會的表面。

So you've got those three lines that are very early on in their ability to produce income and aren't at those levels and then, with SBA or SBSL group and mortgage, those are groups that were producing income above those levels, obviously everybody knows about the challenges on the mortgage side, and that will level out at some point, and we will be able to get there.

因此，這三條線在創造收入的能力方面處於早期階段，但尚未達到這些水平，然後，對於 SBA 或 SBSL 集團和抵押貸款，這些是產生收入高於這些水平的群體，顯然每個人了解抵押貸款方面的挑戰，並且在某個時候會趨於平穩，我們將能夠實現這一目標。

And then on the SBSL, as D mentioned, we did pull back a little bit this quarter and profitability, but a lot of that was related to those charge-offs coming from the SBSL Group. And so that's a group, that should easily be over those levels consistently.

然後，關於 SBSL，正如 D 所提到的，我們本季的獲利能力確實有所回落，但這很大程度上與 SBSL 集團的沖銷有關。所以這是一個群體，應該很容易始終超過這些水準。

So that's kind of the areas that we're focused on and there's a lot of upside opportunity for those areas, especially that are dependent on the bank referrals. And we're just like I said, just beginning to scratch the surface on the opportunity there.

這就是我們關注的領域，這些領域有很多上升的機會，尤其是依賴銀行推薦的領域。正如我所說，我們剛開始觸及那裡的機會的表面。

Got it. That's great color. And then, Heath, maybe just from a holistic standpoint, you mentioned and D mentioned the pullback and lending from a conservatism just demand, not credit. Just curious, as you look out, do you think this environment is a sort of a low single digit growth, mid-single digit growth environment as you sort of put on your forecasting hat?

知道了。那顏色真棒。然後，希思，也許只是從整體的角度來看，你提到了，D 提到了保守主義的撤回和貸款只是需求，而不是信貸。只是好奇，當你觀察時，你是否認為這種環境是一種低個位數成長、中個位數成長的環境，就像你戴上你的預測帽一樣？

Yeah. I think, continuing to see slowdown, but growth, for the remainder of the year. And again, obviously is your forecast and you guys think about a lot of things out of our control with the Fed and the economy. But if kind of things outlooks, things similar to now, I could see it being flat or even maybe slightly negative into the first part of next year and from a loan perspective. So that's kind of where we think it will go.

是的。我認為，今年剩餘時間裡，經濟將持續放緩，但會出現成長。再說一遍，顯然是你們的預測，你們考慮了很多我們無法控制的聯準會和經濟問題。但如果某種情況的前景，與現在類似的情況，我可以看到明年上半年從貸款的角度來看，它會持平，甚至可能略有負面。這就是我們認為它會發展的方向。

Got it. Just D mentioned, a little bit of a delay in terms of law, the Alabama LPO. Just curious maybe what's driving that line, just given that it's typically thought of as a pretty robust market. Is it just the market conditions, interest rates? Just curious maybe an update what you're seeing in terms of loans and deposits in that market?

知道了。剛才 D 提到，阿拉巴馬州 LPO 在法律方面有點延遲。只是好奇是什麼推動了這條線，只是考慮到它通常被認為是一個相當強勁的市場。只是市場狀況、利率嗎？只是好奇您在該市場的貸款和存款方面看到的更新情況嗎？

[Yeah. The environment, if you really look at the profitability, there is going to be driven by our acquisition of deposits and through loan growth. You can imagine in today's environment it's not market driven, but it is environmental and grow. There's a lot of new data to say the team over there and has done a good job in bringing on diversity and active customers to warm relationships that go with that no basis, they are still prevalent following 21 following the laws and had a reasonable] (technical difficulty)

[是的。在環境方面，如果你真正專注於獲利能力，你會發現我們吸收存款和貸款成長將推動這種環境。你可以想像在今天的環境中它不是市場驅動的，而是環境和成長的。有許多新數據表明，那裡的團隊在引入多樣性和活躍的客戶以建立溫暖的關係方面做得很好，但沒有任何基礎，他們在遵守法律的21 條之後仍然很普遍，並且有一個合理的]（技術難度）

D, you were cutting out a little bit, but I'll just add to that comment. I think you know, when we started those initiatives, the expectations were to grow loans faster than we have. I would again repeat what I said earlier. We really haven't changed our credit metrics, but our desire from a pricing perspective and a willingness to concede on pricing is not there in this environment. And so it just between that and between the customer side, not as much activity.

D，你刪掉了一點，但我只是補充一下評論。我想你知道，當我們開始這些舉措時，我們的期望是貸款成長速度比我們現在的速度更快。我想再重複我之前說過的話。我們確實沒有改變我們的信用指標，但在這種環境下，我們從定價角度的願望和在定價上讓步的意願並不存在。所以它只是在這之間和客戶方之間，沒有那麼多的活動。

So the real estate side is pretty much gone, it just takes longer to develop deposit and C&I type relationships. Our team's really doing a great job over there. We are very committed and happy about that from a long-term perspective. And it's just the ramp up will take a little longer and we've or do some on the expense side from that to match the growth expectations as well.

因此，房地產方面幾乎已經消失，只是需要更長的時間來發展存款和 C&I 類型的關係。我們的團隊在那裡做得非常出色。從長遠來看，我們對此非常堅定並感到高興。只是提升需要更長的時間，我們已經或在費用方面做了一些努力，以符合成長預期。

Right. Do you have the dollar amount of loans outstanding a quarter?

正確的。您一個季度的未償還貸款金額是多少美元？

We do. We put that in our earnings release. I believe it's about $40 something million, $45 million at the end of the quarter and if you look at that, it increased significantly as we first got going third-quarter last year going from [$7 million to $21 million, then to $41 million ] . And then, since then, it's been slower [$41 million to $44 million to $45 million]. So just a little bit sower at this point.

我們的確是。我們將其納入收益報告中。我相信這個數字大約是40 百萬美元，到季度末是4500 萬美元，如果你看一下，當我們去年第三季度開始時，它顯著增加，從[700 萬美元到2100 萬美元，然後到4100 萬美元] 。然後，從那時起，它就變慢了[4100萬美元到4400萬美元到4500萬美元]。所以此時只需一點點播種即可。

Perfect. Appreciate the color.

完美的。欣賞顏色。

Thank you. (Operator Instructions) There are no further question at this time, you may proceed.

謝謝。 （操作員說明） 目前沒有其他問題，您可以繼續。

All right. Well, thank you again, everyone for being on the call and thank you for your support of Colony Bankcorp. We appreciate you being on the call and look forward to talking to you soon. That concludes our call. Thanks.

好的。好的，再次感謝各位來電，並感謝大家對 Colony Bankcorp 的支持。我們感謝您接聽電話，並期待很快與您交談。我們的通話到此結束。謝謝。

Ladies and gentlemen, that concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。