EX-99.1 2 a2q2020cbaner.htm EX-99.1
For additional information, contact:
Tracie Youngblood
EVP & Chief Financial Officer
(229) 426-6000 (Ext 6003)
COLONY BANKCORP REPORTS SECOND QUARTER 2020 RESULTS
COMPANY DECLARES QUARTERLY CASH DIVIDEND OF $0.10 PER SHARE
FITZGERALD, GA. (July 22, 2020) – Colony Bankcorp, Inc. (Nasdaq: CBAN) (“Colony” or the “Company”) today reported net income of $2.2 million, or $0.23 per diluted share, for the second quarter of 2020, compared to $2.1 million, or $0.23 per diluted share, for the same period in 2019. Excluding payroll protection program and acquisition-related expenses, Colony reported operating net income of $2.4 million, or $0.25 adjusted earnings per diluted share, in the second quarter of 2020, compared to $3.6 million, or $0.40 adjusted earnings per diluted share, for the same period in 2019.
For the six months ended June 30, 2020, the Company reported net income of $3.8 million, or $0.40 per diluted share, compared to $4.9 million, or $0.56 per diluted share, for the same period in 2019. The Company reported operating net income of $4.9 million, or $0.52 adjusted earnings per diluted share, for the six months ended June 30, 2020, compared to $6.6 million, or $0.78 adjusted earnings per diluted share, for the same period in 2019.
The Company separately announced that on July 16, 2020, the Board of Directors declared a quarterly cash dividend of $0.10 per share, to be paid on its common stock on August 21, 2020, to shareholders of record as of the close of business on August 7, 2020.
Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, “Despite operating in one of the most severe economic disruptions in our time, I am pleased to report that our diluted earnings per share increased 35% over the sequential quarter, and we were able to achieve similar earnings compared with the same period last year. The strong fundamentals underlying our business, diversification of revenue streams as seen by strong growth in mortgage banking income, and revenue contribution from our Small Business Specialty Lending Division give me confidence in our future.
“The COVID-19 pandemic continues to have severe economic disruptions across our operating markets. In these troubling times, we have continued to assist the liquidity needs of our customers, ensure the health and well-being of our employees and support the communities in which we operate. Under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) enacted as part of the Coronavirus Aid, Relief and Economic Security Act, the Company originated approximately $137.8 million in gross PPP loans. Colony Bank brought on new customers under the program who did not previously have a relationship with us. Moreover, these customers executed new non-PPP loans, increased our deposits and will generate additional fee income. These types of multiple cross-selling opportunities of our diverse product offerings will allow us a unique opportunity to capture long-term customers.
“Our loan deferral balances related to the pandemic also decreased 38% from $182.0 million in the first quarter 2020 to $113.2 million at the end of this second quarter. The difference in the preceding amounts are now back to current principal and interest payments.
1

“Growth in net interest income of 15% year over year was partially offset by acquisition-related expenses associated with our purchases of LBC Bancshares, Inc. and PFB Mortgage. Despite the growth in our interest earnings assets, our net interest margin decreased 16 basis points to 3.41% compared with the year-earlier period due to the addition of lower yielding PPP loans offset by lowering our borrowing costs during the quarter as well as lower interest on the level of deposits on our balance sheets.
“Noninterest income saw strong growth, increasing 21% in the second quarter 2020 over the same period last year as a result of our strategic efforts to diversify our revenue streams with mortgage fee income increasing to $1.3 million in the current quarter compared to $544,000 in the second quarter of 2019 due to the acquisition of PFB Mortgage, as well as customers refinancing due to the lower rate environment. This increase in noninterest income was partially offset by increases in noninterest expense, such as increases in salaries and employee benefits due to the additional headcount, as well as increases in occupancy and equipment.
“Despite our strong asset quality, we recorded a higher provision for loan and lease losses in the second quarter of 2020 of $2.2 million, a substantial increase from $179,000 in the second quarter of 2019 and up from $2.0 million in the sequential period, due to increases in our loan portfolio and the current impaired economic operating environment. Our allowance for loan and lease losses now represents 0.92% of total loans outstanding, an increase from 0.73% in the year-earlier quarter and 0.85% on a sequential-quarter basis. Total nonperforming assets in the second quarter of 2020 is 0.75% of total assets, compared to 0.76% in the year-earlier quarter and 0.91% on a sequential-quarter basis.
“As a final thought, against the backdrop of the pandemic and the ensuing disruptions, our team is focused on controlling what we can in order to protect our business. Our investments in strategic acquisitions to diversify our business model, our expenditures in technological enhancements to stay connected to our customers, and our efforts to aggressively protect our capital position and credit metrics allow us to continue to drive our business forward. We also continue to monitor all state and local news to protect our employees and customers. Based on our diversified loan portfolio, capitalization, conservative loan underwriting philosophy and continued growth in several revenue streams, I am confident that we will come out of the current crises stronger,” concluded Fountain.
Balance Sheet
Total assets were $1.78 billion at June 30, 2020, an increase of $262.3 million, or 17.31%, from $1.51 billion at December 31, 2019. The increase in total assets was a result of increased loan production associated with the funding of approximately 1,700 PPP loans which also generated much higher balances in our interest-bearing deposits with other banks as of June 30, 2020.
Total loans, including loans held for sale, were $1.13 billion at June 30, 2020, an increase of $151.6 million, or 15.49%, from $978.9 million at December 31, 2019. The growth in loans was primarily a result of PPP loan production during the second quarter 2020, which totaled $137.8 million in gross PPP loans at June 30, 2020.
Total deposits at June 30, 2020 were $1.42 billion, an increase of $128.0 million, or 9.90%, compared to total deposits of $1.29 billion at December 31, 2019. Noninterest-bearing deposits accounted for the majority of the increase in total deposits, with an increase of $96.2 million, or 41.36%, compared to December 31, 2019. The growth in noninterest-bearing deposits was attributable to PPP-related deposits. In addition, our participation in the PPP loan program resulted in an increase in borrowings, specifically through the Payroll Protection Program Liquidity Facility (“PPPLF”) which totaled $134.5 million at June 30, 2020.
2

Capital
Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be classified as “well-capitalized.” At June 30, 2020, the Company’s preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 7.77%, 12.39%, 13.32% and 10.26%, respectively. In comparison, at December 31, 2019, the Company reported tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio of 8.92%, 12.52%, 13.17% and 10.33%, respectively.
Net Interest Margin
Net interest income was $13.5 million for the second quarter of 2020, compared with $11.8 million for the same quarter in 2019. Net interest margin for the second quarter of 2020 was 3.41%, down twenty-two basis points on a sequential-quarter basis and twenty basis points compared with the year-earlier quarter. The decrease in net interest margin in the second quarter 2020, was primarily due to lower yielding PPP loans combined with an increase in lower yielding, highly liquid assets.
Asset Quality
Nonperforming assets totaled $13.2 million and $11.6 million at June 30, 2020 and 2019, respectively. OREO and repossessed assets totaled $1.8 million at June 30, 2020, an increase of $741,000 or 70.91%, compared to the same quarter in 2019. While nonperforming assets have increased year-over-year, primarily as a result of increased traditional loan production, asset quality remains strong with overall improvement as of the second quarter of 2020 compared to previous quarter and year-over-year comparisons.
In the second quarter of 2020, net loan charge-offs were $295,000 or 0.12% of average loans compared with net recovery of $21,000 in the second quarter of 2019. The loan loss reserve was $10.3 million or 0.92% of total loans on June 30, 2020, compared with $6.8 million or 0.73% of total loans at June 30, 2019. The loan and lease losses reserve methodology resulted in a $2.2 million provision for loan loss and lease loss expense for the quarter ended June 30, 2020, compared with $179,000 for the comparable 2019 period. The increase in the provision for loan and lease loss expense was directly impacted by the current economic disruptions resulting from the COVID-19 pandemic crisis.
Noninterest Income
Noninterest income totaled $4.8 million for the second quarter of 2020, an increase of $409,000 or 9.2%, on a sequential-quarter comparison. The increase during the second quarter 2020 is primarily a result of significant increases in mortgage loan production because of consumers continuing to refinance due to the lower rate environment.
Noninterest Expense
Noninterest expense totaled $13.4 million for the second quarter of 2020, an increase of $837,000 or 6.59%, on a sequential-quarter comparison. The increase in noninterest expense compared to the previous quarter primarily resulted from increases in salaries and employee benefits and other noninterest expenses. Other noninterest expense, which encompasses several categories of activity, increased primarily due to increases in regulatory assessments and software expenses.
3

About Colony Bankcorp
Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in 1975 and headquartered in Fitzgerald, Georgia, Colony operates 33 locations throughout Georgia. The Homebuilder Finance Division helps the local construction industry with building and construction loans, and the Small Business Specialty Lending Division assists small businesses with government guaranteed loans. The Bank also helps its customers achieve their goal of home ownership through Colony Bank Mortgage. Colony’s common stock is traded on the NASDAQ Global Market under the symbol “CBAN.” For more information, please visit www.colony.bank. You can also follow the Company on Facebook or on Twitter @colony_bank.
Forward-Looking Statements
Certain statements contained in this press release that are not statements of historical fact constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, certain statements may be contained in the Company’s future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to: (i) projections and/or expectations of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; (iv) statements regarding growth strategy, capital management, liquidity and funding, and future profitability; (v) statements regarding the potential effects of the COVID-19 pandemic on the Company’s business and financial results and conditions; and (vi) statements of assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: the impact of the COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for loan losses resulting from the COVID-19 pandemic; the Company’s ability to implement its various strategic and growth initiatives; competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; interest rate risk; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs related to the COVID-19 pandemic; and risks that the anticipated benefits from the transactions with LBC Bancshares, Inc. and PFB Mortgage are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict.
Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” and in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.
4

Explanation of Certain Unaudited Non-GAAP Financial Measures
The measures entitled operating noninterest expense; operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are noninterest expense, net income, diluted earnings per share, book value per common share and efficiency ratio, respectively.
Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance, and if not provided would be requested by the investor community. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently.
These disclosures should not be considered an alternative to GAAP. The computations of operating noninterest expense; operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio and the reconciliation of these measures to noninterest expense, net income, diluted earning per share, book value per common share and efficiency ratio are set forth in the table below.
5

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |
Reconciliation of Non-GAAP Measures |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  | 2019 |  |  |  |
(dollars in thousands, except per share data) |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  | Second Quarter
Operating noninterest expense reconciliation |  |  |  |  |  |  |  |  |  |
Noninterest expense (GAAP) |  | $ | 13,375 |  |  | $ | 13,251 |  |  | $ | 13,496 |  |  | $ | 13,358 |  |  | $ | 13,014 |
Acquisition-related expenses |  | (220) |  |  | (287) |  |  | (861) |  |  | (2,076) |  |  | (1,928) |
Operating noninterest expense |  | $ | 13,155 |  |  | $ | 12,964 |  |  | $ | 12,635 |  |  | $ | 11,282 |  |  | $ | 11,086 |
Operating net income reconciliation |  |  |  |  |  |  |  |  |  |
Net income (GAAP) |  | $ | 2,214 |  |  | $ | 1,603 |  |  | $ | 2,756 |  |  | $ | 2,518 |  |  | $ | 2,101 |
Acquisition-related expenses |  | 220 |  |  | 287 |  |  | 335 |  |  | 861 |  |  | 1,928 |
Income tax benefit |  | (46) |  |  | (60) |  |  | (70) |  |  | (181) |  |  | (404) |
Operating net income |  | $ | 2,388 |  |  | $ | 1,830 |  |  | $ | 3,021 |  |  | $ | 3,198 |  |  | $ | 3,625 |
Weighted average diluted shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  | 9,089,461 |
Adjusted earnings per diluted share |  | $ | 0.25 |  |  | $ | 0.19 |  |  | $ | 0.32 |  |  | $ | 0.34 |  |  | $ | 0.40 |
Tangible book value per common share reconciliation |  |  |  |  |  |  |  |  |  |
Book value per common share (GAAP) |  | $ | 14.59 |  |  | $ | 14.35 |  |  | $ | 13.74 |  |  | $ | 13.65 |  |  | $ | 13.32 |
Effect of goodwill and other intangibles |  | (1.96) |  |  | (2.06) |  |  | (2.06) |  |  | (2.04) |  |  | (2.07) |
Tangible book value per common share |  | $ | 12.63 |  |  | $ | 12.29 |  |  | $ | 11.68 |  |  | $ | 11.61 |  |  | $ | 11.25 |
Operating efficiency ratio calculation |  |  |  |  |  |  |  |  |  |
Efficiency ratio (GAAP) |  | 72.75 | % |  | 77.32 | % |  | 77.24 | % |  | 79.94 | % |  | 82.24 | %
Acquisition-related expenses |  | (1.20) |  |  | (1.68) |  |  | (1.92) |  |  | (5.26) |  |  | (12.18) |
Operating efficiency ratio |  | 71.55 | % |  | 75.64 | % |  | 75.32 | % |  | 74.68 | % |  | 70.06 | %

6

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |
Selected Financial Information |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  | 2019 |  |  |  |
(dollars in thousands, except per share data) |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  | Second Quarter
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 13,541 |  |  | $ | 12,704 |  |  | $ | 12,992 |  |  | $ | 12,648 |  |  | $ | 11,825 |
Provision for loan losses |  | 2,200 |  |  | 1,956 |  |  | 581 |  |  | 214 |  |  | 179 |
Non-interest income |  | 4,843 |  |  | 4,434 |  |  | 4,412 |  |  | 4,039 |  |  | 4,000 |
Non-interest expense |  | 13,375 |  |  | 13,251 |  |  | 13,496 |  |  | 13,358 |  |  | 13,014 |
Income taxes |  | 595 |  |  | 328 |  |  | 571 |  |  | 597 |  |  | 531 |
Net income |  | 2,214 |  |  | 1,603 |  |  | 2,756 |  |  | 2,518 |  |  | 2,101 |
PERFORMANCE MEASURES |  |  |  |  |  |  |  |  |  |
Per common share: |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,937 |
Weighted average basic shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  | 9,089,461 |
Weighted average diluted shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  | 9,089,461 |
Earnings per basic share |  | $ | 0.23 |  |  | $ | 0.17 |  |  | $ | 0.29 |  |  | $ | 0.27 |  |  | $ | 0.23 |
Earnings per diluted share |  | 0.23 |  |  | 0.17 |  |  | 0.29 |  |  | 0.27 |  |  | 0.23 |
Adjusted earnings per diluted share |  | 0.25 |  |  | 0.19 |  |  | 0.32 |  |  | 0.34 |  |  | 0.40 |
Cash dividends declared per share |  | 0.10 |  |  | 0.10 |  |  | 0.075 |  |  | 0.075 |  |  | 0.075 |
Common book value per share |  | 14.59 |  |  | 14.35 |  |  | 13.74 |  |  | 13.65 |  |  | 13.32 |
Tangible common book value per share |  | 12.63 |  |  | 12.29 |  |  | 11.68 |  |  | 11.61 |  |  | 11.25 |
Performance ratios: |  |  |  |  |  |  |  |  |  |
Net interest margin (a) |  | 3.41 | % |  | 3.63 | % |  | 3.72 | % |  | 3.64 | % |  | 3.61 | %
Return on average assets |  | 0.52 |  |  | 0.42 |  |  | 0.73 |  |  | 0.67 |  |  | 0.60 |
Return on average total equity |  | 6.47 |  |  | 4.79 |  |  | 8.47 |  |  | 7.86 |  |  | 7.43 |
Efficiency ratio |  | 72.75 |  |  | 77.32 |  |  | 77.24 |  |  | 79.94 |  |  | 82.24 |
Operating efficiency ratio (b) |  | 71.55 |  |  | 75.64 |  |  | 75.32 |  |  | 74.68 |  |  | 70.06 |

7

ASSET QUALITY |  |  |  |  |  |  |  |  |  |
Nonperforming loans (NPLs) |  | $ | 11,459 |  |  | $ | 10,130 |  |  | $ | 9,179 |  |  | $ | 9,572 |  |  | $ | 10,383 |
Other real estate owned |  | 1,769 |  |  | 847 |  |  | 1,320 |  |  | 775 |  |  | 987 |
Repossessed assets |  | 17 |  |  | 19 |  |  | 13 |  |  | 8 |  |  | 58 |
Total nonperforming assets (NPAs) |  | 13,245 |  |  | 10,996 |  |  | 10,512 |  |  | 10,355 |  |  | 11,428 |
Classified loans |  | 20,619 |  |  | 23,093 |  |  | 21,084 |  |  | 20,103 |  |  | 23,656 |
Criticized loans |  | 52,200 |  |  | 46,600 |  |  | 51,182 |  |  | 42,765 |  |  | 42,336 |
Net loan charge-offs |  | 295 |  |  | 435 |  |  | 317 |  |  | 403 |  |  | (21) |
Allowance for loan losses to total loans |  | 0.92 | % |  | 0.85 | % |  | 0.71 | % |  | 0.69 | % |  | 0.73 | %
Allowance for loan losses to total NPLs |  | 89.79 |  |  | 64.81 |  |  | 74.77 |  |  | 68.95 |  |  | 65.38 |
Allowance for loan losses to total NPAs |  | 77.68 |  |  | 60.83 |  |  | 65.29 |  |  | 63.73 |  |  | 59.41 |
Net charge-offs to average loans |  | 0.12 |  |  | 0.18 |  |  | 0.13 |  |  | 0.17 |  |  | — |
NPLs to total loans |  | 1.03 |  |  | 1.13 |  |  | 0.95 |  |  | 1.00 |  |  | 1.11 |
NPAs to total assets |  | 0.75 |  |  | 0.91 |  |  | 0.69 |  |  | 0.70 |  |  | 0.76 |
NPAs to total loans and other real estate owned |  | 1.19 |  |  | 1.39 |  |  | 1.08 |  |  | 1.08 |  |  | 1.18 |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 1,702,902 |  |  | $ | 1,516,191 |  |  | $ | 1,503,521 |  |  | $ | 1,492,852 |  |  | $ | 1,409,265 |
Loans, net |  | 1,016,787 |  |  | 974,614 |  |  | 961,756 |  |  | 942,356 |  |  | 866,841 |
Deposits |  | 1,384,739 |  |  | 1,293,784 |  |  | 1,278,987 |  |  | 1,272,561 |  |  | 1,219,274 |
Total stockholders’ equity |  | 137,213 |  |  | 134,304 |  |  | 130,217 |  |  | 128,172 |  |  | 113,161 |
(a) Computed using fully taxable-equivalent net income. |  |  |  |  |  |  |  |  |  |
(b) Non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and reconciliation to GAAP |  |  |  |  |  |  |  |  |  |

8

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |
Average Balance Sheet and Net Interest Analysis |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |
| Six Months Ended June 30, |  |  |  |  |  |  |  |  |  |
| 2020 |  |  |  |  |  | 2019 |  |  |  |
| Average Balances |  | Income/ Expense |  | Yields/ Rates |  | Average Balances |  | Income/ Expense |  | Yields/ Rates
Assets |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income 1 | $ | 1,037,242 |  |  | $ | 26,989 |  |  | 5.22 | % |  | $ | 828,234 |  |  | $ | 22,783 |  |  | 5.52 | %
Investment securities, taxable | 335,836 |  |  | $ | 3,746 |  |  | 2.24 | % |  | 376,161 |  |  | $ | 4,596 |  |  | 2.45 | %
Investment securities, tax-exempt 2 | 4,941 |  |  | $ | 42 |  |  | 1.70 | % |  | 2,103 |  |  | $ | 28 |  |  | 2.67 | %
Deposits in banks and short term investments | 122,885 |  |  | $ | 332 |  |  | 0.54 | % |  | 61,429 |  |  | $ | 704 |  |  | 2.30 | %
Total interest-earning assets | 1,500,904 |  |  | 31,109 |  |  | 4.16 | % |  | 1,267,927 |  |  | 28,111 |  |  | 4.45 | %
Noninterest-earning assets | 106,932 |  |  |  |  |  |  | 66,888 |  |  |  |  |
Total assets | $ | 1,607,836 |  |  |  |  |  |  | $ | 1,334,815 |  |  |  |  |
Liabilities and stockholders' equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-earning demand and savings | $ | 747,273 |  |  | $ | 1,342 |  |  | 0.36 | % |  | $ | 596,212 |  |  | $ | 1,974 |  |  | 0.66 | %
Other time | 323,073 |  |  | 2,279 |  |  | 1.41 | % |  | 355,731 |  |  | 2,780 |  |  | 1.57 | %
Total interest-bearing deposits | 1,070,346 |  |  | 3,621 |  |  | 0.68 | % |  | 951,943 |  |  | 4,754 |  |  | 1.00 | %
Federal Home Loan Bank advances | 41,038 |  |  | 468 |  |  | 2.29 | % |  | 46,218 |  |  | 506 |  |  | 2.20 | %
Paycheck Protection Program Liquidity Facility | 49,561 |  |  | 87 |  |  | 0.35 | % |  | — |  |  | — |  |  | — | %
Other borrowings | 38,745 |  |  | 688 |  |  | 3.56 | % |  | 24,229 |  |  | 669 |  |  | 5.54 | %
Total other interest-bearing liabilities | 129,344 |  |  | 1,243 |  |  | 1.93 | % |  | 70,447 |  |  | 1,175 |  |  | 3.35 | %
Total interest-bearing liabilities | 1,199,690 |  |  | 4,864 |  |  | 0.81 | % |  | 1,022,390 |  |  | 5,929 |  |  | 1.16 | %
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | $ | 266,163 |  |  |  |  |  |  | $ | 204,012 |  |  |  |  |
Other liabilities | 6,223 |  |  |  |  |  |  | 3,571 |  |  |  |  |
Stockholders' equity | 135,760 |  |  |  |  |  |  | 104,842 |  |  |  |  |
Total noninterest-bearing liabilities and stockholders' equity | 408,146 |  |  |  |  |  |  | 312,425 |  |  |  |  |
Total liabilities and stockholders' equity | $ | 1,607,836 |  |  |  |  |  |  | $ | 1,334,815 |  |  |  |  |
Interest rate spread |  |  |  |  | 3.34 | % |  |  |  |  |  | 3.28 | %
Net interest income |  |  | $ | 26,245 |  |  |  |  |  |  | $ | 22,182 |  |  |
Net interest margin |  |  |  |  | 3.51 | % |  |  |  |  |  | 3.51 | %

1The average balance of loans includes the average balance of nonaccrual loans. Income on such loans is recognized and recorded on the cash basis.
2 T axable-equivalent adjustments totaling $37,000 and $43,000 six months period ended June 30, 2020 and 2019, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

| Three Months Ended June 30, |  |  |  |  |  |  |  |  |  |
| 2020 |  |  |  |  |  | 2019 |  |  |  |
| Average Balances |  | Income/ Expense |  | Yields/ Rates |  | Average Balances |  | Income/ Expense |  | Yields/ Rates
Assets |  |  |  |  |  |  |  |  |  |  |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |
Loans, net of unearned income 3 | $ | 1,094,299 |  |  | $ | 13,699 |  |  | 5.02 | % |  | $ | 866,841 |  |  | $ | 12,313 |  |  | 5.70 | %
Investment securities, taxable | 331,378 |  |  | 1,757 |  |  | 2.13 | % |  | 385,374 |  |  | 2,399 |  |  | 2.50 | %
Investment securities, tax-exempt 4 | 8,959 |  |  | 37 |  |  | 1.66 | % |  | 2,228 |  |  | 17 |  |  | 3.06 | %
Deposits in banks and short term investments | 159,902 |  |  | 48 |  |  | 0.12 | % |  | 59,894 |  |  | 369 |  |  | 2.47 | %
Total interest-earning assets | 1,594,538 |  |  | 15,541 |  |  | 3.91 | % |  | 1,314,337 |  |  | 15,098 |  |  | 4.61 | %
Noninterest-earning assets | 108,364 |  |  |  |  |  |  | 94,928 |  |  |  |  |
Total assets | $ | 1,702,902 |  |  |  |  |  |  | $ | 1,409,265 |  |  |  |  |
Liabilities and stockholders' equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-earning demand and savings | $ | 766,692 |  |  | $ | 407 |  |  | 0.21 | % |  | $ | 624,196 |  |  | $ | 1,136 |  |  | 0.73 | %
Other time | 311,334 |  |  | 996 |  |  | 1.28 | % |  | 368,116 |  |  | 1,496 |  |  | 1.63 | %
Total interest-bearing deposits | 1,078,026 |  |  | 1,403 |  |  | 0.52 | % |  | 992,312 |  |  | 2,632 |  |  | 1.06 | %
Federal Home Loan Bank advances | 36,500 |  |  | 211 |  |  | 2.32 | % |  | 49,070 |  |  | 374 |  |  | 3.06 | %
Paycheck Protection Program Liquidity Facility | 99,124 |  |  | 87 |  |  | 0.35 | % |  | — |  |  | — |  |  | — | %
Other borrowings | 38,694 |  |  | 299 |  |  | 3.10 | % |  | 24,229 |  |  | 267 |  |  | 4.42 | %
Total other interest-bearing liabilities | 174,318 |  |  | 597 |  |  | 1.37 | % |  | 73,299 |  |  | 641 |  |  | 3.51 | %
Total interest-bearing liabilities | 1,252,344 |  |  | 2,000 |  |  | 0.64 | % |  | 1,065,611 |  |  | 3,273 |  |  | 1.23 | %
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | $ | 306,713 |  |  |  |  |  |  | $ | 226,862 |  |  |  |  |
Other liabilities | 6,632 |  |  |  |  |  |  | 3,631 |  |  |  |  |
Stockholders' equity | 137,213 |  |  |  |  |  |  | 113,161 |  |  |  |  |
Total noninterest-bearing liabilities and stockholders' equity | 450,558 |  |  |  |  |  |  | 343,654 |  |  |  |  |
Total liabilities and stockholders' equity | $ | 1,702,902 |  |  |  |  |  |  | $ | 1,409,265 |  |  |  |  |
Interest rate spread |  |  |  |  | 3.27 | % |  |  |  |  |  | 3.38 | %
Net interest income |  |  | $ | 13,541 |  |  |  |  |  |  | $ | 11,825 |  |  |
Net interest margin |  |  |  |  | 3.41 | % |  |  |  |  |  | 3.61 | %

3 The average balance of loans includes the average balance of nonaccrual loans. Income on such loans is recognized and recorded on the cash basis.
4 T axable-equivalent adjustments totaling $6,000 and $9,000 for the three months period ended June 30, 2020 and 2019, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

Colony Bankcorp, Inc. |  |  |
Payroll Protection Program Analytics |  |  |
| Three Months Ended |  | Six Month Ended
| June 30, 2020 |  | June 30, 2020
Net interest margin | 3.41 | % |  | 3.51 | %
Paycheck protection program | (0.04) | % |  | (0.02) | %
Adjusted net interest margin | 3.37 | % |  | 3.49 | %
Net interest spread | 3.27 | % |  | 3.34 | %
Paycheck protection program | (0.06) | % |  | (0.03) | %
Adjusted net interest spread | 3.21 | % |  | 3.31 | %
Allowance for loan loss to total loans | 0.92 | % |  | 0.92 | %
Paycheck protection program | 0.13 | % |  | 0.13 | %
Adjusted allowance for loan loss to total loans | 1.05 | % |  | 1.05 | %
NPLs to total loans | 1.07 | % |  | 1.07 | %
Paycheck protection program | 0.14 | % |  | 0.14 | %
Adjusted NPLs to total loans | 1.21 | % |  | 1.21 | %
NPA to total assets | 0.77 | % |  | 0.77 | %
Paycheck protection program | 0.06 | % |  | 0.06 | %
Adjusted NPA to total assets | 0.83 | % |  | 0.83 | %
NPAs to total loans and other real estate | 1.22 | % |  | 1.22 | %
Paycheck protection program | 0.17 | % |  | 0.17 | %
Adjusted NPAs to total loans and other real estate | 1.39 | % |  | 1.39 | %

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |
Segment Reporting |  |  |  |  |  |  |  |  |
|  | Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |  |
(dollars in thousands) |  | 2020 |  | 2019 |  | 2020 |  |  | 2019
Banking Division |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 12,730 |  |  | $ | 11,806 |  |  | $ | 25,386 |  |  |  | $ | 22,163 |
Provision for loan losses |  | 2,200 |  |  | 179 |  |  | 4,156 |  |  |  | 310 |
Noninterest income |  | 2,901 |  |  | 3,148 |  |  | 5,950 |  |  |  | 5,482 |
Noninterest expenses |  | 11,045 |  |  | 12,168 |  |  | 22,712 |  |  |  | 21,194 |
Income taxes |  | 320 |  |  | 525 |  |  | 688 |  |  |  | 1,224 |
Segment profit |  | $ | 2,066 |  |  | $ | 2,082 |  |  | $ | 3,780 |  |  |  | $ | 4,917 |
Total segment assets |  | $ | 1,622,608 |  |  | $ | 1,502,974 |  |  | $ | 1,622,608 |  |  |  | $ | 1,502,974 |
Mortgage Banking Division |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 82 |  |  | $ | 19 |  |  | $ | 116 |  |  |  | $ | 19 |
Provision for loan losses |  | — |  |  | — |  |  | — |  |  |  | — |
Noninterest income |  | 1,821 |  |  | 852 |  |  | 3,074 |  |  |  | 852 |
Noninterest expenses |  | 1,697 |  |  | 846 |  |  | 2,892 |  |  |  | 846 |
Income taxes |  | 43 |  |  | 6 |  |  | 54 |  |  |  | 6 |
Segment profit |  | $ | 163 |  |  | $ | 19 |  |  | $ | 244 |  |  |  | $ | 19 |
Total segment assets |  | $ | 17,578 |  |  | $ | 3,998 |  |  | $ | 17,578 |  |  |  | $ | 3,998 |
Small Business Specialty Lending Division |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 729 |  |  | $ | — |  |  | $ | 743 |  |  |  | $ | — |
Provision for loan losses |  | — |  |  | — |  |  | — |  |  |  | — |
Noninterest income |  | 121 |  |  | — |  |  | 380 |  |  |  | — |
Noninterest expenses |  | 633 |  |  | — |  |  | 1,149 |  |  |  | — |
Income taxes |  | 232 |  |  | — |  |  | 181 |  |  |  | — |
Segment loss |  | $ | (15) |  |  | $ | — |  |  | $ | (207) |  |  |  | $ | — |
Total segment assets |  | $ | 137,382 |  |  | $ | — |  |  | $ | 137,382 |  |  |  | $ | — |
Total Consolidated |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 13,541 |  |  | $ | 11,825 |  |  | $ | 26,245 |  |  |  | $ | 22,182 |
Provision for loan losses |  | 2,200 |  |  | 179 |  |  | 4,156 |  |  |  | 310 |
Noninterest income |  | 4,843 |  |  | 4,000 |  |  | 9,404 |  |  |  | 6,334 |
Noninterest expenses |  | 13,375 |  |  | 13,014 |  |  | 26,753 |  |  |  | 22,040 |
Income taxes |  | 595 |  |  | 531 |  |  | 923 |  |  |  | 1,230 |
Segment profit |  | $ | 2,214 |  |  | $ | 2,101 |  |  | $ | 3,817 |  |  |  | $ | 4,936 |
Total segment assets |  | $ | 1,777,568 |  |  | $ | 1,506,972 |  |  | $ | 1,777,568 |  |  |  | $ | 1,506,972 |

Colony Bankcorp, Inc. |  |  |  |  |
Consolidated Balance Sheets |  |  |  |  |
|  | June 30, 2020 |  | December 31, 2019 |
(dollars in thousands) |  | (unaudited) |  | (audited) |
ASSETS |  |  |  |  |
Cash and due from banks |  | $ | 17,313 |  |  | $ | 15,570 |  |
Interest-bearing deposits in banks and federal funds sold |  | 173,733 |  |  | 88,522 |  |
Cash and cash equivalents |  | 191,046 |  |  | 104,092 |  |
Investment securities available for sale, at fair value |  | 373,610 |  |  | 347,332 |  |
Other investments, at cost |  | 3,954 |  |  | 4,288 |  |
Loans held for sale |  | 16,537 |  |  | 10,076 |  |
Loans, net of unearned income |  | 1,113,977 |  |  | 968,814 |  |
Allowance for loan losses |  | (10,289) |  |  | (6,863) |  |
Loans, net |  | 1,103,688 |  |  | 961,951 |  |
Premises and equipment |  | 33,276 |  |  | 32,482 |  |
Other real estate |  | 1,769 |  |  | 1,320 |  |
Goodwill and other intangible assets |  | 18,670 |  |  | 19,533 |  |
Other assets |  | 35,018 |  |  | 34,239 |  |
Total assets |  | $ | 1,777,568 |  |  | $ | 1,515,313 |  |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |
Liabilities: |  |  |  |  |
Deposits: |  |  |  |  |
Noninterest-bearing |  | $ | 328,850 |  |  | $ | 232,635 |  |
Interest-bearing |  | 1,092,908 |  |  | 1,061,107 |  |
Total deposits |  | 1,421,758 |  |  | 1,293,742 |  |
Federal Home Loan Bank advances |  | 36,500 |  |  | 47,000 |  |
Paycheck Protection Program Liquidity Facility |  | 134,500 |  |  | — |  |
Other borrowed money |  | 38,292 |  |  | 38,792 |  |
Accrued expenses and other liabilities |  | 7,924 |  |  | 5,273 |  |
Total liabilities |  | 1,638,974 |  |  | 1,384,807 |  |
Stockholders’ equity |  |  |  |  |
Common stock, $1 par value; 20,000,000 shares authorized, 9,498,783 issued and outstanding, respectively |  | 9,499 |  |  | 9,499 |  |
Paid in capital |  | 43,199 |  |  | 43,667 |  |
Retained earnings |  | 78,895 |  |  | 76,978 |  |
Accumulated other comprehensive income, net of tax |  | 7,001 |  |  | 362 |  |
Total stockholders’ equity |  | 138,594 |  |  | 130,506 |  |
Total liabilities and stockholders’ equity |  | $ | 1,777,568 |  |  | $ | 1,515,313 |  |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |
Consolidated Statements of Income (unaudited) |  |  |  |  |  |  |  |
|  | Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
|  | 2020 |  | 2019 |  | 2020 |  | 2019
(dollars in thousands, except per share data) |  |  |  |  |  |  |  |
Interest income: |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 13,699 |  |  | $ | 12,313 |  |  | $ | 26,989 |  |  | $ | 22,783 |
Investment securities, including tax exempt of $37, $6, $43, and $9, respectively |  | 1,794 |  |  | 2,416 |  |  | 3,788 |  |  | 4,624 |
Deposits in banks and short term investments |  | 48 |  |  | 369 |  |  | 332 |  |  | 704 |
Total interest income |  | 15,541 |  |  | 15,098 |  |  | 31,109 |  |  | 28,111 |
Interest expense: |  |  |  |  |  |  |  |
Deposits |  | 1,403 |  |  | 2,632 |  |  | 3,621 |  |  | 4,754 |
Federal Home Loan Bank advances |  | 211 |  |  | 246 |  |  | 468 |  |  | 506 |
Paycheck Protection Program Liquidity Facility |  | 87 |  |  | — |  |  | 87 |  |  | — |
Other borrowings |  | 299 |  |  | 395 |  |  | 688 |  |  | 669 |
Total interest expense |  | 2,000 |  |  | 3,273 |  |  | 4,864 |  |  | 5,929 |
Net interest income |  | 13,541 |  |  | 11,825 |  |  | 26,245 |  |  | 22,182 |
Provision for loan losses |  | 2,200 |  |  | 179 |  |  | 4,156 |  |  | 310 |
Net interest income after provision for loan losses |  | 11,341 |  |  | 11,646 |  |  | 22,089 |  |  | 21,872 |
Noninterest income: |  |  |  |  |  |  |  |
Service charges on deposits |  | 886 |  |  | 1,070 |  |  | 2,190 |  |  | 2,034 |
Other service charges, commissions and fees |  | 1,522 |  |  | 1,110 |  |  | 2,785 |  |  | 2,010 |
Mortgage fee income |  | 1,827 |  |  | 544 |  |  | 3,089 |  |  | 687 |
Gain on sale of SBA loans |  | 46 |  |  | — |  |  | 256 |  |  | — |
Gain on sale of securities |  | — |  |  | 65 |  |  | 293 |  |  | 65 |
Other |  | 562 |  |  | 1,211 |  |  | 791 |  |  | 1,538 |
Total noninterest income |  | 4,843 |  |  | 4,000 |  |  | 9,404 |  |  | 6,334 |
Noninterest expense: |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 7,729 |  |  | 6,292 |  |  | 15,227 |  |  | 11,663 |
Occupancy and equipment |  | 1,316 |  |  | 1,144 |  |  | 2,634 |  |  | 2,169 |
Acquisition related |  | 220 |  |  | 1,928 |  |  | 507 |  |  | 1,961 |
Other |  | 4,110 |  |  | 3,650 |  |  | 8,385 |  |  | 6,247 |
Total noninterest expense |  | 13,375 |  |  | 13,014 |  |  | 26,753 |  |  | 22,040 |
Income before income taxes |  | 2,809 |  |  | 2,632 |  |  | 4,740 |  |  | 6,166 |
Income taxes |  | 595 |  |  | 531 |  |  | 923 |  |  | 1,230 |
Net income |  | $ | 2,214 |  |  | $ | 2,101 |  |  | $ | 3,817 |  |  | $ | 4,936 |
Earnings per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.40 |  |  | $ | 0.56 |
Diluted |  | 0.23 |  |  | 0.23 |  |  | 0.40 |  |  | 0.56 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 9,498,783 |  |  | 9,089,461 |  |  | 9,498,783 |  |  | 8,764,909 |
Diluted |  | 9,498,783 |  |  | 9,089,461 |  |  | 9,498,783 |  |  | 8,764,909 |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |
Quarterly Comparison |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  | 2019 |  |  |  |  |  |
(in thousands, except per share data) |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  |
Assets |  | $ | 1,777,568 |  |  | $ | 1,510,048 |  |  | $ | 1,515,313 |  |  | $ | 1,477,682 |  |  | $ | 1,506,972 |  |  |
Loans, net |  | 1,103,688 |  |  | 980,642 |  |  | 961,951 |  |  | 951,559 |  |  | 927,917 |  |  |
Deposits |  | 1,421,758 |  |  | 1,293,076 |  |  | 1,293,742 |  |  | 1,251,273 |  |  | 1,297,723 |  |  |
Total equity |  | 138,594 |  |  | 136,072 |  |  | 130,506 |  |  | 129,651 |  |  | 126,509 |  |  |
Net income |  | 2,214 |  |  | 1,603 |  |  | 2,757 |  |  | 2,518 |  |  | 2,101 |  |  |
Net income per basic share |  | 0.23 |  |  | 0.17 |  |  | 0.29 |  |  | 0.27 |  |  | 0.23 |  |  |
Key Performance Ratios: |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 0.52 | % |  | 0.42 | % |  | 0.73% |  | 0.67% |  | 0.60% |  |
Return on average total equity |  | 6.47 | % |  | 4.79 | % |  | 8.47% |  | 7.86% |  | 7.43% |  |
Total equity to total assets |  | 7.80 | % |  | 9.01 | % |  | 8.61% |  | 8.77% |  | 8.39% |  |
Tangible equity to tangible assets |  | 6.82 | % |  | 7.83 | % |  | 7.42% |  | 7.56% |  | 7.19% |  |
Net interest margin |  | 3.41 | % |  | 3.63 | % |  | 3.72% |  | 3.64% |  | 3.57% |  |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |
Quarterly Loan Comparison |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  | 2019 |  |  |  |  |  |
(in thousands) |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  |
Legacy |  | $ | 995,245 |  |  | $ | 840,652 |  |  | $ | 848,088 |  |  | $ | 826,309 |  |  | $ | 796,045 |  |  |
Purchased |  | 118,732 |  |  | 148,374 |  |  | 120,726 |  |  | 132,414 |  |  | 139,226 |  |  |
Total |  | $ | 1,113,977 |  |  | $ | 989,026 |  |  | $ | 968,814 |  |  | $ | 958,723 |  |  | $ | 935,271 |  |  |

15