EX-99.1 2 a3q2020cbaner.htm EX-99.1
For additional information, contact:
Tracie Youngblood
EVP & Chief Financial Officer
(229) 426-6000 (Ext 6003)
COLONY BANKCORP REPORTS THIRD QUARTER 2020 RESULTS
COMPANY DECLARES QUARTERLY CASH DIVIDEND OF $0.10 PER SHARE
FITZGERALD, GA. (October 15, 2020) – Colony Bankcorp, Inc. (Nasdaq: CBAN) (“Colony” or the “Company”) today reported financial results for the third quarter of 2020.
Third Quarter 2020 Financial Highlights:
•Net income of $3.1 million, or $0.33 per diluted share
•Operating net income of $3.7 million, or $0.39 adjusted earnings per diluted share (see Non-GAAP reconciliation)
•Total assets of $1.8 billion
•Total loans, including loans held for sale, of $1.2 billion
•$1.1 million provision for loan losses
The Company also announced that on October 15, 2020, the Board of Directors declared a quarterly cash dividend of $0.10 per share, to be paid on its common stock on November 13, 2020, to shareholders of record as of the close of business on October 30, 2020.
Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, “In this quarter of continued significant economic disruption due to the global pandemic, we delivered strong results, while prudently managing risk, as we continued to work diligently to support our customers, communities and employees. Our diluted earnings per share increased 21% over the same period last year and a strong 42% over the sequential quarter. Our results reflect the continued benefit of diversifying our business model, with income before income taxes increasing 28% over the prior-year period and 42% over the sequential quarter. Exceptional growth in mortgage banking income as well as revenue contribution from our Small Business Specialty Lending Division give all of us at Colony confidence in the future of our business. Additionally, our loan deferral balances related to the pandemic decreased 89% from $113.4 million in the second quarter 2020 to $12.6 million at the end of the third quarter, with the hotel sector representing $7.6 million.
“Growth in net interest income before provision for loan losses for the quarter of 9% year over year was offset by acquisition-related expenses related to core deposit intangible amortization, as well as the write-down of the Thomaston branch, the sale of which will close at the end of the fourth quarter. Despite strong growth in our interest earnings assets, our net interest margin decreased 28 basis points to 3.34% compared with the year-earlier period due to the addition of lower yielding PPP loans offset by a decrease in our borrowing costs during the quarter and lower interest on the level of deposits on our balance sheets. For the nine months ending September 30, 2020, our net interest margin was flat compared to the same period last year.
“Noninterest income saw strong growth, increasing 88% in the third quarter 2020 over the same period last year as a result of our continued strategic efforts to diversify our revenue streams. Mortgage fee income increased to $2.6 million in the current quarter compared to $1.3 million in the third quarter of 2019 due to the increasing number of our customers refinancing in the lower interest rate environment. Mortgage fee income now represents 35% of total noninterest income. We also saw increases in interchange fees as well as gains on sales of SBA loans and other securities. 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, increases in occupancy, equipment, information technology expenses, and an FHLB prepayment penalty.
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“Despite our strong asset quality, we recorded a higher provision for loan and losses in the third quarter of 2020 of $1.1 million, a substantial increase from $214,000 in the third quarter of 2019 due to increases in our loan portfolio and the current challenging economic operating environment. Our allowance for loan losses now represents 1.00% of total loans outstanding, an increase from 0.69% in the year-earlier quarter and 0.92% on a sequential-quarter basis. Total nonperforming assets in the third quarter of 2020 is 0.68% of total assets, compared to 0.70% in the year-earlier quarter and 0.75% on a sequential-quarter basis.
“As a final thought, I would like to express my sincere appreciation to every Colony team member for their efforts and contributions in serving our customers during this crisis. While some of our competitors are retrenching, due to our strategic efforts to diversify our business lines, we are adding talented bankers and loan officers in our growing markets. Our expenditures in technological enhancements to stay connected to our customers and our efforts to protect our credit metrics allow us to continue to drive our business forward. As the largest community bank outside of Atlanta, I am excited for our future and believe we will continue to grow our market share in Georgia while staying true to our heritage as a community bank,” concluded Fountain.
Balance Sheet
•Total assets were $1.8 billion at September 30, 2020, an increase of $244.1 million, or 16%, from $1.5 billion at December 31, 2019.
•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 September 30, 2020.
•Total loans, including loans held for sale, were $1.16 billion, an increase of $178.6 million, or 18%, from $978.9 million at December 31, 2019.
•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 September 30, 2020.
•Total deposits were $1.42 billion, an increase of $122.7 million, or 9%, compared to total deposits of $1.29 billion at December 31, 2019.
•Noninterest-bearing deposits increased $91.5 million, or 39%, compared to December 31, 2019, and is attributable to PPP-related deposits.
•Colony’s 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 September 30, 2020.
Capital
•Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be classified as “well-capitalized.”
• Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.36%, 14.29%, 15.29% and 12.16%, respectively.
Third Quarter Results of Operations
•Net interest income before provision for loan losses increased $1.2 million on a sequential-quarter comparison.
•Net interest margin was down seven basis points on a sequential-quarter basis and 28 basis points compared with the year-earlier quarter due to lower yielding PPP loans combined with an increase in lower yielding highly liquid assets.
•Increase in noninterest income of $2.7 million, or 56%, on a sequential-quarter comparison, primarily due to mortgage loan productions from the refinancing in the lower interest rate environment and gain on sale of securities and Small Business Lending (“SBA”) loans.
•Increase in noninterest expenses of $2.9 million, or 22%, on a sequential-quarter comparison, driven by the write down of the Thomaston branch pending the sale later this year, FHLB prepayment penalties and salaries and compensation expense.
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Asset Quality
•Nonperforming assets totaled $11.8 million and $10.4 million at September 30, 2020 and 2019, respectively.
•OREO and repossessed assets totaled $1.9 million at September 30, 2020, an increase of $1.1 million, or 140.8%, compared to the same quarter in 2019.
•Net loan charge-offs were $375,000, or 0.13% of average loans, compared to $317,000 in the third quarter of 2019.
•The loan loss reserve was $11.0 million, or 1.00% of total loans, on September 30, 2020, compared with $6.6 million, or 0.69% of total loans, at September 30, 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 third quarter of 2020 compared to previous quarter and year-over-year comparisons. The increase in the provision for loan losses was directly impacted by the current economic disruptions resulting from the COVID-19 pandemic crisis.
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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; the failure to close the sale of the Thomaston branch and risks that the anticipated benefits from the sale of the Thomaston branch and 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.
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Explanation of Certain Unaudited Non-GAAP Financial Measures
The measures entitled 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 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 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 earnings per share, book value per common share efficiency ratio are set forth in the table below.
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Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |
Reconciliation of Non-GAAP Measures |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |
(dollars in thousands, except per share data) |  | Third Quarter |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  |
Operating net income reconciliation |  |  |  |  |  |  |  |  |  |  |  |
Net income (GAAP) |  | $ | 3,099 |  |  | $ | 2,214 |  |  | $ | 1,603 |  |  | $ | 2,756 |  |  | $ | 2,518 |  |  |
Acquisition-related expenses |  | 207 |  |  | 220 |  |  | 287 |  |  | 335 |  |  | 861 |  |  |
Thomaston building write down |  | 582 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Income tax benefit |  | (166) |  |  | (46) |  |  | (60) |  |  | (70) |  |  | (181) |  |  |
Operating net income |  | $ | 3,722 |  |  | $ | 2,388 |  |  | $ | 1,830 |  |  | $ | 3,021 |  |  | $ | 3,198 |  |  |
Weighted average diluted shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  |
Adjusted earnings per diluted share |  | $ | 0.39 |  |  | $ | 0.25 |  |  | $ | 0.19 |  |  | $ | 0.32 |  |  | $ | 0.34 |  |  |
Tangible book value per common share reconciliation |  |  |  |  |  |  |  |  |  |  |  |
Book value per common share (GAAP) |  | $ | 14.78 |  |  | $ | 14.59 |  |  | $ | 14.35 |  |  | $ | 13.74 |  |  | $ | 13.65 |  |  |
Effect of goodwill and other intangibles |  | (1.96) |  |  | (1.96) |  |  | (2.06) |  |  | (2.06) |  |  | (2.04) |  |  |
Tangible book value per common share |  | $ | 12.82 |  |  | $ | 12.63 |  |  | $ | 12.29 |  |  | $ | 11.68 |  |  | $ | 11.61 |  |  |
Operating efficiency ratio calculation |  |  |  |  |  |  |  |  |  |  |  |
Efficiency ratio (GAAP) |  | 76.22 | % |  | 72.75 | % |  | 77.32 | % |  | 77.24 | % |  | 79.94 | % |  |
Acquisition-related expenses |  | (0.97) |  |  | (1.20) |  |  | (1.68) |  |  | (1.92) |  |  | (5.26) |  |  |
Thomaston building write down |  | (2.72) | % |  | — | % |  | — | % |  | — | % |  | — | % |  |
Operating efficiency ratio |  | 72.53 | % |  | 71.55 | % |  | 75.64 | % |  | 75.32 | % |  | 74.68 | % |  |

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Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |
Selected Financial Information |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |
(dollars in thousands, except per share data) |  | Third Quarter |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  |
EARNINGS SUMMARY |  |  |  |  |  |  |  |  |  |  |  |
Net interest income |  | $ | 13,848 |  |  | $ | 13,541 |  |  | $ | 12,705 |  |  | $ | 12,992 |  |  | $ | 12,656 |  |  |
Provision for loan losses |  | 1,106 |  |  | 2,200 |  |  | 1,956 |  |  | 581 |  |  | 214 |  |  |
Non-interest income |  | 7,554 |  |  | 4,843 |  |  | 4,432 |  |  | 4,412 |  |  | 4,030 |  |  |
Non-interest expense |  | 16,313 |  |  | 13,375 |  |  | 13,250 |  |  | 13,496 |  |  | 13,358 |  |  |
Income taxes |  | 884 |  |  | 595 |  |  | 328 |  |  | 571 |  |  | 597 |  |  |
Net income |  | 3,099 |  |  | 2,214 |  |  | 1,603 |  |  | 2,756 |  |  | 2,517 |  |  |
PERFORMANCE MEASURES |  |  |  |  |  |  |  |  |  |  |  |
Per common share: |  |  |  |  |  |  |  |  |  |  |  |
Common shares outstanding |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  |
Weighted average basic shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  |
Weighted average diluted shares |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,498,783 |  |  | 9,494,859 |  |  | 9,494,771 |  |  |
Earnings per basic share |  | $ | 0.33 |  |  | $ | 0.23 |  |  | $ | 0.17 |  |  | $ | 0.29 |  |  | $ | 0.27 |  |  |
Earnings per diluted share |  | 0.33 |  |  | 0.23 |  |  | 0.17 |  |  | 0.29 |  |  | 0.27 |  |  |
Adjusted earnings per diluted share |  | 0.39 |  |  | 0.25 |  |  | 0.19 |  |  | 0.32 |  |  | 0.34 |  |  |
Cash dividends declared per share |  | 0.10 |  |  | 0.10 |  |  | 0.10 |  |  | 0.075 |  |  | 0.075 |  |  |
Common book value per share |  | 14.78 |  |  | 14.59 |  |  | 14.35 |  |  | 13.74 |  |  | 13.65 |  |  |
Tangible common book value per share |  | 12.82 |  |  | 12.63 |  |  | 12.29 |  |  | 11.68 |  |  | 11.61 |  |  |
Performance ratios: |  |  |  |  |  |  |  |  |  |  |  |
Net interest margin (a) |  | 3.34 | % |  | 3.41 | % |  | 3.63 | % |  | 3.72 | % |  | 3.62 | % |  |
Return on average assets |  | 0.70 |  |  | 0.52 |  |  | 0.42 |  |  | 0.73 |  |  | 0.67 |  |  |
Return on average total equity |  | 8.80 |  |  | 6.47 |  |  | 4.79 |  |  | 8.47 |  |  | 7.86 |  |  |
Efficiency ratio |  | 76.22 |  |  | 72.75 |  |  | 77.32 |  |  | 77.24 |  |  | 79.94 |  |  |
Operating efficiency ratio (b) |  | 72.53 |  |  | 71.55 |  |  | 75.64 |  |  | 75.32 |  |  | 74.68 |  |  |

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ASSET QUALITY |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans (NPLs) |  | $ | 9,926 |  |  | $ | 11,459 |  |  | $ | 10,130 |  |  | $ | 9,179 |  |  | $ | 9,572 |  |  |
Other real estate owned |  | 1,875 |  |  | 1,769 |  |  | 847 |  |  | 1,320 |  |  | 775 |  |  |
Repossessed assets |  | 11 |  |  | 17 |  |  | 19 |  |  | 13 |  |  | 8 |  |  |
Total nonperforming assets (NPAs) |  | 11,812 |  |  | 13,245 |  |  | 10,996 |  |  | 10,512 |  |  | 10,355 |  |  |
Classified loans |  | 21,388 |  |  | 20,619 |  |  | 23,093 |  |  | 21,084 |  |  | 20,103 |  |  |
Criticized loans |  | 72,076 |  |  | 52,200 |  |  | 46,600 |  |  | 51,182 |  |  | 42,765 |  |  |
Net loan charge-offs |  | 375 |  |  | 295 |  |  | 435 |  |  | 317 |  |  | 403 |  |  |
Allowance for loan losses to total loans |  | 1.00 | % |  | 0.92 | % |  | 0.85 | % |  | 0.71 | % |  | 0.69 | % |  |
Allowance for loan losses to total NPLs |  | 111.02 |  |  | 89.79 |  |  | 64.81 |  |  | 74.77 |  |  | 68.95 |  |  |
Allowance for loan losses to total NPAs |  | 93.29 |  |  | 77.68 |  |  | 60.83 |  |  | 65.29 |  |  | 63.73 |  |  |
Net charge-offs to average loans |  | 0.13 |  |  | 0.12 |  |  | 0.18 |  |  | 0.13 |  |  | 0.17 |  |  |
NPLs to total loans |  | 0.90 |  |  | 1.03 |  |  | 1.13 |  |  | 0.95 |  |  | 1.00 |  |  |
NPAs to total assets |  | 0.67 |  |  | 0.75 |  |  | 0.91 |  |  | 0.69 |  |  | 0.70 |  |  |
NPAs to total loans and other real estate owned |  | 1.07 |  |  | 1.19 |  |  | 1.39 |  |  | 1.08 |  |  | 1.08 |  |  |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 1,766,717 |  |  | $ | 1,702,902 |  |  | $ | 1,516,191 |  |  | $ | 1,503,521 |  |  | $ | 1,492,852 |  |  |
Loans, net |  | 1,130,231 |  |  | 1,016,787 |  |  | 974,614 |  |  | 961,756 |  |  | 942,356 |  |  |
Deposits |  | 1,417,724 |  |  | 1,384,739 |  |  | 1,293,784 |  |  | 1,278,987 |  |  | 1,272,561 |  |  |
Total stockholders’ equity |  | 139,721 |  |  | 137,213 |  |  | 134,304 |  |  | 130,217 |  |  | 128,172 |  |  |
(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 |  |  |  |  |  |  |  |  |  |  |  |

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Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |
Average Balance Sheet and Net Interest Analysis |  |  |  |  |  |  |  |  |  |  |
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |
| Three Months Ended September 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 | $ | 1,140,487 |  |  | $ | 13,809 |  |  | 4.80 | % |  | $ | 956,150 |  |  | $ | 13,699 |  |  | 5.68 | %
Investment securities, taxable | 339,094 |  |  | 1,644 |  |  | 1.92 | % |  | 391,117 |  |  | 2,328 |  |  | 2.36 | %
Investment securities, tax-exempt 2 | 26,916 |  |  | 130 |  |  | 1.92 | % |  | 1,615 |  |  | 13 |  |  | 3.11 | %
Deposits in banks and short term investments | 151,508 |  |  | 52 |  |  | 0.14 | % |  | 43,951 |  |  | 206 |  |  | 1.86 | %
Total interest-earning assets | 1,658,005 |  |  | 15,635 |  |  | 3.74 | % |  | 1,392,833 |  |  | 16,246 |  |  | 4.63 | %
Noninterest-earning assets | 108,712 |  |  |  |  |  |  | 99,613 |  |  |  |  |
Total assets | $ | 1,766,717 |  |  |  |  |  |  | $ | 1,492,446 |  |  |  |  |
Liabilities and stockholders' equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-earning demand and savings | $ | 793,831 |  |  | $ | 324 |  |  | 0.16 | % |  | $ | 672,633 |  |  | $ | 1,260 |  |  | 0.74 | %
Other time | 295,559 |  |  | 820 |  |  | 1.10 | % |  | 379,873 |  |  | 1,555 |  |  | 1.62 | %
Total interest-bearing deposits | 1,089,390 |  |  | 1,144 |  |  | 0.42 | % |  | 1,052,506 |  |  | 2,815 |  |  | 1.06 | %
Federal Home Loan Bank advances | 28,587 |  |  | 159 |  |  | 2.20 | % |  | 48,565 |  |  | 269 |  |  | 2.20 | %
Paycheck Protection Program Liquidity Facility | 134,500 |  |  | 118 |  |  | 0.35 | % |  | — |  |  | — |  |  | — | %
Other borrowings | 38,289 |  |  | 273 |  |  | 2.83 | % |  | 39,498 |  |  | 458 |  |  | 4.60 | %
Total other interest-bearing liabilities | 201,376 |  |  | 550 |  |  | — | % |  | 88,063 |  |  | 727 |  |  | 3.27 | %
Total interest-bearing liabilities | 1,290,766 |  |  | 1,694 |  |  | 0.52 | % |  | 1,140,569 |  |  | 3,542 |  |  | 1.23 | %
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | $ | 328,334 |  |  |  |  |  |  | $ | 219,718 |  |  |  |  |
Other liabilities | 7,896 |  |  |  |  |  |  | 3,987 |  |  |  |  |
Stockholders' equity | 139,721 |  |  |  |  |  |  | 128,172 |  |  |  |  |
Total noninterest-bearing liabilities and stockholders' equity | 475,951 |  |  |  |  |  |  | 351,877 |  |  |  |  |
Total liabilities and stockholders' equity | $ | 1,766,717 |  |  |  |  |  |  | $ | 1,492,446 |  |  |  |  |
Interest rate spread |  |  |  |  | 3.22 | % |  |  |  |  |  | 3.40 | %
Net interest income |  |  | $ | 13,941 |  |  |  |  |  |  | $ | 12,704 |  |  |
Net interest margin |  |  |  |  | 3.34 | % |  |  |  |  |  | 3.62 | %

1The average balance of loans includes the average balance of nonaccrual loans. Income on such loans is recognized and recorded on the cash basis. Taxable-equivalent adjustments totaling $66,000 and $46,000.
2T axable-equivalent adjustments totaling $27,000 and $3,,000 three months period ended September 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.

| Nine Months Ended September 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 | $ | 1,071,908 |  |  | $ | 40,923 |  |  | 5.09 | % |  | $ | 868,579 |  |  | $ | 36,566 |  |  | 5.61 | %
Investment securities, taxable | 336,446 |  |  | 5,391 |  |  | 2.13 | % |  | 381,200 |  |  | 7,040 |  |  | 2.46 | %
Investment securities, tax-exempt 4 | 12,319 |  |  | 184 |  |  | 1.99 | % |  | 1,939 |  |  | 48 |  |  | 3.28 | %
Deposits in banks and short term investments | 132,496 |  |  | 384 |  |  | 0.39 | % |  | 53,589 |  |  | 810 |  |  | 2.01 | %
Total interest-earning assets | 1,553,169 |  |  | 46,882 |  |  | 4.02 | % |  | 1,305,307 |  |  | 44,464 |  |  | 4.54 | %
Noninterest-earning assets | 107,015 |  |  |  |  |  |  | 78,202 |  |  |  |  |
Total assets | $ | 1,660,184 |  |  |  |  |  |  | $ | 1,383,509 |  |  |  |  |
Liabilities and stockholders' equity |  |  |  |  |  |  |  |  |  |  |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest-earning demand and savings | $ | 762,906 |  |  | $ | 1,667 |  |  | 0.29 | % |  | $ | 620,731 |  |  | $ | 3,234 |  |  | 0.69 | %
Other time | 313,834 |  |  | 3,099 |  |  | 1.32 | % |  | 362,651 |  |  | 4,335 |  |  | 1.59 | %
Total interest-bearing deposits | 1,076,740 |  |  | 4,766 |  |  | 0.59 | % |  | 983,382 |  |  | 7,569 |  |  | 1.03 | %
Federal Home Loan Bank advances | 36,858 |  |  | 626 |  |  | 2.26 | % |  | 43,868 |  |  | 775 |  |  | 2.35 | %
Paycheck Protection Program Liquidity Facility | 78,081 |  |  | 205 |  |  | 0.35 | % |  | — |  |  | — |  |  | — | %
Other borrowings | 38,591 |  |  | 962 |  |  | 3.32 | % |  | 32,515 |  |  | 1,127 |  |  | 4.62 | %
Total other interest-bearing liabilities | 153,530 |  |  | 1,793 |  |  | 1.56 | % |  | 76,383 |  |  | 1,902 |  |  | 3.32 | %
Total interest-bearing liabilities | 1,230,270 |  |  | 6,559 |  |  | 0.71 | % |  | 1,059,765 |  |  | 9,471 |  |  | 1.19 | %
Noninterest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |
Demand deposits | 287,038 |  |  |  |  |  |  | $ | 207,328 |  |  |  |  |
Other liabilities | 6,136 |  |  |  |  |  |  | 3,712 |  |  |  |  |
Stockholders' equity | 136,740 |  |  |  |  |  |  | 112,704 |  |  |  |  |
Total noninterest-bearing liabilities and stockholders' equity | 429,914 |  |  |  |  |  |  | 323,744 |  |  |  |  |
Total liabilities and stockholders' equity | $ | 1,660,184 |  |  |  |  |  |  | $ | 1,383,509 |  |  |  |  |
Interest rate spread |  |  |  |  | 3.34 | % |  |  |  |  |  | 3.28 | %
Net interest income |  |  | $ | 40,323 |  |  |  |  |  |  | $ | 34,993 |  |  |
Net interest margin |  |  |  |  | 3.51 | % |  |  |  |  |  | 3.51 | %

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. Taxable-equivalent adjustments totaling $190,000 and $129,000.
4 T axable-equivalent adjustments totaling $39,000 and $10,000 for nine months period ended September 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. |  |  |  |  |  |  |  |
Segment Reporting |  |  |  |  |  |  |  |
|  | Three months ended September 30, |  |  |  | Nine months ended September 30, |  |
(dollars in thousands) |  | 2020 |  | 2019 |  | 2020 |  | 2019
Banking Division |  |  |  |  |  |  |  |
Net interest income |  | $ | 12,920 |  |  | $ | 12,567 |  |  | $ | 38,306 |  |  | $ | 34,730 |
Provision for loan losses |  | 1,106 |  |  | 214 |  |  | 5,262 |  |  | 524 |
Noninterest income |  | 4,139 |  |  | 2,794 |  |  | 9,960 |  |  | 8,485 |
Noninterest expenses |  | 13,242 |  |  | 11,638 |  |  | 36,712 |  |  | 32,799 |
Income taxes |  | 785 |  |  | 723 |  |  | 1,472 |  |  | 1,955 |
Segment income |  | $ | 1,926 |  |  | $ | 2,786 |  |  | $ | 4,820 |  |  | $ | 7,937 |
Total segment assets |  | $ | 1,563,131 |  |  | $ | 1,467,324 |  |  | $ | 1,563,131 |  |  | $ | 1,467,324 |
Mortgage Banking Division |  |  |  |  |  |  |  |
Net interest income |  | $ | 188 |  |  | $ | 81 |  |  | $ | 305 |  |  | $ | 100 |
Provision for loan losses |  | — |  |  | — |  |  | — |  |  | — |
Noninterest income |  | 2,612 |  |  | 1,245 |  |  | 5,686 |  |  | 1,888 |
Noninterest expenses |  | 2,410 |  |  | 1,191 |  |  | 5,302 |  |  | 2,037 |
Income taxes |  | 82 |  |  | (15) |  |  | 137 |  |  | (10) |
Segment income (loss) |  | $ | 308 |  |  | $ | 150 |  |  | $ | 552 |  |  | $ | (39) |
Total segment assets |  | $ | 50,265 |  |  | $ | 10,209 |  |  | $ | 50,265 |  |  | $ | 10,209 |
Small Business Specialty Lending Division |  |  |  |  |  |  |  |
Net interest income |  | $ | 740 |  |  | $ | — |  |  | $ | 1,483 |  |  | $ | — |
Provision for loan losses |  | — |  |  | — |  |  | — |  |  | — |
Noninterest income |  | 803 |  |  | — |  |  | 1,183 |  |  | — |
Noninterest expenses |  | 661 |  |  | — |  |  | 924 |  |  | — |
Income taxes |  | 17 |  |  | — |  |  | 198 |  |  | — |
Segment income |  | $ | 865 |  |  | $ | — |  |  | $ | 1,544 |  |  | $ | — |
Total segment assets |  | $ | 146,050 |  |  | $ | — |  |  | $ | 146,050 |  |  | $ | — |
Total Consolidated |  |  |  |  |  |  |  |
Net interest income |  | $ | 13,848 |  |  | $ | 12,648 |  |  | $ | 40,094 |  |  | $ | 34,830 |
Provision for loan losses |  | 1,106 |  |  | 214 |  |  | 5,262 |  |  | 524 |
Noninterest income |  | 7,554 |  |  | 4,039 |  |  | 16,829 |  |  | 10,373 |
Noninterest expenses |  | 16,313 |  |  | 12,829 |  |  | 42,938 |  |  | 34,836 |
Income taxes |  | 884 |  |  | 708 |  |  | 1,807 |  |  | 1,945 |
Segment income |  | $ | 3,099 |  |  | $ | 2,936 |  |  | $ | 6,916 |  |  | $ | 7,898 |
Total segment assets |  | $ | 1,759,446 |  |  | $ | 1,477,533 |  |  | $ | 1,759,446 |  |  | $ | 1,477,533 |

Colony Bankcorp, Inc. |  |  |  |  |
Consolidated Balance Sheets |  |  |  |  |
|  | September 30, 2020 |  | December 31, 2019 |
(dollars in thousands) |  | (unaudited) |  | (audited) |
ASSETS |  |  |  |  |
Cash and due from banks |  | $ | 14,226 |  |  | $ | 15,570 |  |
Interest-bearing deposits in banks and federal funds sold |  | 134,613 |  |  | 88,522 |  |
Cash and cash equivalents |  | 148,839 |  |  | 104,092 |  |
Investment securities available for sale, at fair value |  | 363,601 |  |  | 347,332 |  |
Other investments, at cost |  | 3,296 |  |  | 4,288 |  |
Loans held for sale |  | 55,864 |  |  | 10,076 |  |
Loans, net of unearned income |  | 1,101,606 |  |  | 968,814 |  |
Allowance for loan losses |  | (11,020) |  |  | (6,863) |  |
Loans, net |  | 1,090,586 |  |  | 961,951 |  |
Premises and equipment |  | 31,961 |  |  | 32,482 |  |
Other real estate |  | 1,875 |  |  | 1,320 |  |
Goodwill and other intangible assets |  | 18,618 |  |  | 19,533 |  |
Bank owned life insurance |  | 31,339 |  |  | 21,629 |  |
Other assets |  | 13,467 |  |  | 12,610 |  |
Total assets |  | $ | 1,759,446 |  |  | $ | 1,515,313 |  |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |
Liabilities: |  |  |  |  |
Deposits: |  |  |  |  |
Noninterest-bearing |  | $ | 324,135 |  |  | $ | 232,635 |  |
Interest-bearing |  | 1,092,266 |  |  | 1,061,107 |  |
Total deposits |  | 1,416,401 |  |  | 1,293,742 |  |
Federal Home Loan Bank advances |  | 22,500 |  |  | 47,000 |  |
Paycheck Protection Program Liquidity Facility |  | 134,500 |  |  | — |  |
Other borrowed money |  | 38,042 |  |  | 38,792 |  |
Accrued expenses and other liabilities |  | 7,657 |  |  | 5,273 |  |
Total liabilities |  | 1,619,100 |  |  | 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 |  | 43,207 |  |  | 43,667 |  |
Retained earnings |  | 81,044 |  |  | 76,978 |  |
Accumulated other comprehensive income, net of tax |  | 6,596 |  |  | 362 |  |
Total stockholders’ equity |  | 140,346 |  |  | 130,506 |  |
Total liabilities and stockholders’ equity |  | $ | 1,759,446 |  |  | $ | 1,515,313 |  |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |
Consolidated Statements of Income (unaudited) |  |  |  |  |  |  |  |
|  | Three months ended September 30, |  |  |  | Nine months ended September 30, |  |
|  | 2020 |  | 2019 |  | 2020 |  | 2019
(dollars in thousands, except per share data) |  |  |  |  |  |  |  |
Interest income: |  |  |  |  |  |  |  |
Loans, including fees |  | $ | 13,743 |  |  | 13,654 |  |  | $ | 40,733 |  |  | 36,437 |
Investment securities, including tax exempt of $103, $10, $145, and $38, respectively |  | 1,747 |  |  | 2,338 |  |  | 5,536 |  |  | 7,078 |
Deposits in banks and short term investments |  | 52 |  |  | 206 |  |  | 384 |  |  | 810 |
Total interest income |  | 15,542 |  |  | 16,198 |  |  | 46,653 |  |  | 44,325 |
Interest expense: |  |  |  |  |  |  |  |
Deposits |  | 1,144 |  |  | 2,815 |  |  | 4,766 |  |  | 7,569 |
Federal Home Loan Bank advances |  | 159 |  |  | 269 |  |  | 626 |  |  | 775 |
Paycheck Protection Program Liquidity Facility |  | 118 |  |  | — |  |  | 205 |  |  | — |
Other borrowings |  | 273 |  |  | 458 |  |  | 962 |  |  | 1,127 |
Total interest expense |  | 1,694 |  |  | 3,542 |  |  | 6,559 |  |  | 9,471 |
Net interest income |  | 13,848 |  |  | 12,656 |  |  | 40,094 |  |  | 34,854 |
Provision for loan losses |  | 1,106 |  |  | 214 |  |  | 5,262 |  |  | 524 |
Net interest income after provision for loan losses |  | 12,742 |  |  | 12,442 |  |  | 34,832 |  |  | 34,330 |
Noninterest income: |  |  |  |  |  |  |  |
Service charges on deposits |  | 1,316 |  |  | 1,546 |  |  | 3,906 |  |  | 3,997 |
Mortgage fee income |  | 2,616 |  |  | 1,255 |  |  | 5,706 |  |  | 1,942 |
Gain on sale of SBA loans |  | 748 |  |  | — |  |  | 1,004 |  |  | — |
Gain on sale of securities |  | 716 |  |  | 34 |  |  | 1,009 |  |  | 99 |
Interchange fees |  | 1,342 |  |  | 1,001 |  |  | 3,624 |  |  | 2,755 |
BOLI Income |  | 237 |  |  | 124 |  |  | 548 |  |  | 405 |
Insurance commissions and fees |  | 254 |  |  | 66 |  |  | 679 |  |  | 96 |
Other |  | 325 |  |  | 4 |  |  | 353 |  |  | 1,056 |
Total noninterest income |  | 7,554 |  |  | 4,030 |  |  | 16,829 |  |  | 10,350 |
Noninterest expense: |  |  |  |  |  |  |  |
Salaries and employee benefits |  | 9,104 |  |  | 7,186 |  |  | 24,331 |  |  | 18,848 |
Occupancy and equipment |  | 1,338 |  |  | 1,290 |  |  | 3,972 |  |  | 3,459 |
Acquisition related |  | 207 |  |  | 649 |  |  | 714 |  |  | 2,610 |
Information technology expenses |  | 1,440 |  |  | 1,196 |  |  | 4,135 |  |  | 3,158 |
Insurance expenses |  | 483 |  |  | 241 |  |  | 1,596 |  |  | 450 |
Professional fees |  | 481 |  |  | 558 |  |  | 1,343 |  |  | 1,369 |
Advertising and public relations |  | 459 |  |  | 677 |  |  | 1,478 |  |  | 1,370 |
Communications |  | 212 |  |  | 196 |  |  | 631 |  |  | 538 |
Writedown of building |  | 582 |  |  | — |  |  | 582 |  |  | — |
FHLB prepayment penalty |  | 925 |  |  | — |  |  | 925 |  |  | — |
Other |  | 1,082 |  |  | 1,365 |  |  | 3,231 |  |  | 3,596 |
Total noninterest expense |  | 16,313 |  |  | 13,358 |  |  | 42,938 |  |  | 35,398 |
Income before income taxes |  | 3,983 |  |  | 3,114 |  |  | 8,723 |  |  | 9,282 |
Income taxes |  | 884 |  |  | 597 |  |  | 1,807 |  |  | 1,827 |
Net income |  | $ | 3,099 |  |  | $ | 2,517 |  |  | $ | 6,916 |  |  | $ | 7,455 |
Earnings per common share: |  |  |  |  |  |  |  |
Basic |  | $ | 0.33 |  |  | $ | 0.27 |  |  | $ | 0.73 |  |  | $ | 0.83 |
Diluted |  | 0.33 |  |  | 0.27 |  |  | 0.73 |  |  | 0.83 |
Weighted average common shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 9,498,783 |  |  | 9,494,771 |  |  | 9,498,783 |  |  | 9,008,196 |
Diluted |  | 9,498,783 |  |  | 9,491,771 |  |  | 9,498,783 |  |  | 9,008,196 |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quarterly Comparison |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |  |  |
(dollars in thousands) |  | Third Quarter |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  |  |  |
Assets |  | $ | 1,759,446 |  |  | $ | 1,777,568 |  |  | $ | 1,510,048 |  |  | $ | 1,515,313 |  |  | $ | 1,477,682 |  |  |  |  |
Loans, net |  | 1,090,586 |  |  | 1,103,688 |  |  | 980,642 |  |  | 961,951 |  |  | 951,559 |  |  |  |  |
Deposits |  | 1,416,401 |  |  | 1,421,758 |  |  | 1,293,076 |  |  | 1,293,742 |  |  | 1,251,273 |  |  |  |  |
Total equity |  | 140,346 |  |  | 138,594 |  |  | 136,072 |  |  | 130,506 |  |  | 129,651 |  |  |  |  |
Net income |  | 3,099 |  |  | 2,214 |  |  | 1,603 |  |  | 2,757 |  |  | 2,518 |  |  |  |  |
Earnings per basic share |  | 0.33 |  |  | 0.23 |  |  | 0.17 |  |  | 0.29 |  |  | 0.27 |  |  |  |  |
Key Performance Ratios: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on average assets |  | 0.70 | % |  | 0.52 | % |  | 0.42 | % |  | 0.73% |  | 0.67% |  |  |  |
Return on average total equity |  | 8.80 | % |  | 6.47 | % |  | 4.79 | % |  | 8.47% |  | 7.86% |  |  |  |
Total equity to total assets |  | 7.98 | % |  | 7.80 | % |  | 9.01 | % |  | 8.61% |  | 8.77% |  |  |  |
Tangible equity to tangible assets |  | 7.00 | % |  | 6.82 | % |  | 7.83 | % |  | 7.42% |  | 7.56% |  |  |  |
Net interest margin |  | 3.34 | % |  | 3.41 | % |  | 3.63 | % |  | 3.72% |  | 3.64% |  |  |  |

Colony Bankcorp, Inc. |  |  |  |  |  |  |  |  |  |  |  |  |  |
Quarterly Loan Comparison |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  |  |  |  | 2019 |  |  |  |  |  |
(dollars in thousands) |  | Third Quarter |  | Second Quarter |  | First Quarter |  | Fourth Quarter |  | Third Quarter |  |  |  |
Core |  | $ | 868,833 |  |  | $ | 862,087 |  |  | $ | 840,652 |  |  | $ | 848,088 |  |  | $ | 826,309 |  |  |  |  |
PPP |  | 133,756 |  |  | 133,158 |  |  | — |  |  | — |  |  | — |  |  |  |  |
Purchased |  | 99,017 |  |  | 118,732 |  |  | 148,374 |  |  | 120,726 |  |  | 132,414 |  |  |  |  |
Total |  | $ | 1,101,606 |  |  | $ | 1,113,977 |  |  | $ | 989,026 |  |  | $ | 968,814 |  |  | $ | 958,723 |  |  |  |  |

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