Colony Bankcorp Reports Third Quarter 2020 Results

Rhea-AI Summary

Colony Bankcorp, Inc. (Nasdaq: CBAN) reported Q3 2020 financial results showing net income of $3.1 million, or $0.33 per diluted share. Adjusted earnings per diluted share reached $0.39. Total assets grew to $1.8 billion, with loans totaling $1.2 billion. A $1.1 million provision for loan losses was noted, while noninterest income surged by 88%. The company declared a $0.10 quarterly dividend, payable November 13, 2020. Despite an increase in nonperforming assets, Colony maintains a strong capital position, with robust loan growth fueled by PPP loans amidst the ongoing pandemic.

Positive

• Net income of $3.1 million representing a 21% increase year-over-year.
• Adjusted earnings per diluted share increased to $0.39.
• Total assets rose by 16% to $1.8 billion since December 31, 2019.
• Total loans increased 18% to $1.16 billion, boosted by PPP loans.
• Noninterest income saw an impressive 88% increase, driven by mortgage banking and SBA loans.
• Quarterly cash dividend of $0.10 declared, showcasing financial stability.

Negative

• Provision for loan losses increased to $1.1 million, up from $214,000 in Q3 2019.
• Net interest margin decreased by 28 basis points to 3.34% year-over-year due to lower yielding PPP loans.
• Nonperforming assets rose to 0.68% of total assets compared to 0.70% a year earlier.

FITZGERALD, Ga.--(BUSINESS WIRE)--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.

“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.

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.

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.

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 and efficiency ratio are set forth in the table below.

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		%

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
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

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. 2Taxable-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 Taxable-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