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Colony Bankcorp Reports Second Quarter 2021 Results

·20 min read

Declares Quarterly Cash Dividend of $0.1025 Per Share

FITZGERALD, Ga., July 22, 2021--(BUSINESS WIRE)--Colony Bankcorp, Inc. (Nasdaq: CBAN) ("Colony" or the "Company") today reported net income of $4.0 million, or $0.42 per diluted share, for the quarter ended June 30, 2021, compared with $2.2 million, or $0.23 per diluted share, for the quarter ended June 30, 2020. The Company reported operating net income of $4.6 million, or $0.49 per diluted share, for the quarter ended June 30, 2021, compared with $2.4 million, or $0.25 per diluted share for the same period in 2020. Operating net income for June 30, 2021 and 2020 excludes pre-tax acquisition related expenses, and the net income tax benefit for these adjustments.

For the six months ended June 30, 2021, the Company reported net income of $8.9 million, or $0.94 per diluted share, compared to $3.5 million, or $0.40 per diluted share, for the same period in 2020. The Company reported operating net income of $9.7 million, or $1.02 adjusted earnings per diluted share, for the six months ended June 30, 2021, compared to $4.2 million, or $0.44 adjusted earnings per diluted share, for the same period in 2020.

Second Quarter 2021 Financial Highlights:

  • Net income was $4.0 million, or $0.42 per diluted share compared to $2.2 million, or $0.23 per diluted share for the second quarter of 2020.

  • Operating net income of $4.6 million, or $0.49 per diluted share, (see Non-GAAP reconciliation).

  • No provision for loan losses was recorded in second quarter, a decrease of $500,000, or 100%, compared to the first quarter of 2021.

  • Mortgage production was $151.4 million, with $37.7 million in refinances, $103.4 million in purchases, and $10.3 million in construction related loans.

  • Small Business Specialty Lending ("SBSL") closed $15.1 million in SBA loans and sold $9.3 million in SBA loans.

The Company also announced that on July 22, 2021, the Board of Directors declared a quarterly cash dividend of $0.1025 per share, to be paid on its common stock on August 17, 2021, to shareholders of record as of the close of business on August 3, 2021. Outstanding shares as of July 1, 2021 were 9,686,383.

Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, "As we moved to a more open economy from the global pandemic, we delivered strong growth in earnings for the second quarter of 2021 compared to the same period last year. Diluted earnings per share increased 81% for the second quarter year over year to $0.42 per diluted share. Our team continued to do a great job serving clients as shown by increased levels of our non-interest income for the period mentioned. Mortgage fee income increased 65% year over year as a result of historically low interest rates and consumer demand, a tribute also to our strategic vision to diversify our revenues. Diluted earnings per share decreased on a sequential quarter basis primarily due to acquisition costs related to our proposed acquisitions of SouthCrest Financial Group, Inc. (PK: SCSG) ("SouthCrest") and The Barnes Agency ("Barnes"), both with anticipated closings on or before August 1, 2021. Adjusted earnings also increased for the year over year period to $0.49 from $0.25, and decreased 8% from the prior quarter primarily due to increased operating expenses.

"Building a world class organization and recruiting the best of people, we have been very busy at Colony these last several months. The recently announced acquisition of SouthCrest allows us to optimize our balance sheet, further invest in Colony and become a more efficient organization due to the synergies we will experience. In furtherance of our strategic plan, we believe our newly formed Colony Insurance subsidiary operating as an Allstate agency, diversifies our revenue stream by increasing non interest income as well as cross-selling of product lines. Furthermore, I am pleased that R. Dallis ‘D’ Copeland, Jr., agreed to join our organization as Special Advisor. D has over 27 years of banking experience at a $45 billion balance sheet financial institution in all areas including commercial real estate, corporate and retail banking, private wealth, credit card, treasury management and strategy. We anticipate leveraging his many skills to continue to build our organization.

"Our balance sheet remains solid with strong credit metrics, as evidenced by no provision for loan losses as well as net recoveries in our loan portfolio for the period ended June 30, 2021. We experienced solid core loan growth while total deposits increased to $1.5 billion, a record for the company. Average interest-bearing deposits increased $77.0 million year over year with most of the increase in lower-yielding demand and savings accounts. Total assets were fairly flat from last year with the prior year period having strong demand for Paycheck Protection Program (‘PPP’) loans.

"Net interest income increased 11% year-over-year primarily due to loan fee income recognized on PPP loans forgiven, as well as lower costs of interest bearing liabilities. Our cost related to demand and savings deposits rate was down 15 basis points to 0.07% and total average deposits cost this quarter decreased 33 basis points to 0.20% from the same period last year. The team has done a great job of attracting more deposits while maintaining a strong cost discipline. Moreover, while many banks are reporting decreases in their net interest margin, I am pleased to report our net interest margin increased to 3.68% from 3.46% year over year attributable to lower costs of interest bearing liabilities. While we have experienced inflation across many sectors of the economy, the Federal Reserve Board has so far not increased interest rates and we continue to closely monitor the situation.

"Noninterest income saw very strong growth, increasing 60% year over year, with mortgage fee income increasing to $3.0 million in the current quarter compared to $1.8 million in the second quarter of 2020. Service charges on deposits had a strong quarter increasing 16% over the same period last year. The increase in noninterest income was offset by increases in noninterest expense, such as salaries and employee benefits, information technology expenses as well as elevated acquisition related expenses.

"Our allowance for loan and lease losses now represents 1.26% of total loans outstanding, an increase from 0.92% in the year-earlier quarter and 1.19% on a sequential-quarter basis. Total nonperforming assets decreased to 0.54% of total assets from 0.75% in the year-earlier quarter and from 0.62% on a sequential-quarter basis.

"Average interest earning assets of $1.7 billion increased $80.0 million, or 5%, while total assets remained stable at $1.8 billion. Total loans, including acquisition activity and loans from the Small Business Administration Paycheck Protection Program (‘PPP’), decreased 8% year-over-year, while organic loan growth increased 6%.

In closing, Fountain added, "Our management team and Board are always focused on investing, innovating and making strategic decisions to better serve our customers, employees and communities. The acquisitions of SouthCrest and The Barnes Agency will make us the number one community bank in Georgia as well as expand our reach into consumer insurance. We welcome new customers by offering a wide range of financial products and services as well as demonstrating new product lines to our existing customers. All of us at Colony look forward to integrating the SouthCrest and Barnes acquisitions, while continuing to reward our shareholders."

Balance Sheet

  • Total assets totaled $1.8 billion at June 30, 2021, a decrease of $22.1 million, or 1.2%, compared to the same period in 2020. The decrease was primarily related to PPP loans being forgiven beginning in the third quarter of 2020.

  • Interest-bearing deposits in banks and federal funds sold at June 30, 2021, totaled $129.4 million, a decrease of $44.4 million, or 25.5% compared to the same period in 2020. The decrease is primarily attributable to the deployment of funds that came from PPP loans and the repayment of Paycheck Protection Program Liquidity Facility ("PPLF").

  • Total loans, including loans held for sale, totaled $1.05 billion at June 30, 2021, a decrease of $77.0 million, or 6.81% from the same period in 2020. Legacy loan growth was up $50.3 million or 5.9% compared to the same period in 2020.

  • Deposits totaled $1.54 billion at June 30, 2021, an increase of $120.5 million, or 8.5%, compared to the same period in 2020. The increase in deposits was primarily in noninterest-bearing and interest bearing demand deposits as a result of the PPP loan activity during 2020 and 2021.

  • Total borrowings at June 30, 2021, totaled $59.8 million, a decrease of $149.5 million, or 71.4%, compared to the same period in 2020. At June 30, 2021, the PPPLF was completely paid off in the second quarter of 2021.

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 8.45%, 13.41%, 14.56%, and 11.31%, respectively at June 30, 2021.

Second Quarter Results of Operations

  • Net interest income on a tax-equivalent basis for the second quarter 2021 totaled $15.2 million, compared to $13.6 million for the second quarter 2020. The increase during the quarter is primarily attributable to loan fee income recognized on PPP loans forgiven and a decrease in the cost of interest-bearing liabilities.

  • Net interest margin was up 18 basis points over the sequential quarter primarily driven by an increase in deferred fee income recognized on PPP loans partially offset by reductions in loan rates driven by Federal Reserve interest rate decreases during 2020. During the quarter ended June 30, 2021, PPP loans totaling approximately $44.6 million were forgiven through the SBA.

  • Noninterest income totaled $7.8 million for the second quarter ended June 30, 2021, an increase of $2.9 million, or 60.05%, compared to the same period in 2020. The increase was primarily attributable to growth in mortgage production income as a result of increased loan demand resulting from a historically low interest rate environment.

  • Noninterest expense totaled $17.5 million for the second quarter ended June 30, 2021, compared to $13.4 million for the same period in 2020. The increase in noninterest expense primarily resulted from a $2.4 million increase in salary expense largely related to the increase in mortgage and SBSL loan production.

Asset Quality

  • Nonperforming assets totaled $9.5 million and $11.2 million at June 30, 2021 and March 31, 2021, respectively.

  • OREO and repossessed assets totaled $299,000 at June 30, 2021, a decrease of $248,000, or 45% compared to March 31, 2021.

  • Net loan recoveries were $244,000, or (0.09%) of average loans for the second quarter of 2021, compared to net charge-offs of $66,000 in the first quarter of 2021.

  • The loan loss reserve was $12.9 million, or 1.26% of total loans, at June 30, 2021, compared to $12.7 million, or 1.14% of total loans, at March 31, 2021.

Asset quality remains strong as indicated by the overall improvement in asset quality ratios as of the second quarter 2021 on a year-over-year comparison along with a decrease in nonperforming assets. .

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in 1975 and headquartered in Fitzgerald, Georgia, Colony operates 29 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; (vi) statements relating to the timing, benefits, costs, and synergies of the proposed merger with SouthCrest (the "Merger") and the proposed acquisition of Barnes; and (vii) 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 risk that the cost savings and any revenue synergies from the Merger and the acquisition of Barnes may not be realized or take longer than anticipated; disruption from the Merger and the acquisition of Barnes with customers, suppliers, employee or other business partners relationships; the occurrence of any event, change or circumstances that could give rise to the termination of the merger agreement with SouthCrest; the risk of successful integration of SouthCrest’s and Barnes’ businesses into the Company; the amount of the costs, fees, expenses and charges related to the Merger and the acquisition of Barnes; reputation risk and the reaction of each of the Company’s and SouthCrest’s customers, suppliers, employees or other business partners to the Merger; the failure of the closing conditions in the merger agreement with SouthCrest to be satisfied, or any unexpected delay in closing of the Merger; the risk that the integration of SouthCrest’s operations into the operations of the Company will be materially delayed or will be more costly or difficult than expected; the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the dilution caused by the Company’s issuance of additional shares of its common stock in the Merger; the risks associated with the Company’s pursuit of future acquisitions; and general competitive, economic, political and market conditions. . 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, 2020, 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 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

2021

2020

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Operating net income reconciliation

Net income (GAAP)

$

3,997

$

4,919

$

4,900

$

3,098

$

2,214

Acquisition-related expenses

865

176

148

207

220

Thomaston building write down

582

Gain on sale of Thomaston branch

(1,026

)

Income tax expense (benefit)

(225

)

(46

)

184

(166

)

(46

)

Operating net income

$

4,637

$

5,049

$

4,206

$

3,721

$

2,388

Weighted average diluted shares

9,498,783

9,498,783

9,498,783

9,498,783

9,498,783

Adjusted earnings per diluted share

$

0.49

$

0.53

$

0.44

$

0.39

$

0.25

Tangible book value per common share reconciliation

Book value per common share (GAAP)

$

15.46

$

15.11

$

15.21

$

14.78

$

14.59

Effect of goodwill and other intangibles

(1.97

)

(1.97

)

(1.95

)

(1.96

)

(1.96

)

Tangible book value per common share

$

13.50

$

13.14

$

13.26

$

12.82

$

12.63

Operating efficiency ratio calculation

Efficiency ratio (GAAP)

76.53

%

69.04

%

68.93

%

76.22

%

72.75

%

Acquisition-related expenses

(3.44

)

(0.46

)

(0.64

)

(0.97

)

(1.20

)

Gain on sale of Thomaston branch

%

%

3.19

%

%

%

Thomaston building write down

%

%

%

(2.72

)%

%

Operating efficiency ratio

73.10

%

68.58

%

71.49

%

72.53

%

71.55

%

Colony Bankcorp, Inc.

Selected Financial Information

2021

2020

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

EARNINGS SUMMARY

Net interest income

$

15,069

$

14,283

$

15,151

$

13,848

$

13,541

Provision for loan losses

500

1,296

1,106

2,200

Non-interest income

7,751

8,576

8,039

6,930

4,843

Non-interest expense

17,465

15,782

15,986

15,690

13,375

Income taxes

1,358

1,658

1,008

884

595

Net income

3,997

4,919

4,900

3,098

2,214

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

9,498,783

9,498,783

Weighted average diluted shares

9,498,783

9,498,783

9,498,783

9,498,783

9,498,783

Earnings per basic share

$

0.42

$

0.52

$

0.52

$

0.33

$

0.23

Earnings per diluted share

0.42

0.52

0.52

0.33

0.23

Adjusted earnings per diluted share(b)

0.49

0.53

0.44

0.39

0.25

Cash dividends declared per share

0.1025

0.1025

0.1000

0.1000

0.1000

Common book value per share

15.46

15.11

15.21

14.78

14.59

Tangible common book value per share(b)

13.50

13.14

13.26

12.82

12.63

Performance ratios:

Net interest margin (a)

3.68

%

3.50

%

3.58

%

3.34

%

3.46

%

Return on average assets

0.91

1.12

1.08

0.70

0.52

Return on average total equity

11.14

13.71

13.73

8.80

6.47

Efficiency ratio

76.53

69.04

68.93

76.22

72.75

Operating efficiency ratio (b)

73.10

68.58

71.49

72.53

71.55

ASSET QUALITY

Nonperforming loans (NPLs)

$

9,184

$

10,676

$

9,128

$

9,926

$

11,459

Other real estate owned

270

518

1,006

1,875

1,769

Repossessed assets

29

29

30

11

17

Total nonperforming assets (NPAs)

9,483

11,223

10,164

11,812

13,245

Classified loans

30,852

35,182

30,404

21,388

20,619

Criticized loans

64,818

80,288

75,633

72,076

52,200

Net loan (recoveries)/charge-offs

(244

)

(66

)

189

375

295

Allowance for loan losses to total loans

1.26

%

1.19

%

1.14

%

1.00

%

0.92

%

Allowance for loan losses to total NPLs

140.15

118.89

132.85

111.02

89.79

Allowance for loan losses to total NPAs

135.73

113.10

119.31

93.29

77.68

Net (recoveries)/charge-offs to average loans

0.09

(0.02

)

0.07

0.13

0.12

NPLs to total loans

0.90

1.00

0.86

0.90

1.03

NPAs to total assets

0.54

0.62

0.58

0.67

0.75

NPAs to total loans and other real estate owned

0.93

1.06

0.96

1.19

AVERAGE BALANCES

Total assets

$

1,774,122

$

1,774,123

$

1,797,749

$

1,766,717

$

1,702,902

Loans, net

1,076,784

1,079,007

1,151,872

1,130,231

1,094,299

Deposits

1,547,139

1,475,944

1,456,287

1,140,487

1,384,739

Total stockholders’ equity

145,515

145,515

141,570

139,721

137,213

(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

Three Months Ended June 30,

2021

2020

(dollars in thousands)

Average

Balances

Income/

Expense

Yields/

Rates

Average

Balances

Income/

Expense

Yields/

Rates

Assets

Interest-earning assets:

Loans, net of unearned income 1

$

1,076,784

$

14,165

5.34

%

$

1,094,299

$

13,763

5.10

%

Investment securities, taxable

417,343

1,794

1.74

%

330,649

1,757

2.16

%

Investment securities, tax-exempt 2

33,156

160

1.96

%

8,959

46

2.08

%

Deposits in banks and short term investments

146,591

45

0.12

%

159,902

48

0.12

%

Total interest-earning assets

1,673,874

16,164

3.92

%

1,593,809

15,614

3.97

%

Noninterest-earning assets

100,248

109,093

Total assets

$

1,774,122

$

1,702,902

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

901,978

$

146

0.07

%

$

766,692

$

407

0.22

%

Other time

253,944

423

0.68

%

311,334

996

1.30

%

Total interest-bearing deposits

1,155,922

569

0.20

%

1,078,026

1,403

0.53

%

Federal Home Loan Bank advances

22,500

115

2.09

%

36,500

211

2.34

%

Paycheck Protection Program Liquidity Facility

19,031

25

0.53

%

99,124

87

0.36

%

Other borrowings

37,536

258

2.78

%

38,694

299

3.13

%

Total other interest-bearing liabilities

79,067

398

2.04

%

174,318

597

1.39

%

Total interest-bearing liabilities

1,234,989

967

0.32

%

1,252,344

2,000

0.65

%

Noninterest-bearing liabilities:

Demand deposits

$

391,217

$

306,713

Other liabilities

2,401

6,632

Stockholders' equity

145,515

137,213

Total noninterest-bearing liabilities and stockholders' equity

539,133

450,558

Total liabilities and stockholders' equity

$

1,774,122

$

1,702,902

Interest rate spread

3.60

%

3.33

%

Net interest income

$

15,197

$

13,614

Net interest margin

3.68

%

3.46

%

_________________________________________________

1 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 $67,000 and $62,000 for the quarter ended June 30, 2021 and 2020, respectively, are included in income and fees on loans. Accretion income of $104,000 and $82,000 for the quarter ended June 30, 2021 and 2020 are also included in income and fees on loans.

2 Taxable-equivalent adjustments totaling $43,000 and $12,000 for the quarter ended June 30, 2021 and 2020, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% and a Georgia state tax rate of 5.75% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

Six Months Ended June 30,

2021

2020

(dollars in thousands)

Average

Balances

Income/

Expense

Yields/

Rates

Average

Balances

Income/

Expense

Yields/

Rates

Assets

Interest-earning assets:

Loans, net of unearned income3

$

1,077,859

$

27,805

5.20

%

$

1,037,242

$

27,114

5.27

%

Investment securities, taxable

394,431

3,401

1.74

%

335,107

3,649

2.20

%

Investment securities, tax-exempt4

32,887

314

1.93

%

4,941

54

2.20

%

Deposits in banks and short term investments

164,882

97

0.12

%

122,885

332

0.54

%

Total interest-earning assets

1,670,059

31,617

3.82

%

1,500,175

31,149

4.19

%

Noninterest-earning assets

105,746

107,661

Total assets

$

1,775,805

$

1,607,836

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

880,838

$

311

0.07

%

$

747,273

$

1,342

0.36

%

Other time

257,173

912

0.72

%

323,073

2,279

1.42

%

Total interest-bearing deposits

1,138,011

1,223

0.22

%

1,070,346

3,621

0.68

%

Federal Home Loan Bank advances

22,500

230

2.06

%

41,038

468

2.30

%

Paycheck Protection Program Liquidity Facility

51,516

205

0.80

%

49,561

87

0.35

%

Other borrowings

37,715

402

2.15

%

38,745

688

3.58

%

Total other interest-bearing liabilities

111,731

837

1.51

%

129,344

1,243

1.94

%

Total interest-bearing liabilities

1,249,742

2,060

0.33

%

1,199,690

4,864

0.82

%

Noninterest-bearing liabilities:

Demand deposits

$

373,728

$

266,163

Other liabilities

7,201

6,223

Stockholders' equity

145,136

135,760

Total noninterest-bearing liabilities and stockholders' equity

526,065

408,146

Total liabilities and stockholders' equity

$

1,775,807

$

1,607,836

Interest rate spread

3.49

%

3.37

%

Net interest income

$

29,557

$

26,285

Net interest margin

3.57

%

3.53

%

_________________________________________________

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 $133,000 and $124,000 for the six months ended June 30, 2021 and 2020, respectively, are included in income and fees on loans. Accretion income of $313,000 and $264,000 for the six months ended June 30, 2021 and 2020 are also included in income and fees on loans.

4 Taxable-equivalent adjustments totaling $84,000 and $14,000 for the six months ended June 30, 2021 and 2020, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% and a Georgia state tax rate of 5.75% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.

Colony Bankcorp, Inc.

Segment Reporting

2021

2020

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Banking Division

Net interest income

$

14,864

$

13,985

$

14,752

$

13,631

$

13,440

Provision for loan losses

500

1,296

1,106

2,200

Noninterest income

3,354

3,005

3,952

3,515

2,901

Noninterest expenses

14,366

11,960

11,656

11,792

10,158

Income taxes

1,241

1,160

973

940

842

Segment income

$

2,611

$

3,370

$

4,779

$

3,308

$

3,141

Total segment assets

$

1,710,345

$

1,755,667

$

1,709,696

$

1,666,742

$

1,726,219

Full time employees

287

291

305

312

321

Mortgage Banking Division

Net interest income

$

123

$

168

$

299

$

188

$

82

Provision for loan losses

Noninterest income

2,997

3,986

3,420

2,612

1,821

Noninterest expenses

1,887

2,793

2,835

2,410

1,697

Income taxes

60

354

188

82

43

Segment income

$

1,173

$

1,007

$

696

$

308

$

163

Total segment assets

$

25,149

$

27,478

$

50,266

$

50,265

$

17,578

Full time employees

53

51

43

41

40

Small Business Specialty Lending Division

Net interest income

$

82

$

130

$

100

$

29

$

19

Provision for loan losses

Noninterest income

1,400

1,585

667

803

121

Noninterest expenses

1,212

1,029

1,495

1,488

1,520

Income taxes

57

144

(153

)

(138

)

(290

)

Segment income

$

213

$

542

$

(575

)

$

(518

)

$

(1,090

)

Total segment assets

$

20,024

$

15,901

$

4,012

$

42,439

$

33,771

Full time employees

24

23

21

15

13

Total Consolidated

Net interest income

$

15,069

$

14,283

$

15,151

$

13,848

$

13,541

Provision for loan losses

500

1,296

1,106

2,200

Noninterest income

7,751

8,576

8,039

6,930

4,843

Noninterest expenses

17,465

15,782

15,986

15,690

13,375

Income taxes

1,358

1,658

1,008

884

595

Segment income

$

3,997

$

4,919

$

4,900

3,098

$

2,214

Total segment assets

$

1,755,518

$

1,799,046

$

1,763,974

$

1,759,446

$

1,777,568

Full time employees

364

365

369

368

374

Colony Bankcorp, Inc.

Consolidated Balance Sheets

June 30,

2021

December 31,

2020

(dollars in thousands)

(unaudited)

(audited)

ASSETS

Cash and due from banks

$

16,897

$

17,218

Interest-bearing deposits in banks and federal funds sold

129,369

166,288

Cash and cash equivalents

146,266

183,506

Investment securities available for sale, at fair value

469,714

380,814

Other investments, at cost

2,703

3,296

Loans held for sale

30,910

52,386

Loans, net of unearned income

1,022,618

1,059,503

Allowance for loan losses

(12,871

)

(12,127

)

Loans, net

1,009,747

1,047,376

Premises and equipment

32,689

32,057

Other real estate

270

1,006

Goodwill and other intangible assets

18,701

18,558

Bank owned life insurance

31,805

31,547

Other assets

12,713

13,428

Total assets

$

1,755,518

$

1,763,974

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities:

Deposits:

Noninterest-bearing

$

393,677

$

326,999

Interest-bearing

1,148,537

1,118,028

Total deposits

1,542,214

1,445,027

Federal Home Loan Bank advances

22,500

22,500

Paycheck Protection Program Liquidity Facility

106,789

Other borrowed money

37,292

37,792

Accrued expenses and other liabilities

6,618

7,378

Total liabilities

$

1,608,624

$

1,619,486

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

43,232

43,215

Retained earnings

91,963

84,993

Accumulated other comprehensive income, net of tax

2,200

6,781

Total stockholders’ equity

146,894

144,488

Total liabilities and stockholders’ equity

$

1,755,518

$

1,763,974

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

(dollars in thousands, except per share data)

Interest income:

Loans, including fees

$

14,099

13,699

$

27,672

26,989

Investment securities, including tax exempt of $126, $37, $248 and $43, respectively

1,893

1,794

3,591

3,788

Deposits in banks and short term investments

44

48

98

332

Total interest income

16,036

15,541

31,361

31,109

Interest expense:

Deposits

569

1,403

1,223

3,622

Federal Home Loan Bank advances

115

211

230

468

Paycheck Protection Program Liquidity Facility

25

87

93

87

Other borrowings

258

299

515

688

Total interest expense

967

2,000

2,061

4,865

Net interest income

15,069

13,541

29,300

26,244

Provision for loan losses

2,200

500

4,156

Net interest income after provision for loan losses

15,069

11,341

28,800

22,088

Noninterest income:

Service charges on deposits

1,264

1,091

2,486

2,590

Mortgage fee income

3,005

1,827

7,000

3,089

Gain on sale of SBA loans

1,263

46

2,735

255

(Loss)/Gain on sale of securities

141

137

293

(Loss)/Gain on sale of assets

56

56

Interchange fees

1,667

1,250

3,197

2,283

BOLI Income

222

160

430

311

Other

189

413

367

212

Total noninterest income

7,751

4,843

16,352

9,089

Noninterest expense:

Salaries and employee benefits

10,126

7,729

20,081

15,227

Occupancy and equipment

1,245

1,316

2,571

2,634

Acquisition related

865

220

1,040

507

Information technology expenses

1,856

1,380

3,448

2,696

Professional fees

690

480

1,177

862

Advertising and public relations

566

385

1,146

1,020

Communications

308

527

527

420

Other

1,809

1,338

3,232

3,387

Total noninterest expense

17,465

13,375

33,222

26,753

Income before income taxes

5,355

2,809

11,930

4,424

Income taxes

1,358

595

3,016

923

Net income

$

3,997

$

2,214

$

8,914

$

3,501

Earnings per common share:

Basic

$

0.42

$

0.23

$

0.94

$

0.40

Diluted

0.42

0.23

0.94

0.40

Dividends declared per share

0.10

0.10

0.21

0.20

Weighted average common shares outstanding:

Basic

9,498,783

9,498,783

9,498,783

9,498,783

Diluted

9,498,783

9,498,783

9,498,783

9,498,783

Colony Bankcorp, Inc.

Quarterly Comparison

2021

2020

(dollars in thousands, except per share data)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Assets

$

1,755,518

$

1,799,047

$

1,763,974

$

1,759,446

$

1,777,568

Loans, net

1,009,747

1,050,082

1,047,376

1,090,586

1,103,688

Deposits

1,542,214

1,525,884

1,445,027

1,416,401

1,421,758

Total equity

146,894

143,487

144,488

140,346

138,594

Net income

3,997

4,919

4,900

3,099

2,214

Earnings per basic share

$

0.42

$

0.52

$

0.52

$

0.33

$

0.23

Key Performance Ratios:

Return on average assets

0.91

%

1.12

%

1.08

%

0.70

%

0.52

%

Return on average total equity

11.14

%

13.71

%

13.73

%

8.80

%

6.47

%

Total equity to total assets

8.37

%

7.98

%

8.19

%

7.98

%

7.80

%

Tangible equity to tangible assets

7.38

%

7.01

%

7.21

%

7.00

%

6.82

%

Net interest margin

3.68

%

3.50

%

3.58

%

3.34

%

3.41

%

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2021

2020

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Core

$

905,850

$

888,800

$

873,426

$

871,416

$

855,556

PPP

58,769

102,633

101,147

133,756

133,158

Purchased

57,999

71,342

84,930

96,434

125,263

Total

$

1,022,618

$

1,062,775

$

1,059,503

$

1,101,606

$

1,113,977

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2021

2020

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

Atlanta

$

436

$

492

$

562

$

7,025

$

7,425

Augusta

30,521

23,982

20,432

22,931

25,140

Middle Georgia

73,458

73,543

68,838

60,275

56,209

Northwest Georgia

2,703

1,698

Coastal Georgia

236,985

235,094

230,184

224,604

223,746

South Central Georgia

361,821

371,227

372,947

391,702

398,107

Southwest Georgia

95,870

97,575

104,132

101,247

108,070

West Georgia

148,271

148,457

154,819

152,159

154,979

Small Business Specialty Lending

14,923

7,906

4,537

9,281

1,903

Paycheck Protection Program

55,425

102,633

101,147

133,756

133,158

Purchase Accounting

(565

)

(668

)

(876

)

(1,262

)

(1,196

)

Other

2,770

836

2,781

5,948

6,436

Total

$

1,022,618

$

1,062,775

$

1,059,503

$

1,107,666

$

1,113,977

Colony Bankcorp, Inc.

Quarterly PPP Fees Comparison

2021

2020

(dollars in thousands)

Second

Quarter

First

Quarter

Fourth

Quarter

Third

Quarter

Second

Quarter

PPP loan fee income

$

1,581

$

1,212

$

1,324

$

508

$

576

Unearned income on PPP loans

2,573

3,077

2,072

3,396

3,904

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722005941/en/

Contacts

Tracie Youngblood
EVP & Chief Financial Officer
(229) 426-6000 (Ext 6003)