Business Wire | Jul 22, 2020 05:30PM EDT

Colony Bankcorp Reports Second Quarter 2020 Results

Jul. 22, 2020

FITZGERALD, Ga.--(BUSINESS WIRE)--Jul. 22, 2020--Colony Bankcorp, Inc. (Nasdaq: CBAN) ("Colony" or the "Company") today reported net income of $2.2 million, or $0.23 per diluted share, for the second quarter of 2020, compared to $2.1 million, or $0.23 per diluted share, for the same period in 2019. Excluding payroll protection program and acquisition-related expenses, Colony reported operating net income of $2.4 million, or $0.25 adjusted earnings per diluted share, in the second quarter of 2020, compared to $3.6 million, or $0.40 adjusted earnings per diluted share, for the same period in 2019.

For the six months ended June 30, 2020, the Company reported net income of $3.8 million, or $0.40 per diluted share, compared to $4.9 million, or $0.56 per diluted share, for the same period in 2019. The Company reported operating net income of $4.9 million, or $0.52 adjusted earnings per diluted share, for the six months ended June 30, 2020, compared to $6.6 million, or $0.78 adjusted earnings per diluted share, for the same period in 2019.

The Company separately announced that on July 16, 2020, the Board of Directors declared a quarterly cash dividend of $0.10 per share, to be paid on its common stock on August 21, 2020, to shareholders of record as of the close of business on August 7, 2020.

Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, "Despite operating in one of the most severe economic disruptions in our time, I am pleased to report that our diluted earnings per share increased 35% over the sequential quarter, and we were able to achieve similar earnings compared with the same period last year. The strong fundamentals underlying our business, diversification of revenue streams as seen by strong growth in mortgage banking income, and revenue contribution from our Small Business Specialty Lending Division give me confidence in our future.

"The COVID-19 pandemic continues to have severe economic disruptions across our operating markets. In these troubling times, we have continued to assist the liquidity needs of our customers, ensure the health and well-being of our employees and support the communities in which we operate. Under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") enacted as part of the Coronavirus Aid, Relief and Economic Security Act, the Company originated approximately $137.8 million in gross PPP loans. Colony Bank brought on new customers under the program who did not previously have a relationship with us. Moreover, these customers executed new non-PPP loans, increased our deposits and will generate additional fee income. These types of multiple cross-selling opportunities of our diverse product offerings will allow us a unique opportunity to capture long-term customers.

"Our loan deferral balances related to the pandemic also decreased 38% from $182.0 million in the first quarter 2020 to $113.2 million at the end of this second quarter. The difference in the preceding amounts are now back to current principal and interest payments.

"Growth in net interest income of 15% year over year was partially offset by acquisition-related expenses associated with our purchases of LBC Bancshares, Inc. and PFB Mortgage. Despite the growth in our interest earnings assets, our net interest margin decreased 16 basis points to 3.41% compared with the year-earlier period due to the addition of lower yielding PPP loans offset by lowering our borrowing costs during the quarter as well as lower interest on the level of deposits on our balance sheets.

"Noninterest income saw strong growth, increasing 21% in the second quarter 2020 over the same period last year as a result of our strategic efforts to diversify our revenue streams with mortgage fee income increasing to $1.3 million in the current quarter compared to $544,000 in the second quarter of 2019 due to the acquisition of PFB Mortgage, as well as customers refinancing due to the lower rate environment. This increase in noninterest income was partially offset by increases in noninterest expense, such as increases in salaries and employee benefits due to the additional headcount, as well as increases in occupancy and equipment.

"Despite our strong asset quality, we recorded a higher provision for loan and lease losses in the second quarter of 2020 of $2.2 million, a substantial increase from $179,000 in the second quarter of 2019 and up from $2.0 million in the sequential period, due to increases in our loan portfolio and the current impaired economic operating environment. Our allowance for loan and lease losses now represents 0.92% of total loans outstanding, an increase from 0.73% in the year-earlier quarter and 0.85% on a sequential-quarter basis. Total nonperforming assets in the second quarter of 2020 is 0.75% of total assets, compared to 0.76% in the year-earlier quarter and 0.91% on a sequential-quarter basis.

"As a final thought, against the backdrop of the pandemic and the ensuing disruptions, our team is focused on controlling what we can in order to protect our business. Our investments in strategic acquisitions to diversify our business model, our expenditures in technological enhancements to stay connected to our customers, and our efforts to aggressively protect our capital position and credit metrics allow us to continue to drive our business forward. We also continue to monitor all state and local news to protect our employees and customers. Based on our diversified loan portfolio, capitalization, conservative loan underwriting philosophy and continued growth in several revenue streams, I am confident that we will come out of the current crises stronger," concluded Fountain.

Balance Sheet

Total assets were $1.78 billion at June 30, 2020, an increase of $262.3 million, or 17.31%, from $1.51 billion at December 31, 2019. The increase in total assets was a result of increased loan production associated with the funding of approximately 1,700 PPP loans which also generated much higher balances in our interest-bearing deposits with other banks as of June 30, 2020.

Total loans, including loans held for sale, were $1.13 billion at June 30, 2020, an increase of $151.6 million, or 15.49%, from $978.9 million at December 31, 2019. The growth in loans was primarily a result of PPP loan production during the second quarter 2020, which totaled $137.8 million in gross PPP loans at June 30, 2020.

Total deposits at June 30, 2020 were $1.42 billion, an increase of $128.0 million, or 9.90%, compared to total deposits of $1.29 billion at December 31, 2019. Noninterest-bearing deposits accounted for the majority of the increase in total deposits, with an increase of $96.2 million, or 41.36%, compared to December 31, 2019. The growth in noninterest-bearing deposits was attributable to PPP-related deposits. In addition, our participation in the PPP loan program resulted in an increase in borrowings, specifically through the Payroll Protection Program Liquidity Facility ("PPPLF") which totaled $134.5 million at June 30, 2020.

Capital

Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be classified as "well-capitalized." At June 30, 2020, the Company's preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 7.77%, 12.39%, 13.32% and 10.26%, respectively. In comparison, at December 31, 2019, the Company reported tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio of 8.92%, 12.52%, 13.17% and 10.33%, respectively.

Net Interest Margin

Net interest income was $13.5 million for the second quarter of 2020, compared with $11.8 million for the same quarter in 2019. Net interest margin for the second quarter of 2020 was 3.41%, down twenty-two basis points on a sequential-quarter basis and twenty basis points compared with the year-earlier quarter. The decrease in net interest margin in the second quarter 2020, was primarily due to lower yielding PPP loans combined with an increase in lower yielding, highly liquid assets.

Asset Quality

Nonperforming assets totaled $13.2 million and $11.6 million at June 30, 2020 and 2019, respectively. OREO and repossessed assets totaled $1.8 million at June 30, 2020, an increase of $741,000 or 70.91%, compared to the same quarter in 2019. While nonperforming assets have increased year-over-year, primarily as a result of increased traditional loan production, asset quality remains strong with overall improvement as of the second quarter of 2020 compared to previous quarter and year-over-year comparisons.

In the second quarter of 2020, net loan charge-offs were $295,000 or 0.12% of average loans compared with net recovery of $21,000 in the second quarter of 2019. The loan loss reserve was $10.3 million or 0.92% of total loans on June 30, 2020, compared with $6.8 million or 0.73% of total loans at June 30, 2019. The loan and lease losses reserve methodology resulted in a $2.2 million provision for loan loss and lease loss expense for the quarter ended June 30, 2020, compared with $179,000 for the comparable 2019 period. The increase in the provision for loan and lease loss expense was directly impacted by the current economic disruptions resulting from the COVID-19 pandemic crisis.

Noninterest Income

Noninterest income totaled $4.8 million for the second quarter of 2020, an increase of $409,000 or 9.2%, on a sequential-quarter comparison. The increase during the second quarter 2020 is primarily a result of significant increases in mortgage loan production because of consumers continuing to refinance due to the lower rate environment.

Noninterest Expense

Noninterest expense totaled $13.4 million for the second quarter of 2020, an increase of $837,000 or 6.59%, on a sequential-quarter comparison. The increase in noninterest expense compared to the previous quarter primarily resulted from increases in salaries and employee benefits and other noninterest expenses. Other noninterest expense, which encompasses several categories of activity, increased primarily due to increases in regulatory assessments and software expenses.

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in 1975 and headquartered in Fitzgerald, Georgia, Colony operates 33 locations throughout Georgia. The Homebuilder Finance Division helps the local construction industry with building and construction loans, and the Small Business Specialty Lending Division assists small businesses with government guaranteed loans. The Bank also helps its customers achieve their goal of home ownership through Colony Bank Mortgage. Colony's common stock is traded on the NASDAQ Global Market under the symbol "CBAN." For more information, please visit www.colony.bank. You can also follow the Company on Facebook or on Twitter @colony_bank.

Forward-Looking Statements

Certain statements contained in this press release that are not statements of historical fact constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, certain statements may be contained in the Company's future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to: (i) projections and/or expectations of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; (iv) statements regarding growth strategy, capital management, liquidity and funding, and future profitability; (v) statements regarding the potential effects of the COVID-19 pandemic on the Company's business and financial results and conditions; and (vi) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties. Factors that might cause such differences include, but are not limited to: the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for loan losses resulting from the COVID-19 pandemic; the Company's ability to implement its various strategic and growth initiatives; competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally, in areas in which the Company conducts operations being less favorable than expected; interest rate risk; legislation or regulatory changes which adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic; and risks that the anticipated benefits from the transactions with LBC Bancshares, Inc. and PFB Mortgage are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company's ability to control or predict.

Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company's management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company's filings with the Securities and Exchange Commission, the Company's Annual Report on Form 10-K for the year ended December 31, 2019, under the captions "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," and in the Company's quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.

Explanation of Certain Unaudited Non-GAAP Financial Measures

The measures entitled operating noninterest expense; operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are noninterest expense, net income, diluted earnings per share, book value per common share and efficiency ratio, respectively.

Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance, and if not provided would be requested by the investor community. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently.

These disclosures should not be considered an alternative to GAAP. The computations of operating noninterest expense; operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio and the reconciliation of these measures to noninterest expense, net income, diluted earning per share, book value per common share and efficiency ratio are set forth in the table below.

Colony Bankcorp, Inc.

Reconciliation of Non-GAAP Measures



2020 2019

(dollars in thousands, Second First Fourth Third Secondexcept per share data) Quarter Quarter Quarter Quarter Quarter

Operating noninterest expense reconciliation

Noninterest expense $ 13,375 $ 13,251 $ 13,496 $ 13,358 $ 13,014 (GAAP)

Acquisition-related (220 ) (287 ) (861 ) (2,076 ) (1,928 ) expenses

Operating noninterest $ 13,155 $ 12,964 $ 12,635 $ 11,282 $ 11,086 expense



Operating net income reconciliation

Net income (GAAP) $ 2,214 $ 1,603 $ 2,756 $ 2,518 $ 2,101

Acquisition-related 220 287 335 861 1,928 expenses

Income tax benefit (46 ) (60 ) (70 ) (181 ) (404 )

Operating net income $ 2,388 $ 1,830 $ 3,021 $ 3,198 $ 3,625

Weighted average diluted 9,498,783 9,498,783 9,494,859 9,494,771 9,089,461 shares

Adjusted earnings per $ 0.25 $ 0.19 $ 0.32 $ 0.34 $ 0.40 diluted share



Tangible book value percommon share reconciliation

Book value per common $ 14.59 $ 14.35 $ 13.74 $ 13.65 $ 13.32 share (GAAP)

Effect of goodwill and (1.96 ) (2.06 ) (2.06 ) (2.04 ) (2.07 ) other intangibles

Tangible book value per $ 12.63 $ 12.29 $ 11.68 $ 11.61 $ 11.25 common share



Operating efficiency ratio calculation

Efficiency ratio (GAAP) 72.75 % 77.32 % 77.24 % 79.94 % 82.24 %

Acquisition-related (1.20 ) (1.68 ) (1.92 ) (5.26 ) (12.18 ) expenses

Operating efficiency 71.55 % 75.64 % 75.32 % 74.68 % 70.06 %ratio





Colony Bankcorp, Inc.

Selected Financial Information



2020 2019

(dollars inthousands, Second First Quarter Fourth Third Quarter Secondexcept per Quarter Quarter Quartershare data)

EARNINGS SUMMARY

Net interest $ 13,541 $ 12,704 $ 12,992 $ 12,648 $ 11,825 income

Provision for 2,200 1,956 581 214 179 loan losses

Non-interest 4,843 4,434 4,412 4,039 4,000 income

Non-interest 13,375 13,251 13,496 13,358 13,014 expense

Income taxes 595 328 571 597 531

Net income 2,214 1,603 2,756 2,518 2,101

PERFORMANCE MEASURES

Per common share:

Common shares 9,498,783 9,498,783 9,498,783 9,498,783 9,498,937 outstanding

Weightedaverage basic 9,498,783 9,498,783 9,494,859 9,494,771 9,089,461 shares

Weightedaverage 9,498,783 9,498,783 9,494,859 9,494,771 9,089,461 dilutedshares

Earnings per $ 0.23 $ 0.17 $ 0.29 $ 0.27 $ 0.23 basic share

Earnings per 0.23 0.17 0.29 0.27 0.23 diluted share

Adjustedearnings per 0.25 0.19 0.32 0.34 0.40 diluted share

Cashdividends 0.10 0.10 0.075 0.075 0.075 declared pershare

Common bookvalue per 14.59 14.35 13.74 13.65 13.32 share

Tangiblecommon book 12.63 12.29 11.68 11.61 11.25 value pershare



Performance ratios:

Net interest 3.41 % 3.63 % 3.72 % 3.64 % 3.61 %margin^ (a)

Return onaverage 0.52 0.42 0.73 0.67 0.60 assets

Return onaverage total 6.47 4.79 8.47 7.86 7.43 equity

Efficiency 72.75 77.32 77.24 79.94 82.24 ratio

Operatingefficiency 71.55 75.64 75.32 74.68 70.06 ratio ^(b)



ASSET QUALITY

Nonperforming $ 11,459 $ 10,130 $ 9,179 $ 9,572 $ 10,383 loans (NPLs)

Other real 1,769 847 1,320 775 987 estate owned

Repossessed 17 19 13 8 58 assets

Totalnonperforming 13,245 10,996 10,512 10,355 11,428 assets (NPAs)

Classified 20,619 23,093 21,084 20,103 23,656 loans

Criticized 52,200 46,600 51,182 42,765 42,336 loans

Net loan 295 435 317 403 (21) charge-offs

Allowance forloan losses 0.92 % 0.85 % 0.71 % 0.69 % 0.73 %to totalloans

Allowance forloan losses 89.79 64.81 74.77 68.95 65.38 to total NPLs

Allowance forloan losses 77.68 60.83 65.29 63.73 59.41 to total NPAs

Netcharge-offs 0.12 0.18 0.13 0.17 - to averageloans

NPLs to total 1.03 1.13 0.95 1.00 1.11 loans

NPAs to total 0.75 0.91 0.69 0.70 0.76 assets

NPAs to totalloans and 1.19 1.39 1.08 1.08 1.18 other realestate owned



AVERAGE BALANCES

Total assets $ 1,702,902 $ 1,516,191 $ 1,503,521 $ 1,492,852 $ 1,409,265

Loans, net 1,016,787 974,614 961,756 942,356 866,841

Deposits 1,384,739 1,293,784 1,278,987 1,272,561 1,219,274

Totalstockholders' 137,213 134,304 130,217 128,172 113,161 equity

(a) Computed using fully taxable-equivalent net income.

(b) Non-GAAP measure - see "Explanation of Certain Unaudited Non-GAAP FinancialMeasures" for more information and reconciliation to GAAP

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

(dollars in thousands)

Six Months Ended June 30,

2020 2019

Average Income/ Yields Average Income/ Yields Balances Expense / Balances Expense / Rates Rates

Assets

Interest-earning assets:

Loans, net of $ 1,037,242 $ 26,989 5.22 % $ 828,234 $ 22,783 5.52 %unearned income ^1

Investment 335,836 $ 3,746 2.24 % 376,161 $ 4,596 2.45 %securities, taxable

Investmentsecurities, 4,941 $ 42 1.70 % 2,103 $ 28 2.67 %tax-exempt ^2

Deposits in banksand short term 122,885 $ 332 0.54 % 61,429 $ 704 2.30 %investments

Totalinterest-earning 1,500,904 31,109 4.16 % 1,267,927 28,111 4.45 %assets

Noninterest-earning 106,932 66,888 assets

Total assets $ 1,607,836 $ 1,334,815

Liabilities andstockholders' equity

Interest-bearing liabilities:

Interest-earning $ 747,273 $ 1,342 0.36 % $ 596,212 $ 1,974 0.66 %demand and savings

Other time 323,073 2,279 1.41 % 355,731 2,780 1.57 %

Totalinterest-bearing 1,070,346 3,621 0.68 % 951,943 4,754 1.00 %deposits

Federal Home Loan 41,038 468 2.29 % 46,218 506 2.20 %Bank advances

Paycheck ProtectionProgram Liquidity 49,561 87 0.35 % - - - %Facility

Other borrowings 38,745 688 3.56 % 24,229 669 5.54 %

Total otherinterest-bearing 129,344 1,243 1.93 % 70,447 1,175 3.35 %liabilities

Totalinterest-bearing 1,199,690 4,864 0.81 % 1,022,390 5,929 1.16 %liabilities

Noninterest-bearing liabilities:

Demand deposits $ 266,163 $ 204,012

Other liabilities 6,223 3,571

Stockholders' 135,760 104,842 equity

Totalnoninterest-bearingliabilities and 408,146 312,425 stockholders'equity

Total liabilitiesand stockholders' $ 1,607,836 $ 1,334,815 equity

Interest rate 3.34 % 3.28 %spread

Net interest income $ 26,245 $ 22,182

Net interest margin 3.51 % 3.51 %

Three Months Ended June 30,

2020 2019

Average Income/ Yields Average Income/ Yields Balances Expense / Balances Expense / Rates Rates

Assets

Interest-earning assets:

Loans, net of $ 1,094,299 $ 13,699 5.02 % $ 866,841 $ 12,313 5.70 %unearned income ^3

Investment 331,378 1,757 2.13 % 385,374 2,399 2.50 %securities, taxable

Investmentsecurities, 8,959 37 1.66 % 2,228 17 3.06 %tax-exempt ^4

Deposits in banksand short term 159,902 48 0.12 % 59,894 369 2.47 %investments

Totalinterest-earning 1,594,538 15,541 3.91 % 1,314,337 15,098 4.61 %assets

Noninterest-earning 108,364 94,928 assets

Total assets $ 1,702,902 $ 1,409,265

Liabilities andstockholders' equity

Interest-bearing liabilities:

Interest-earning $ 766,692 $ 407 0.21 % $ 624,196 $ 1,136 0.73 %demand and savings

Other time 311,334 996 1.28 % 368,116 1,496 1.63 %

Totalinterest-bearing 1,078,026 1,403 0.52 % 992,312 2,632 1.06 %deposits

Federal Home Loan 36,500 211 2.32 % 49,070 374 3.06 %Bank advances

Paycheck ProtectionProgram Liquidity 99,124 87 0.35 % - - - %Facility

Other borrowings 38,694 299 3.10 % 24,229 267 4.42 %

Total otherinterest-bearing 174,318 597 1.37 % 73,299 641 3.51 %liabilities

Totalinterest-bearing 1,252,344 2,000 0.64 % 1,065,611 3,273 1.23 %liabilities

Noninterest-bearing liabilities:

Demand deposits $ 306,713 $ 226,862

Other liabilities 6,632 3,631

Stockholders' 137,213 113,161 equity

Totalnoninterest-bearingliabilities and 450,558 343,654 stockholders'equity

Total liabilitiesand stockholders' $ 1,702,902 $ 1,409,265 equity

Interest rate 3.27 % 3.38 %spread

Net interest income $ 13,541 $ 11,825

Net interest margin 3.41 % 3.61 %

________________________________________^1The average balance of loans includes the average balance of nonaccrualloans. Income on such loans is recognized and recorded on the cash basis.

^2 Taxable-equivalent adjustments totaling $37,000 and $43,000 six monthsperiod ended June 30, 2020 and 2019, respectively, are included in tax-exemptinterest on investment securities. The adjustments are based on federal taxrate of 21% with appropriate reductions for the effect of disallowed interestexpense incurred in carrying tax-exempt obligations.

^3 The average balance of loans includes the average balance of nonaccrualloans. Income on such loans is recognized and recorded on the cash basis.

^4 Taxable-equivalent adjustments totaling $6,000 and $9,000 for the threemonths period ended June 30, 2020 and 2019, respectively, are included intax-exempt interest on investment securities. The adjustments are based onfederal tax rate of 21% with appropriate reductions for the effect ofdisallowed interest expense incurred in carrying tax-exempt obligations.

Colony Bankcorp, Inc.Payroll Protection Program Analytics

Three Months Six Month Ended Ended

June 30, 2020 June 30, 2020

Net interest margin 3.41 % 3.51 %

Paycheck protection program (0.04) % (0.02) %

Adjusted net interest margin 3.37 % 3.49 %



Net interest spread 3.27 % 3.34 %

Paycheck protection program (0.06) % (0.03) %

Adjusted net interest spread 3.21 % 3.31 %



Allowance for loan loss to total loans 0.92 % 0.92 %

Paycheck protection program 0.13 % 0.13 %

Adjusted allowance for loan loss to total 1.05 % 1.05 %loans



NPLs to total loans 1.07 % 1.07 %

Paycheck protection program 0.14 % 0.14 %

Adjusted NPLs to total loans 1.21 % 1.21 %



NPA to total assets 0.77 % 0.77 %

Paycheck protection program 0.06 % 0.06 %

Adjusted NPA to total assets 0.83 % 0.83 %



NPAs to total loans and other real estate 1.22 % 1.22 %

Paycheck protection program 0.17 % 0.17 %

Adjusted NPAs to total loans and other real 1.39 % 1.39 %estate

Colony Bankcorp, Inc.

Segment Reporting

Three Months Ended June 30, Six Months Ended June 30,

(dollars in 2020 2019 2020 2019thousands)

Banking Division

Net interest $ 12,730 $ 11,806 $ 25,386 $ 22,163 income

Provisionfor loan 2,200 179 4,156 310 losses

Noninterest 2,901 3,148 5,950 5,482 income

Noninterest 11,045 12,168 22,712 21,194 expenses

Income taxes 320 525 688 1,224

Segment $ 2,066 $ 2,082 $ 3,780 $ 4,917 profit



Totalsegment $ 1,622,608 $ 1,502,974 $ 1,622,608 $ 1,502,974 assets



MortgageBanking Division

Net interest $ 82 $ 19 $ 116 $ 19 income

Provisionfor loan - - - - losses

Noninterest 1,821 852 3,074 852 income

Noninterest 1,697 846 2,892 846 expenses

Income taxes 43 6 54 6

Segment $ 163 $ 19 $ 244 $ 19 profit



Totalsegment $ 17,578 $ 3,998 $ 17,578 $ 3,998 assets



SmallBusinessSpecialty LendingDivision

Net interest $ 729 $ - $ 743 $ - income

Provisionfor loan - - - - losses

Noninterest 121 - 380 - income

Noninterest 633 - 1,149 - expenses

Income taxes 232 - 181 -

Segment loss $ (15 ) $ - $ (207 ) $ -



Totalsegment $ 137,382 $ - $ 137,382 $ - assets



Total Consolidated

Net interest $ 13,541 $ 11,825 $ 26,245 $ 22,182 income

Provisionfor loan 2,200 179 4,156 310 losses

Noninterest 4,843 4,000 9,404 6,334 income

Noninterest 13,375 13,014 26,753 22,040 expenses

Income taxes 595 531 923 1,230

Segment $ 2,214 $ 2,101 $ 3,817 $ 4,936 profit



Totalsegment $ 1,777,568 $ 1,506,972 $ 1,777,568 $ 1,506,972 assets

Colony Bankcorp, Inc.

Consolidated Balance Sheets

June 30, 2020 December 31, 2019

(dollars in thousands) (unaudited) (audited)

ASSETS

Cash and due from banks $ 17,313 $ 15,570

Interest-bearing deposits in banks and 173,733 88,522 federal funds sold

Cash and cash equivalents 191,046 104,092

Investment securities available for sale, 373,610 347,332 at fair value

Other investments, at cost 3,954 4,288

Loans held for sale 16,537 10,076

Loans, net of unearned income 1,113,977 968,814

Allowance for loan losses (10,289 ) (6,863 )

Loans, net 1,103,688 961,951

Premises and equipment 33,276 32,482

Other real estate 1,769 1,320

Goodwill and other intangible assets 18,670 19,533

Other assets 35,018 34,239

Total assets $ 1,777,568 $ 1,515,313



LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing $ 328,850 $ 232,635

Interest-bearing 1,092,908 1,061,107

Total deposits 1,421,758 1,293,742

Federal Home Loan Bank advances 36,500 47,000

Paycheck Protection Program Liquidity 134,500 - Facility

Other borrowed money 38,292 38,792

Accrued expenses and other liabilities 7,924 5,273

Total liabilities 1,638,974 1,384,807



Stockholders' equity

Common stock, $1 par value; 20,000,000shares authorized, 9,498,783 issued and 9,499 9,499 outstanding, respectively

Paid in capital 43,199 43,667

Retained earnings 78,895 76,978

Accumulated other comprehensive income, net 7,001 362 of tax

Total stockholders' equity 138,594 130,506

Total liabilities and stockholders' equity $ 1,777,568 $ 1,515,313

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three Months Ended June Six Months Ended June 30, 30,

2020 2019 2020 2019

(dollars in thousands, except per share data)

Interest income:

Loans, including fees $ 13,699 $ 12,313 $ 26,989 $ 22,783

Investment securities,including tax exempt of 1,794 2,416 3,788 4,624 $37, $6, $43, and $9,respectively

Deposits in banks and 48 369 332 704 short term investments

Total interest income 15,541 15,098 31,109 28,111



Interest expense:

Deposits 1,403 2,632 3,621 4,754

Federal Home Loan Bank 211 246 468 506 advances

Paycheck ProtectionProgram Liquidity 87 - 87 - Facility

Other borrowings 299 395 688 669

Total interest expense 2,000 3,273 4,864 5,929

Net interest income 13,541 11,825 26,245 22,182

Provision for loan 2,200 179 4,156 310 losses

Net interest incomeafter provision for 11,341 11,646 22,089 21,872 loan losses



Noninterest income:

Service charges on 886 1,070 2,190 2,034 deposits

Other service charges, 1,522 1,110 2,785 2,010 commissions and fees

Mortgage fee income 1,827 544 3,089 687

Gain on sale of SBA 46 - 256 - loans

Gain on sale of - 65 293 65 securities

Other 562 1,211 791 1,538

Total noninterest 4,843 4,000 9,404 6,334 income



Noninterest expense:

Salaries and employee 7,729 6,292 15,227 11,663 benefits

Occupancy and equipment 1,316 1,144 2,634 2,169

Acquisition related 220 1,928 507 1,961

Other 4,110 3,650 8,385 6,247

Total noninterest 13,375 13,014 26,753 22,040 expense

Income before income 2,809 2,632 4,740 6,166 taxes

Income taxes 595 531 923 1,230

Net income $ 2,214 $ 2,101 $ 3,817 $ 4,936

Earnings per common share:

Basic $ 0.23 $ 0.23 $ 0.40 $ 0.56

Diluted 0.23 0.23 0.40 0.56

Weighted average common shares outstanding:

Basic 9,498,783 9,089,461 9,498,783 8,764,909

Diluted 9,498,783 9,089,461 9,498,783 8,764,909

Colony Bankcorp, Inc.

Quarterly Comparison

2020 2019

(inthousands, Second First Fourth Third Secondexcept per Quarter Quarter Quarter Quarter Quartershare data)

Assets $ 1,777,568 $ 1,510,048 $ 1,515,313 $ 1,477,682 $ 1,506,972

Loans, net 1,103,688 980,642 961,951 951,559 927,917

Deposits 1,421,758 1,293,076 1,293,742 1,251,273 1,297,723

Total 138,594 136,072 130,506 129,651 126,509 equity

Net income 2,214 1,603 2,757 2,518 2,101

Net incomeper basic 0.23 0.17 0.29 0.27 0.23 share



KeyPerformance Ratios:

Return onaverage 0.52 % 0.42 % 0.73% 0.67% 0.60%assets

Return onaverage 6.47 % 4.79 % 8.47% 7.86% 7.43%totalequity

Totalequity to 7.80 % 9.01 % 8.61% 8.77% 8.39%totalassets

Tangibleequity to 6.82 % 7.83 % 7.42% 7.56% 7.19%tangibleassets

Netinterest 3.41 % 3.63 % 3.72% 3.64% 3.57%margin

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2020 2019

(in Second First Fourth Third Secondthousands) Quarter Quarter Quarter Quarter Quarter

Legacy $ 995,245 $ 840,652 $ 848,088 $ 826,309 $ 796,045

Purchased 118,732 148,374 120,726 132,414 139,226

Total $ 1,113,977 $ 989,026 $ 968,814 $ 958,723 $ 935,271

View source version on businesswire.com: https://www.businesswire.com/news/home/20200722005921/en/

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