Business Wire | Oct 21, 2021 04:30PM EDT

Colony Bankcorp Reports Third Quarter 2021 Results

Oct. 21, 2021

FITZGERALD, Ga.--(BUSINESS WIRE)--Oct. 21, 2021--Colony Bankcorp, Inc. (Nasdaq: CBAN) ("Colony" or the "Company") today reported net income of $5.6 million, or $0.45 per diluted share, for the quarter ended September 30, 2021, compared with $3.1 million, or $0.33 per diluted share, for the quarter ended September 30, 2020. The Company reported operating net income of $7.1 million, or $0.57 per diluted share, for the quarter ended September 30, 2021, compared with $3.7 million, or $0.39 per diluted share, for the same period in 2020. Operating net income for quarter ended September 30, 2021 and 2020 excludes pre-tax acquisition related expenses, and the net income tax benefit for these adjustments (See Reconciliation of Non-GAAP Measures).

For the nine months ended September 30, 2021, the Company reported net income of $14.5 million, or $1.39 per diluted share, compared to $6.9 million, or $0.73 per diluted share, for the same period in 2020. The Company reported operating net income of $16.7 million, or $1.60 adjusted earnings per diluted share, for the nine months ended September 30, 2021, compared to $7.9 million, or $0.84 adjusted earnings per diluted share, for the same period in 2020 (See Reconciliation of Non-GAAP Measures).

Third Quarter 2021 Financial Highlights:

* Net income was $5.6 million, or $0.45 per diluted share, compared to $3.1 million, or $0.33 per diluted share, for the third quarter of 2020. * Operating net income of $7.1 million, or $0.57 per diluted share (see Reconciliation of Non-GAAP Measures). * $150,000 in provision for loan losses was recorded in third quarter of 2021, a decrease of $956,000, or 86%, compared to the third quarter of 2020. * Mortgage production was $89.4 million, with $21.2 million in refinances, and $68.1 million in purchases. * Small Business Specialty Lending ("SBSL") closed $26.1 million in Small Business Administration ("SBA") loans and sold $12.9 million in SBA loans. * Total borrowings at September 30, 2021 totaled $88.9 million, a decrease of $120.4 million, or 57.5%, compared to the same period in 2020.

The Company also announced that on October 21, 2021, the Board of Directors declared a quarterly cash dividend of $0.1025 per share, to be paid on its common stock on November 17, 2021, to shareholders of record as of the close of business on November 3, 2021. Outstanding shares as of October 20, 2021 were 13,674,198.

Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, "As the economy continues to open, Colony's results remain strong and demonstrate solid growth despite the dampening effect of the Delta variant and supply chain disruptions. I am pleased to report solid earnings growth for the third quarter of 2021 compared to the same period last year. Diluted earnings per share increased 36% for the third quarter to $0.45 per diluted share, despite significantly higher acquisition related expenses associated with successfully completing the acquisition of SouthCrest Financial Group, Inc (SouthCrest"). Our continued efforts to diversify our revenue streams resulted in non-interest income growth of 25% year-over-year with mortgage fee income increasing 19% as a result of continued low interest rates, consumer demand and the dedication and hard work of our associates. Diluted earnings per share increased on a sequential quarter basis as well. Additionally, adjusted earnings increased for the year-over- year period to $0.57 from $0.39, and increased 16% from the prior quarter.

"We have continued to be very busy at Colony and have made important investments during the quarter, including strategic and add-on acquisitions that will drive our Company's future prospects and position it to grow and prosper. During the quarter, we successfully closed the acquisitions of SouthCrest and formed Colony Insurance in conjunction with acquiring The Barnes Agency and related tuck-in acquisitions. Management and our Board of Directors continue to analyze utilizing our balance sheet for synergistic opportunities and becoming a more efficient organization. Increasing non-interest income has been of paramount importance to us and we believe will continue to grow with the addition of new customers and cross-selling of our range of product lines.

"Credit metrics in our balance sheet continued to be strong. We took a $150,000 provision for loan and lease losses, a substantial decrease from $1.1 million in the same period last year. Core loan growth increased 7% with total loans increasing 19% versus the same period last year, and deposits increased 52% to $2.2 billion over the same period, primarily due to the acquisition of SouthCrest. Average interest earning assets increased $442.8 million, or 25% from the quarter ended September 30, 2020, while total assets increased to $2.5 billion. Average interest-bearing deposits increased $400.8 million year-over-year with most of the increase in lower-yielding demand and savings accounts.

"Net interest income increased 29% year over year as a result of increases in average interest earning assets and lower costs of interest bearing liabilities. Demand and savings deposits rate was down six basis points to 0.11% and total average deposits cost this quarter decreased 23 basis points to 0.19% from the same period last year. Despite operating in a highly competitive market, I am pleased to report our net interest margin increased to 3.48% from 3.34% year over year.

"Noninterest income saw very strong growth, increasing 25% year over year, with mortgage fee income increasing to $3.1 million in the current quarter compared to $2.6 million in the third quarter of 2020. 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 and professional fees.

"Our allowance for loan and lease losses now represents 0.98% of total loans outstanding, a decrease from 1.00% in the year-earlier quarter and 1.26% on a sequential-quarter basis. Total nonperforming assets decreased to 0.52% of total assets from 0.67% in the year-earlier quarter and from 0.54% on a sequential-quarter basis."

In closing, Fountain added, "This is a very exciting time for all of us at Colony. As the largest community bank in Georgia and the continued execution of our strategic priorities, we see substantial opportunities to leverage our best-in-class products and services, and deliver enhanced shareholder value for years to come. The team has done a remarkable job, and I couldn't be prouder of how they stepped up to support our clients and new customers to deliver another quarter of outstanding results."

Balance Sheet

* Total assets were $2.5 billion at September 30, 2021, an increase of $753.1 million, or 42.8%, compared to the same period in 2020. The increase was primarily related to acquisition of SouthCrest. * Total loans, including loans held for sale, totaled $1.34 billion at September 30, 2021, an increase of $235.0 million, or 20.3% from the same period in 2020. Legacy loan growth was up $60.4 million or 6.9% compared to the same period in 2020. The increase in loans was a primarily a result of the acquisition of SouthCrest offset by the forgiveness of loans under the Paycheck Protection Program. * Deposits totaled $2.20 billion at September 30, 2021, an increase of $778.7 million, or 55.0%, compared to the same period in 2020. The increase was in all types of deposits and was primarily the result of the acquisition of SouthCrest. * Total borrowings at September 30, 2021 totaled $88.6 million, a decrease of $120.6 million, or 57.6%, compared to the same period in 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 8.45%, 12.09%, 12.91%, and 10.60%, respectively at September 30, 2021.

Third Quarter Results of Operations

* Net interest income, on a tax-equivalent basis, for the third quarter of 2021 totaled $18.0 million, compared to $13.9 million for the third quarter 2020. The increase during the quarter is primarily attributable to loan fee income recognized on Paycheck Protection Program ("PPP") loans forgiven and a decrease in the cost of interest-bearing liabilities. * Net interest margin decreased 20 basis points over the sequential quarter primarily driven by a decrease in deferred fee income recognized on PPP loans. During the quarter ended September 30, 2021, PPP loans totaling approximately $44.6 million were forgiven through the SBA. * Noninterest income totaled $9.4 million for the third quarter ended September 30, 2021, an increase of $1.9 million, or 24.9%, 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 along with SBSL loan sales. * Noninterest expense totaled $21.2 million for the third quarter ended September 30, 2021, compared to $16.3 million for the same period in 2020. The increase in noninterest expense primarily resulted from a $2.7 million increase in salary expense and $1.8 million in acquisition expenses related to the acquisitions of SouthCrest and The Barnes Agency ("Barnes"). * Tax expense totaled $362,000 for the third quarter ended September 30, 2021, a decrease of $522,000, or 59.0%, compared the same period in 2020. This decrease is primarily due to repricing of deferred taxes, recognition of state tax credits, and the integration of SouthCrest. The effective tax rate for the fourth quarter of 2021 is expected to be approximately 22.0%.

Asset Quality

* Nonperforming assets totaled $13.1 million and $9.5 million at September 30, 2021 and June 30, 2021, respectively. * OREO and repossessed assets totaled $810,000 at September 30, 2021, an increase of $511,000, or 63% compared to June 30, 2021, primarily related to the acquisition of SouthCrest. * Net loan charge-offs were $144,000, or 0.05% of average loans for the third quarter of 2021, compared to net recoveries of $178,000 or (0.09)% in the second quarter of 2021. * The loan loss reserve was $12.9 million, or 0.98% of total loans, at September 30, 2021, compared to $12.9 million, or 1.26% of total loans, at June 30, 2021.

Asset quality remains strong as indicated by the overall improvement in asset quality ratios as of the third 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 39 locations throughout Georgia. At Colony Bank, we offer a wide range of banking services including personal banking, business banking, mortgage solutions, government guaranteed lending solutions, and more. We have expanded our services to also include consumer insurance products, such as automotive, homeowners, and other insurance needs for our community. 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 social media.

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 effects of the COVID-19 pandemic and related variants on the Company's business and financial results and conditions; (vi) statements relating to the timing, benefits, costs, and synergies of the recently completed acquisitions of SouthCrest (the "Merger") and 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 and related variants 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 and related variants; 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 and related variants; 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 related variants; 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; the risk of successful integration of SouthCrest's and Barnes' businesses into the Company; the reaction of each of the Company's, SouthCrest's and Barnes' customers, suppliers, employees or other business partners to the Merger and the Barnes acquisition; 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 timing and achievement of expected cost reductions following the Merger; the timing and achievement of the recovery of the reduction of tangible book value resulting from the Merger; the risks associated with the Company's pursuit of future acquisitions; and general competitive, economic, political 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, 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. Operating net income and operating efficiency ratio both exclude acquisition-related expenses. Adjusted earnings per diluted share includes the adjustments to operating net income. Tangible book value per common share excludes goodwill and other intangibles.

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, efficiency ratio, are set forth in the table below.

Colony Bankcorp, Inc.

Selected Financial Information



2021 2020

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

EARNINGS SUMMARY

Net interest $ 17,868 $ 15,069 $ 14,283 $ 15,151 $ 13,848 income

Provision for 150 - 500 1,296 1,106 loan losses

Non-interest 9,438 7,751 8,576 8,039 7,554 income

Non-interest 21,211 17,465 15,782 15,986 16,313 expense

Income taxes 362 1,358 1,658 1,008 884

Net income 5,583 3,997 4,919 4,900 3,099

PERFORMANCE MEASURES

Per common share:

Common shares 13,674,198 9,498,783 9,498,783 9,498,783 9,498,783 outstanding

Weightedaverage basic 12,344,926 9,498,783 9,498,783 9,498,783 9,498,783 shares

Weightedaverage 12,344,926 9,498,783 9,498,783 9,498,783 9,498,783 diluted shares

Earnings per $ 0.45 $ 0.42 $ 0.52 $ 0.52 $ 0.33 basic share

Earnings per 0.45 0.42 0.52 0.52 0.33 diluted share

Adjustedearnings per 0.57 0.49 0.53 0.44 0.39 diluted share^(b)

Cash dividendsdeclared per 0.1025 0.1025 0.1025 0.1000 0.1000 share

Common bookvalue per 17.59 15.46 15.11 15.21 14.78 share

Tangible bookvalue per 12.65 13.50 13.14 13.26 12.82 common share^(b)



Performance ratios:

Net interest 3.48 % 3.68 % 3.50 % 3.58 % 3.34 %margin^ (a)

Return on 1.00 0.91 1.12 1.08 0.70 average assets

Return onaverage total 11.49 11.14 13.71 13.73 8.80 equity

Efficiency 77.68 76.53 69.04 68.93 76.22 ratio

Operatingefficiency 74.91 73.10 68.58 71.49 72.53 ratio ^(b)

ASSET QUALITY

Nonperforming $ 12,246 $ 9,205 $ 10,676 $ 9,128 $ 9,926 loans (NPLs)

Other real 807 270 518 1,006 1,875 estate owned

Repossessed 3 29 29 30 11 assets

Totalnonperforming 13,056 9,504 11,223 10,164 11,812 assets (NPAs)

Classified 30,300 30,852 35,182 30,404 21,388 loans

Criticized 61,857 64,818 80,288 75,633 72,076 loans

Net loan(recoveries)/ 144 (178 ) (66 ) 189 375 charge-offs

Allowance forloan losses to 0.98 % 1.26 % 1.19 % 1.14 % 1.00 %total loans

Allowance forloan losses to 105.15 140.15 118.89 132.85 111.02 total NPLs

Allowance forloan losses to 98.63 135.73 113.10 119.31 93.29 total NPAs

Net(recoveries)/ 0.05 (0.09 ) (0.02 ) 0.07 0.13 charge-offs toaverage loans

NPLs to total 0.93 0.90 1.00 0.86 0.90 loans

NPAs to total 0.52 0.54 0.62 0.58 0.67 assets

NPAs to totalloans and 1.00 0.93 1.06 0.96 1.07 other realestate owned



AVERAGE BALANCES

Total assets $ 2,272,904 $ 1,777,559 $ 1,774,123 $ 1,797,749 $ 1,766,717

Loans, net 1,243,066 1,076,784 1,079,007 1,151,872 1,140,486

Deposits 1,975,418 1,547,139 1,475,944 1,456,287 1,417,724

Totalstockholders' 197,109 144,761 145,515 141,570 139,721 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.

Reconciliation of Non-GAAP Measures

2021

2020

(dollars in thousands, except per share data)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Operating net income reconciliation

Net income (GAAP)

$

5,583

$

3,997

$

4,919

$

4,900

$

3,099

Acquisition-related expenses

1,994

865

176

148

207

Thomaston building write down

-

-

-

-

582

Gain on sale of Thomaston branch

-

-

-

(1,026

)

-

Income tax expense (benefit)

(518

)

(225

)

(46

)

184

(166

)

Operating net income

$

7,059

$

4,637

$

5,049

$

4,206

$

3,722

Weighted average diluted shares

12,344,926

9,498,783

9,498,783

9,498,783

9,498,783

Adjusted earnings per diluted share

$

0.57

$

0.49

$

0.53

$

0.44

$

0.39

Tangible book value per common share reconciliation

Book value per common share (GAAP)

$

17.59

$

15.46

$

15.11

$

15.21

$

14.78

Effect of goodwill and other intangibles

(4.94

)

(1.89

)

(1.97

)

(1.95

)

(1.96

)

Tangible book value per common share

$

12.65

$

13.57

$

13.14

$

13.26

$

12.82

Operating efficiency ratio calculation

Efficiency ratio (GAAP)

77.68

%

76.53

%

69.04

%

68.93

%

76.22

%

Acquisition-related expenses

(2.77

)

(3.44

)

(0.46

)

(0.64

)

(0.97

)

Gain on sale of Thomaston branch

-

%

-

%

-

%

3.19

%

-

%

Thomaston building write down

-

%

-

%

-

%

-

%

(2.72

)%

Operating efficiency ratio

74.91

%

73.10

%

68.58

%

71.49

%

72.53

%

Colony Bankcorp, Inc.

Reconciliation of Non-GAAP Measures



2021 2020

(dollars in Third Second First Fourth Thirdthousands, except Quarter Quarter Quarter Quarter Quarterper share data)

Operating netincome reconciliation

Net income (GAAP) $ 5,583 $ 3,997 $ 4,919 $ 4,900 $ 3,099

Acquisition-related 1,994 865 176 148 207 expenses

Thomaston building - - - - 582 write down

Gain on sale of - - - (1,026 ) - Thomaston branch

Income tax expense (518 ) (225 ) (46 ) 184 (166 )(benefit)

Operating net $ 7,059 $ 4,637 $ 5,049 $ 4,206 $ 3,722 income

Weighted average 12,344,926 9,498,783 9,498,783 9,498,783 9,498,783 diluted shares

Adjusted earnings $ 0.57 $ 0.49 $ 0.53 $ 0.44 $ 0.39 per diluted share



Tangible book valueper common share reconciliation

Book value per $ 17.59 $ 15.46 $ 15.11 $ 15.21 $ 14.78 common share (GAAP)

Effect of goodwilland other (4.94 ) (1.89 ) (1.97 ) (1.95 ) (1.96 )intangibles

Tangible book value $ 12.65 $ 13.57 $ 13.14 $ 13.26 $ 12.82 per common share



Operatingefficiency ratio calculation

Efficiency ratio 77.68 % 76.53 % 69.04 % 68.93 % 76.22 %(GAAP)

Acquisition-related (2.77 ) (3.44 ) (0.46 ) (0.64 ) (0.97 )expenses

Gain on sale of - % - % - % 3.19 % - %Thomaston branch

Thomaston building - % - % - % - % (2.72 )write down %

Operating 74.91 % 73.10 % 68.58 % 71.49 % 72.53 %efficiency ratio

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

Three Months Ended September 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

$

1,243,066

$

16,085

5.25

%

$

1,140,486

$

13,809

4.80

%

Investment securities, taxable

614,404

2,668

1.76

%

339,094

1,644

1.92

%

Investment securities, tax-exempt 2

77,255

362

1.90

%

26,916

130

1.92

%

Deposits in banks and short term investments

166,064

57

0.14

%

151,508

52

0.14

%

Total interest-earning assets

2,100,789

19,172

3.70

%

1,658,004

15,635

3.74

%

Noninterest-earning assets

172,115

108,712

Total assets

$

2,272,904

$

1,766,716

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand and savings

$

1,169,693

$

319

0.11

%

$

793,831

$

324

0.16

%

Other time

320,484

380

0.48

%

295,559

820

1.10

%

Total interest-bearing deposits

1,490,177

699

0.19

%

1,089,390

1,144

0.42

%

Federal Home Loan Bank advances

42,391

170

1.64

%

28,587

159

2.21

%

Paycheck Protection Program Liquidity Facility

-

-

-

%

134,500

118

0.35

%

Other borrowings

37,289

290

3.14

%

38,289

273

2.83

%

Total other interest-bearing liabilities

79,680

460

2.34

%

201,376

550

1.08

%

Total interest-bearing liabilities

1,569,857

1,159

0.30

%

1,290,766

1,694

0.52

%

Noninterest-bearing liabilities:

Demand deposits

$

485,241

$

328,334

Other liabilities

20,697

7,895

Stockholders' equity

197,109

139,721

Total noninterest-bearing liabilities and stockholders' equity

703,047

475,950

Total liabilities and stockholders' equity

$

2,272,904

$

1,766,716

Interest rate spread

3.40

%

3.22

%

Net interest income

$

18,013

$

13,941

Net interest margin

3.48

%

3.34

%

_______________________ 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 $73,000 and $66,000 for the quarter ended September 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 September 30, 2021 and 2020 are also included in income and fees on loans.

2Taxable-equivalent adjustments totaling $72,000 and $27,000 for the quarter ended September 30, 2021 and 2020, respectively, are included in tax-exempt interest on investment securities.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis



Three Months Ended September 30,

2021 2020

Average Income/ Yields Average Income/ Yields(dollars in thousands) / / Balances Expense Balances Expense Rates Rates

Assets

Interest-earning assets:

Loans, net of unearned $ 1,243,066 $ 16,085 5.25 % $ 1,140,486 $ 13,809 4.80 %income ^1

Investment securities, 614,404 2,668 1.76 % 339,094 1,644 1.92 %taxable

Investment securities, 77,255 362 1.90 % 26,916 130 1.92 %tax-exempt ^2

Deposits in banks and 166,064 57 0.14 % 151,508 52 0.14 %short term investments

Total interest-earning 2,100,789 19,172 3.70 % 1,658,004 15,635 3.74 %assets

Noninterest-earning 172,115 108,712 assets

Total assets $ 2,272,904 $ 1,766,716

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand $ 1,169,693 $ 319 0.11 % $ 793,831 $ 324 0.16 %and savings

Other time 320,484 380 0.48 % 295,559 820 1.10 %

Total interest-bearing 1,490,177 699 0.19 % 1,089,390 1,144 0.42 %deposits

Federal Home Loan Bank 42,391 170 1.64 % 28,587 159 2.21 %advances

Paycheck ProtectionProgram Liquidity - - - % 134,500 118 0.35 %Facility

Other borrowings 37,289 290 3.14 % 38,289 273 2.83 %

Total otherinterest-bearing 79,680 460 2.34 % 201,376 550 1.08 %liabilities

Total interest-bearing 1,569,857 1,159 0.30 % 1,290,766 1,694 0.52 %liabilities

Noninterest-bearing liabilities:

Demand deposits $ 485,241 $ 328,334

Other liabilities 20,697 7,895

Stockholders' equity 197,109 139,721

Totalnoninterest-bearing 703,047 475,950 liabilities andstockholders' equity

Total liabilities and $ 2,272,904 $ 1,766,716 stockholders' equity

Interest rate spread 3.40 % 3.22 %

Net interest income $ 18,013 $ 13,941

Net interest margin 3.48 % 3.34 %

_______________________ 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 $73,000 and $66,000 for the quarter ended September 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 September 30, 2021 and 2020 are also included in income and fees on loans.

2Taxable-equivalent adjustments totaling $72,000 and $27,000 for the quarter ended September 30, 2021 and 2020, respectively, are included in tax-exempt interest on investment securities.

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis



Nine Months Ended September 30,

2021 2020

Average Income/ Yields Average Income/ Yields(dollars in thousands) / / Balances Expense Balances Expense Rates Rates

Assets

Interest-earning assets:

Loans, net of unearned $ 1,133,533 $ 43,890 5.18 % $ 1,071,908 $ 40,923 5.09 %income^3

Investment securities, 468,561 6,011 1.72 % 336,446 5,390 2.13 %taxable

Investment securities, 47,839 677 1.89 % 12,319 184 1.99 %tax-exempt^4

Deposits in banks and 165,280 155 0.13 % 132,496 384 0.39 %short term investments

Total interest-earning 1,815,213 50,733 3.74 % 1,553,169 46,881 4.02 %assets

Noninterest-earning 121,417 107,013 assets

Total assets $ 1,936,630 $ 1,660,182

Liabilities and stockholders' equity

Interest-bearing liabilities:

Interest-earning demand $ 978,181 $ 630 0.09 % $ 762,906 $ 1,667 0.29 %and savings

Other time 278,508 1,291 0.62 % 313,834 3,099 1.32 %

Total interest-bearing 1,256,689 1,921 0.20 % 1,076,740 4,766 0.59 %deposits

Federal Home Loan Bank 29,203 401 1.84 % 36,858 626 2.27 %advances

Paycheck ProtectionProgram Liquidity 34,155 93 0.36 % 78,081 205 0.35 %Facility

Other borrowings 37,536 896 3.19 % 38,591 962 3.32 %

Total otherinterest-bearing 100,894 1,390 1.84 % 153,530 1,793 1.56 %liabilities

Total interest-bearing 1,357,583 3,311 0.33 % 1,230,270 6,559 0.71 %liabilities

Noninterest-bearing liabilities:

Demand deposits $ 411,307 $ 287,038

Other liabilities 11,412 6,134

Stockholders' equity 162,650 136,740

Totalnoninterest-bearing 585,369 429,912 liabilities andstockholders' equity

Total liabilities and $ 1,942,952 $ 1,660,182 stockholders' equity

Interest rate spread 3.41 % 3.31 %

Net interest income $ 47,422 $ 40,322

Net interest margin 3.49 % 3.46 %

_______________________ 3The 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 $206,000 and $190,000 for the nine months ended September 30, 2021 and 2020, respectively, are included in income and fees on loans. Accretion income of $375,000 and $198,000 for the nine months ended September 30, 2021 and 2020 are also included in income and fees on loans.

4Taxable-equivalent adjustments totaling $135,000 and $38,000 for the nine months ended September 30, 2021 and 2020, respectively, are included in tax-exempt interest on investment securities.

Colony Bankcorp, Inc.

Segment Reporting

2021 2020

(dollars in Third Quarter Second First Fourth Third Quarterthousands) Quarter Quarter Quarter

Banking Division

Net interest $ 17,181 $ 14,864 $ 13,985 $ 14,752 $ 13,631 income

Provisionfor loan 150 - 500 1,296 1,106 losses

Noninterest 4,340 3,354 3,005 3,952 4,139 income

Noninterest 16,941 13,366 11,960 11,656 12,415 expenses

Income taxes 434 1,241 1,160 973 940

Segment $ 3,996 $ 3,611 $ 3,370 $ 4,779 $ 3,308 income



Totalsegment $ 2,499,223 $ 1,710,345 $ 1,755,667 $ 1,709,696 $ 1,666,742 assets



Full time 417 294 291 305 312 employees



MortgageBanking Division

Net interest $ 138 $ 123 $ 168 $ 299 $ 188 income

Provisionfor loan - - - - - losses

Noninterest 3,104 2,997 3,986 3,420 2,612 income

Noninterest 2,765 2,887 2,793 2,835 2,410 expenses

Income taxes (290 ) 60 354 188 82

Segment $ 767 $ 173 $ 1,007 $ 696 $ 308 income



Totalsegment $ 21,184 $ 25,149 $ 27,478 $ 50,266 $ 50,265 assets



Full time 53 53 51 43 41 employees



SmallBusinessSpecialty LendingDivision

Net interest $ 549 $ 82 $ 130 $ 100 $ 29 income

Provisionfor loan - - - - - losses

Noninterest 1,994 1,400 1,585 667 803 income

Noninterest 1,505 1,212 1,029 1,495 1,488 expenses

Income taxes 218 57 144 (153 ) (138 )

Segment $ 820 $ 213 $ 542 $ (575 ) $ (518 )income



Totalsegment $ 23,291 $ 20,024 $ 15,901 $ 4,012 $ 42,439 assets



Full time 24 24 23 21 15 employees



Total Consolidated

Net interest $ 17,868 $ 15,069 $ 14,283 $ 15,151 $ 13,848 income

Provisionfor loan 150 - 500 1,296 1,106 losses

Noninterest 9,438 7,751 8,576 8,039 7,554 income

Noninterest 21,211 17,465 15,782 15,986 16,313 expenses

Income taxes 362 1,358 1,658 1,008 884

Segment $ 5,583 $ 3,997 $ 4,919 4,900 $ 3,099 income



Totalsegment $ 2,543,698 $ 1,755,518 $ 1,799,046 $ 1,763,974 $ 1,759,446 assets



Full time 494 371 365 369 368 employees

Colony Bankcorp, Inc.

Consolidated Balance Sheets

September 30, 2021

December 31, 2020

(dollars in thousands)

(unaudited)

(audited)

ASSETS

Cash and due from banks

$

24,170

$

17,218

Interest-bearing deposits in banks and federal funds sold

152,827

166,288

Cash and cash equivalents

176,997

183,506

Investment securities available for sale, at fair value

830,418

380,814

Other investments, at cost

4,184

3,296

Loans held for sale

26,697

52,386

Loans, net of unearned income

1,309,860

1,059,503

Allowance for loan losses

(12,877

)

(12,127

)

Loans, net

1,296,983

1,047,376

Premises and equipment

41,762

32,057

Other real estate

807

1,006

Goodwill and other intangible assets

60,959

18,558

Bank owned life insurance

54,822

31,547

Other assets

18,952

13,428

Total assets

$

2,512,581

$

1,763,974

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing

$

539,251

$

326,999

Interest-bearing

1,655,871

1,118,028

Total deposits

2,195,122

1,445,027

Federal Home Loan Bank advances

51,601

22,500

Paycheck Protection Program Liquidity Facility

-

106,789

Other borrowed money

37,042

37,792

Accrued expenses and other liabilities

11,686

7,378

Total liabilities

$

2,295,451

$

1,619,486

Stockholders' equity

Common stock, $1 par value; 20,000,000 shares authorized, 13,674,198 and 9,498,783 issued and outstanding, respectively

$

13,674

$

9,499

Paid in capital

110,722

43,215

Retained earnings

96,145

84,993

Accumulated other comprehensive income, net of tax

(3,411

)

6,781

Total stockholders' equity

217,130

144,488

Total liabilities and stockholders' equity

$

2,512,581

$

1,763,974

Colony Bankcorp, Inc.

Consolidated Balance Sheets

September 30, December 31, 2021 2020

(dollars in thousands) (unaudited) (audited)

ASSETS

Cash and due from banks $ 24,170 $ 17,218

Interest-bearing deposits in banks and federal 152,827 166,288 funds sold

Cash and cash equivalents 176,997 183,506

Investment securities available for sale, at 830,418 380,814 fair value

Other investments, at cost 4,184 3,296

Loans held for sale 26,697 52,386

Loans, net of unearned income 1,309,860 1,059,503

Allowance for loan losses (12,877 ) (12,127 )

Loans, net 1,296,983 1,047,376

Premises and equipment 41,762 32,057

Other real estate 807 1,006

Goodwill and other intangible assets 60,959 18,558

Bank owned life insurance 54,822 31,547

Other assets 18,952 13,428

Total assets $ 2,512,581 $ 1,763,974



LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Noninterest-bearing $ 539,251 $ 326,999

Interest-bearing 1,655,871 1,118,028

Total deposits 2,195,122 1,445,027

Federal Home Loan Bank advances 51,601 22,500

Paycheck Protection Program Liquidity Facility - 106,789

Other borrowed money 37,042 37,792

Accrued expenses and other liabilities 11,686 7,378

Total liabilities $ 2,295,451 $ 1,619,486



Stockholders' equity

Common stock, $1 par value; 20,000,000 sharesauthorized, 13,674,198 and 9,498,783 issued and $ 13,674 $ 9,499 outstanding, respectively

Paid in capital 110,722 43,215

Retained earnings 96,145 84,993

Accumulated other comprehensive income, net of (3,411 ) 6,781 tax

Total stockholders' equity 217,130 144,488

Total liabilities and stockholders' equity $ 2,512,581 $ 1,763,974

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

(dollars in thousands, except per share data)

Interest income:

Loans, including fees

$

16,013

13,743

$

43,684

40,733

Investment securities

2,954

1,747

6,546

5,536

Deposits in banks and short term investments

58

52

154

384

Total interest income

19,025

15,542

50,384

46,653

Interest expense:

Deposits

698

1,144

1,921

4,766

Federal Home Loan Bank advances

170

159

401

626

Paycheck Protection Program Liquidity Facility

-

118

93

205

Other borrowings

289

273

802

962

Total interest expense

1,157

1,694

3,217

6,559

Net interest income

17,868

13,848

47,167

40,094

Provision for loan losses

150

1,106

650

5,262

Net interest income after provision for loan losses

17,718

12,742

46,517

34,832

Noninterest income:

Service charges on deposits

1,792

1,316

4,278

3,906

Mortgage fee income

3,107

2,616

10,107

5,706

Gain on sale of SBA loans

1,813

748

4,548

1,004

(Loss)/Gain on sale of securities

-

716

137

1,009

Interchange fees

1,745

1,342

4,941

3,624

BOLI Income

280

237

710

548

Other

701

579

754

1,032

Total noninterest income

9,438

7,554

25,475

16,829

Noninterest expense:

Salaries and employee benefits

11,826

9,103

31,907

24,331

Occupancy and equipment

1,599

1,338

4,169

3,972

Acquisition related

1,994

207

3,031

714

Information technology expenses

2,045

1,440

5,493

4,135

Professional fees

804

481

1,975

1,343

Advertising and public relations

674

459

1,817

1,478

Communications

310

212

837

631

Writedown of building

-

582

-

582

FHLB prepayment penalty

-

925

-

925

Other

1,959

1,566

4,884

4,827

Total noninterest expense

21,211

16,313

54,113

42,938

Income before income taxes

5,945

3,983

17,879

8,723

Income taxes

362

884

3,379

1,807

Net income

$

5,583

$

3,099

$

14,500

$

6,916

Earnings per common share:

Basic

$

0.45

$

0.33

$

1.39

$

0.73

Diluted

0.45

0.33

1.39

0.73

Dividends declared per share

0.1025

0.1000

0.3075

0.3000

Weighted average common shares outstanding:

Basic

12,344,926

9,498,783

10,447,496

9,498,783

Diluted

12,344,926

9,498,783

10,447,496

9,498,783

Colony Bankcorp, Inc.

Consolidated Statements of Income (unaudited)

Three months ended Nine months ended September 30, September 30,

2021 2020 2021 2020

(dollars inthousands, except per share data)

Interest income:

Loans, including fees $ 16,013 13,743 $ 43,684 40,733

Investment securities 2,954 1,747 6,546 5,536

Deposits in banks andshort term 58 52 154 384investments

Total interest income 19,025 15,542 50,384 46,653



Interest expense:

Deposits 698 1,144 1,921 4,766

Federal Home Loan 170 159 401 626Bank advances

Paycheck ProtectionProgram Liquidity - 118 93 205Facility

Other borrowings 289 273 802 962

Total interest 1,157 1,694 3,217 6,559expense

Net interest income 17,868 13,848 47,167 40,094

Provision for loan 150 1,106 650 5,262losses

Net interest incomeafter provision for 17,718 12,742 46,517 34,832loan losses



Noninterest income:

Service charges on 1,792 1,316 4,278 3,906deposits

Mortgage fee income 3,107 2,616 10,107 5,706

Gain on sale of SBA 1,813 748 4,548 1,004loans

(Loss)/Gain on sale - 716 137 1,009of securities

Interchange fees 1,745 1,342 4,941 3,624

BOLI Income 280 237 710 548

Other 701 579 754 1,032

Total noninterest 9,438 7,554 25,475 16,829income



Noninterest expense:

Salaries and employee 11,826 9,103 31,907 24,331benefits

Occupancy and 1,599 1,338 4,169 3,972equipment

Acquisition related 1,994 207 3,031 714

Information 2,045 1,440 5,493 4,135technology expenses

Professional fees 804 481 1,975 1,343

Advertising and 674 459 1,817 1,478public relations

Communications 310 212 837 631

Writedown of building - 582 - 582

FHLB prepayment - 925 - 925penalty

Other 1,959 1,566 4,884 4,827

Total noninterest 21,211 16,313 54,113 42,938expense

Income before income 5,945 3,983 17,879 8,723taxes

Income taxes 362 884 3,379 1,807

Net income $ 5,583 $ 3,099 $ 14,500 $ 6,916

Earnings per common share:

Basic $ 0.45 $ 0.33 $ 1.39 $ 0.73

Diluted 0.45 0.33 1.39 0.73

Dividends declared 0.1025 0.1000 0.3075 0.3000per share

Weighted averagecommon shares outstanding:

Basic 12,344,926 9,498,783 10,447,496 9,498,783

Diluted 12,344,926 9,498,783 10,447,496 9,498,783

Colony Bankcorp, Inc.

Quarterly Comparison

2021

2020

(dollars in thousands, except per share data)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Assets

$

2,512,581

$

1,755,518

$

1,799,047

$

1,763,974

$

1,759,446

Loans, net

1,296,983

1,009,747

1,050,082

1,047,376

1,090,586

Deposits

2,195,122

1,542,214

1,525,884

1,445,027

1,416,401

Total equity

217,130

146,894

143,487

144,488

140,346

Net income

5,583

3,997

4,919

4,900

3,099

Earnings per basic share

$

0.45

$

0.42

$

0.52

$

0.52

$

0.33

Key Performance Ratios:

Return on average assets

1.00

%

0.91

%

1.12

%

1.08

%

0.70

%

Return on average total equity

11.49

%

11.14

%

13.71

%

13.73

%

8.80

%

Total equity to total assets

8.64

%

8.37

%

7.98

%

8.19

%

7.98

%

Tangible equity to tangible assets

6.37

%

7.38

%

7.01

%

7.21

%

7.00

%

Net interest margin

3.48

%

3.68

%

3.50

%

3.58

%

3.34

%

Colony Bankcorp, Inc.

Quarterly Comparison

2021 2020

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

Assets $ 2,512,581 $ 1,755,518 $ 1,799,047 $ 1,763,974 $ 1,759,446

Loans, net 1,296,983 1,009,747 1,050,082 1,047,376 1,090,586

Deposits 2,195,122 1,542,214 1,525,884 1,445,027 1,416,401

Total 217,130 146,894 143,487 144,488 140,346 equity

Net income 5,583 3,997 4,919 4,900 3,099

Earningsper basic $ 0.45 $ 0.42 $ 0.52 $ 0.52 $ 0.33 share



KeyPerformance Ratios:

Return onaverage 1.00 % 0.91 % 1.12 % 1.08 % 0.70 %assets

Return onaverage 11.49 % 11.14 % 13.71 % 13.73 % 8.80 %totalequity

Totalequity to 8.64 % 8.37 % 7.98 % 8.19 % 7.98 %totalassets

Tangibleequity to 6.37 % 7.38 % 7.01 % 7.21 % 7.00 %tangibleassets

Netinterest 3.48 % 3.68 % 3.50 % 3.58 % 3.34 %margin

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2021

2020

(dollars in thousands)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Core

$

931,793

$

905,850

$

888,800

$

873,426

$

871,416

PPP

16,999

58,769

102,633

101,147

133,756

Purchased

361,068

57,999

71,342

84,930

96,434

Total

$

1,309,860

$

1,022,618

$

1,062,775

$

1,059,503

$

1,101,606

Colony Bankcorp, Inc.

Quarterly Loan Comparison

2021 2020

(dollars in Third Second First Fourth Thirdthousands) Quarter Quarter Quarter Quarter Quarter

Core $ 931,793 $ 905,850 $ 888,800 $ 873,426 $ 871,416

PPP 16,999 58,769 102,633 101,147 133,756

Purchased 361,068 57,999 71,342 84,930 96,434

Total $ 1,309,860 $ 1,022,618 $ 1,062,775 $ 1,059,503 $ 1,101,606

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2021

2020

(dollars in thousands)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

Atlanta

$

278,473

$

436

$

492

$

562

$

7,025

Augusta

28,064

30,521

23,982

20,432

22,931

Middle Georgia

100,804

73,458

73,543

68,838

60,275

Northwest Georgia

24,334

2,703

1,698

-

-

Coastal Georgia

233,648

236,985

235,094

230,184

224,604

South Central Georgia

352,057

361,821

371,227

372,947

391,702

Southwest Georgia

99,385

95,870

97,575

104,132

101,247

West Georgia

160,663

148,271

148,457

154,819

152,159

Small Business Specialty Lending

8,850

14,923

7,906

4,537

9,281

Paycheck Protection Program

16,999

55,425

102,633

101,147

133,756

Purchase Accounting

(1,025

)

(565

)

(668

)

(876

)

(1,262

)

Other

7,608

2,770

836

2,781

5,948

Total

$

1,309,860

$

1,022,618

$

1,062,775

$

1,059,503

$

1,107,666

Colony Bankcorp, Inc.

Quarterly Loans by Location Comparison

2021 2020

(dollars Second Fourthin Third Quarter Quarter First Quarter Quarter Third Quarterthousands)

Atlanta $ 278,473 $ 436 $ 492 $ 562 $ 7,025

Augusta 28,064 30,521 23,982 20,432 22,931

Middle 100,804 73,458 73,543 68,838 60,275 Georgia

Northwest 24,334 2,703 1,698 - - Georgia

Coastal 233,648 236,985 235,094 230,184 224,604 Georgia

SouthCentral 352,057 361,821 371,227 372,947 391,702 Georgia

Southwest 99,385 95,870 97,575 104,132 101,247 Georgia

West 160,663 148,271 148,457 154,819 152,159 Georgia

SmallBusiness 8,850 14,923 7,906 4,537 9,281 SpecialtyLending

PaycheckProtection 16,999 55,425 102,633 101,147 133,756 Program

Purchase (1,025 ) (565 ) (668 ) (876 ) (1,262 )Accounting

Other 7,608 2,770 836 2,781 5,948

Total $ 1,309,860 $ 1,022,618 $ 1,062,775 $ 1,059,503 $ 1,107,666

Colony Bankcorp, Inc.

Quarterly PPP Fees Comparison

2021

2020

(dollars in thousands)

Third Quarter

Second Quarter

First Quarter

Fourth Quarter

Third Quarter

PPP loan fee income

$

1,556

$

1,581

$

1,212

$

1,324

$

508

Unearned income on PPP loans

1,019

2,573

3,077

2,072

3,396

View source version on businesswire.com: https://www.businesswire.com/news/home/20211021006007/en/

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