8-K
COLONY BANKCORP INC (CBAN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): January 22, 2021
COLONY BANKCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
| Georgia | 000-12436 | 58-1492391 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
115 South Grant Street, Fitzgerald, Georgia 31750
(Address of Principal Executive Offices) (Zip Code)
(229) 426-6000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $1.00 per share | CBAN | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operation and Financial Condition.
On January 22, 2021, Colony Bankcorp, Inc. (the "Company") issued a press release announcing its consolidated financial results for the fourth quarter and year ended December 31, 2020, as well as the announcement of a regular quarterly cash dividend. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The Company is furnishing a copy of its most recent investor presentation, which it intends to use in connection with certain community group presentations. A copy of the presentation materials to be used by the Company is furnished as Exhibit 99.2 to this Current Report and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1 | Colony Bankcorp, Inc., press release dated January 22, 2021 |
| 99.2 | Slide Presentation |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COLONY BANKCORP, INC. | ||
|---|---|---|
| Date: January 22, 2021 | By: | /s/ Tracie Youngblood |
| Tracie Youngblood | ||
| Executive Vice President and Chief Financial Officer |
Document
For additional information, contact:
Tracie Youngblood
EVP & Chief Financial Officer
(229) 426-6000 (Ext 6003)
COLONY BANKCORP REPORTS FOURTH QUARTER 2020 RESULTS
COMPANY DECLARES QUARTERLY CASH DIVIDEND OF $0.1025 PER SHARE
FITZGERALD, GA. (January 22, 2021) – Colony Bankcorp, Inc. (Nasdaq: CBAN) (“Colony” or the “Company”) today reported net income of $4.9 million, $0.52 per diluted share, for the quarter ended December 31, 2020, compared with $2.8 million, or $0.29 per diluted share, for the quarter ended December 31, 2019. The Company reported operating net income of $4.2 million, or $0.44 per diluted share, for the quarter ended December 31, 2020, compared with $3.0 million, or $0.32 per diluted share for the same period in 2019. Operating net income excludes after-tax acquisition related expenses, gain on sale and write-down of the Thomaston banking center as well as the net income tax expense (benefit) for the adjustments.
For the year-to-date period ended December 31, 2020, the Company reported net income of $11.8 million, or $1.24 per diluted share, compared with $10.2 million, or $1.12 per diluted share for the same period in 2019. The Company reported operating net income of $12.1 million, or $1.28 per diluted share, for the year-ended December 31, 2020, compared with $12.8 million, or $1.35 per diluted share, for the same period in 2019. Operating net income excludes the same items listed above for the Company’s quarter-to-date period.
Fourth Quarter 2020 Financial Highlights:
•Net income of $4.9 million, or $0.52 per diluted share, an increase of $1.8 million, or $0.19 per diluted share, compared to the third quarter of 2020.
•Operating net income of $4.2 million, or $0.44 per diluted share, an increase of $484,000, or $0.05, compared to the third quarter of 2020 (see Non-GAAP reconciliation).
•Growth in total assets of $4.5 million, or 26 basis points, compared to the third quarter of 2020.
•Increase in noninterest income from mortgage banking activity of $827,000 compared to the third quarter of 2020.
•$1.3 million provision for loan losses, an increase of $190,000, or 17.18%, compared to the third quarter 2020.
The Company also announced that on January 21, 2021, the Board of Directors declared a quarterly cash dividend of $0.1025 per share, to be paid on its common stock on February 12, 2021, to shareholders of record as of the close of business on January 31, 2021.
Commenting on the announcement, Heath Fountain, President and Chief Executive Officer, said, “While we continue to operate in a difficult environment due to the ongoing global pandemic, I am pleased to report strong earnings growth for the fourth quarter and full year. Diluted earnings per share increased 78% over the same period last year and 11% for the full year.
“Our efforts in business development and adding talented bankers to our team continues to have positive impacts on our operations. We saw solid growth in our balance sheet metrics for both the fourth quarter and full year, including growth in total loans, total deposits and total assets. Asset quality remained strong throughout the year and we are pleased that most loans for which payments were deferred for borrowers in response to the global pandemic are back to current status. We ended the year with total interest earning assets of $1.6 billion, up $258.0 million, or 19% propelling total assets to $1.8 billion, a record for the Company. Total loans, including acquisition activity and loans from the Small Business Administration Payroll Protection Program (“PPP”), increased 9% year-over-year, while legacy loan growth increased 6%. Furthermore, strong growth in net interest income was partially offset by higher provisions for loan losses due to the global pandemic as well as increases in noninterest expense, such as salaries and employee benefits, as well as occupancy and equipment.
“Net interest margin increased 24 basis points to 3.58% over the sequential quarter primarily driven by increased accretion income on acquired loans and deferred fee income recognized on PPP loans. During the quarter ended December 31, 2020, PPP loans totaling approximately $32.6 million were forgiven through the SBA. Increases to accretion income during the quarter ended December 31, 2020, were primarily driven by higher than expected loan payoffs as well as changes to cash flow projections on remaining loans driven by loan performance during the second half of the year ended 2020. Additionally, our continued efforts to diversify our revenue streams resulted in strong full year increases in our noninterest income of $10.2 million, highlighted by mortgage fee income growth of $6.0 million helping to mitigate declining margins.”
In closing, Fountain added, “We are pleased with the Company’s continued growth during 2020 despite operating in one of the most difficult economic environments experienced in our times. These achievements reaffirm the strategic initiatives we have put in place to grow our business across our markets and also reflect the dedication and hard work of everyone at Colony Bankcorp. While the current economic environment and competitive landscape is intense, we are optimistic based on our loan pipeline, core deposit base growth, diversified streams of earnings and mortgage fee income as we continue to deliver market share gains. Moreover, we will also support our customers and communities by participating in the recently announced new round of the Small Business Administration Payroll Protection Program. While some of our competitors have suspended payments, our Board remains confident in our operational structure and strategic vision as evidenced by the continued dividend payment. We look forward to the coming year with renewed enthusiasm as we seek opportunities to continue to reward our shareholders.”
Balance Sheet
•Total assets totaled $1.8 billion at December 31, 2020, an increase of $248.7 million, or 16%, compared to the same period in 2019.
•Interest-bearing deposits in banks at December 31, 2020, totaled $166.3 million, an increase of $77.8 million, or 87.8% compared to the same period in 2019. The increase is primarily attributable to the funding of approximately 1,700 PPP loans during 2020, which also generated much higher balances in our interest-bearing deposits in banks as of December 31, 2020.
•Total loans, including loans held for sale, totaled $1.11 billion at December 31, 2020, an increase of $133.0 million, or 14%, from the same period in 2019. Growth in core loans was primarily attributable to PPP loan originations, while mortgage demand substantially increased during 2020 as a result of declining interest rates.
•Total deposits totaled $1.45 billion at December 31, 2020, an increase of $151.3 million, or 12%, compared to the same period in 2019. The increase in deposits was primarily in noninterest-bearing deposits as a result of the PPP loan activity during 2020.
•Total borrowings at December 31, 2020, totaled $167.1 million, an increase of $81.3 million or 94.8% compared to the same period in 2019. While the Company prepaid $24.5 million in FHLB advances, funding of PPP loans through the Payroll Protection Program Liquidity Facility (“PPPLF”) increased outstanding borrowings substantially during 2020. At December 31, 2020, the PPPLF totaled $106.8 million with comparison to prior year not applicable.
Capital
•Colony continues to maintain a strong capital position, with ratios that exceed regulatory minimums required to be classified as “well-capitalized.”
•Preliminary tier one leverage ratio, tier one capital ratio, total risk-based capital ratio and common equity tier one capital ratio were 9.55%, 14.29%, 15.37%, and 12.21%, respectively.
Fourth Quarter Results of Operations
•Net interest income on a tax-equivalent basis for the fourth quarter 2020 totaled $15.2 million, compared to $13.9 million for the third quarter 2020. The increase during the quarter is primarily attributable to increases in accretion income on acquired loans and loan fee income recognized on PPP loans forgiven which was only partially offset by a decrease in the cost of interest-bearing liabilities.
•Net interest margin was up 24 basis points over the sequential quarter primarily driven by increased accretion income on acquired loans and deferred fee income recognized on PPP loans. During the quarter ended December 31, 2020, PPP loans totaling approximately $32.6 million were forgiven through the SBA. Accretion income increased $384,000 for the quarter ended December 31, 2020, which was primarily driven by higher than expected loan payoffs as well as changes to cash flow projections on remaining loans driven by loan performance during the second half of the year ended 2020. These positive impacts to the margin were primarily offset by increases in lower-yielding, highly-liquid assets, combined with the reduction by the Federal Reserve of interest rates during 2020.
•Noninterest income totaled $8.0 million for the fourth quarter ended December 31, 2020, an increase of $485,000, or 6.4%, compared to the same period in 2019. 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. Also, during the fourth quarter 2020, the Thomaston banking center was sold resulting in a gain on sale.
•Noninterest expense totaled $16.0 million for the fourth quarter ended December 31, 2020, compared to $16.3 million for the sequential quarter ended 2019. The decrease in noninterest expense during the fourth quarter 2020 was primarily attributable FHLB prepayment penalties only during the third quarter 2020.
Asset Quality
•Nonperforming assets totaled $10.2 million and $10.5 million at December 31, 2020 and 2019, respectively.
•OREO and repossessed assets totaled $1.0 million at December 31, 2020, a decrease of $297,000, or 22.3%, compared to the same quarter in 2019.
•Net loan charge-offs were $189,000, or 0.07% of average loans, compared to $317,000 in the fourth quarter of 2019.
•The loan loss reserve was $12.1 million, or 1.14% of total loans, on December 31, 2020, compared $6.9 million, or 0.71% of total loans, at December 31, 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 fourth quarter 2020 compared to previous quarter and year-over-year comparisons. The increase in the provision for loan losses was directly impacted by the current economic disruptions resulting from the continued COVID-19 pandemic crisis.
About Colony Bankcorp
Colony Bankcorp, Inc. is the bank holding company for Colony Bank. Founded in 1975 and headquartered in Fitzgerald, Georgia, Colony operates 32 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; risks that the anticipated benefits from the sale of the Thomaston branch and the transactions with LBC Bancshares, Inc. and PFB Mortgage are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict.
Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” and in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.
Explanation of Certain Unaudited Non-GAAP Financial Measures
The measures entitled operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio are not measures recognized under U.S. generally accepted accounting principles (GAAP) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are net income, diluted earnings per share, book value per common share and efficiency ratio, respectively.
Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance, and if not provided would be requested by the investor community. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently.
These disclosures should not be considered an alternative to GAAP. The computations of operating net income; adjusted earnings per diluted share; tangible book value per common share and operating efficiency ratio and the reconciliation of these measures to net income, diluted earnings per share, book value per common share and efficiency ratio are set forth in the table below.
| Colony Bankcorp, Inc. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Non-GAAP Measures | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| (dollars in thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | ||||||||||
| Operating net income reconciliation | |||||||||||||||
| Net income (GAAP) | $ | 4,900 | $ | 3,098 | $ | 2,214 | $ | 1,603 | $ | 2,756 | |||||
| Acquisition-related expenses | 148 | 207 | 220 | 287 | 335 | ||||||||||
| Thomaston building write down | — | 582 | — | — | — | ||||||||||
| Gain on sale of Thomaston branch | (1,026) | — | — | — | — | ||||||||||
| Income tax expense (benefit) | 184 | (166) | (46) | (60) | (70) | ||||||||||
| Operating net income | $ | 4,206 | $ | 3,722 | $ | 2,388 | $ | 1,830 | $ | 3,021 | |||||
| Weighted average diluted shares | 9,498,783 | 9,498,783 | 9,498,783 | 9,498,783 | 9,494,859 | ||||||||||
| Adjusted earnings per diluted share | $ | 0.44 | $ | 0.39 | $ | 0.25 | $ | 0.19 | $ | 0.32 | |||||
| Tangible book value per common share reconciliation | |||||||||||||||
| Book value per common share (GAAP) | $ | 15.21 | $ | 14.78 | $ | 14.59 | $ | 14.35 | $ | 13.74 | |||||
| Effect of goodwill and other intangibles | (1.95) | (1.96) | (1.96) | (2.06) | (2.06) | ||||||||||
| Tangible book value per common share | $ | 13.26 | $ | 12.82 | $ | 12.63 | $ | 12.29 | $ | 11.68 | |||||
| Operating efficiency ratio calculation | |||||||||||||||
| Efficiency ratio (GAAP) | 68.93 | % | 76.22 | % | 72.75 | % | 77.32 | % | 77.24 | % | |||||
| Acquisition-related expenses | (0.64) | (0.97) | (1.20) | (1.68) | (1.92) | ||||||||||
| Gain on sale of Thomaston branch | 3.19 | % | — | % | — | % | — | % | — | % | |||||
| Thomaston building write down | — | % | (2.72) | % | — | % | — | % | — | % | |||||
| Operating efficiency ratio | 71.49 | % | 72.53 | % | 71.55 | % | 75.64 | % | 75.32 | % | |||||
| Colony Bankcorp, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Selected Financial Information | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| (dollars in thousands, except per share data) | Fourth <br>Quarter | Third <br>Quarter | Second <br>Quarter | First <br>Quarter | Fourth <br>Quarter | ||||||||||
| EARNINGS SUMMARY | |||||||||||||||
| Net interest income | $ | 15,151 | $ | 13,848 | $ | 13,541 | $ | 12,705 | $ | 12,992 | |||||
| Provision for loan losses | 1,296 | 1,106 | 2,200 | 1,956 | 581 | ||||||||||
| Non-interest income | 8,039 | 6,930 | 4,843 | 4,432 | 4,412 | ||||||||||
| Non-interest expense | 15,986 | 15,690 | 13,375 | 13,250 | 13,496 | ||||||||||
| Income taxes | 1,008 | 884 | 595 | 328 | 571 | ||||||||||
| Net income | 4,900 | 3,098 | 2,214 | 1,603 | 2,756 | ||||||||||
| 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 | 9,494,859 | ||||||||||
| Weighted average diluted shares | 9,498,783 | 9,498,783 | 9,498,783 | 9,498,783 | 9,494,859 | ||||||||||
| Earnings per basic share | $ | 0.52 | $ | 0.33 | $ | 0.23 | $ | 0.17 | $ | 0.29 | |||||
| Earnings per diluted share | 0.52 | 0.33 | 0.23 | 0.17 | 0.29 | ||||||||||
| Adjusted earnings per diluted share | 0.44 | 0.39 | 0.25 | 0.39 | 0.32 | ||||||||||
| Cash dividends declared per share | 0.10 | 0.10 | 0.10 | 0.10 | 0.08 | ||||||||||
| Common book value per share | 15.21 | 14.78 | 14.59 | 14.35 | 13.74 | ||||||||||
| Tangible common book value per share | 13.26 | 12.82 | 12.63 | 12.29 | 11.68 | ||||||||||
| Performance ratios: | |||||||||||||||
| Net interest margin (a) | 3.58 | % | 3.34 | % | 3.41 | % | 3.63 | % | 3.70 | % | |||||
| Return on average assets | 1.08 | 0.70 | 0.52 | 0.42 | 0.73 | ||||||||||
| Return on average total equity | 13.73 | 8.80 | 6.47 | 4.79 | 8.47 | ||||||||||
| Efficiency ratio | 68.93 | 76.22 | 72.75 | 77.32 | 77.24 | ||||||||||
| Operating efficiency ratio (b) | 71.49 | 72.53 | 71.55 | 75.64 | 75.32 | ||||||||||
| Colony Bankcorp, Inc. | |||||||||||||||
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| Selected Financial Information | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| (dollars in thousands, except per share data) | Fourth <br>Quarter | Third <br>Quarter | Second <br>Quarter | First <br>Quarter | Fourth <br>Quarter | ||||||||||
| ASSET QUALITY | |||||||||||||||
| Nonperforming loans (NPLs) | $ | 9,128 | $ | 9,926 | $ | 11,459 | $ | 10,130 | $ | 9,179 | |||||
| Other real estate owned | 1,006 | 1,875 | 1,769 | 847 | 1,320 | ||||||||||
| Repossessed assets | 30 | 11 | 17 | 19 | 13 | ||||||||||
| Total nonperforming assets (NPAs) | 10,164 | 11,812 | 13,245 | 10,996 | 10,512 | ||||||||||
| Classified loans | 30,404 | 21,388 | 20,619 | 23,093 | 21,084 | ||||||||||
| Criticized loans | 75,633 | 72,076 | 52,200 | 46,600 | 51,182 | ||||||||||
| Net loan charge-offs | 189 | 375 | 295 | 435 | 317 | ||||||||||
| Allowance for loan losses to total loans | 1.14 | % | 1.00 | % | 0.92 | % | 0.85 | % | 0.71 | % | |||||
| Allowance for loan losses to total NPLs | 132.85 | 111.02 | 89.79 | 64.81 | 74.77 | ||||||||||
| Allowance for loan losses to total NPAs | 119.31 | 93.29 | 77.68 | 60.83 | 65.29 | ||||||||||
| Net charge-offs to average loans | 0.07 | 0.13 | 0.12 | 0.18 | 0.13 | ||||||||||
| NPLs to total loans | 0.86 | 0.90 | 1.03 | 1.13 | 0.95 | ||||||||||
| NPAs to total assets | 0.58 | 0.67 | 0.75 | 0.91 | 0.69 | ||||||||||
| NPAs to total loans and other real estate owned | 0.96 | 1.07 | 1.19 | 1.39 | 1.08 | ||||||||||
| AVERAGE BALANCES | |||||||||||||||
| Total assets | $ | 1,797,749 | $ | 1,766,717 | $ | 1,702,902 | $ | 1,516,191 | $ | 1,503,521 | |||||
| Loans, net | 1,151,872 | 1,130,231 | 1,094,299 | 974,614 | 961,756 | ||||||||||
| Deposits | 1,456,287 | 1,140,487 | 1,384,739 | 1,293,784 | 1,278,987 | ||||||||||
| Total stockholders’ equity | 141,570 | 139,721 | 137,213 | 134,304 | 130,217 | ||||||||||
| (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. | |||||||||||||||
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| Average Balance Sheet and Net Interest Analysis | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three Months Ended December 31, | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| Average<br>Balances | Income/<br>Expense | Yields/<br>Rates | Average<br>Balances | Income/<br>Expense | Yields/<br>Rates | ||||||||||
| Assets | |||||||||||||||
| Interest-earning assets: | |||||||||||||||
| Loans, net of unearned income 1 | $ | 1,151,872 | $ | 14,878 | 5.12 | % | $ | 977,760 | $ | 13,898 | 5.64 | % | |||
| Investment securities, taxable | 335,228 | 1,485 | 1.76 | % | 355,484 | 2,064 | 2.30 | % | |||||||
| Investment securities, tax-exempt 2 | 31,218 | 147 | 1.87 | % | 1,138 | 9 | 3.14 | % | |||||||
| Deposits in banks and short term investments | 168,876 | 54 | 0.13 | % | 66,690 | 246 | 1.46 | % | |||||||
| Total interest-earning assets | 1,687,194 | 16,564 | 3.89 | % | 1,401,072 | 16,217 | 4.59 | % | |||||||
| Noninterest-earning assets | 110,555 | 99,145 | |||||||||||||
| Total assets | $ | 1,797,749 | $ | 1,500,217 | |||||||||||
| Liabilities and stockholders' equity | |||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-earning demand and savings | $ | 843,497 | $ | 203 | 0.10 | % | $ | 697,893 | $ | 1,040 | 0.59 | % | |||
| Other time | 280,175 | 630 | 0.89 | % | 357,364 | 1,440 | 1.60 | % | |||||||
| Total interest-bearing deposits | 1,123,672 | 833 | 0.29 | % | 1,055,257 | 2,480 | 0.93 | % | |||||||
| Federal Home Loan Bank advances | 22,500 | 116 | 2.06 | % | 49,283 | 271 | 2.18 | % | |||||||
| Paycheck Protection Program Liquidity Facility | 128,554 | 118 | 0.36 | % | — | — | — | % | |||||||
| Other borrowings | 38,339 | 254 | 2.62 | % | 39,036 | 415 | 4.22 | % | |||||||
| Total other interest-bearing liabilities | 189,393 | 488 | — | % | 88,319 | 686 | 3.08 | % | |||||||
| Total interest-bearing liabilities | 1,313,065 | 1,321 | 0.40 | % | 1,143,576 | 3,166 | 1.10 | % | |||||||
| Noninterest-bearing liabilities: | |||||||||||||||
| Demand deposits | $ | 332,615 | $ | 220,356 | |||||||||||
| Other liabilities | 10,499 | 6,068 | |||||||||||||
| Stockholders' equity | 141,570 | 130,217 | |||||||||||||
| Total noninterest-bearing liabilities and stockholders' equity | 484,684 | 356,641 | |||||||||||||
| Total liabilities and stockholders' equity | $ | 1,797,749 | $ | 1,500,217 | |||||||||||
| Interest rate spread | 3.49 | % | 3.49 | % | |||||||||||
| Net interest income | $ | 15,243 | $ | 13,051 | |||||||||||
| Net interest margin | 3.58 | % | 3.70 | % |
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 $61,000 and $53,000 for the quarter ended December 31, 2020 and 2019, respectively, are included in income and fees on loans. Accretion income of $385,000 and $350,000 for the quarter ended December 31, 2020 and 2019 are also included in income and fees on loans.
2Taxable-equivalent adjustments totaling $31,000 and $3,000 three months period ended December 31, 2020 and 2019, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.
| Twelve Months ended December 31, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | |||||||||||
| Average<br>Balances | Income/<br>Expense | Yields/<br>Rates | Average<br>Balances | Income/<br>Expense | Yields/<br>Rates | |||||||
| Assets | ||||||||||||
| Interest-earning assets: | ||||||||||||
| Loans, net of unearned income 3 | $ | 1,092,009 | $ | 55,802 | 5.11 | % | $ | 896,098 | $ | 50,464 | 5.63 | % |
| Investment securities, taxable | 336,140 | 6,875 | 2.05 | % | 374,719 | 9,103 | 2.43 | % | ||||
| Investment securities, tax-exempt 4 | 17,070 | 331 | 1.94 | % | 1,737 | 56 | 3.22 | % | ||||
| Deposits in banks and short term investments | 141,641 | 438 | 0.31 | % | 56,891 | 1,056 | 1.86 | % | ||||
| Total interest-earning assets | 1,586,860 | 63,446 | 4.00 | % | 1,329,445 | 60,679 | 4.56 | % | ||||
| Noninterest-earning assets | 104,375 | 81,886 | ||||||||||
| Total assets | $ | 1,691,235 | $ | 1,411,331 | ||||||||
| Liabilities and stockholders' equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Interest-earning demand and savings | $ | 787,030 | $ | 1,870 | 0.24 | % | $ | 640,180 | $ | 4,274 | 0.67 | % |
| Other time | 305,374 | 3,729 | 1.22 | % | 361,319 | 5,775 | 1.60 | % | ||||
| Total interest-bearing deposits | 1,092,404 | 5,599 | 0.51 | % | 1,001,499 | 10,049 | 1.00 | % | ||||
| Federal Home Loan Bank advances | 33,249 | 743 | 2.23 | % | 45,233 | 1,046 | 2.31 | % | ||||
| Paycheck Protection Program Liquidity Facility | 90,768 | 205 | 0.23 | % | — | — | — | % | ||||
| Other borrowings | 38,527 | 1,333 | 3.46 | % | 34,159 | 1,542 | 4.51 | % | ||||
| Total other interest-bearing liabilities | 162,544 | 2,281 | 1.40 | % | 79,392 | 2,588 | 3.26 | % | ||||
| Total interest-bearing liabilities | 1,254,948 | 7,880 | 0.63 | % | 1,080,891 | 12,637 | 1.17 | % | ||||
| Noninterest-bearing liabilities: | ||||||||||||
| Demand deposits | 294,008 | $ | 208,320 | |||||||||
| Other liabilities | 4,325 | 5,002 | ||||||||||
| Stockholders' equity | 137,954 | 117,118 | ||||||||||
| Total noninterest-bearing liabilities and stockholders' equity | 436,287 | 330,440 | ||||||||||
| Total liabilities and stockholders' equity | $ | 1,691,235 | $ | 1,411,331 | ||||||||
| Interest rate spread | 3.34 | % | 3.40 | % | ||||||||
| Net interest income | $ | 55,566 | $ | 48,042 | ||||||||
| Net interest margin | 3.50 | % | 3.61 | % |
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 $252,000 and $182,000 for the year ended December 31, 2020 and 2019, respectively, are included in income and fees on loans. Accretion income of $763,000 and $583,000 for the quarter ended December 31, 2020 and 2019 are also included in income and fees on loans.
4 Taxable-equivalent adjustments totaling $69,000 and $11,000 for twelve months period ended December 31, 2020 and 2019, respectively, are included in tax-exempt interest on investment securities. The adjustments are based on federal tax rate of 21% with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations.
| Colony Bankcorp, Inc. | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Segment Reporting | |||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Banking Division | |||||||||||||||
| Net interest income | $ | 13,240 | $ | 12,931 | $ | 51,546 | $ | 47,684 | |||||||
| Provision for loan losses | 1,296 | 581 | 6,558 | 1,104 | |||||||||||
| Noninterest income | 3,952 | 2,743 | 13,288 | 10,865 | |||||||||||
| Noninterest expenses | 11,656 | 11,315 | 47,805 | 43,669 | |||||||||||
| Income taxes | 643 | 687 | 1,947 | 2,642 | |||||||||||
| Segment income | $ | 3,597 | $ | 3,091 | $ | 8,524 | $ | 11,134 | |||||||
| Total segment assets | $ | 1,606,086 | $ | 1,503,284 | $ | 1,606,085 | $ | 1,503,284 | |||||||
| Mortgage Banking Division | |||||||||||||||
| Net interest income | $ | 299 | $ | 64 | $ | 603 | $ | 164 | |||||||
| Provision for loan losses | — | — | — | — | |||||||||||
| Noninterest income | 3,420 | 1,251 | 9,106 | 3,139 | |||||||||||
| Noninterest expenses | 2,835 | 1,220 | 8,137 | 3,258 | |||||||||||
| Income taxes | 188 | 20 | 325 | 10 | |||||||||||
| Segment income | $ | 696 | $ | 75 | $ | 1,247 | $ | 35 | |||||||
| Total segment assets | $ | 50,265 | $ | 11,624 | $ | 50,265 | $ | 11,624 | |||||||
| Small Business Specialty Lending Division | |||||||||||||||
| Net interest income | $ | 1,612 | $ | — | $ | 1,483 | $ | — | |||||||
| Provision for loan losses | — | — | — | — | |||||||||||
| Noninterest income | 667 | — | 1,183 | — | |||||||||||
| Noninterest expenses | 1,495 | 652 | 924 | 1,213 | |||||||||||
| Income taxes | 177 | (136) | 198 | (254) | |||||||||||
| Segment income | $ | 607 | $ | (516) | $ | 1,544 | $ | (959) | |||||||
| Total segment assets | $ | 107,623 | $ | 405 | $ | 107,623 | $ | 405 | |||||||
| Total Consolidated | |||||||||||||||
| Net interest income | $ | 15,151 | $ | 12,995 | $ | 53,632 | $ | 47,848 | |||||||
| Provision for loan losses | 1,296 | 581 | 6,558 | 1,104 | |||||||||||
| Noninterest income | 8,039 | 3,994 | 23,577 | 14,004 | |||||||||||
| Noninterest expenses | 15,986 | 13,187 | 56,866 | 48,140 | |||||||||||
| Income taxes | 1,008 | 571 | 2,470 | 2,398 | |||||||||||
| Segment income | $ | 4,900 | $ | 2,650 | $ | 11,315 | $ | 10,210 | |||||||
| Total segment assets | $ | 1,763,974 | $ | 1,515,313 | $ | 1,763,973 | $ | 1,515,313 | |||||||
| Colony Bankcorp, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | |||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||||||
| (dollars in thousands) | (unaudited) | (audited) | |||||||||||||
| ASSETS | |||||||||||||||
| Cash and due from banks | $ | 17,218 | $ | 15,570 | |||||||||||
| Interest-bearing deposits in banks and federal funds sold | 166,288 | 88,522 | |||||||||||||
| Cash and cash equivalents | 183,506 | 104,092 | |||||||||||||
| Investment securities available for sale, at fair value | 380,814 | 347,332 | |||||||||||||
| Other investments, at cost | 3,296 | 4,288 | |||||||||||||
| Loans held for sale | 52,386 | 10,076 | |||||||||||||
| Loans, net of unearned income | 1,059,503 | 968,814 | |||||||||||||
| Allowance for loan losses | (12,127) | (6,863) | |||||||||||||
| Loans, net | 1,047,376 | 961,951 | |||||||||||||
| Premises and equipment | 32,057 | 32,482 | |||||||||||||
| Other real estate | 1,006 | 1,320 | |||||||||||||
| Goodwill and other intangible assets | 18,558 | 19,533 | |||||||||||||
| Bank owned life insurance | 31,547 | 21,629 | |||||||||||||
| Other assets | 13,428 | 12,610 | |||||||||||||
| Total assets | $ | 1,763,974 | $ | 1,515,313 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
| Liabilities: | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing | $ | 326,999 | $ | 232,635 | |||||||||||
| Interest-bearing | 1,118,028 | 1,061,107 | |||||||||||||
| Total deposits | 1,445,027 | 1,293,742 | |||||||||||||
| Federal Home Loan Bank advances | 22,500 | 47,000 | |||||||||||||
| Paycheck Protection Program Liquidity Facility | 106,789 | — | |||||||||||||
| Other borrowed money | 37,792 | 38,792 | |||||||||||||
| Accrued expenses and other liabilities | 7,378 | 5,273 | |||||||||||||
| Total liabilities | 1,619,486 | 1,384,807 | |||||||||||||
| Stockholders’ equity | |||||||||||||||
| Common stock, $1 par value; 20,000,000 shares authorized, 9,498,783 issued and outstanding, respectively | 9,499 | 9,499 | |||||||||||||
| Paid in capital | 43,215 | 43,667 | |||||||||||||
| Retained earnings | 84,993 | 76,978 | |||||||||||||
| Accumulated other comprehensive income, net of tax | 6,781 | 362 | |||||||||||||
| Total stockholders’ equity | 144,488 | 130,506 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,763,974 | $ | 1,515,313 | |||||||||||
| Colony Bankcorp, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Interest income: | |||||||||||||||
| Loans, including fees | $ | 14,818 | 13,844 | $ | 55,550 | 50,281 | |||||||||
| Investment securities, including tax exempt of $31, $3, $69,$11, respectively | 1,601 | 2,071 | 7,137 | 9,149 | |||||||||||
| Deposits in banks and short term investments | 53 | 246 | 438 | 1,056 | |||||||||||
| Total interest income | 16,472 | 16,161 | 63,125 | 60,486 | |||||||||||
| Interest expense: | |||||||||||||||
| Deposits | 833 | 2,480 | 5,599 | 10,049 | |||||||||||
| Federal Home Loan Bank advances | 116 | 271 | 743 | 1,046 | |||||||||||
| Paycheck Protection Program Liquidity Facility | 118 | — | 205 | — | |||||||||||
| Other borrowings | 254 | 415 | 1,333 | 1,542 | |||||||||||
| Total interest expense | 1,321 | 3,166 | 7,880 | 12,637 | |||||||||||
| Net interest income | 15,151 | 12,995 | 55,245 | 47,849 | |||||||||||
| Provision for loan losses | 1,296 | 581 | 6,558 | 1,104 | |||||||||||
| Net interest income after provision for loan losses | 13,855 | 12,414 | 48,687 | 46,745 | |||||||||||
| Noninterest income: | |||||||||||||||
| Service charges on deposits | 1,387 | 1,596 | 5,293 | 5,593 | |||||||||||
| Mortgage fee income | 3,443 | 1,257 | 9,149 | 3,199 | |||||||||||
| Gain on sale of SBA loans | 596 | — | 1,600 | — | |||||||||||
| (Loss)/Gain on sale of securities | (83) | (2) | 926 | 97 | |||||||||||
| Gain on sale of assets | 1,026 | — | 1,082 | — | |||||||||||
| Interchange fees | 1,363 | 1,012 | 4,988 | 3,768 | |||||||||||
| BOLI Income | 195 | 131 | 743 | 536 | |||||||||||
| Other | 112 | — | 463 | 811 | |||||||||||
| Total noninterest income | 8,039 | 3,994 | 24,244 | 14,004 | |||||||||||
| Noninterest expense: | |||||||||||||||
| Salaries and employee benefits | 9,810 | 7,370 | 34,141 | 26,218 | |||||||||||
| Occupancy and equipment | 1,339 | 1,391 | 5,311 | 4,850 | |||||||||||
| Acquisition related | 148 | 335 | 862 | 3,333 | |||||||||||
| Information technology expenses | 1,611 | 1,195 | 5,746 | 4,353 | |||||||||||
| Professional fees | 908 | 821 | 2,250 | 2,190 | |||||||||||
| Advertising and public relations | 635 | 622 | 2,111 | 1,992 | |||||||||||
| Communications | 203 | 201 | 835 | 739 | |||||||||||
| Writedown of building | — | — | 582 | — | |||||||||||
| FHLB prepayment penalty | — | — | 925 | — | |||||||||||
| Other | 1,332 | 1,252 | 5,538 | 4,465 | |||||||||||
| Total noninterest expense | 15,986 | 13,187 | 58,301 | 48,140 | |||||||||||
| Income before income taxes | 5,908 | 3,221 | 14,630 | 12,609 | |||||||||||
| Income taxes | 1,008 | 571 | 2,815 | 2,398 | |||||||||||
| Net income | $ | 4,900 | $ | 2,650 | $ | 11,815 | $ | 10,211 | |||||||
| Earnings per common share: | |||||||||||||||
| Basic | $ | 0.52 | $ | 0.29 | $ | 1.24 | $ | 1.12 | |||||||
| Diluted | 0.52 | 0.29 | 1.24 | 1.12 | |||||||||||
| Dividends declared per share | 0.10 | 0.08 | 0.40 | 0.30 | |||||||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 9,498,783 | 9,494,859 | 9,498,783 | 9,129,705 | |||||||||||
| Diluted | 9,498,783 | 9,494,859 | 9,498,783 | 9,129,705 | |||||||||||
| Colony Bankcorp, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Quarterly Comparison | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| (dollars in thousands) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | ||||||||||
| Assets | $ | 1,763,974 | $ | 1,759,446 | $ | 1,777,568 | $ | 1,510,048 | $ | 1,515,313 | |||||
| Loans, net | 1,047,376 | 1,090,586 | 1,103,688 | 980,642 | 961,951 | ||||||||||
| Deposits | 1,445,027 | 1,416,401 | 1,421,758 | 1,293,076 | 1,293,742 | ||||||||||
| Total equity | 144,488 | 140,346 | 138,594 | 136,072 | 130,506 | ||||||||||
| Net income | 4,900 | 3,099 | 2,214 | 1,603 | 2,757 | ||||||||||
| Earnings per basic share | $ | 0.52 | $ | 0.33 | $ | 0.23 | $ | 0.17 | $ | 0.29 | |||||
| Key Performance Ratios: | |||||||||||||||
| Return on average assets | 1.08 | % | 0.70 | % | 0.52 | % | 0.42 | % | 0.73% | ||||||
| Return on average total equity | 13.73 | % | 8.80 | % | 6.47 | % | 4.79 | % | 8.47% | ||||||
| Total equity to total assets | 8.19 | % | 7.98 | % | 7.80 | % | 9.01 | % | 8.61% | ||||||
| Tangible equity to tangible assets | 7.21 | % | 7.00 | % | 6.82 | % | 7.83 | % | 7.42% | ||||||
| Net interest margin | 3.58 | % | 3.34 | % | 3.41 | % | 3.63 | % | 3.70 | % | |||||
| Colony Bankcorp, Inc. | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Quarterly Loan Comparison | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| (dollars in thousands) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | Fourth Quarter | ||||||||||
| Core | $ | 872,495 | $ | 868,833 | $ | 840,652 | $ | 848,088 | $ | 826,309 | |||||
| PPP | 101,147 | 133,756 | 133,158 | — | — | ||||||||||
| Purchased | 85,861 | 118,732 | 148,374 | 120,726 | 132,414 | ||||||||||
| Total | $ | 1,059,503 | $ | 1,121,321 | $ | 989,026 | $ | 968,814 | $ | 958,723 |
13
cban4q20presentation1
1 Investor Presentation Fourth Quarter - 2020
1 This presentation contains "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 sale of the Thomaston branch and the transactions with LBC Bancshares, Inc. and PFB Mortgage are not realized in the time frame anticipated or at all as a result of changes in general economic and market conditions or other unexpected factors or events. These and other factors, risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Many of these factors are beyond the Company’s ability to control or predict. Forward-looking statements speak only as of the date on which such statements are made. These forward-looking statements are based upon information presently known to the Company’s management and are inherently subjective, uncertain and subject to change due to any number of risks and uncertainties, including, without limitation, the risks and other factors set forth in the Company’s filings with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” and in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements. CAUTIONARY STATEMENTS
2 Statements included in this presentation include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measure to GAAP financial measures. The non-GAAP financial measures used in this presentation include the following: operating net income, adjusted earnings per diluted share, tangible book value per common share and operating efficiency ratio. 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 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. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Colony Bankcorp, Inc. performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of Colony Bankcorp, Inc. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. NON-GAAP FINANCIAL MEASURES
3 COMPANY PROFILE Locations • Founded in 1975 • Headquartered in Fitzgerald, Georgia • $1.8 billion in assets at December 31, 2020 • 32 locations in Georgia • 368 team members • Traded on NASDAQ – symbol “CBAN” • The sixth largest Georgia-based bank in the state and the largest community bank headquartered outside of Atlanta as of September 30, 2020* • New leadership joined July 2018 • Strategic plan for profitable growth • Track record of solid organic growth • Successful execution of acquisitions *Source: S&P Global Market Intelligence
4 Name Position Years In Banking Years With Colony T. Heath Fountain President and Chief Executive Officer 20 2 Edward "Lee" Bagwell EVP, Chief Risk Officer and General Counsel 17 17 Leonard H. “Lenny” Bateman EVP, Chief Credit Officer 25 1 Kimberly Dockery EVP, Chief Administrative Officer 14 2 Max "Eddie" Hoyle EVP, Chief Banking Officer 41 9 Tracie Youngblood EVP, Chief Financial Officer 26 1 LEADERSHIP TEAM
5 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year ◦ Proactive business development system ◦ Increased accountability for loan and deposit production ◦ Created incentive plans to motivate bankers ◦ Retail marketing plan to grow deposits ◦ Streamlined our consumer and commercial deposits products ◦ Larger national and regional banks with large market share in our footprint are more focused on large MSAs ◦ Organic growth of checking and money market accounts of 12% in 2020
6 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year • Seize on expansion opportunities ◦ Technology and regulatory headwinds are causing industry consolidation ◦ Industry consolidation is creating opportunity to acquire customers and talent ◦ Acquisition of both LBC Bancshares, Inc. (“LBC”), holding company of Calumet Bank, and PFB Mortgage in May 2019 ◦ Entered the Augusta, GA market in December 2019 by hiring an experienced commercial banker with a niche focus in homebuilder finance ◦ Expanded Savannah and Augusta footprint through acquisition of Cadence Bank’s East Georgia Homebuilder Finance Loan portfolio
7 Overview ◦ Completed acquisition of LBC on May 1, 2019 ▪ Holding company for Calumet Bank ◦ Natural expansion into logical, contiguous markets in western Georgia ▪ Added two branches in LaGrange and Columbus, GA ◦ Potential to be rapidly accretive to earnings with a short tangible book earnback ◦ Provides ability to increase scale and build on existing operations in western Georgia Franchise Footprint ACQUISITION ACTIVITY
8 DRIVING HIGH PERFORMANCE •Achieve strong organic growth each year • Seize on expansion opportunities • Increase operating efficiency ◦ Optimize our balance sheet for improved earnings ◦ Improve processes for efficiency and better controls ◦ Run a more efficiently staffed branch network ◦ Utilize technology to lower operating costs ◦ Align our staffing and procedures to adhere to industry best practices for service and efficiency
9 DRIVING HIGH PERFORMANCE • Increase non-interest income ◦ Growing our deposit account customer base increases service charge and interchange revenue ◦ Acquisition of PFB Mortgage added to our mortgage team in 2019 ◦ Started a Small Business Specialty Lending division to offer SBA, USDA and other government guaranteed loan products ◦ Look to add wealth management and other lines of business •Achieve strong organic growth each year • Seize on expansion opportunities • Increase operating efficiency
10 • In May 2019, Colony Bank acquired PFB Mortgage, which had more than $100 million in annual mortgage production in 2019 ◦ Added to our team by adding originators in Albany, Athens, Macon, Savannah, Statesboro and Warner Robins ◦ Added seasoned mortgage executives through acquisition • Increased volume in Mortgage division production: ◦ 188 loans totaling $36.0 million in the first quarter of 2020 ◦ 313 loans totaling $64.0 million in the second quarter of 2020 ◦ 531 loans totaling $108.8 million in the third quarter of 2020 ◦ 506 loans totaling $107.1 million in the fourth quarter of 2020 • Added experienced origination teams in Augusta, LaGrange, and Savannah, focused on expanding business MORTGAGE DIVISION
11 SMALL BUSINESS SPECIALTY LENDING GROUP • In July 2019, opened a metro Atlanta office for Small Business Specialty Lending (SBSL) Group focused on Small Business Administration (SBA) lending and other government guaranteed loans • 11 team members added, including three business development officers, led by two veteran bankers, Darren Davis, President, and Stephen T. Kruto, Director of Operations • Originated loans under SBA Paycheck Protection Program (PPP), resulting in 1,672 loans totaling over $137.8 million • Closed $5.3 million in loans in the fourth quarter and $4.5 million remains in the pipeline
12 DRIVING HIGH PERFORMANCE • Increase non-interest income •Create a culture of high performance ◦ Instill behaviors and habits that lead to great results ◦ Coaching team members to improve performance ◦ Increase incentive and performance based compensation ◦ Pursue open communication and honest feedback •Achieve strong organic growth each year • Seize on expansion opportunities • Improve operating efficiency
13 • Since our founding in 1975, our mission is to provide an alternative to traditional banking that our customers deserve • Focus on relationships that are beneficial to the customer and the Bank – one-sided relationships and transactions do not create value • Strive to be trusted advisors and give consultative advice •Nimble and responsive to customer needs • Team members are passionate about delivering solutions VALUE PROPOSITION TO OUR CUSTOMERS
14 2016 2017 2018 2019 2020 Diluted earnings per share $ 0.84 $ 0.87 $ 1.40 $ 1.12 $ 1.24 Dividends per share $ — $ 0.10 $ 0.20 $ 0.30 $ 0.40 Return on average assets 0.62% 0.63% 0.99% 0.72% 0.70% Return on average total equity 7.17% 8.28% 13.32% 8.72% 8.56% Net interest margin 3.51% 3.46% 3.56% 3.61% 3.50% Efficiency ratio 71.74% 69.19% 70.05% 77.93% 73.34% ANNUAL FINANCIAL HIGHLIGHTS
15 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 Diluted earnings per share $ 0.29 $ 0.17 $ 0.23 $ 0.33 $ 0.52 Adjusted earnings per diluted share (1) $ 0.32 $ 0.19 $ 0.25 $ 0.39 $ 0.44 Dividends per share $ 0.075 $ 0.10 $ 0.10 $ 0.10 $ 0.10 Return on average assets 0.73% 0.42% 0.52% 0.70% 1.08% Return on average total equity 8.47% 4.79% 6.47% 8.80% 13.73% Net interest margin 3.72% 3.63% 3.41% 3.34% 3.58% Efficiency ratio 77.24% 77.32% 72.75% 76.22% 68.93% FINANCIAL HIGHLIGHTS (1) See non-GAAP reconciliation table on slide 26 Trailing 5 quarters
16 2016 2017 2018 2019 2020 Total assets $ 1,210.4 $ 1,232.8 $ 1,251.9 $ 1,515.3 $ 1,763.9 Loans $ 754.3 $ 765.3 $ 782.4 $ 971.2 $ 1,062.8 Unearned income $ (0.4) $ (0.5) $ (0.5) $ (0.6) $ (2.4) Unamortized discount on acquired loans $ — $ — $ (0.3) $ (1.7) $ (0.9) Allowance for loan losses $ (8.9) $ (7.5) $ (7.3) $ (6.9) $ (12.1) Total loans, net $ 745.0 $ 757.3 $ 774.3 $ 962.0 $ 1,047.4 Total deposits $ 1,044.4 $ 1,068.0 $ 1,085.1 $ 1,294.2 $ 1,445.1 NPA/Total assets 1.55% 0.95% 0.90% 0.73% 0.58% ANNUAL BALANCE SHEET FINANCIAL HIGHLIGHTS (Dollars in millions)
17 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 Total assets $ 1,515.3 $ 1,510.0 $ 1,777.6 $ 1,759.4 $ 1,763.9 Loans $ 971.2 $ 990.8 $ 1,119.6 $ 1,112.6 $ 1,062.8 Unearned income $ (0.6) $ (0.5) $ (4.4) $ (3.8) $ (2.4) Unamortized discount on acquired loans $ (1.7) $ (1.3) $ (1.2) $ (1.2) $ (0.9) Allowance for loan losses $ (6.9) $ (8.4) $ (10.3) $ (11.0) $ (12.1) Total loans, net $ 962.0 $ 980.6 $ 1,103.7 $ 1,096.6 $ 1,047.4 Total deposits $ 1,293.7 $ 1,293.1 $ 1,421.8 $ 1,416.4 $ 1,445.1 NPA/Total assets 0.69% 0.91% 0.75% 0.68% 0.58% BALANCE SHEET FINANCIAL HIGHLIGHTS (Dollars in millions) Trailing 5 quarters
18 The current indicated annual rate is $0.40 per share, equating to a yield of 2.7% and a payout ratio of 32% SHAREHOLDER FOCUSED DIVIDEND POLICY Quarterly Dividend Payment $0.025 $0.05 $0.075 $0.10 Quarterly Dividend 2017 2018 2019 2020
19 CAPITAL RATIOS 9.9% 10.2% 9.0% 9.6% 14.6% 15.0% 12.5% 14.3% 15.6% 15.9% 13.2% 15.4% 11.8% 12.2% 10.3% 12.2% Tier One Leverage Ratio Tier One Ratio Total Risk-based Capital Ratio Common Equity Tier One Capital Ratio 2017 2018 2019 2020
20 SOLID CORE DEPOSIT FRANCHISE As of December 31, 2020 Total Deposits: $1.45 billion MRQ Cost of Deposits: 0.29% Interest Bearing Demand, 30% Noninterest bearing demand, 23% Time deposits, 18% Savings and Money- markets, 29%
21 LOAN PORTFOLIO BREAKDOWN As of December 31, 2020 $890.7 million Commercial real estate 55% Residential real estate 22% Construction 15% Farmland 8% $1,059.3 million Real Estate 78% Consumer and Other 2.0% Commercial 19% Agriculture 1.6%
22 LOAN PORTFOLIO (1) (Dollars in millions) Organic Loan Growth (Excluding PPP Loans) (1) Represents gross loan balances. Excludes PPP loans totaling $101.1 million at 12/31/2020 and $133.8 million at 9/30/2020 and 6/30/2020 $971.2 $990.8 $981.9 $967.8 $958.4 $850.5 $842.5 $863.0 $868.8 $872.5 Total Loans Organic Loans 12/31/19 03/31/20 6/30/2020 09/30/20 12/31/20
23 COVID-RELATED ACTIVITY • Originated $137.8 million in PPP loans • Prospected new customers from larger banks and executed non-PPP loans and other fee-generating income • Branches have been reconfigured and are currently open and operating in a way to protect team members and customers • Able to serve customers through drive through only and drive-up options, if shutdowns re-occur • Offered consumer and commercial customers loan modifications in accordance with regulatory guidance
24 Number Amount Hotel(1) 1 $ 1.9 Total 1 $ 1.9 COVID-RELATED ACTIVE LOAN DEFERRALS BY COLLATERAL TYPE (as of December 31, 2020) (Dollars in millions) (1) Loan is a top tier hotel
25 •Well positioned for continued organic growth • Potential for accelerated growth through acquisitions • Improving earnings outlook • Shareholder friendly dividend policy • Opportunities created by industry consolidation • Seasoned leadership with a proven track record INVESTMENT CONSIDERATIONS
26 RECONCILIATION OF NON-GAAP MEASURES (Dollars in thousands, except per share data) 2020 2019 Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Net income (GAAP) $ 4,900 $ 2,214 $ 2,214 $ 1,603 $ 2,756 Acquisition-related expenses 148 207 220 287 335 Gain on sale of Thomaston branch (1,026) — — — — Thomaston building write down — 582 — — — Income tax benefit of acquisition-related expenses 184 (166) (46) (60) (70) Operating net income $ 4,206 $ 3,722 $ 2,388 $ 1,830 $ 3,021 Weighted average diluted shares 9,498,783 9,498,783 9,498,783 9,498,783 9,494,859 Adjusted earnings per diluted share $ 0.44 $ 0.39 0.25 $ 0.19 $ 0.32 Tangible common book value per share reconciliation Common book value per share (GAAP) $ 15.21 $ 14.78 $ 14.59 $ 14.35 $ 13.74 Effect of goodwill and other intangibles (1.95) (1.96) (1.96) (2.06) (2.06) Tangible common book value per share $ 13.26 $ 12.82 $ 12.63 $ 12.29 $ 11.68 Operating efficiency ratio calculation Efficiency ratio (GAAP) 68.93 % 76.22 % 72.75 % 77.32 % 77.24 % Acquisition-related expenses (0.64) (0.97) (1.20) (1.68) (1.92) Gain on sale of Thomaston branch 3.19 — — — — Thomaston building write down — (2.72) — — — Operating efficiency ratios 71.49 % 72.53 % 71.55 % 75.64 % 75.32 %
27 NASDAQ: CBAN