Colony Bankcorp Reports Second Quarter 2020 Results

Company Release - 7/22/2020 5:30 PM ET

Company Declares Quarterly Cash Dividend of $0.10 Per Share

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

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

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

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

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

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

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

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

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

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

Balance Sheet

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

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

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

Capital

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

Net Interest Margin

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

Asset Quality

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

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

Noninterest Income

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

Noninterest Expense

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

About Colony Bankcorp

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

Forward-Looking Statements

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

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

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

Explanation of Certain Unaudited Non-GAAP Financial Measures

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

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

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

 

Colony Bankcorp, Inc.

Reconciliation of Non-GAAP Measures

 

 

 

 

 

 

 

 

 

2020

 

2019

(dollars in thousands, except per share data)

 

Second
Quarter

 

First
Quarter

 

Fourth
Quarter

 

Third
Quarter

 

Second
Quarter

Operating noninterest expense reconciliation

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

$

13,375

 

 

 

$

13,251

 

 

 

$

13,496

 

 

 

$

13,358

 

 

 

$

13,014

 

 

Acquisition-related expenses

 

(220

)

 

 

(287

)

 

 

(861

)

 

 

(2,076

)

 

 

(1,928

)

 

Operating noninterest expense

 

$

13,155

 

 

 

$

12,964

 

 

 

$

12,635

 

 

 

$

11,282

 

 

 

$

11,086

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net income reconciliation

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

2,214

 

 

 

$

1,603

 

 

 

$

2,756

 

 

 

$

2,518

 

 

 

$

2,101

 

 

Acquisition-related expenses

 

220

 

 

 

287

 

 

 

335

 

 

 

861

 

 

 

1,928

 

 

Income tax benefit

 

(46

)

 

 

(60

)

 

 

(70

)

 

 

(181

)

 

 

(404

)

 

Operating net income

 

$

2,388

 

 

 

$

1,830

 

 

 

$

3,021

 

 

 

$

3,198

 

 

 

$

3,625

 

 

Weighted average diluted shares

 

9,498,783

 

 

 

9,498,783

 

 

 

9,494,859

 

 

 

9,494,771

 

 

 

9,089,461

 

 

Adjusted earnings per diluted share

 

$

0.25

 

 

 

$

0.19

 

 

 

$

0.32

 

 

 

$

0.34

 

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per common share reconciliation

 

 

 

 

 

 

 

 

 

 

Book value per common share (GAAP)

 

$

14.59

 

 

 

$

14.35

 

 

 

$

13.74

 

 

 

$

13.65

 

 

 

$

13.32

 

 

Effect of goodwill and other intangibles

 

(1.96

)

 

 

(2.06

)

 

 

(2.06

)

 

 

(2.04

)

 

 

(2.07

)

 

Tangible book value per common share

 

$

12.63

 

 

 

$

12.29

 

 

 

$

11.68

 

 

 

$

11.61

 

 

 

$

11.25

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating efficiency ratio calculation

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (GAAP)

 

72.75

 

%

 

77.32

 

%

 

77.24

 

%

 

79.94

 

%

 

82.24

 

%

Acquisition-related expenses

 

(1.20

)

 

 

(1.68

)

 

 

(1.92

)

 

 

(5.26

)

 

 

(12.18

)

 

Operating efficiency ratio

 

71.55

 

%

 

75.64

 

%

 

75.32

 

%

 

74.68

 

%

 

70.06

 

%

 

 

 

Colony Bankcorp, Inc.

Selected Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

(dollars in thousands, except per share data)

 

Second Quarter

 

First Quarter

 

Fourth Quarter

 

Third Quarter

 

Second Quarter

EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

13,541

 

 

$

12,704

 

 

$

12,992

 

 

$

12,648

 

 

$

11,825

 

Provision for loan losses

 

2,200

 

 

1,956

 

 

581

 

 

214

 

 

179

 

Non-interest income

 

4,843

 

 

4,434

 

 

4,412

 

 

4,039

 

 

4,000

 

Non-interest expense

 

13,375

 

 

13,251

 

 

13,496

 

 

13,358

 

 

13,014

 

Income taxes

 

595

 

 

328

 

 

571

 

 

597

 

 

531

 

Net income

 

2,214

 

 

1,603

 

 

2,756

 

 

2,518

 

 

2,101

 

PERFORMANCE MEASURES

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

9,498,783

 

 

9,498,783

 

 

9,498,783

 

 

9,498,783

 

 

9,498,937

 

Weighted average basic shares

 

9,498,783

 

 

9,498,783

 

 

9,494,859

 

 

9,494,771

 

 

9,089,461

 

Weighted average diluted shares

 

9,498,783

 

 

9,498,783

 

 

9,494,859

 

 

9,494,771

 

 

9,089,461

 

Earnings per basic share

 

$

0.23

 

 

$

0.17

 

 

$

0.29

 

 

$

0.27

 

 

$

0.23

 

Earnings per diluted share

 

0.23

 

 

0.17

 

 

0.29

 

 

0.27

 

 

0.23

 

Adjusted earnings per diluted share

 

0.25

 

 

0.19

 

 

0.32

 

 

0.34

 

 

0.40

 

Cash dividends declared per share

 

0.10

 

 

0.10

 

 

0.075

 

 

0.075

 

 

0.075

 

Common book value per share

 

14.59

 

 

14.35

 

 

13.74

 

 

13.65

 

 

13.32

 

Tangible common book value per share

 

12.63

 

 

12.29

 

 

11.68

 

 

11.61

 

 

11.25

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios:

 

 

 

 

 

 

 

 

 

 

Net interest margin (a)

 

3.41

%

 

3.63

%

 

3.72

%

 

3.64

%

 

3.61

%

Return on average assets

 

0.52

 

 

0.42

 

 

0.73

 

 

0.67

 

 

0.60

 

Return on average total equity

 

6.47

 

 

4.79

 

 

8.47

 

 

7.86

 

 

7.43

 

Efficiency ratio

 

72.75

 

 

77.32

 

 

77.24

 

 

79.94

 

 

82.24

 

Operating efficiency ratio (b)

 

71.55

 

 

75.64

 

 

75.32

 

 

74.68

 

 

70.06

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

Nonperforming loans (NPLs)

 

$

11,459

 

 

$

10,130

 

 

$

9,179

 

 

$

9,572

 

 

$

10,383

 

Other real estate owned

 

1,769

 

 

847

 

 

1,320

 

 

775

 

 

987

 

Repossessed assets

 

17

 

 

19

 

 

13

 

 

8

 

 

58

 

Total nonperforming assets (NPAs)

 

13,245

 

 

10,996

 

 

10,512

 

 

10,355

 

 

11,428

 

Classified loans

 

20,619

 

 

23,093

 

 

21,084

 

 

20,103

 

 

23,656

 

Criticized loans

 

52,200

 

 

46,600

 

 

51,182

 

 

42,765

 

 

42,336

 

Net loan charge-offs

 

295

 

 

435

 

 

317

 

 

403

 

 

(21)

 

Allowance for loan losses to total loans

 

0.92

%

 

0.85

%

 

0.71

%

 

0.69

%

 

0.73

%

Allowance for loan losses to total NPLs

 

89.79

 

 

64.81

 

 

74.77

 

 

68.95

 

 

65.38

 

Allowance for loan losses to total NPAs

 

77.68

 

 

60.83

 

 

65.29

 

 

63.73

 

 

59.41

 

Net charge-offs to average loans

 

0.12

 

 

0.18

 

 

0.13

 

 

0.17

 

 

 

NPLs to total loans

 

1.03

 

 

1.13

 

 

0.95

 

 

1.00

 

 

1.11

 

NPAs to total assets

 

0.75

 

 

0.91

 

 

0.69

 

 

0.70

 

 

0.76

 

NPAs to total loans and other real estate owned

 

1.19

 

 

1.39

 

 

1.08

 

 

1.08

 

 

1.18

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

1,702,902

 

 

$

1,516,191

 

 

$

1,503,521

 

 

$

1,492,852

 

 

$

1,409,265

 

Loans, net

 

1,016,787

 

 

974,614

 

 

961,756

 

 

942,356

 

 

866,841

 

Deposits

 

1,384,739

 

 

1,293,784

 

 

1,278,987

 

 

1,272,561

 

 

1,219,274

 

Total stockholders’ equity

 

137,213

 

 

134,304

 

 

130,217

 

 

128,172

 

 

113,161

 

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

(b) Non-GAAP measure - see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and reconciliation to GAAP

Colony Bankcorp, Inc.

Average Balance Sheet and Net Interest Analysis

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

2020

 

2019

 

Average
Balances

 

Income/
Expense

 

Yields/
Rates

 

Average
Balances

 

Income/
Expense

 

Yields/
Rates

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned income 1

$

1,037,242

 

 

$

26,989

 

 

5.22

%

 

$

828,234

 

 

$

22,783

 

 

5.52

%

Investment securities, taxable

335,836

 

 

$

3,746

 

 

2.24

%

 

376,161

 

 

$

4,596

 

 

2.45

%

Investment securities, tax-exempt 2

4,941

 

 

$

42

 

 

1.70

%

 

2,103

 

 

$

28

 

 

2.67

%

Deposits in banks and short term investments

122,885

 

 

$

332

 

 

0.54

%

 

61,429

 

 

$

704

 

 

2.30

%

Total interest-earning assets

1,500,904

 

 

31,109

 

 

4.16

%

 

1,267,927

 

 

28,111

 

 

4.45

%

Noninterest-earning assets

106,932

 

 

 

 

 

 

66,888

 

 

 

 

 

Total assets

$

1,607,836

 

 

 

 

 

 

$

1,334,815

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-earning demand and savings

$

747,273

 

 

$

1,342

 

 

0.36

%

 

$

596,212

 

 

$

1,974

 

 

0.66

%

Other time

323,073

 

 

2,279

 

 

1.41

%

 

355,731

 

 

2,780

 

 

1.57

%

Total interest-bearing deposits

1,070,346

 

 

3,621

 

 

0.68

%

 

951,943

 

 

4,754

 

 

1.00

%

Federal Home Loan Bank advances

41,038

 

 

468

 

 

2.29

%

 

46,218

 

 

506

 

 

2.20

%

Paycheck Protection Program Liquidity Facility

49,561

 

 

87

 

 

0.35

%

 

 

 

 

 

%

Other borrowings

38,745

 

 

688

 

 

3.56

%

 

24,229

 

 

669

 

 

5.54

%

Total other interest-bearing liabilities

129,344

 

 

1,243

 

 

1.93

%

 

70,447

 

 

1,175

 

 

3.35

%

Total interest-bearing liabilities

1,199,690

 

 

4,864

 

 

0.81

%

 

1,022,390

 

 

5,929

 

 

1.16

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

$

266,163

 

 

 

 

 

 

$

204,012

 

 

 

 

 

Other liabilities

6,223

 

 

 

 

 

 

3,571

 

 

 

 

 

Stockholders' equity

135,760

 

 

 

 

 

 

104,842

 

 

 

 

 

Total noninterest-bearing liabilities and stockholders' equity

408,146

 

 

 

 

 

 

312,425

 

 

 

 

 

Total liabilities and stockholders' equity

$

1,607,836

 

 

 

 

 

 

$

1,334,815

 

 

 

 

 

Interest rate spread

 

 

 

 

3.34

%

 

 

 

 

 

3.28

%

Net interest income

 

 

$

26,245

 

 

 

 

 

 

$

22,182

 

 

 

Net interest margin

 

 

 

 

3.51

%

 

 

 

 

 

3.51

%

 

 

Three Months Ended June 30,

 

2020

 

2019

 

Average
Balances

 

Income/
Expense

 

Yields/
Rates

 

Average
Balances

 

Income/
Expense

 

Yields/
Rates

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned income 3

$

1,094,299

 

 

$

13,699

 

 

5.02

%

 

$

866,841

 

 

$

12,313

 

 

5.70

%

Investment securities, taxable

331,378

 

 

1,757

 

 

2.13

%

 

385,374

 

 

2,399

 

 

2.50

%

Investment securities, tax-exempt 4

8,959

 

 

37

 

 

1.66

%

 

2,228

 

 

17

 

 

3.06

%

Deposits in banks and short term investments

159,902

 

 

48

 

 

0.12

%

 

59,894

 

 

369

 

 

2.47

%

Total interest-earning assets

1,594,538

 

 

15,541

 

 

3.91

%

 

1,314,337

 

 

15,098

 

 

4.61

%

Noninterest-earning assets

108,364

 

 

 

 

 

 

94,928

 

 

 

 

 

Total assets

$

1,702,902

 

 

 

 

 

 

$

1,409,265

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-earning demand and savings

$

766,692

 

 

$

407

 

 

0.21

%

 

$

624,196

 

 

$

1,136

 

 

0.73

%

Other time

311,334

 

 

996

 

 

1.28

%

 

368,116

 

 

1,496

 

 

1.63

%

Total interest-bearing deposits

1,078,026

 

 

1,403

 

 

0.52

%

 

992,312

 

 

2,632

 

 

1.06

%

Federal Home Loan Bank advances

36,500

 

 

211

 

 

2.32

%

 

49,070

 

 

374

 

 

3.06

%

Paycheck Protection Program Liquidity Facility

99,124

 

 

87

 

 

0.35

%

 

 

 

 

 

%

Other borrowings

38,694

 

 

299

 

 

3.10

%

 

24,229

 

 

267

 

 

4.42

%

Total other interest-bearing liabilities

174,318

 

 

597

 

 

1.37

%

 

73,299

 

 

641

 

 

3.51

%

Total interest-bearing liabilities

1,252,344

 

 

2,000

 

 

0.64

%

 

1,065,611

 

 

3,273

 

 

1.23

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

$

306,713

 

 

 

 

 

 

$

226,862

 

 

 

 

 

Other liabilities

6,632

 

 

 

 

 

 

3,631

 

 

 

 

 

Stockholders' equity

137,213

 

 

 

 

 

 

113,161

 

 

 

 

 

Total noninterest-bearing liabilities and stockholders' equity

450,558

 

 

 

 

 

 

343,654

 

 

 

 

 

Total liabilities and stockholders' equity

$

1,702,902

 

 

 

 

 

 

$

1,409,265

 

 

 

 

 

Interest rate spread

 

 

 

 

3.27

%

 

 

 

 

 

3.38

%

Net interest income

 

 

$

13,541

 

 

 

 

 

 

$

11,825

 

 

 

Net interest margin

 

 

 

 

3.41

%

 

 

 

 

 

3.61

%

 ________________________________________

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

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

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.

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

Colony Bankcorp, Inc.

Payroll Protection Program Analytics

 

Three Months Ended

 

Six Month Ended

 

June 30, 2020

 

June 30, 2020

Net interest margin

3.41

%

 

3.51

%

Paycheck protection program

(0.04)

%

 

(0.02)

%

Adjusted net interest margin

3.37

%

 

3.49

%

 

 

 

 

Net interest spread

3.27

%

 

3.34

%

Paycheck protection program

(0.06)

%

 

(0.03)

%

Adjusted net interest spread

3.21

%

 

3.31

%

 

 

 

 

Allowance for loan loss to total loans

0.92

%

 

0.92

%

Paycheck protection program

0.13

%

 

0.13

%

Adjusted allowance for loan loss to total loans

1.05

%

 

1.05

%

 

 

 

 

NPLs to total loans

1.07

%

 

1.07

%

Paycheck protection program

0.14

%

 

0.14

%

Adjusted NPLs to total loans

1.21

%

 

1.21

%

 

 

 

 

NPA to total assets

0.77

%

 

0.77

%

Paycheck protection program

0.06

%

 

0.06

%

Adjusted NPA to total assets

0.83

%

 

0.83

%

 

 

 

 

NPAs to total loans and other real estate

1.22

%

 

1.22

%

Paycheck protection program

0.17

%

 

0.17

%

Adjusted NPAs to total loans and other real estate

1.39

%

 

1.39

%

Colony Bankcorp, Inc.

Segment Reporting

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in thousands)

 

2020

 

2019

 

2020

 

2019

Banking Division

 

 

 

 

 

 

 

 

Net interest income

 

$

12,730

 

 

 

$

11,806

 

 

$

25,386

 

 

 

$

22,163

 

Provision for loan losses

 

2,200

 

 

 

179

 

 

4,156

 

 

 

310

 

Noninterest income

 

2,901

 

 

 

3,148

 

 

5,950

 

 

 

5,482

 

Noninterest expenses

 

11,045

 

 

 

12,168

 

 

22,712

 

 

 

21,194

 

Income taxes

 

320

 

 

 

525

 

 

688

 

 

 

1,224

 

Segment profit

 

$

2,066

 

 

 

$

2,082

 

 

$

3,780

 

 

 

$

4,917

 

 

 

 

 

 

 

 

 

 

Total segment assets

 

$

1,622,608

 

 

 

$

1,502,974

 

 

$

1,622,608

 

 

 

$

1,502,974

 

 

 

 

 

 

 

 

 

 

Mortgage Banking Division

 

 

 

 

 

 

 

 

Net interest income

 

$

82

 

 

 

$

19

 

 

$

116

 

 

 

$

19

 

Provision for loan losses

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

1,821

 

 

 

852

 

 

3,074

 

 

 

852

 

Noninterest expenses

 

1,697

 

 

 

846

 

 

2,892

 

 

 

846

 

Income taxes

 

43

 

 

 

6

 

 

54

 

 

 

6

 

Segment profit

 

$

163

 

 

 

$

19

 

 

$

244

 

 

 

$

19

 

 

 

 

 

 

 

 

 

 

Total segment assets

 

$

17,578

 

 

 

$

3,998

 

 

$

17,578

 

 

 

$

3,998

 

 

 

 

 

 

 

 

 

 

Small Business Specialty Lending Division

 

 

 

 

 

 

 

 

Net interest income

 

$

729

 

 

 

$

 

 

$

743

 

 

 

$

 

Provision for loan losses

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

121

 

 

 

 

 

380

 

 

 

 

Noninterest expenses

 

633

 

 

 

 

 

1,149

 

 

 

 

Income taxes

 

232

 

 

 

 

 

181

 

 

 

 

Segment loss

 

$

(15

)

 

 

$

 

 

$

(207

)

 

 

$

 

 

 

 

 

 

 

 

 

 

Total segment assets

 

$

137,382

 

 

 

$

 

 

$

137,382

 

 

 

$

 

 

 

 

 

 

 

 

 

 

Total Consolidated

 

 

 

 

 

 

 

 

Net interest income

 

$

13,541

 

 

 

$

11,825

 

 

$

26,245

 

 

 

$

22,182

 

Provision for loan losses

 

2,200

 

 

 

179

 

 

4,156

 

 

 

310

 

Noninterest income

 

4,843

 

 

 

4,000

 

 

9,404

 

 

 

6,334

 

Noninterest expenses

 

13,375

 

 

 

13,014

 

 

26,753

 

 

 

22,040

 

Income taxes

 

595

 

 

 

531

 

 

923

 

 

 

1,230

 

Segment profit

 

$

2,214

 

 

 

$

2,101

 

 

$

3,817

 

 

 

$

4,936

 

 

 

 

 

 

 

 

 

 

Total segment assets

 

$

1,777,568

 

 

 

$

1,506,972

 

 

$

1,777,568

 

 

 

$

1,506,972

 

Colony Bankcorp, Inc.

Consolidated Balance Sheets

 

 

June 30, 2020

 

December 31, 2019

(dollars in thousands)

 

(unaudited)

 

(audited)

ASSETS

 

 

 

 

Cash and due from banks

 

$

17,313

 

 

 

$

15,570

 

 

Interest-bearing deposits in banks and federal funds sold

 

173,733

 

 

 

88,522

 

 

Cash and cash equivalents

 

191,046

 

 

 

104,092

 

 

Investment securities available for sale, at fair value

 

373,610

 

 

 

347,332

 

 

Other investments, at cost

 

3,954

 

 

 

4,288

 

 

Loans held for sale

 

16,537

 

 

 

10,076

 

 

Loans, net of unearned income

 

1,113,977

 

 

 

968,814

 

 

Allowance for loan losses

 

(10,289

)

 

 

(6,863

)

 

Loans, net

 

1,103,688

 

 

 

961,951

 

 

Premises and equipment

 

33,276

 

 

 

32,482

 

 

Other real estate

 

1,769

 

 

 

1,320

 

 

Goodwill and other intangible assets

 

18,670

 

 

 

19,533

 

 

Other assets

 

35,018

 

 

 

34,239

 

 

Total assets

 

$

1,777,568

 

 

 

$

1,515,313

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Deposits:

 

 

 

 

Noninterest-bearing

 

$

328,850

 

 

 

$

232,635

 

 

Interest-bearing

 

1,092,908

 

 

 

1,061,107

 

 

Total deposits

 

1,421,758

 

 

 

1,293,742

 

 

Federal Home Loan Bank advances

 

36,500

 

 

 

47,000

 

 

Paycheck Protection Program Liquidity Facility

 

134,500

 

 

 

 

 

Other borrowed money

 

38,292

 

 

 

38,792

 

 

Accrued expenses and other liabilities

 

7,924

 

 

 

5,273

 

 

Total liabilities

 

1,638,974

 

 

 

1,384,807

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

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

 

9,499

 

 

 

9,499

 

 

Paid in capital

 

43,199

 

 

 

43,667

 

 

Retained earnings

 

78,895

 

 

 

76,978

 

 

Accumulated other comprehensive income, net of tax

 

7,001

 

 

 

362

 

 

Total stockholders’ equity

 

138,594

 

 

 

130,506

 

 

Total liabilities and stockholders’ equity

 

$

1,777,568

 

 

 

$

1,515,313

 

 

 

Colony Bankcorp, Inc.

 

 

 

 

 

 

 

 

Consolidated Statements of Income (unaudited)

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

(dollars in thousands, except per share data)

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

Loans, including fees

 

$

13,699

 

 

$

12,313

 

 

$

26,989

 

 

$

22,783

 

Investment securities, including tax exempt of $37, $6, $43, and $9, respectively

 

1,794

 

 

2,416

 

 

3,788

 

 

4,624

 

Deposits in banks and short term investments

 

48

 

 

369

 

 

332

 

 

704

 

Total interest income

 

15,541

 

 

15,098

 

 

31,109

 

 

28,111

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

Deposits

 

1,403

 

 

2,632

 

 

3,621

 

 

4,754

 

Federal Home Loan Bank advances

 

211

 

 

246

 

 

468

 

 

506

 

Paycheck Protection Program Liquidity Facility

 

87

 

 

 

 

87

 

 

 

Other borrowings

 

299

 

 

395

 

 

688

 

 

669

 

Total interest expense

 

2,000

 

 

3,273

 

 

4,864

 

 

5,929

 

Net interest income

 

13,541

 

 

11,825

 

 

26,245

 

 

22,182

 

Provision for loan losses

 

2,200

 

 

179

 

 

4,156

 

 

310

 

Net interest income after provision for loan losses

 

11,341

 

 

11,646

 

 

22,089

 

 

21,872

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

 

 

 

Service charges on deposits

 

886

 

 

1,070

 

 

2,190

 

 

2,034

 

Other service charges, commissions and fees

 

1,522

 

 

1,110

 

 

2,785

 

 

2,010

 

Mortgage fee income

 

1,827

 

 

544

 

 

3,089

 

 

687

 

Gain on sale of SBA loans

 

46

 

 

 

 

256

 

 

 

Gain on sale of securities

 

 

 

65

 

 

293

 

 

65

 

Other

 

562

 

 

1,211

 

 

791

 

 

1,538

 

Total noninterest income

 

4,843

 

 

4,000

 

 

9,404

 

 

6,334

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,729

 

 

6,292

 

 

15,227

 

 

11,663

 

Occupancy and equipment

 

1,316

 

 

1,144

 

 

2,634

 

 

2,169

 

Acquisition related

 

220

 

 

1,928

 

 

507

 

 

1,961

 

Other

 

4,110

 

 

3,650

 

 

8,385

 

 

6,247

 

Total noninterest expense

 

13,375

 

 

13,014

 

 

26,753

 

 

22,040

 

Income before income taxes

 

2,809

 

 

2,632

 

 

4,740

 

 

6,166

 

Income taxes

 

595

 

 

531

 

 

923

 

 

1,230

 

Net income

 

$

2,214

 

 

$

2,101

 

 

$

3,817

 

 

$

4,936

 

Earnings per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

 

$

0.23

 

 

$

0.40

 

 

$

0.56

 

Diluted

 

0.23

 

 

0.23

 

 

0.40

 

 

0.56

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

9,498,783

 

 

9,089,461

 

 

9,498,783

 

 

8,764,909

 

Diluted

 

9,498,783

 

 

9,089,461

 

 

9,498,783

 

 

8,764,909

 

Colony Bankcorp, Inc.

Quarterly Comparison

 

 

2020

 

2019

(in thousands, except per share data)

 

Second
Quarter

 

First
Quarter

 

Fourth
Quarter

 

Third
Quarter

 

Second
Quarter

Assets

 

$

1,777,568

 

 

$

1,510,048

 

 

$

1,515,313

 

 

$

1,477,682

 

 

$

1,506,972

 

Loans, net

 

1,103,688

 

 

980,642

 

 

961,951

 

 

951,559

 

 

927,917

 

Deposits

 

1,421,758

 

 

1,293,076

 

 

1,293,742

 

 

1,251,273

 

 

1,297,723

 

Total equity

 

138,594

 

 

136,072

 

 

130,506

 

 

129,651

 

 

126,509

 

Net income

 

2,214

 

 

1,603

 

 

2,757

 

 

2,518

 

 

2,101

 

Net income per basic share

 

0.23

 

 

0.17

 

 

0.29

 

 

0.27

 

 

0.23

 

 

 

 

 

 

 

 

 

 

 

 

Key Performance Ratios:

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.52

%

 

0.42

%