As of June 30, 2020, the DIF reserve ratio fell to 1.30%, below the statutory minimum of 1.35%. The FDIC, as required under the Federal Deposit Insurance Act, established a plan on September 15, 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35% within eight years. On October 18, 2022, the FDIC adopted an amended restoration plan to increase the likelihood that the reserve ratio would be restored to at least 1.35 percent by September 30, 2028. The FDIC’s amended restoration plan increases the initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning in the first quarterly assessment period of 2023. The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including the Bank, if the DIF reserve ratio is not restored as projected.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by a bank’s federal regulatory agency. In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company.

Standards for Safety and Soundness. The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality.

The federal banking agencies have adopted regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to implement these required standards. These guidelines set forth the safety and soundness standards used to identify and address problems at insured depository institutions before capital becomes impaired. Under the regulations, if a regulator determines that a bank fails to meet any standards prescribed by the guidelines, the regulator may require the bank to submit an acceptable plan to achieve compliance, consistent with deadlines for the submission and review of such safety and soundness compliance plans.

Anti-Money Laundering. A continued focus of governmental policy relating to financial institutions in recent years has been combating money laundering and terrorist financing. The USA PATRIOT Act broadened the application of anti-money laundering regulations to apply to additional types of financial institutions such as broker-dealers, investment advisors and insurance companies, and strengthened the ability of the U.S. Government to help prevent, detect and prosecute international

money laundering and the financing of terrorism. The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including state member banks: (i) establish an anti-money laundering program that includes training and audit components; (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S. owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships. Failure of a financial institution to comply with the USA PATRIOT Act’s requirements could have serious legal and reputational consequences for the institution. The Bank has augmented its systems and procedures to meet the requirements of these regulations and will continue to revise and update its policies, procedures and controls to reflect changes required by law.

FinCEN has adopted rules that require financial institutions to obtain beneficial ownership information with respect to legal entities with which such institutions conduct business, subject to certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.

Banking regulators will consider compliance with the Act’s money laundering provisions in acting upon acquisition and merger proposals. Bank regulators routinely examine institutions for compliance with these obligations and have been active in imposing cease and desist and other regulatory orders and money penalty sanctions against institutions found to be violating these obligations. Sanctions for violations of the Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1 million. On January 1, 2021, Congress passed federal legislation that made sweeping changes to federal anti-money laundering laws, including changes that will be implemented in 2021 and subsequent years.

Economic Sanctions. The Office of Foreign Assets Control (“OFAC”) is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress. OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons List. If we find a name on any transaction, account or wire transfer that is on an OFAC list, we must undertake certain specified activities, which could include blocking or freezing the account or transaction requested, and we must notify the appropriate authorities.

Concentrations in Lending. During 2006, the federal bank regulatory agencies released guidance on “Concentrations in Commercial Real Estate Lending” (the “Guidance”) and advised financial institutions of the risks posed by commercial real estate (“CRE”) lending concentrations. The Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations. Higher allowances for loan losses and capital levels may also be required. The Guidance is triggered when CRE loan concentrations exceed either:

•total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk-based capital; or

•total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk-based capital.

The Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type. We have always had exposures to loans secured by commercial real estate due to the nature of our markets and the loan needs of both retail and commercial customers. We believe our long term experience in CRE lending, underwriting policies, internal controls, and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the Guidance.

Community Reinvestment Act. The Bank is subject to the provisions of the Community Reinvestment Act (“CRA”), which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods. The FDIC’s assessment of the Bank’s CRA record is made available to the public. Further, a less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities and prevent a company from becoming or remaining a financial holding company. Following the enactment of the Gramm-Leach-Bliley Act (“GLB”), CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank’s primary federal regulator. A bank holding company will not be permitted to become or remain a financial holding company and no new activities authorized under GLB may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination. Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation. The Bank has a rating of “Satisfactory” in its most recent CRA evaluation.

On May 5, 2022, the OCC, FRB, and FDIC issued a notice of proposed rulemaking to provide for a coordinated approach to modernize their respective CRA regulations, such that all banks will be subject to the same set of CRA rules. No final rule has been issued, but the rulemaking may affect the Bank’s CRA compliance obligations in the future.

Privacy and Data Security. The GLB generally prohibits disclosure of consumer information to non-affiliated third parties unless the consumer has been given the opportunity to object and has not objected to such disclosure. Financial institutions are further required to disclose their privacy policies to customers annually. Financial institutions, however, will be required to comply with state law if it is more protective of consumer privacy than the GLB. The GLB also directed federal regulators, including the FDIC, to prescribe standards for the security of consumer information. The Bank is subject to such standards, as well as standards for notifying customers in the event of a security breach. Under federal law, the Bank must disclose its privacy policy to consumers, permit customers to opt out of having nonpublic customer information disclosed to third parties in certain circumstances and allow customers to opt out of receiving marketing solicitations based on information about the customer received from another subsidiary. States may adopt more extensive privacy protections. We are similarly required to have an information security program to safeguard the confidentiality and security of customer information and to ensure proper disposal. Customers must be notified when unauthorized disclosure involves sensitive customer information that may be misused. On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.”

Consumer Regulation. Activities of the Bank are subject to a variety of statutes and regulations designed to protect consumers. These laws and regulations include, among numerous other things, provisions that:

•limit the interest and other charges collected or contracted for by the Bank, including new rules respecting the terms of credit cards and of debit card overdrafts;

•govern the Bank’s disclosures of credit terms to consumer borrowers;

•require the Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the community it serves;

•prohibit the Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit;

•govern the manner in which the Bank may collect consumer debts; and

•prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.

Mortgage Regulation. The CFPB adopted a rule that implements the ability-to-repay and qualified mortgage provisions of the Dodd-Frank Act (the “ATR/QM rule”), which requires lenders to consider, among other things, income, employment status, assets, payment amounts, and credit history before approving a mortgage, and provides a compliance “safe harbor” for lenders that issue certain “qualified mortgages.” The ATR/QM rule defines a “qualified mortgage” to have certain specified characteristics, and generally prohibit loans with negative amortization, interest-only payments, balloon payments, or terms exceeding 30 years from being qualified mortgages. The rule also establishes general underwriting criteria for qualified mortgages, including that monthly payments be calculated based on the highest payment that will apply in the first five years of the loan and that the borrower have a total debt-to-income ratio that is less than or equal to 43%. While “qualified mortgages” will generally be afforded safe harbor status, a rebuttable presumption of compliance with the ability-to-repay requirements will attach to “qualified mortgages” that are “higher priced mortgages” (which are generally subprime loans). In addition, the securitizer of asset-backed securities must retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities, unless subject to an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages.”

The CFPB has also issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) as well as integrated mortgage disclosure rules. In addition, the CFPB has issued rules that require servicers to comply with new standards and practices with regard to: error correction; information disclosure; force-placement of insurance; information management policies and procedures; requiring information about mortgage loss mitigation options be provided to delinquent borrowers; providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and evaluating borrowers’ applications for available loss mitigation options. These rules also address initial rate adjustment notices for adjustable-rate mortgages (ARMs), periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts.

In 2020, the CARES Act granted certain forbearance rights and protection against foreclosure to borrowers with a “federally backed mortgage loan,” including certain first or subordinate lien loans designed principally for the occupancy of one to four families. These consumer protections continued during the COVID 19 pandemic emergency.

Non-Discrimination Policies. The Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (the “ECOA”) and the Fair Housing Act (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. The Department of Justice (the “DOJ”), and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.

LIBOR. On March 15, 2022, Congress enacted the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) to address references to LIBOR in contracts that (i) are governed by U.S. law; (ii) will not mature before June 30, 2023; and (iii) lack fallback provisions providing for a clearly defined and practicable replacement for LIBOR. On December 16, 2022, the FRB adopted a final rule to implement the LIBOR Act by identifying benchmark rates based on SOFR (Secured Overnight Financing Rate) that will replace LIBOR in certain financial contracts after June 30, 2023. The final rule identifies replacement benchmark rates based on SOFR to replace overnight, one-month, three-month, six-month, and 12-month LIBOR in contracts subject to the LIBOR Act.

Item 1A.

Risk Factors

In addition to the other information contained in this Annual Report, you should carefully consider the risks described below, as well as the risk factors and uncertainties discussed in our other public filings with the SEC under the caption “Risk Factors” in evaluating us and our business and making or continuing an investment in our stock. Our operations and financial results are subject to various risks and uncertainties, including, but not limited to, the material risks described below. Many of these risks are beyond our control although efforts are made to manage those risks while simultaneously optimizing operational and financial results. The occurrence of any of the following risks, as well as risks of which we are currently unaware or currently deem immaterial, could materially and adversely affect our assets, business, cash flows, condition (financial or otherwise), liquidity, prospects, results of operations and the trading price of our common stock. It is impossible to predict or identify all such factors and, as a result, you should not consider the following factors to be a complete discussion of the risks, uncertainties and assumptions that could materially and adversely affect our assets, business, cash flows, condition (financial or otherwise), liquidity, prospects, results of operations and the trading price of our common stock. ~~These risks may also be heightened by the disruption and uncertainty resulting from COVID-19.~~

In addition, certain statements in the following risk factors constitute forward-looking statements. Please refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” beginning on page 1 of this Annual Report.

Risks Related to Our Business

~~Our business may be adversely affected by downturns~~Difficult or volatile conditions in ~~our~~the national financial markets and local economies ~~and our concentration in Georgia makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could~~may adversely affect our results of operations and financial condition.

Our ~~operations~~business and financial performance are ~~significantly~~vulnerable to weak economic conditions in the financial markets and economic conditions generally or specifically in the state of Georgia, the principal market in which we conduct business. We are operating in a challenging and uncertain economic environment. The global credit and financial markets have from time to time experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, high rates of inflation, the U.S. government’s decisions regarding its debt ceiling and the possibility that the U.S. could default on its debt obligations, fluctuations in debt and equity capital markets, increased delinquencies on mortgage, commercial and consumer loans, residential and commercial real estate price declines, and lower home sales and commercial activity, changes in securities markets and uncertainty about economic stability. As a result, financial institutions continue to be affected by uncertainty in the real estate market, the credit markets, and the national financial market generally. We retain direct exposure to the commercial and ~~local~~residential real estate markets, and we are affected by events in these markets. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the current conflict between Russia and Ukraine, which is increasing volatility in commodity and energy prices, creating supply chain issues and causing instability in financial markets. Sanctions imposed by the United States and other countries in response to such conflict could further adversely impact the financial markets and the global economy, and any economic ~~conditions. Substantially~~countermeasures by the affected countries or others could exacerbate market and economic instability.

Moreover, substantially all of our loans are to businesses and individuals in Georgia, and all of our branches and most of our deposit customers are also located in this area. As a result, local economic conditions significantly affect the demand for loans and other products we offer to our customers (including real estate, commercial and construction loans), the ability of borrowers to repay these loans and the value of the collateral securing these loans. A decline in the economies in which we operate could have a material adverse effect on our business, financial condition and results of operations, including, but not limited to the following:

•demand for our loans, deposits and services may decline;

•loan delinquencies, problem assets and foreclosures may increase;

•weak economic conditions may continue to limit the demand for loans by creditworthy borrowers, limiting our capacity to leverage our retail deposits and maintain our net interest income;

•collateral for our loans may decline further in value; and

•the amount of our low-cost or non-interest bearing deposits may decrease.

Strong competition and changing banking environment may limit growth and profitability.

Competition in the banking and financial services industry is intense. We compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment

banking firms operating locally and elsewhere, and non-traditional financial institutions, including fintech companies, non-depository financial services providers. Many of these competitors (whether regional or national institutions) have substantially greater resources and lending limits than we have and may offer certain services that we do not or cannot provide. Additionally, non-traditional financial institutions may not have the same regulatory requirements or burdens as we do, despite playing a rapidly increasing role in the financial services industry including providing services previously limited to commercial banks. Such competition could ultimately limit our growth, profitability and shareholder value, as increased competition in our markets may result in reduced loans, deposits and commissions and brokers’ fees, gains on sales, servicing fees, as well as reduced net interest margin and profitability. If we are unable to successfully compete in our market areas and adapt to the ever changing banking environment, we may be unable to continue to grow our business, and our financial condition and results of operations may be adversely affected. We also compete with many forms of payments offered by both bank and non-bank providers, including a variety of new and evolving alternative payment mechanisms, systems and products, such as aggregators and web-based and wireless payment platforms or technologies, digital or “crypto” currencies, prepaid systems and payment services targeting users of social networks, communications platforms and online gaming. Our future success may depend, in part, on our ability to use technology competitively to offer products and services that provide convenience to customers and create additional efficiencies in our operations.

Some of our competitors have reduced or eliminated certain service charges on deposit accounts, including overdraft fees, and additional competitors may be willing to reduce or eliminate service or other fees in order to attract additional customers. If the Company chooses to reduce or eliminate certain categories of fees, including those related to deposit accounts, fee income related to these products and services would be reduced. If the Company chooses not to take such actions, we may be at a competitive disadvantage in attracting customers for certain fee producing products.

Fluctuations in interest rates may impact net interest income and otherwise negatively impact our financial condition and results of operations.

Net interest income, which is the difference between the interest income that we earn on interest-earning assets and the interest expense that we pay on interest-bearing liabilities, is a major component of our income and our primary source of revenue from our operations. A further narrowing of interest rate spreads could adversely affect our earnings and financial condition. We cannot control or predict with certainty changes in interest rates. Regional and local economic conditions, competitive pressures and the policies of regulatory authorities, including monetary policies of the Federal Reserve, affect interest income and interest expense.

~~Effective March 2020,~~Interest rates are highly sensitive to many factors including, without limitation: the rate of inflation; economic conditions; federal monetary policies; and stability of domestic and foreign markets. Interest rates increased significantly in 2022 as the Federal Reserve ~~lowered the target range for the federal funds rate~~attempted to ~~a range from 0 to 0.25 percent~~slow economic growth and counteract rising inflation. Further changes in ~~response to the economic disruption that occurred at the outset of the COVID-19 pandemic, which has continued into 2022. We expect a long duration of reduced~~ interest rates ~~to negatively impact our net interest income, margin, cost of borrowing~~ and ~~future profitability and to have a material adverse effect on our financial results. However, we expect~~monetary policy reportedly are dependent upon the Federal ~~Reserve~~Reserve’s assessment of economic data as it becomes available, though the rising interest rate environment is expected to ~~raise rates more than once~~continue in ~~the next twelve months.~~ 2023. Increasing interest rates can have a negative impact on our business by reducing the amount of money our customers borrow or by adversely affecting their ability to repay outstanding loan balances that may increase due to adjustments in their variable rates. This may lead to an increase in nonperforming assets and a reduction of income recognized, which could have a material adverse effect on our results of operations and cash flows. In addition, in a rising interest rate environment we may have to offer more attractive interest rates to depositors to compete for deposits, or pursue other sources of liquidity, such as wholesale funds. Higher income volatility from changes in interest rates and spreads to benchmark indices could result in a decrease in net interest income and a decrease in current fair market values of our assets. Fluctuations in interest rates impacts both the level of income and expense recorded on most of our assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities, which in turn could have a material adverse effect on our net income, operating results, asset quality, liquidity, or financial condition. A prolonged period of volatile and unstable market conditions would likely increase our funding costs and negatively affect market risk mitigation strategies.

We have ongoing policies and procedures designed to manage the risks associated with changes in market interest rates and actively manage these risks through hedging and other risk mitigation strategies. However, these risks are many times outside of our control, and if our assumptions are wrong or overall economic conditions are significantly different than anticipated, our risk mitigation techniques may be ineffective or costly.

~~The COVID-19 pandemic has adversely impacted, and will likely continue to adversely impact, our business, financial condition, liquidity, capital and results of operations.~~

The extent and duration to which the continuing COVID-19 pandemic will impact our business in the future is unknown and will depend on future developments, which are highly uncertain and outside our control. These developments include the duration and severity of the pandemic (including the possibility of further surges ofnew or existing COVID-19 variants of concern), supply chain disruptions, decreased demand for our products and services or those of our borrowers, which could increase our credit risk, rising inflation, our ability to maintain sufficient qualified personnel due to labor shortages, talent attrition, employee illness, quarantine, willingness to return to work, face-coverings and other safety requirements, or travel and other restrictions, and the actions taken by governments, businesses and individuals to contain the impact of COVID-19, as well as further actions taken by governmental authorities to limit the resulting economic impact. It is also possible that the pandemic and its aftermath will lead to a prolonged economic slowdown in sectors disproportionately affected by the pandemic or recession in the U.S. economy or the world economy in general.

Inflation could negatively impact our business, our profitability and our stock price.

Inflation has continued rising in 2022 at levels not seen for over 40 years. Inflationary pressures remained elevated throughout 2022 and are likely to continue into 2023. Prolonged periods of inflation may impact our profitability by negatively impacting our fixed costs and expenses, including increasing funding costs and expense related to talent acquisition and retention, and negatively impacting the demand for our products and services. Additionally, inflation may lead to a decrease in consumer and clients purchasing power and negatively affect the need or demand for our products and services. If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could decrease our appetite for new credit extensions. These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer.

19Our future success is largely dependent upon our ability to successfully execute our business strategy.

~~Interest rates~~Our future success, including our ability to achieve our growth and profitability goals, is dependent on the ability of our management team to execute on our ~~outstanding financial instruments might be subject~~long-term business strategy, which requires them to, ~~change based on developments related~~among other things: maintain and enhance our reputation; attract and retain experienced and talented bankers in each of our markets; maintain adequate funding sources, including by continuing to ~~LIBOR, which~~attract stable, low-cost deposits; enhance our market penetration in our metropolitan markets and maintain our leadership position in our community markets; improve our operating efficiency; implement new technologies to enhance the client experience and keep pace with our competitors; attract and maintain commercial banking relationships with well-qualified businesses, real estate developers and investors with proven track records in our market areas; attract sufficient loans that meet prudent credit standards; maintain adequate liquidity and regulatory capital and comply with applicable federal and state banking regulations; manage our credit, interest rate and liquidity risks; develop new, and grow our existing, streams of noninterest income; oversee the performance of third-party service providers that provide material services to our business; and control expenses in line with current projections.

Failure to achieve these strategic goals could adversely affect our ~~revenue, expenses, and the value of~~ability to successfully implement our ~~financial instruments.~~

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. The ICE Benchmark Administration (IBA), the administrator of LIBOR, announced on November 30, 2020, that it would cease publishing the one-week and two-month LIBOR rates on December 31, 2021, but would continue publishing the one-, three-, six-, and twelve-month LIBOR rates until June 30, 2023. Regardless, the federal banking agencies also issued guidance on November 30, 2020, encouraging banks to (i) stop using LIBOR in new financial contracts no later than December 31, 2021; and (ii) either use a rate other than LIBOR or include clear language defining the alternative rate that will be applicable after LIBOR’s discontinuation. At this time, it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions for the calculation of LIBOR. Similarly, it is not possible to predict whether LIBOR will continue to be viewed as an acceptable market benchmark prior to its 2023 retirement, what rate or rates may become accepted alternatives to LIBOR, or the effect of any such changes in views or alternatives may be on the markets for LIBOR-indexed financial instruments.

~~In particular, regulators, industry groups and certain committees (e.g.~~, the Alternative Reference Rates Committee) have, among other things, published recommended fallback language for LIBOR-linked financial instruments, identified recommended alternatives for certain LIBOR rates (e.g., the Secured Overnight Financing Rate as the recommended alternative to U.S. Dollar LIBOR), and proposed implementations of the recommended alternatives in floating rate instruments. At this time, it is not possible to predict whether these specific recommendations and proposals will be broadly accepted, whether they will continue to evolve, and what the effect of their implementation may be on the markets for floating-rate financial instruments.

~~The uncertainty regarding the future of LIBOR as well as the transition from LIBOR to another benchmark rate or rates is complex~~business strategies and could ~~have a range of adverse effects on~~negatively impact our business, growth prospects, financial condition and results of operations. ~~In particular, any such transition could:~~

•~~adversely affect the interest rates paid or received on,~~Further, if we do not manage our growth effectively, our business, financial condition, results of operations and ~~the revenue~~future prospects could be negatively affected, and ~~expenses associated with,~~we may not be able to continue to implement our business strategy and the value of Colony’s floating rate obligations, loans, deposits, derivatives and other financial instruments tied to LIBOR rates, or other securities or financial arrangements given LIBOR’s role in determining market interest rates globally;

•~~prompt inquiries or other actions from regulators in respect of~~successfully conduct our ~~preparation and readiness for the replacement of LIBOR with an alternative reference rate;~~

•result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language, or the absence of such language, in LIBOR-based securities and loans;

•result in customer uncertainty and disputes around how variable rates should be calculated in light of the foregoing, thereby damaging our reputation and resulting in a loss of customers and additional costs to us; and

•require the transition to or development of appropriate systems and analytics to effectively transition Colony’s risk management processes from LIBOR-based products to those based on the applicable alternative pricing benchmark, such as SOFR.

The manner and impact of this transition, as well as the effect of these developments on Colony’s funding costs, loan, and investment and trading securities portfolios, asset liability management and business is uncertain.operations.

Liquidity risks could affect operations and jeopardize our business, financial condition, and results of operations.

Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and/or investment securities and through other sources could have a substantial negative effect on our liquidity. Our most important source of funds consists of our customer deposits. Such deposit balances can decrease when customers perceive alternative investments, such as the stock market, as providing a better risk/return tradeoff. If customers move money out of bank deposits and into other investments, we could lose a relatively low cost source of funds, which would require us to seek wholesale funding alternatives in order to continue to grow, thereby increasing our funding costs and reducing our net interest income and net income. Moreover, competition among U.S. banks and non-banks for customer deposits is intense and may increase the cost of deposits (particularly in an elevated rate environment) or prevent new deposits and may otherwise negatively affect our ability to grow our deposit base. In addition, our access to deposits may be affected by the liquidity and/or cash flow needs of depositors, which may be exacerbated in an inflationary, recessionary, or elevated rate environment. This may cause our deposit accounts to decrease in the future, and any such decrease could have a material adverse impact on our sources of funding.

Other primary sources of funds consist of cash from operations, investment maturities and sales, sale of loans and proceeds from the issuance and sale of our equity securities to investors. Additional liquidity is provided by our ability to borrow from the Federal Reserve Bank of Atlanta and the Federal Home Loan Bank of Atlanta. We also may borrow from third-party lenders from time to time. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry.

Any decline in available funding could adversely impact our ability to continue to implement our strategic plan, including our ability to originate loans, invest in securities, meet our expenses, or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

Our business depends on our ability to successfully manage our asset quality and credit risk.

We are subject to the risk of losses resulting from the failure of borrowers, guarantors and related parties to pay us the interest and principal amounts due on their loans. Although we maintain well-defined credit policies and credit underwriting and monitoring and collection procedures, these policies and procedures may not prevent losses, as some of these risks are outside of our control, particularly during periods in which the local, regional or national economy suffers a general decline. Moreover,

the future effects of the continued elevated inflationary and interest rate environment on economic activity could negatively affect the collateral values associated with our existing loans, the ability to liquidate the real estate collateral securing our residential and commercial real estate loans, our ability to maintain loan origination volume and to obtain additional financing, the future demand for or profitability of our lending and services, and the financial condition and credit risk of our customers. Further, in the event of delinquencies, regulatory changes and policies designed to protect borrowers may slow or prevent us from making our business decisions or may result in a delay in our taking certain remediation actions, such as foreclosure. If borrowers fail to repay their loans, our financial condition and results of operations would be adversely affected.

Our commercial real estate, real estate construction, and commercial business loans increase our exposure to credit risks.

~~Over the last several years, we have increased our non-residential lending in order to improve the yield and reduce the average duration of our assets.~~ At December 31, ~~2021,~~2022, our portfolio of commercial real estate and commercial, financial and agricultural loans totaled $1.4 billion or 82.3% of total loans compared to $1.1 billion, or 82.7% of total loans ~~compared $854.9 million, or 80.7% of total loans of total loans~~ at December 31, ~~2020.~~2021. At December 31, ~~2021,~~2022, the amount of nonperforming commercial real estate and commercial, financial and agricultural loans was ~~$1.6~~$3.0 million , or ~~28.9%~~52.6% of total nonperforming loans. These loans may expose us to a greater risk of non-payment and loss than residential real estate loans because, in the case of commercial loans, repayment often depends on the successful operation and earnings of the borrower's businesses and, in the case of consumer loans, the applicable collateral is subject to rapid depreciation. Additionally, commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. If loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest due on the loan, which could cause us to increase our provision for loan losses and adversely affect our financial condition and operating results.

Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loans and other losses.

At December 31, 2022, approximately 86.1% of our loan portfolio was comprised of loans with real estate as a primary or secondary component of collateral. As a result, adverse developments affecting real estate values in our market areas could increase the credit risk associated with our real estate loan portfolio. The market value of real estate can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located. Adverse changes affecting real estate values and the liquidity of real estate in one or more of our markets could increase the credit risk associated with our loan portfolio, significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses, which could result in losses that would adversely affect credit quality, profitability, financial condition, and results of operation. Such declines and losses would have a material adverse impact on our business, results of operations and growth prospects. In addition, if hazardous or toxic substances are found on properties pledged as collateral, the value of the real estate could be impaired. If we foreclose on and take title to such properties, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may also require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property.

Our provision and allowance for loan losses may not cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition and results of operations.

We ~~derive~~make various assumptions and judgments about the ~~most significant portion~~collectability of our ~~revenues from our lending activities. When we lend money, commit to lend money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, which is~~loan and lease portfolio and utilize these assumptions and judgments when determining the ~~risk of losses if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts. We estimate~~provision and ~~maintain an~~ allowance for loan losses, which is a reserve established through a provision for loan losses charged to expenses, which represents management's best estimate of probable credit losses that have been incurred within the existing portfolio of loans, as described under Note 5 of Notes to Consolidated Financial Statements in this Report and under “Allowance for Loan Losses” under “Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of this Report.

~~The allowance, in the judgment of management, is established to reserve for estimated loan losses and risks inherent in the loan portfolio.~~losses. The determination of the appropriate level of the provision and allowance for loan losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks ~~using~~suing existing qualitative and quantitative information and future trends, all of which may undergo material ~~changes, as we have experienced as a result of the COVID-19 pandemic and continue to experience the after-effects of the pandemic through supply chain disruptions. Changes~~changes. Deterioration in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans ~~risk ratings,~~ and other factors, both within and outside of our control, ~~including the impact of COVID-19,~~ may require an increase in the amount reserved in the allowance for loan losses.

Because the risk rating of the loans is dependent on some subjective information and subject to changes in the borrower's credit risk profile, evolving local market conditions and other factors, it can be difficult for us to predict the effects that those factors

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will have on the classifications assigned to the loan portfolio, and thus difficult to anticipate the velocity or volume of the migration of loans through the classification process and effect on the level of the allowance for loan losses. AnIn addition, due to the declining economic conditions, our customers may not be able to repay their loans according to the original terms, and the collateral securing the payment of those loans may be insufficient to pay any remaining loan balance. While we maintain our allowance to provide for loan defaults and non-performance, losses may exceed the value of the collateral securing the loans and the allowance may not fully cover any excess loss. In addition, bank regulatory agencies periodically review our provision and the total allowance for loan losses and may require an increase in the allowance for loan losses ~~would~~or future provisions for loan losses, based on judgments different than those of management. Any increases in the provision or allowance for loan losses will result in a decrease in our net income and, potentially, capital, and ~~could~~may have a material adverse effect on our ~~capital,~~ financial condition ~~and~~or results of operations. ~~Accordingly, we monitor~~

We may not be able to meet our unfunded credit commitments, or adequately reserve for losses associated with our unfunded credit commitments.

A commitment to extend credit is a formal agreement to lend funds to a client as long as there is no violation of any condition established under the agreement. The borrowing needs of our customers may exceed our expected funding requirements, especially during a challenging economic environment when our client companies may be more dependent on our credit ~~quality and~~commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financings from other sources. Any failure to meet our ~~reserve requirements and use that as~~unfunded credit commitments in accordance with the borrowing needs of our customers may have a ~~basis for capital planning and other purposes. See “Item 7. Management's Discussion and Analysis~~material adverse effect on our business, financial condition, results of ~~Financial Condition and Results of Operations – Capital Requirements” of this Report for further information.~~operations or reputation.

We may not be able to continue growing our business, particularly if we cannot increase loans and deposits through organic growth.

Our ability to continue to grow successfully will depend to a significant extent on our capital resources. It also will depend, in part, upon our ability to attract deposits and grow our loan portfolio and investment opportunities and on whether we can continue to fund growth while maintaining cost controls and asset quality, as well as on other factors beyond our control, such as national, regional and local economic conditions and interest rate trends.

We use brokered deposits which may be an unstable and/or expensive deposit source to fund earning asset growth.

We use brokered deposits, as a source of funding to support our asset growth and augment deposits generated from our branch network, which are our principal source of funding. We have established policies and procedures with respect to the use of brokered deposits, which require, among other things, that (i) we limit the amount of brokered deposits as a percentage of total assets, and (ii) our asset liability committee monitors our use of brokered deposits on a regular basis, including interest rates and the total volume of such deposits in relation to our total assets. In the event that our funding strategies call for the use of brokered deposits, there can be no assurance that such sources will be available, or will remain available, or that the cost of such funding sources will be reasonable. Additionally, if the Bank is no longer considered well-capitalized, our ability to access new brokered deposits or retain existing brokered deposits could be affected by market conditions, regulatory requirements or a combination thereof, which could result in most, if not all, brokered deposit sources being unavailable. The inability to utilize brokered deposits as a source of funding could have an adverse effect on our financial position, results of operations and liquidity.

We hold certain intangible assets that in the future could be classified as either partially or fully impaired, which would reduce our earnings and the book values of these assets.

Pursuant to applicable accounting requirements, we are required to periodically test our goodwill and core deposit intangible assets for impairment. The impairment testing process considers a variety of factors, including the current market price of our common shares, the estimated net present value of our assets and liabilities and information concerning the terminal valuation of similarly situated insured depository institutions. Future impairment testing may result in a partial or full impairment of the value of our goodwill or core deposit intangible assets, or both. If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment.

The current expected credit loss standard established by the Financial Accounting Standards Board will require significant data requirements and changes to methodologies.

In the aftermath of the 2007-2008 financial crisis, the Financial Accounting Standards Board, or FASB, decided to review how banks estimate losses in the allowance for loan losses calculation, and it issued the final Current Expected Credit Loss, or CECL, standard on June 16, 2016. ~~Currently, the~~The impairment model previously used by financial institutions iswas based on incurred losses, and loans ~~are~~were recognized as impaired when there iswas no longer an assumption that future cash flows will be collected in full under the originally contracted terms. This model ~~will be~~has been replaced by the CECL model that will become effective for us for the fiscal year beginning after December 15, 2022 in which financial institutions will be required to use historical information, current conditions and reasonable forecasts to estimate the expected loss over the life of the loan. The transition to the CECL model will require significantly greater data requirements and changes to methodologies to accurately account for expected loss. There can be no assurance that we will not be required to increase our reserves and allowance for loan losses as a result of the implementation of CECL.

Acquisitions could disrupt our business and adversely affect our operating results.

To the extent that we grow through acquisitions, we may not be able to adequately or profitably manage this growth. In addition, such acquisitions may involve the issuance of securities, which may have a dilutive effect on earnings per share. Acquiring banks, bank branches or businesses involves risks commonly associated with acquisitions, including:

•potential exposure to unknown or contingent liabilities we acquire;

•exposure to potential asset quality problems of the acquired financial institutions, businesses or branches;

•difficulty and expense of integrating the operations and personnel of financial institutions, businesses or branches we acquire;

•higher than expected deposit attrition;

•potential diversion of our management’s time and attention;

•the possible loss of key employees and customers of financial institutions, businesses or branches we acquire;

•difficulty in safely investing any cash generated by the acquisition;

•inability to utilize potential tax benefits from such transactions;

•difficulty in estimating the fair value of the financial institutions, businesses or branches to be acquired which affects the profits we generate from the acquisitions; and

•potential changes in banking or tax laws or regulations that may affect the financial institutions or businesses to be acquired.

In addition, we face significant competition from numerous other financial services institutions, many of which will have greater financial resources than we do, when considering acquisition opportunities. Accordingly, attractive acquisition opportunities may not be available to us. Furthermore, we may not be able to complete future acquisitions and, if we do complete such acquisitions, we may not be able to successfully integrate the operations, management, products and services of the entities that we acquire and eliminate redundancies.

~~Reductions in service charge~~If we are unable to grow our noninterest income, ~~or failure to comply with payment network rules could negatively impact~~ our ~~earnings.~~growth prospects will be impaired.

~~We derive significant revenue from~~Taking advantage of opportunities to develop new, and expand existing, streams of noninterest income, including service charges, ~~on deposit accounts, the bulk~~interchange fees and mortgage fees, is a part of ~~which comes from overdraft-related fees. We have seen a slight increase~~our long-term growth strategy. If we are unsuccessful in our ~~service charge~~attempts to grow our noninterest income, our long-term growth will be impaired. Furthermore, focusing on these noninterest income streams may divert management’s attention and resources away from our core banking business, which ~~is primarily attributable to an increase in insufficient funds and overdraft fees due to a general increase in customer spending activity driven by the winding down of the economic impact of COVID-19.~~

~~In addition, changes in banking regulations~~ could ~~have an adverse impact on~~impair our ability to derive income from service charges. Increased competition from other financial institutions or changes in consumer behavior could lead to declines in our deposit balances, which would result in a decline in service charge fees. Such a reduction could have a material impact on our earnings.

~~Reductions in interchange income could negatively impact our earnings.~~

Interchange income is derived from fees paid by merchants to the interchange network in exchange for the use of the network's infrastructure and payment facilitation. These fees are paid to card issuers to compensate them for the costs associated with issuance and operation. We earn interchange fees on card transactions from debit cards, including $6.9 million during the year ended December 31, 2021. Merchants have attempted to negotiate lower interchange rates, and the Durbin Amendment to the Dodd-Frank Act limits the amount of interchange fees that may be charged for certain debit card transactions. Merchants may also continue to pursue alternative payment platforms, such as Apple Pay, to lower their processing costs. Any such new payment system may reduce our interchange income. Our failure to comply with the operating regulations set forth by payment card networks, which may change, could subject us to penalties, fees or the termination of our license to use the networks. Any of these scenarios could have a material impact on ourcore business, financial condition and ~~results~~operating results.

Decreased residential mortgage origination, volume and pricing decisions of ~~operations.~~

~~Because the nature of the financial services business involves a high volume of transactions, we face significant operational risks.~~

We are exposed to many types of operation risks, including reputational risk, legal and regulatory and compliance risk, the risk of fraud, theft, illegal, wrongful or suspicious activities, and/or activities resulting in consumer harm that adversely affects our customers and/or our business by employees or persons outside our Company, including the execution of unauthorized transactions by employees or operational errors, clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems. The precautions we take to detect and prevent such misconductcompetitors may not always be effective and regulatory sanctions and/or penalties, serious harm to our reputation, financial condition, customer relationships and ability to attract new customers. In addition, improper use or disclosure of confidential information by our employees, even if inadvertent, could result in serious harm to our reputation, financial condition and current and future business relationships. The precautions we take to detect and prevent such misconduct may not always be effective. Actual or alleged conduct by Colony Bank can result in negative public opinion about our business. Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance and acquisitions and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can adversely affect our ability to attract and keep customers and can expose us to litigation and regulatory action. Negative public opinion could also affect our credit ratings, which are important to our access to unsecured wholesale borrowings.profitability.

Our ~~business involves storing~~mortgage operation originates residential mortgage loans and ~~processing sensitive consumer~~services residential mortgage loans. Changes in interest rates, housing prices, financial stress on borrowers as a result of economic conditions, regulations by the applicable governmental authorities and ~~business customer data. If personal, non-public, confidential or proprietary information of customers in~~pricing decisions by our ~~possession were to be mishandled or misused, we could suffer significant~~loan competitors may adversely affect demand for our residential mortgage loan products, revenues received from servicing such loans for others, and ultimately reduce our net income. New regulations, increased regulatory consequences, reputational damage and financial loss. Such mishandling or misuse could include, for example, if such information were erroneously provided to parties who were not permitted to have that information, either by fault of our systems, employees, or counterparties, or where such information is intercepted or otherwise inappropriately taken by third parties. Furthermore, a cybersecurity breach could result in theft of such data.

~~Because we operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions, certain errors~~reviews may be ~~repeated or compounded before they are discovered~~introduced and ~~successfully rectified. Our necessary~~may increase costs and make it more difficult to operate a residential mortgage origination business.

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~~dependence upon automated systems~~Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future.

Our nonperforming assets adversely affect our net income in various ways. We do not record interest income on nonaccrual loans or OREO, thereby adversely affecting our net interest income, net income and ~~process transactions,~~returns on assets and equity, and our ~~large transaction volume, may further~~loan administration costs increase, which together with reduced interest income adversely affects our efficiency ratio. When we take collateral in foreclosure and similar proceedings, we are required to mark the ~~risk that technical flaws or employee tampering or manipulation of those systems will result in losses that are difficult~~collateral to detect. We also may be subject to disruptions of our operating systems arising from events that are wholly or partially beyond our control (for example, security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers, computer break-ins, phishing and other disruptions or electrical or telecommunications outages, or natural disasters, disease pandemics or other damage to property or physical assets)its then-fair market value, which may result in ~~violations~~a loss. These nonperforming loans and OREO also increase our risk profile and the level of ~~consumer privacy laws including the Gramm-Leach-Bliley Act, cause~~capital our regulators believe is appropriate for us to maintain in light of such risks. The resolution of nonperforming assets requires significant ~~liability to us~~time commitments from management and give reason for existing and potential customers to refrain from doing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage and potential liability, there can be ~~no assurance that these security measures will~~detrimental to the performance of their other responsibilities. If we experience increases in nonperforming loans and nonperforming assets, our net interest income may be ~~successful. In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we~~negatively impacted and our ~~third-party service providers use to encrypt~~loan administration costs could increase, each of which would have an adverse effect on our net income and protect customer transaction data. We are further exposed to the risk that our external vendors may be unable to fulfill their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employeesrelated ratios, such as ~~we are)~~return on assets and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate. The occurrence of any of these risks could result in a diminished ability of us to operate our business (for example, by requiring us to expend significant resources to correct the defect), as well as potential liability to clients, reputational damage and regulatory intervention, which could adversely affect our business, financial condition or operations results, perhaps materially.equity.

~~As an issuer~~We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate.

Changes in interest rates may negatively affect both the returns on and market value of ~~debit cards, we are exposed to~~our investment securities. Interest rate volatility can reduce unrealized gains or increase unrealized losses in ~~the event that holders of~~ our ~~cards experience fraud on their card accounts.~~

~~Our customers regularly use Colony Bank-issued debit cards~~portfolio. Interest rates are highly sensitive to ~~pay for transactions with retailers~~many factors including monetary policies, domestic and international economic and political issues, and other ~~businesses. There is~~factors beyond our control. These changes can negatively impact our other comprehensive income and equity levels through accumulated other comprehensive income, which includes net unrealized gains and losses on our investment securities. Further, such losses could be realized into earnings should liquidity and/or business strategy necessitate the sales of securities in a loss position. Additionally, actual investment income and cash flows from investment securities that carry prepayment risk, ~~of data security breaches at these retailers~~such as mortgage-backed securities and ~~other businesses that could result in the misappropriation of our customers’ debit card information. When our customers use Colony Bank-issued cards to make purchases~~callable securities, may materially differ from those ~~businesses, card account information is provided to~~anticipated at the ~~business. If the business’s systems that process~~time of investment or ~~store card account information are subject to~~subsequently as a ~~data security breach, holders~~result of changes in interest rates and market conditions. These occurrences could have a material adverse effect on our ~~cards who have made purchases from that business may experience fraud on their card accounts. Colony Bank may suffer losses associated with reimbursing~~net interest income or our customers for such fraudulent transactions on customers’ card accounts, as well as for other costs related to data security compromise events, such as replacing cards associated with compromised card accounts.results of operations.

The implementation of other new lines of business or new products and services may subject us to additional risk.

We continuously evaluate our service offerings and may implement new lines of business or offer new products and services within existing lines of business in the future. There are substantial risks and uncertainties associated with these efforts. In developing and marketing new lines of business and/or new products and services, we undergo a new product process to assess the risks of the initiative, and invest significant time and resources to build internal controls, policies and procedures to mitigate those risks, including hiring experienced management to oversee the implementation of the initiative. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business and/or a new product or service. Furthermore, any new line of business and/or new product or service could require the establishment of new key and other controls and have a significant impact on our existing system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business and, in turn, our financial condition and results of operations.

~~As a community bank,~~We are highly dependent on our ~~recruitment~~management team, and ~~retention efforts may not be sufficient enough~~the loss of our senior executive officers or other key employees could harm our ability to implement our strategic plan, impair our relationships with customers and adversely affect our business, ~~strategy~~results of operations and ~~execute successful operations.~~growth prospects.

Our ~~financial~~ success depends, ~~upon~~in large part, on our ability to attract and retain ~~highly motivated, well-qualified~~key personnel. ~~We face significant competition~~Competition for the best personnel in ~~the recruitment of qualified employees from financial institutions~~most activities we engage in can be intense, as we compete with both smaller banks that may be able to offer bankers with more responsibility and ~~others. As we continue~~autonomy and larger banks that may be able to ~~grow, we may find our recruitment~~offer bankers with higher compensation, resources and ~~retention efforts more challenging. If we do not succeed in attracting, hiring,~~support, and ~~integrating experienced or qualified personnel,~~ we may not be able to ~~successfully implement our business strategy, and~~hire personnel or to retain them. As a result, we may not be ~~required~~able to ~~substantially increase~~effectively compete for talent across our ~~overall compensation or benefits~~markets. Further, our bankers may leave us to work for our competitors and, in some instances, may take important banking and lending relationships with them to our competitors.If we are unable to attract and retain ~~such employees. Furthermore,~~talented bankers in ~~June 2010,~~ our markets, our business, growth prospects and financial results could be materially and adversely affected. In addition, the ~~Federal Reserve,~~unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business because of their skills, knowledge of our market, relationships in the ~~Office~~communities we serve, years of ~~the Comptroller of the Currency, the Office of Thrift Supervision,~~industry experience and the ~~FDIC jointly issued comprehensive final guidance designed to ensure~~difficulty of promptly finding qualified replacement personnel. Although we have employment agreements with certain of our executive officers, there is no guarantee that ~~incentive compensation policies do not undermine~~these officers and other key personnel will remain employed with the safety and soundness of banking organizations by encouraging employees to take imprudent risks. This regulation significantly restricts the amount, form, and context in which we pay incentive-based compensation and may put us at a competitive disadvantage compared to non-financial institutions in terms of attracting and retaining senior level employees.Company.

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We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance.

Our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates. Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, and questionable or fraudulent activities of our customers. Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers, investors and employees, costly litigation, a decline in revenues and increased governmental regulation. If our reputation is negatively affected, by the actions of our employees or otherwise, our business and, therefore, our operating results may be materially adversely affected.

Our risk management framework may not be effective in mitigating risks and/or losses to us.

Our risk management framework is comprised of various processes, systems and strategies, and is designed to manage the types of risk to which we are subject, including, among others, credit, market, liquidity, interest rate and compliance. Our framework also includes financial or other modeling methodologies that involve management assumptions and judgment. Our risk management framework may not be effective under all circumstances and may not adequately mitigate any risk or loss to us. If our risk management framework is not effective, we could suffer unexpected losses and our business, financial condition, results of operations or growth prospects could be materially and adversely affected. We may also be subject to potentially adverse regulatory consequences.

The financial services market is undergoing rapid technological changes, and if we are unable to stay current with those changes, we will not be able to effectively compete.

The financial services market ~~including banking services,~~ is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. These trends were accelerated by the COVID-19 pandemic, increasing demand for mobile banking solutions. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, in part, on our ability to keep pace with the technological changes and to use technology to satisfy and grow customer demand for our products and services ~~and~~that will satisfy customer demands for convenience as well as to create additional efficiencies in our ~~operations.~~operations as we continue to grow and expand our market area. We expect that we will need to make substantial investments in our technology and information systems to compete effectively and to stay current with technological changes. ~~Some~~Many of our larger competitors have substantially greater resources to invest in technological improvements and ~~will~~have invested significantly more than us in technological improvements. As a result, they may be able to invest more heavily in developing and adopting new technologies, and offer additional or more convenient products compared to those that we will be able to provide, which ~~may~~would put us at a competitive disadvantage. ~~In addition,~~Accordingly, we may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our ~~customers.~~customers, which could impair our growth and profitability. As a result, our ability to effectively compete to retain or acquire new business may be impaired, and the failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on our business, financial condition and results of operations.

~~We face significant cyber and~~System failure or breaches of our network security, or the security of our data processing subsidiary, including as a result of cyberattacks or data security ~~risk that~~breaches, could ~~result in the dissemination of confidential and sensitive information, adversely affecting our business or reputation and exposing~~subject us to ~~material~~increased operating costs as well as litigation and other liabilities.

The computer systems and network infrastructure we use could be vulnerable to hardware and cyber security issues. Our operations are dependent upon our ability to protect our computer equipment against damage from fire, power loss, telecommunications failure, natural disasters such as earthquakes, tornadoes and hurricanes, or a similar catastrophic event. We could also experience a breach by intentional or negligent conduct on the part of employees or other internal or external sources, including our third-party vendors and cyber criminals. Any damage or failure that causes an interruption in our operations could have an adverse effect on our financial condition and results of operations. In addition, our operations are dependent upon our ability to protect the computer systems and network infrastructure utilized by us, including our internet banking activities, against damage from physical break-ins, cyber security breaches and other disruptive problems caused by the internet or other users. Such computer break-ins, breaches and other disruptions would jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability, damage our reputation and inhibit the use of our internet banking services by current and potentialcustomers, any of which may result in a material adverse impact on our financial condition, results of operations or the market price of our common stock. As ~~a financial institution,~~cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify

or enhance our protective measures or to investigate and remediate any information security vulnerabilities. In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.

We are under continuous threat of loss due to ~~the swiftness and sophistication of~~ hacking and ~~cyber-attacks. This~~cyberattacks especially as we continue to expand client capabilities to utilize internet and other remote channels to transact business. These cyber risks include greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk ~~although considerable at~~of unauthorized dissemination of confidential information, limited ability to restore the ~~present, will only increase~~systems in the ~~future. Two~~event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.

To date, none of foregoing types of attacks have had a material effect on our business or operations and we maintaina system of internal controls and insurance coverage to mitigate against operational risks, including data processing system failures and errors and customer or employee fraud. However, no assurances can be provided that we may not suffer from such an attack in the future that may cause us material harm, especially in light of the ~~most significant cyber-attack~~ risks that we face are electronic fraud and loss of sensitive customer data. Loss from electronic fraud occurs when cybercriminals breach and extract funds directly from customer accounts or our own accounts. The attempts to breach sensitive customer data, such as account numbers, social security numbers, or other personal information are less frequent but would present significant legal and/or regulatory costs to us if successful,being posed by changing technologies as well as ~~potentially damage~~criminal intent on committing cyber-crime.

Our operations could be interrupted if our ~~reputation among the markets~~third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations.

We depend to a significant extent on a number of relationships with third-party service providers. Specifically, we ~~serve. Our risk~~receive core systems processing, essential web hosting, deposit processing and ~~exposure~~other processing services from third-party service providers. If these third-party service providers experience financial, operational, or technological difficulties or terminate their services and we are unable to ~~these matters will remain relevant because of the evolving nature and complexity of the threats posed by cybercriminals and hackers along~~replace them with other suitable service providers, our ~~plans~~operations could be interrupted. If an interruption were to continue for a significant period of time, our business, financial condition and results of operations could be adversely affected, perhaps materially. Even if we are able to ~~provide internet banking~~replace our service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and ~~mobile banking avenues for transacting business. While we have not experienced material losses relating to cyber-attacks or other information security breaches to date, we have been the subject~~results of ~~attempted hacking and cyber-attacks and there can be no assurance that we will not suffer such losses in the future.~~operations.

~~The occurrence of any cyber-attack or information security breach could result in material adverse consequences including damage~~We are subject to our reputation and the loss of current or potential customers. We also could face litigation or additional regulatory scrutiny due to such an occurrence. Litigation or regulatory actions in turn could lead to material liability,certain operational risks, including, but not limited to, ~~fines~~client or employee fraud and ~~penalties~~data processing system failures and errors.

Employee errors and employee and client misconduct could subject us to financial losses or ~~reimbursement~~regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our clients or improper use of confidential information. It is not always possible to ~~customers adversely affected by~~prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence. We maintain a ~~data breach. Even~~system of internal controls and insurance coverage to mitigate against operational risks. If our internal controls fail to prevent or detect an occurrence, or if ~~we do~~any resulting loss is not ~~suffer any~~insured or exceeds applicable insurance limits, it could have a material adverse ~~consequences~~effect on our business, financial condition and results of operations.

In addition, we rely heavily upon information supplied by third parties, including the information contained in credit applications, property appraisals, title information, equipment pricing and valuation and employment and income documentation, in deciding which loans we will originate, as well as the terms of those loans. If any of the information upon which we rely is misrepresented, either fraudulently or inadvertently, and the misrepresentation is not detected prior to asset funding, the value of the asset may be significantly lower than expected, or we may fund a ~~result of events affecting us directly, successful attacks~~loan that we would not have funded or ~~systems failures at other financial institutions could lead to a general loss of customer confidence in our Company.~~on terms we would not have extended.

~~We rely on third-party vendors for key components of our business.~~

Many key components of our operations, including data processing, recording and monitoring transactions, online interfaces and services, internet connections and network access are provided by other companies. Our vendor management process selects third-party vendors carefully, but we do not control their actions. Problems, including disruptions in communication, security breaches, or failure of a vendor to provide services, could hurt our operations or our relationships with customers. If our vendors suffer financial or operational issues, our operations and reputation could suffer if it harms the vendors’ ability to serve us and our customers. Third-party vendors are also a source of operational and information security risk to us. Replacing or renegotiating contracts with vendors could entail significant operational expense and delays. The use of third-party vendors represents an unavoidable inherent risk to our Company.

Our accounting estimates and risk management processes rely on analytical and forecasting models.

Processes that management uses to estimate our probable incurred credit losses and to measure the fair value of financial instruments, as well as the processes used to estimate the effects of changing interest rates and other market measures on our financial condition and results of operations, depend upon the use of analytical and forecasting models. These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen ~~circumstances, as we have experienced as a result of the COVID-19 pandemic.~~circumstances. Even if these assumptions are accurate, the models may prove to be inadequate or inaccurate because of other flaws in their design or their implementation. If the models that management uses for interest rate risk and asset liability management are inadequate, we may incur increased or unexpected losses upon changes in market interest rates or other market measures. If the models that

management uses for determining our probable credit losses are inadequate, the allowance for loan losses may not be sufficient to support future charge offs. If the models that management uses to measure the fair value of financial instruments are inadequate, the fair value of such financial instruments may fluctuate unexpectedly or may not accurately reflect what we could realize upon sale or settlement of such financial instruments. Any such failure in management’s analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations.

Changes in accounting standards could materially impact our financial statements.

From time to time, the FASB or the Securities and Exchange Commission, or SEC, may change the financial accounting and reporting standards that govern the preparation of our financial statements. Such changes may result in us being subject to new or changing accounting and reporting standards. In addition, the bodies that interpret the accounting standards (such as banking regulators or outside auditors) may change their interpretations or positions on how these standards should be applied. These changes may be beyond our control, can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retrospectively, or apply an existing standard differently, also retrospectively, in each case resulting in our needing to revise or restate prior period financial statements. ~~Restating or revising our financial statements may result in reputational harm or may have other adverse effects on us.~~

Any deficiencies in our financial reporting or internal controls could materially and adversely affect us, including resulting in material misstatements in our financial statements, and could materially and adversely affect the market price of our common stock.

~~If we fail~~Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our ~~operating~~business and stock price.

Management regularly monitors, reviews and updates our disclosure controls and procedures, including our internal control over financial reporting. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable assurances that the controls will be effective. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition. Failure to achieve and maintain an effective internal control environment could ~~be harmed~~prevent us from accurately reporting our financial results, preventing or detecting fraud or providing timely and itreliable financial information pursuant to our reporting obligations, which could result in a material ~~misstatement~~weakness in our internal controls over financial reporting and the restatement of previously filed financial statements ~~in the future. Inferior~~and could have a material adverse effect on our business, financial condition and results of operations. Further, ineffective internal controls ~~and procedures or the identification of accounting errors~~ could cause our investors to lose confidence in our ~~internal controls and question our reported~~ financial information, which ~~among other things,~~ could ~~have a negative impact on~~affect the trading price of our common stock. Additionally, we could become subject to increased regulatory scrutiny and a higher risk of shareholder litigation, which could result in significant additional expenses and require additional financial and management resources.

We may be adversely affected by the soundness of other financial institutions.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties and routinely execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure due to us. There is no assurance that any such losses would not materially and adversely affect our results of operations or earnings.

Hurricanes or other adverse weather events would negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations.

Our market area is located in the southeastern region of the United States and is susceptible to natural disasters, such as hurricanes, tornadoes, tropical storms, other severe weather events and related flooding and wind damage, and man-made disasters. These natural disasters could negatively impact regional economic conditions, cause a decline in the value or destruction of mortgaged properties and an increase in the risk of delinquencies, foreclosures or loss on loans originated by us, damage our banking facilities and offices and negatively impact our growth strategy. Climate change may be increasing the nature, severity and frequency of adverse weather conditions, making the impact from these types of natural disasters on us or our customers worse. Such weather events can disrupt operations, result in damage to properties and negatively affect the local economies in the markets where they operate. We cannot predict whether or to what extent damage that may be caused by future hurricanes or tornadoes will affect our operations or the economies in our current or future market areas, but such weather events could negatively impact economic conditions in these regions and result in a decline in local loan demand and loan originations, a decline in the value or destruction of properties securing our loans and an increase in delinquencies, foreclosures or loan losses. Our business or results of operations may be adversely affected by these and other negative effects of natural or man-made disasters.

We may need to rely on the financial markets to provide needed capital.

Our common stock is listed and traded on the NASDAQ Global Market. If our capital resources prove in the future to be inadequate to meet our capital requirements, we may need to raise additional debt or equity capital. If conditions in the capital markets are not favorable, we may be constrained in raising capital, and an inability to raise additional capital on acceptable terms when and if needed could have a material adverse effect on our business, financial condition or results of operations.

The interest rates that we pay on our securities are also influenced by, among other things, the credit ratings that we, our affiliates and/or our securities receive from recognized rating agencies. Our credit ratings are based on a number of factors, including our financial strength and some factors not entirely within our control such as conditions affecting the financial services industry generally, and remain subject to change at any time. A downgrade to the credit rating of us or our affiliates could affect our ability to access the capital markets, increase our borrowing costs and negatively impact our profitability. A downgrade to us, our affiliates or our securities could create obligations or liabilities to us under the terms of our outstanding securities that could increase our costs or otherwise have a negative effect on our results of operations or financial condition. Additionally, a downgrade to the credit rating of any particular security issued by us or our affiliates could negatively affect the ability of the holders of that security to sell the securities and the prices at which any such securities may be sold.

Because our decision to incur debt and issue securities in future offerings will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future. In addition, geopolitical and worldwide market conditions may cause disruption or volatility in the U.S. equity and debt markets, which could hinder our ability to issue debt and equity securities in the future on favorable terms.

Interest rates on our outstanding financial instruments might be subject to change based on regulatory developments, which could adversely affect our revenue, expenses, and the value of those financial instruments.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, publicly announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. The ICE Benchmark Administration (IBA), the administrator of LIBOR, announced on November 30, 2020, that it would cease publishing the one-week and two-month LIBOR rates on December 31, 2021, but would continue publishing the one-, three-, six-, and twelve-month LIBOR rates until June 30, 2023. Regardless, the federal banking agencies also issued guidance on November 30, 2020, encouraging banks to: (i) stop using LIBOR in new financial contracts no later than December 31, 2021; and (ii) either use a rate other than LIBOR or include clear language defining the alternative rate that will be applicable after LIBOR’s discontinuation. To address the problem created by legacy financial contracts that incorporate LIBOR as their reference interest rate, but extend beyond the date after which LIBOR will be published, on March 15, 2022, Congress enacted the LIBOR Act. On December 16, 2022, the Federal Reserve adopted a final rule implementing the LIBOR Act by adopting benchmark rates based on the Secured Overnight Financing Rate (“SOFR”) that will replace LIBOR in certain financial contracts after June 30, 2023.

The Company has a number of existing loans, borrowings and other financial instruments with attributes that are either directly or indirectly dependent on LIBOR. The transition from LIBOR has resulted in and could continue to result in added costs and employee efforts and could present additional risk. Since alternative reference rates are calculated differently than LIBOR, payments under contracts referencing new alternative reference rates will differ from those referencing LIBOR. The transition has changed and will continue to change, the Company’s market risk profiles, requiring changes to risk and pricing models, valuation tools, product design and hedging strategies. The Company cannot predict what the ultimate impact of the transition from LIBOR will be; however, failure to adequately manage the transition could have a material adverse effect on the Company’s business, financial condition, results of operations and reputation with its customers.

The ongoing COVID-19 pandemic and resulting adverse economic conditions have adversely impacted, and could continue to adversely impact, our business and results.

While the level of disruption caused by, and the economic impact of, COVID-19 subsided in 2022, the extent and duration to which the continuing COVID-19 pandemic will impact our business in the future is unknown and will depend on future developments, which are highly uncertain and outside our control. These developments include the duration and severity of the pandemic (including the possibility of further surges of new or existing COVID-19 variants of concern), supply chain disruptions, decreased demand for our products and services or those of our borrowers, which could increase our credit risk, rising inflation, our ability to maintain sufficient qualified personnel due to labor shortages, talent attrition, employee illness, willingness to return to work, and the actions taken by governments, businesses and individuals to contain the impact of COVID-19, as well as further actions taken by governmental authorities to limit the resulting economic impact. It is also

possible that the pandemic and its aftermath will lead to a prolonged economic slowdown in sectors disproportionately affected by the pandemic or recession in the U.S. economy or the world economy in general.

The costs and effects of litigation, investigations or similar matters involving us or other financial institutions or counterparties, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.

We may be involved from time to time in a variety of litigation, investigations or similar matters arising out of our ~~business, including litigation related to our participation in stimulus programs associated with the government’s response to the COVID-19 pandemic.~~business. It is inherently difficult to assess the outcome of these matters, and we may not prevail in any proceedings or litigation. Our insurance may not cover all claims that may be asserted against us and indemnification rights to which we are entitled may not be honored, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation or investigation significantly exceed our insurance coverage or to the extent that we incur civil money penalties that are not covered by insurance, they could have a

material adverse effect on our business, financial condition and results of operations. In addition, premiums for insurance covering the financial and banking sectors are rising. We may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms or at historic rates, if at all. Finally, in recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. We could become subject to claims based on this or other evolving legal theories in the future.

Risks Related to Legislative and Regulatory Events

We are subject to extensive government regulation that could limit or restrict our activities, which in turn may adversely impact our ability to increase our assets and earnings.

We operate in a highly regulated environment and are subject to supervision and regulation by a number of governmental regulatory agencies, including the Federal Reserve, the Georgia Department of Banking and Finance (“DBF”) and the FDIC. Regulations adopted by these agencies, which are generally intended to provide protection for depositors and customers rather than for the benefit of shareholders, govern a comprehensive range of matters relating to ownership and control of our shares, our acquisition of other companies and businesses, permissible activities for us to engage in, maintenance of adequate capital levels, and other aspects of our operations. These bank regulators possess broad authority to prevent or remedy unsafe or unsound practices or violations of law. The laws and regulations applicable to the banking industry could change at any time and we cannot predict the effects of these changes on our business, profitability or growth strategy. Increased regulation could increase our cost of compliance and adversely affect profitability. Moreover, certain of these regulations contain significant punitive sanctions for violations, including monetary penalties and limitations on a bank’s ability to implement components of its business plan, such as expansion through mergers and acquisitions or the opening of new branch offices. In addition, changes in regulatory requirements may add costs associated with compliance efforts. Furthermore, government policy and regulation, particularly as implemented through the Federal Reserve System, significantly affect credit conditions. Negative developments in the financial industry and the impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance.

Federal and state regulators periodically examine our business, and we may be required to remediate adverse examination findings.

The Federal Reserve, the FDIC, and the DBF periodically examine our business, including our compliance with laws and regulations. If, as a result of an examination, a banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity, interest rate sensitivity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship. Any regulatory action against us could have an adverse effect on our business, financial condition and results of operations.

The Federal Reserve has implemented significant monetary policies and economic strategies that have impacted interest rates, inflation, asset values, and the shape of the yield curve, over which the Company has no control and which the Company may not be able to adequately anticipate.

In recent years, the Federal Reserve implemented a series of accommodative domestic monetary initiatives. Several of these have emphasized so-called quantitative easing strategies and decreases to the Federal funds target rate. The Federal Reserve reduced rates five times during 2019 through 2021. However, in response to the significant increase in the domestic inflation rate in the U.S, the Federal Reserve increased the federal funds target rate seven times in 2022 for a total increase of 4.25%, and indicated additional increases would be forthcoming in 2023. Also, during 2022, the Federal reserve has implemented quantitative tightening. Further rate changes reportedly are dependent on the Federal Reserve’s assessment of economic data as it becomes available. The Company cannot predict the nature or timing of future changes in monetary, economic, or other policies or the effect that they may have on the Company's business activities, financial condition and results of operations.

We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.

Federal and state fair lending laws and regulations, such as the Equal Credit Opportunity Act and the Fair Housing Act, impose nondiscriminatory lending requirements on financial institutions. The Department of Justice, Consumer Financial Protection Bureau (“CFPB”) and other federal and state agencies are responsible for enforcing these laws and regulations. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. A successful challenge to our performance under the fair lending laws and regulations could adversely impact our rating under the Community Reinvestment Act and result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief, imposition of restrictions on merger and acquisition activity and restrictions on expansion activity, which could negatively impact our reputation, business, financial condition and results of operations.

We could face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.

The Bank Secrecy Act of 1970, the USA PATRIOT Act and other laws and regulations require financial institutions, among other duties, to institute and maintain effective anti-money laundering programs and file suspicious activity and currency transaction reports as appropriate. FinCEN, established by the U.S. Department of the Treasury to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of those requirements and engages in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice, Drug Enforcement Administration and IRS. There is also increased scrutiny of compliance with the rules enforced by OFAC related to U.S. sanctions regimes. If our policies, procedures and systems are deemed deficient or the policies, procedures and systems of the financial institutions that we have already acquired or may acquire in the future are deficient, we would be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans, which would negatively impact our business, financial condition and results of operations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.

Our deposit insurance premiums could be substantially higher in the future, which could have a material adverse effect on our future earnings.

The FDIC insures deposits at FDIC-insured depository institutions, such as the Bank, up to applicable limits. The amount of a particular institution’s deposit insurance assessment is based on that institution’s risk classification under an FDIC risk-based assessment system. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern the institution poses to its regulators. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. Any future additional assessments, increases or required prepayments in FDIC insurance premiums could reduce our profitability, may limit our ability to pursue certain business opportunities or otherwise negatively impact our operations.

Risks Related to Our Common Stock

Our management team’s strategies for the enhancement of shareholder value may not succeed.

Our management team is taking and considering actions to enhance shareholder value, including reviewing personnel, developing new products, issuing dividends and exploring acquisition opportunities. These actions may not enhance shareholder value. For example, holders of our common stock are only entitled to receive such dividends as our Board of Directors may declare out of funds legally available for such payments. We are not legally required to do so. Further, the Federal Reserve could decide at any time that paying any dividends on our common stock could be an unsafe or unsound banking practice. The reduction or elimination of dividends paid on our common stock could adversely affect the market price of our common stock.

An investment in our common stock is not an insured deposit and may lose value.

An investment in our common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in our common stock is inherently risky for the reasons described herein, and is subject to the same market forces that affect the price of common stock in any company. As a result, if you acquire our common stock, you could lose some or all of your investment.

Our stock price may be ~~volatile due to limited trading volume.~~volatile.

Our common stock is traded on the NASDAQ Global Market. However, the average daily trading volume in the Company’s common stock has been relatively small, averaging approximately 391 total trades per day during 2021. As a result, trades involving a relatively small number of shares may have a significant effect on theThe market price of ~~the~~our common stock ~~and it~~ may be ~~difficult for investors~~volatile and could be subject to ~~acquire or dispose~~wide fluctuations in price in response to various factors, some of ~~large blocks~~which are beyond our control, including rising interest rates and the impact of ~~stock without significantly affecting~~inflation. In addition, if the market ~~price.~~for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management which could materially adversely affect our business, financial condition or results of operations.

ESG risks could adversely affect our reputation and shareholder, employee, client and third party relationships and may negatively affect our stock price.

Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities. We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as diversity, equity, inclusion, environmental stewardship, human capital management, support for our local communities, corporate governance and transparency, or fail to consider ESG factors in our business operations.

Furthermore, as a result of our diverse base of clients and business partners, we may face potential negative publicity based on the identity of our clients or business partners and the public’s (or certain segments of the public’s) view of those entities. Such publicity may arise from traditional media sources or from social media and may increase rapidly in size and scope. If our client or business partner relationships were to become intertwined in such negative publicity, our ability to attract and retain clients, business partners, and employees may be negatively impacted, and our stock price may also be negatively impacted. Additionally, we may face pressure to not do business in certain industries that are viewed as harmful to the environment or are otherwise negatively perceived, which could impact our growth.

Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations. We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer. In addition, ongoing legislative or regulatory uncertainties and changes regarding climate risk management and practices may result in higher regulatory, compliance, credit and reputational risks and costs.

Our ~~ability~~dividend policy may change, and consequently, your only opportunity to ~~deliver and pay dividends depends primarily upon~~achieve a return on your investment may be if the ~~results of operations~~price of our ~~subsidiary Bank,~~common stock appreciates.

We have historically paid quarterly dividends to our shareholders. However, we have no obligationto pay dividends and we may ~~not pay, or be permitted~~change our dividend policy at any time without notice to ~~pay,~~our shareholders. Holders of our common stock are only entitled to receive such cash dividends as our board of directors, in its discretion, may declare out of funds legally available for such payments. Furthermore, consistent with our strategic plans, growth initiatives, capital availability and requirements, projected liquidity needs, financial condition, and other factors, we have made, and will continue to make, capital management decisions and policies that could adversely impact the ~~future.~~amount of dividends paid to our shareholders.

We are a ~~bank holding company that conducts~~separate and distinct legal entity from our subsidiary, the Bank. We receive substantially all of our ~~operations through~~revenue from dividends from the Bank, which we use as the principal source of funds to pay our ~~subsidiary Bank. As a result,~~expenses. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay us. Such limits are also tied to the earnings of our ~~ability~~subsidiary. If the Bank does not receive regulatory approval or if the Bank’s earnings are not sufficient to make dividend payments ~~on our common stock will depend primarily upon the receipt of dividends and other distributions from the Bank. The ability of the Bank to pay dividends or make other payments~~ to us ~~as well as~~while maintaining adequate capital levels, our ability to pay ~~dividends on~~ our ~~common stock, is limited by the Bank’s obligation to maintain sufficient capital~~expenses and ~~by other general regulatory restrictions on its dividends, which have tightened since the financial crisis.~~

The Federal Reserve has stated that bank holding companies should not pay dividends from sources other than current earnings. If these requirements are not satisfied, we will be unable to pay dividends on our common stock. We may also decide to limit the payment of dividends even when we have the legal ability to pay them in order to retain earnings for use in our business, ~~which~~financial condition or results of operations could be materially and adversely ~~affect the market value of our common stock. There can be no assurance of whether or when we may pay dividends in the future.~~impacted.

Securities analysts might not continue coverage on our common stock, which could adversely affect the market for our common stock.

The trading price of our common stock depends in part on the research and reports that securities analysts publish about us and our business. We do not have any control over these analysts, and they may not continue to cover our common stock. If securities analysts do not continue to cover our common stock, the lack of research coverage may adversely affect the market price of our common stock. If securities analysts continue to cover our common stock, and our common stock is the subject of an unfavorable report, the price of our common stock may decline. If one or more of these analysts cease to cover us or fail to publish regular reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our common stock to decline.

Future equity issuances could result in dilution, which could cause our common stock price to decline.

We are generally not restricted from issuing additional shares of our common stock up to the ~~20 million~~authorized number of shares ~~of voting common stock and 10 million shares of preferred stock authorized~~set forth in our ~~articles of incorporation (subject to Nasdaq shareholder approval rules), which in each case could be increased by a vote of a majority of our shares.~~charter. We may issue additional shares of our common stock or securities convertible into our common stock in the future pursuant to current or future ~~equity compensation~~employee stock option plans, ~~upon conversions of preferred~~employee stock ~~or debt,~~grants, upon exercise of warrants or in connection with future acquisitions or financings. ~~If we choose to raise capital by selling~~We cannot predict the size of any such future issuances or the effect, if any, that any such future issuances will have on the trading price of our common stock. Any such future issuances of shares of our common stock ~~for any reason, the issuance could~~or securities convertible into common stock may have a dilutive effect on the holders of our common stock and could have a material negative effect on the trading price of our common stock.

In addition, we may sell additional shares of our common stock in public offerings, and issue additional shares of common stock or convertible securities to finance future acquisitions. We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares that may be issued in connection with acquisitions), or the perception that such issuance could occur, may adversely affect prevailing market prices for our common stock.

We have the ability to incur debt and pledge our assets, including our stock in the Bank, to secure that debt.

We have the ability to incur debt and pledge our assets to secure that debt. Absent special and unusual circumstances, a holder of indebtedness for borrowed money has rights that are superior to those of holders of common stock. For example, interest must be paid to the lender before dividends can be paid to the shareholders, and loans must be paid off before any assets can be distributed to shareholders if we were to liquidate. Furthermore, we would have to make principal and interest payments on our indebtedness, which could reduce our profitability or result in net losses on a consolidated basis even if the Bank were profitable.

Item 1B

Unresolved Staff Comments

None.

Item 2

Properties

~~Properties~~

The principal properties of the Company consist of the properties of the Bank. The Company's headquarters is located at 115 South Grant Street, Fitzgerald, Georgia 31750. The Bank currently operates ~~thirty-one~~thirty-four domestic banking offices and ~~two~~three corporate operations offices in Georgia. The Bank owns all of the banking offices occupied except for nine which are leased. In addition, the Company owns the corporate operation offices located in Fitzgerald, Georgia and Warner Robins Georgia. We believe that our banking offices are in good condition and are suitable and adequate to our needs.

Item 3

Legal Proceedings

The Company and its subsidiary may become parties to various legal proceedings arising from the normal course of business. As of December 31, ~~2021,~~2022, there are no material pending legal proceedings to which Colony or its subsidiary are a party or of which any of its or its subsidiaries' assets or properties are subject. However, one or more unfavorable outcomes in any legal action against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially adversely affect our reputation, even if resolved in our favor.

Item 4

Mine Safety Disclosures

Not applicable.

Part II

Item 5

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

Market Information and Holders of Record

Since April 2, 1998, Colony Bankcorp, Inc.'s common stock has been quoted on the NASDAQ Global Market under the symbol “CBAN.” Prior to this date, there was no public market for the common stock of the Company.

As of March ~~16, 2022,~~14, 2023, there were ~~17,586,333~~17,593,879 shares of our common stock outstanding held by ~~1,019~~1,002 holders of record.

Dividends

During ~~2021,~~2022, the Company paid ~~$4.5~~$7.2 million in cash dividends on its common stock. During ~~2020,~~2021, the Company paid ~~$3.8~~$4.5 million in cash dividends on its common stock. We have no obligation to pay dividends and we may change our dividend policy at any time without notice to our shareholders. Any future determination to pay dividends to holders of our common stock will depend on our results of operations, financial condition, capital requirements, banking regulations, contractual restrictions and any other factors that our board of directors may deem relevant.

As a Georgia corporation, the Company is subject to certain restrictions on dividends under the Georgia Business Corporation Code. We are also subject to certain restrictions on the payment of cash dividends as a result of banking laws, regulations and policies. See “Item 1 – Business – Supervision and Regulation – Regulation of the Company – Payment of Dividends.”

Issuer Purchase of Equity Securities

~~The Company did not purchase any shares~~On October 20, 2022, the Board of Directors of the ~~Company’s~~Company authorized a stock buyback program, under which the Company may repurchase up to $12 million of its outstanding common stock. The buyback program began on October 20, 2022 and is intended to expire at the end of 2023.

The repurchases were made in compliance with all SEC rules, including Rule 10b-18, and other legal requirements and may be made in part under Rule 10b5-1 plans, which permits share repurchases when the Company might otherwise be precluded from doing so. Repurchases can be made from time-to-time in the open market or through privately negotiated transactions depending on market and/or other conditions. The repurchase program may be modified, suspended or discontinued at any time.

The table below sets forth information regarding repurchases of our common stock during the ~~year ended December 31, 2021.~~fourth quarter of 2022.


(dollars in thousands, except per share data)	Total Number of Shares Repurchased			Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

October 1, 2022 to October 31, 2022	—			$	—	—	$	—
November 1, 2022 to November 30, 2022	—			—		—	—
December 1, 2022 to December 31, 2022	40,000			13.50		40,000	11,460
Total	40,000	$	40	$	13.50	40,000	$	11,460

Securities Authorized for Issuance Under Equity Compensation Plans

See the information included under Part III, Item 12, which is incorporated in response to this item by ~~reference.~~reference, for information with respect to shares of common stock that are authorized for issuance under the Company's equity compensation plans as of December 31, 2022.

Performance Graph

The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return on the equity securities of companies included in the NASDAQ Composite Index and the SNL Southeast Bank Index, measured at the last trading day of each year shown. The graph assumes an investment of $100 on December 31, ~~2016~~2017 through December 31, ~~2021,~~2022, and assumes the reinvestment of dividends, if any. The performance graph represents past performance and should not be considered to be an indication of future performance.

3135


Colony Bankcorp, Inc.


		Period Ending							Period Ending
Index	Index	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	12/31/21	Index	12/31/17	12/31/18	12/31/19	12/31/20	12/31/21	12/31/22
Colony Bankcorp, Inc.	Colony Bankcorp, Inc.	100.00	111.41	112.78	129.83	119.07	142.25	Colony Bankcorp, Inc.	100.00	101.22	116.53	106.87	127.68	97.63
NASDAQ Composite Index	NASDAQ Composite Index	100.00	129.64	125.96	172.18	249.51	304.85	NASDAQ Composite Index	100.00	97.16	132.81	192.47	235.15	158.65
SNL Southeast Bank Index		100.00	123.70	102.20	144.05	129.15	184.47
S&P U.S. BMI Banks - Southeast Region Index								S&P U.S. BMI Banks - Southeast Region Index	100.00	82.62	116.45	104.41	149.13	121.30

Source: S&P Global Market Intelligence

Pursuant to the regulations of the SEC, this performance graph is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act.

Item 6

Reserved.

Item 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and, assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors,” and elsewhere in this Annual Report on Form 10-K, may cause actual results to differ materially from those projected in the ~~forward looking~~forward-looking statements. We assume no obligation to update any of these forward-looking statements.

3236

The Company

Colony Bankcorp, Inc. is a bank holding company headquartered in Fitzgerald, Georgia that provides, through its wholly-owned subsidiary Colony Bank (collectively referred to as the Company), a broad array of products and services throughout central, south and coastal Georgia markets. The Company offers commercial, consumer and mortgage banking services.

Recent Developments

On August 1, 2021, the Company completed its previously announced acquisition (the “Merger”) of SouthCrest Financial Group, Inc. (“SouthCrest”), a Georgia corporation and the parent holding company of SouthCrest Bank, N.A. The Merger was completed pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated April 22, 2021, by and between the Company and SouthCrest. In accordance with the terms of the Merger Agreement, at the effective time, SouthCrest was merged with and into the Company, with the Company surviving the Merger. Immediately following the holding company Merger, SouthCrest Bank, N.A. was merged with and into Colony Bank, with Colony Bank as the surviving bank.

Pursuant to the terms of the Merger Agreement, each issued and outstanding share of SouthCrest stock was converted into the right to receive either $10.45 in cash or 0.7318 of a share of the Company's common stock, subject to certain proration and allocation procedures. In aggregate, the Company issued approximately 4.0 million shares of its common stock at a fair value of $71.4 million and paid approximately $21.6 million cash in the Merger.

The Company paid dividends to its shareholders throughout ~~2021~~2022 and ~~2020~~2021 on a quarterly basis. In 2022, we had a quarterly dividend of $0.1075 per share of common stock and in 2021, we had a quarterly dividend of ~~$0.1025~~ ~~per common stock and in 2020, we had a quarterly dividend of~~ $~~0.10~~0.1025 per share of common stock.

On February 10, 2022, the Company completed a public offering of 3,848,485 shares of its common stock at a public offering price of $16.50 per share, with aggregate proceeds of approximately $63.5 million.

~~GAAP~~ On May 20, 2022, the Company completed a private placement of $40 million in fixed-to-floating rate subordinated notes due 2032 (the “Notes”). The Notes will bear a fixed rate of 5.25% for the first five years and will reset quarterly thereafter to then current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York, plus 265 basis points for the five-year floating term. The Company is entitled to redeem the Notes, in whole or in part, on any interest payment date on or after May 20, 2027, or at any time, in whole but not in part, upon certain other specified event. At December 31, 2022, $39.1 million of Notes, net of debt issuance costs were outstanding.

On October 20, 2022, the Board of Directors of the Company authorized a stock buyback program, under which the Company may repurchase up to $12 million of its outstanding common stock. Repurchases under this program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The buyback program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to the exact number of shares that will be repurchased by the Company. The buyback program is intended to expire at the end of 2023 but may be suspended, modified or terminated by the Company at any time and for any reason, without prior notice. As of December 31, 2022, 40,000 shares had been repurchased at a price of $13.50, leaving $11.5 million available for future repurchases.

Reconciliation and Management Explanation of Non-GAAP Financial Measures

Our accounting and reporting policies conform to generally accepted accounting principles (GAAP) in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of our performance. These include the fully-taxable equivalent measures: tax-equivalent net interest income, tax-equivalent net interest margin and tax-equivalent net interest spread, which include the effects of taxable-equivalent adjustments using a federal income tax rate of ~~19%~~14% and ~~21%~~19% to increase tax-exempt interest income to a tax-equivalent basis for the year ended December 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Tax-equivalent adjustments are reported in Notes 1 and 2 to the Average Balances with Average Yields and Rates table under Rate/Volume Analysis. Management believes that non-GAAP financial measures provide additional useful information that allows investors to evaluate the ongoing performance of the company and provide meaningful comparisons to its peers. Management believes these non-GAAP financial measures also enhance investors' ability to compare period-to-period financial results and allow investors and company management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance.

Tax-equivalent net interest income, net interest margin and net interest spread.

Net interest income on a tax-equivalent basis is a non-GAAP measure that adjusts for the tax-favored status of net interest income from loans and investments. We believe this measure to be the preferred industry measurement of net interest income and it enhances comparability of net interest income arising from taxable and tax-exempt sources. The most directly comparable financial measure calculated in accordance with GAAP is our net interest income. Net interest margin on a tax-equivalent basis is net interest income on a tax-equivalent basis divided by average interest-earning assets on a tax-equivalent basis. The most directly comparable financial measure calculated in accordance with GAAP is our net interest margin. Net interest spread on a tax-equivalent basis is the difference in the average yield on average interest-earning assets on a tax equivalent basis and the average rate paid on average interest-bearing liabilities. The most directly comparable financial measure calculated in accordance with GAAP is our net interest spread.

These non-GAAP financial measures should not be considered alternatives to GAAP-basis financial statements, and other bank holding companies may define or calculate these non-GAAP measures or similar measures differently.

A reconciliation of these performance measures to GAAP performance measures is included in the tables below.

3338

Non-GAAP Performance Measures Reconciliation

Years Ended December 31,
2021 2020
(dollars in thousands, except per share data)
Operating noninterest expense reconciliation
Operating net income reconciliation
Net income (GAAP) $ 18,659 $ 11,815
Acquisition-related expenses 4,617 862
Gain on sale of Thomaston branch — (1,026)
Writedown of Building — 582
Income tax benefit of expenses (874) (88)
Operating net income $ 22,402 $ 12,145
Weighted average diluted shares 11,254,130 9,498,783
Adjusted earnings per diluted share $ 1.99 $ 1.28
Tangible book value per common share reconciliation
Book value per common share (GAAP) $ 15.92 $ 15.21
Effect of goodwill and other intangibles (4.41) (1.95)
Tangible book value per common share 11.51 13.26

~~COVID-19 and Recent Events~~

The U.S. economy contracted in the first half of 2020, ending the longest expansionary period in U.S. history, due to the COVID-19 pandemic. During March 2020, in an effort to lessen the impact of COVID-19 on consumers and businesses, the Federal Reserve reduced the federal funds rate 1.5 percentage points to 0.00 to 0.25 percent and the U.S. government enacted the CARES Act, the largest economic stimulus package in the nation’s history. The Company responded to the pandemic, beginning in March 2020, by supporting our clients, employees, and communities with such measures as remote work capabilities and branch service enhancements, loan payment deferrals, and accelerated investments in several technology initiatives that provided more convenience and a better digital experience as clients adapted to this highly virtual environment. The Company participated in the PPP and funded approximately 2,600 loans totaling approximately $193.2 million under the programs available in both 2020 and 2021, and $144.0 million in PPP loans related to CARES Act were forgiven.


	Years Ended December 31,
	2022			2021
(dollars in thousands, except per share data)
Operating noninterest expense reconciliation
Operating net income reconciliation
Net income (GAAP)	$	19,542		$	18,659
Acquisition-related expenses	142			4,617
Severance Costs	1,346			90
FHLB mark from called borrowings	751			—
Income tax benefit of expenses	(298)			(874)
Operating net income	$	21,483		$	22,492
Weighted average diluted shares	17,191,079			11,254,130
Adjusted earnings per diluted share	$	1.25		$	2.00

Tangible book value per common share reconciliation
Book value per common share (GAAP)	$	13.08		$	15.92
Effect of goodwill and other intangibles	(3.10)			(4.41)
Tangible book value per common share	$	9.98		$	11.51

Tangible equity to tangible assets reconciliation
Equity to assets (GAAP)	7.84		%	8.09		%
Effect of goodwill and other intangibles	(1.74)		%	(2.11)		%
Tangible equity to tangible assets	6.10		%	5.98		%

Operating efficiency ratio calculation
Efficiency ratio (GAAP)	77.34		%	76.72		%
Severance Costs	(1.16)			—
Acquisition-related expenses	(0.12)			(4.51)
Writedown of bank premises	—			(0.09)
FHLB mark from called borrowings	(0.65)			—
Operating efficiency ratio	75.40		%	72.13		%

Pre-provision net revenue
Net interest income before provision for credit losses	$	80,625		$	66,189
Noninterest income	35,072			36,290
	115,697			102,479

Noninterest expense	89,475			78,625
Pre-provision net revenue	$	26,222		$	23,854

Additional government spending measures and the availability of vaccines improved consumer confidence and demand, and the economy largely reopened in 2021, leading to a reduction in the unemployment rate and accelerated GDP growth. While 2021 has seen a recovery in the U.S. economy compared to 2020, uncertainty and market disruptions such as additional coronavirus variants, pandemic-related supply chain issues and labor shortages persist. The economic expansion has been met with inflationary pressures that are expected to result in the Federal Open Market Committee policy-tightening in 2022, likely including multiple interest rate hikes.

~~With a strong asset-sensitive balance sheet and our strong position in our market markets, we expect increases in loan demand and interest rates will improve returns going forward.~~

Critical Accounting Policies and Estimates

The consolidated financial statements of Colony are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and follow general practices within the industry in which it operates. This preparation requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the consolidated financial statements. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Estimates that are particularly susceptible to significant change include the valuation of loan acquisition transactions, as well as the determination of the allowance for loan losses and income taxes and, therefore, are critical accounting policies. In addition to the discussion that follows, the accounting policies related to these estimates are further described in Note 1, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements, under Part II, Item 8.

Business Combinations and Valuation of Loans Acquired in Business Combinations

We account for acquisitions under Financial Accounting Standards Board (“FASB”) ASC Topic 805, Business Combinations, which requires the use of the acquisition method of accounting. Assets acquired and liabilities assumed in a business combination are recorded at the estimated fair value on their purchase date. As provided for under GAAP, management has up to 12 months following the date of the acquisition to finalize the fair values of acquired assets and assumed liabilities, where it was not possible to estimate the acquisition date fair value upon consummation. Management finalized the fair values of acquired assets and assumed liabilities within this 12-month period and management currently considers such values to be the Day 1 Fair Values for the acquisition transactions.

In particular, the valuation of acquired loans involves significant estimates, assumptions and judgment based on information available as of the acquisition date. Loans acquired in a business combination transaction are evaluated either individually or in pools of loans with similar characteristics; including consideration of a credit component. A number of factors are considered in determining the estimated fair value of purchased loans including, among other things, the remaining life of the acquired loans, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, estimated holding periods, contractual interest rates compared to market interest rates, and net present value of cash flows expected to be received.

Allowance for Loan Losses

The allowance for loan losses is a critical accounting estimate that requires significant judgments and assumptions, which are inherently subjective. The use of different estimates or assumptions could have a significant impact on the provision for credit losses, allowance for loan losses, financial condition, and results of operations. The economic and business climate in any given industry or market is difficult to gauge and can change rapidly, and the effects of those changes can vary by borrower.

The allowance consists of specific, historical and general components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. The historical component covers nonclassified loans and is based on historical loss experience adjusted for qualitative factors. A general component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The general component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and historical losses in the portfolio. General valuation allowances are based on internal and external qualitative risk factors such as (1) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices, (2) changes in international, national, regional, and local conditions, (3) changes in the nature and volume of the portfolio and terms of loans, (4) changes in the experience, depth, and ability of lending management, (5) changes in the volume and severity of past due loans and other similar conditions, (6) changes in the quality of the organization's loan review system, (7) changes in the value of underlying collateral for collateral dependent loans, (8) the existence and effect of any concentrations of credit and changes in the levels of such concentrations, and (9) the effect of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

Consolidated net income and stockholders’ equity could be affected if management’s estimate of the allowance necessary to cover loan losses is subsequently materially different, requiring a change in the level of provision for loan losses to be recorded. While management uses currently available information to recognize losses on loans, future adjustments may be necessary

based on newly received appraisals, updated commercial customer financial statements, rapidly deteriorating customer cash flow, and changes in economic conditions or forecasts that affect the Company's customers.

Income Taxes

The assessment of income tax assets and liabilities involves the use of estimates, assumptions, interpretation, and judgment concerning certain accounting pronouncements and federal and state tax codes. There can be no assurance that future events, such as court decisions or positions of federal and state taxing authorities, will not differ from management’s current assessment, the impact of which could be significant to the consolidated results of operations and reported earnings.

Colony files a consolidated federal income tax return and a combined state income tax return (both of which include Colony and its wholly owned subsidiaries). Accordingly, amounts equal to tax benefits of those companies having taxable federal losses or credits are reimbursed by the companies that incur federal tax liabilities. Amounts provided for income tax expense are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable under tax laws. Deferred income tax assets and liabilities are computed quarterly for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax law rates

applicable to the periods in which the differences are expected to affect taxable income. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through provision for income tax expense. Valuation allowances are established when it is more likely than not that a portion of the full amount of the deferred tax asset will not be realized. In assessing the ability to realize deferred tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies. Colony may also recognize a liability for unrecognized tax benefits from uncertainty in income taxes. Unrecognized tax benefits represent the differences between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured in the financial statements. Penalties related to unrecognized tax benefits are classified as income tax expense.

Overview

The following discussion and analysis present the more significant factors affecting the Company’s financial condition as of December 31, ~~2021~~2022 and ~~2020~~2021 and results of operations for each of the two year-periods ended December 31, ~~2021.~~2022. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements, notes thereto and other financial information appearing elsewhere in this report.

Taxable-equivalent adjustments are the result of increasing income from tax-free loans and investments by an amount equal to the taxes that would be paid if the income were fully taxable based on a ~~19%~~14% federal tax rate for ~~2021~~2022 and a ~~21%~~19% federal rate for ~~2020,~~2021, thus making tax-exempt yields comparable to taxable asset yields.

Dollar amounts in tables are stated in thousands, except for per share amounts.

Results of Operations

The Company’s results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income and to control noninterest expense. Since market forces and economic conditions beyond the control of the Company determine interest rates, the ability to generate net interest income is dependent upon the Company’s ability to obtain an adequate spread between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities. Thus, the key performance for net interest income is the interest margin or net yield, which is taxable-equivalent net interest income divided by average interest-earning assets. Net income available to common shareholders totaled $19.5 million, or $1.14 per diluted shares in 2022, compared to $18.7 million, or $1.66 per diluted shares in ~~2021, compared to $11.8 million, or $1.24 per diluted shares in 2020.~~2021.

Net Interest Income

Net interest income is the difference between interest income on earning assets, such as loans and securities, and interest expense on liabilities, such as deposits and borrowings, which are used to fund those assets. Net interest income is the Company’s largest source of revenue, representing ~~64.3%~~63.7% of total revenue during ~~2021~~2022 and ~~66.76%~~61.9% of total revenue during ~~2020.~~2021.

Net interest margin is the taxable-equivalent net interest income as a percentage of average interest-earning assets for the period. The level of interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities impact net interest income and net interest margin.

The Company’s loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate, which is the rate offered on loans to borrowers with strong credit, was 7.50% as of December 31, 2022 and 3.25% as of December 31, ~~2021 and 2020.~~2021. The Federal Reserve Board sets general market rates of interest, including the deposit and loan rates offered by many financial institutions. During 2022, the prime interest rate increased 4.25%. During 2021, the prime interest rate remained the same. ~~During 2020, the prime interest rate decreased by 100 basis points.~~

The following table presents the changes in taxable-equivalent net interest income and identifies the changes due to differences in the average volume of interest-earning assets and interest-bearing liabilities and the changes due to changes in the average interest rate on those assets and liabilities. The changes in net interest income due to changes in both average volume and average interest rate have been allocated to the average volume change or the average interest rate change in proportion to the absolute amounts of the change in each. The Company’s consolidated average balance sheets along with an analysis of taxable-equivalent net interest earnings are presented in the Rate/Volume Analysis.

Rate/Volume Analysis

The rate/volume analysis presented hereafter illustrates the change from year to year for each component of the taxable equivalent net interest income separated into the amount generated through volume changes and the amount generated by changes in the yields/rates.


		Changes from 2020 to 2021 (a)						Changes from 2021 to 2022 (a)
(dollars in thousands)	(dollars in thousands)	Volume		Rate		Total			(dollars in thousands)	Volume		Rate		Total
Interest income	Interest income								Interest income
Loans, net of unearned fees	Loans, net of unearned fees	$	4,850	$	(272)	$	4,578		Loans, net of unearned fees	$	16,231	$	(5,755)	$	10,476
Investment securities, taxable	Investment securities, taxable	4,329		(1,861)		2,468			Investment securities, taxable	4,661		3,950		8,611
Investment securities, exempt	Investment securities, exempt	861		(31)		830			Investment securities, exempt	1,033		53		1,086
Interest-bearing deposits	Interest-bearing deposits	85		(309)		(224)			Interest-bearing deposits	(101)		774		673
Total interest income	Total interest income	10,125		(2,473)		7,652			Total interest income	21,824		(978)		20,846

Interest expense	Interest expense								Interest expense
Interest-Bearing Demand and Savings Deposits	Interest-Bearing Demand and Savings Deposits	681		(1,622)		(941)			Interest-Bearing Demand and Savings Deposits	329		1,789		2,118
Time Deposits	Time Deposits	(94)		(1,963)		(2,057)			Time Deposits	407		750		1,157
Federal funds purchased									Federal funds purchased	—		54		54
FHLB Advances	FHLB Advances	36		(88)		(52)			FHLB Advances	729		1,144		1,873
Paycheck Protection Program Liquidity Facility ("PPPLF")	Paycheck Protection Program Liquidity Facility ("PPPLF")	(147)		35		(112)			Paycheck Protection Program Liquidity Facility ("PPPLF")	(93)		—		(93)
Other Borrowings	Other Borrowings	(202)		(119)		(321)			Other Borrowings	626		733		1,359
Total interest expense	Total interest expense	274		(3,757)		(3,483)			Total interest expense	1,998		4,470		6,468

Net interest income	Net interest income	$	9,851	$	1,284	$	11,135		Net interest income	$	19,826	$	(5,448)	$	14,378


Georgia						58-1492391
(State or Other Jurisdiction of Incorporation or Organization)						(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

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


		Page
PART I

Item 1.	Business	7
Item 1A.	Risk Factors	1819
Item 1B.	Unresolved Staff Comments	3033
Item 2.	Properties	3033
Item 3.	Legal Proceedings	3134
Item 4.	Mine Safety Disclosures	3134

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3134
Item 6.	Reserved	3236
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3236
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	5561
Item 8.	Financial Statements and Supplementary Data	5561
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~106~~115
Item 9A.	Controls and Procedures	~~107~~116
Item 9B.	Other Information	~~108~~116

PART III

Item 10.	Directors and Executive Officers and Corporate Governance	~~108~~116
Item 11.	Executive Compensation	~~108~~117
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~108~~117
Item 13.	Certain Relationships and Related Transactions and Director Independence	~~108~~117
Item 14.	Principal Accounting Fees and Services	~~108~~117

PART IV

Item 15.	Exhibits, Financial Statement Schedules	~~109~~117
Item 16.	Form 10-K Summary	~~110~~119
	Signatures	~~110~~120


		2021						2020						2022				2021
		Average		Income/		Yields/		Average		Income/		Yields/				Average		Income/		Yields/		Average		Income/		Yields/
(dollars in thousands)	(dollars in thousands)	Balances		Expense		Rates		Balances		Expense		Rates			(dollars in thousands)	Balances		Expense		Rates		Balances		Expense		Rates
Assets	Assets														Assets
Loans, net of unearned fees (1)	Loans, net of unearned fees (1)	$	1,186,919	$	60,380	5.09	%	$	1,092,009	$	55,802	5.11	%		Loans, net of unearned fees (1)	$	1,505,792	$	70,856	4.71	%	$	1,186,919	$	60,380	5.09	%
Investment securities, taxable	Investment securities, taxable	547,793		9,343		1.71		336,140		6,875		2.05			Investment securities, taxable	820,356		17,954		2.19		547,793		9,343		1.71
Investment securities, exempt (2)	Investment securities, exempt (2)	61,476		1,161		1.89		17,070		331		1.94			Investment securities, exempt (2)	116,154		2,247		1.93		61,476		1,161		1.89
Deposits in banks and short term investments	Deposits in banks and short term investments	169,188		214		0.13		141,641		438		0.31			Deposits in banks and short term investments	91,825		887		0.97		169,188		214		0.13
Total interest-earning assets	Total interest-earning assets	1,965,376		71,098		3.62		1,586,860		63,446		4.00			Total interest-earning assets	2,534,127		91,944		3.63	%	1,965,376		71,098		3.62	%
Total noninterest-earning assets	Total noninterest-earning assets	135,916						104,375							Total noninterest-earning assets	215,723						135,916
Total assets	Total assets	$	2,101,292					$	1,691,235						Total assets	$	2,749,850					$	2,101,292

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity														Liabilities and Stockholders' Equity
Interest-bearing liabilities:	Interest-bearing liabilities:														Interest-bearing liabilities:
Savings and interest-bearing demand deposits	Savings and interest-bearing demand deposits	1,073,824		929		0.09	%	787,030		1,870		0.24	%		Savings and interest-bearing demand deposits	$	1,439,234	3,047		0.21	%	$	1,073,824	929		0.09	%
Time deposits	Time deposits	297,704		1,672		0.56		305,374		3,729		1.22			Time deposits	370,375		2,829		0.76		297,704		1,672		0.56
Total interest-bearing deposits	Total interest-bearing deposits	$	1,371,528	$	2,601	0.19		$	1,092,404	$	5,599	0.51			Total interest-bearing deposits	1,809,609		5,876		0.32		1,371,528		2,601		0.19
FHLB advances		34,849		691		1.98		33,249		743		2.23
Federal funds purchased															Federal funds purchased	2,835		54		1.89		—		—		—
FHLB advances (3)															FHLB advances (3)	71,690		2,564		3.58		34,849		691		1.98
Paycheck Protection Program Liquidity Facility	Paycheck Protection Program Liquidity Facility	25,546		93		0.36		90,768		205		0.23			Paycheck Protection Program Liquidity Facility	—		—		—		25,546		93		0.36
Other borrowings	Other borrowings	32,686		1,012		3.10		38,527		1,333		3.46			Other borrowings	52,872		2,371		4.48		32,686		1,012		3.10
Total other interest-bearing liabilities															Total other interest-bearing liabilities	127,397		4,989		3.92		93,081		1,796		1.93
Total interest-bearing liabilities	Total interest-bearing liabilities	1,464,609		4,397		0.30		1,254,948		7,880		0.63			Total interest-bearing liabilities	1,937,006		10,865		0.56	%	1,464,609		4,397		0.30	%
Noninterest-bearing demand deposits	Noninterest-bearing demand deposits	449,445						294,008							Noninterest-bearing demand deposits	564,322						449,445
Other liabilities	Other liabilities	11,195						4,325							Other liabilities	12,173						11,195
Stockholders' equity	Stockholders' equity	176,043						137,954							Stockholders' equity	236,349						176,043
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	2,101,292					$	1,691,235						Total liabilities and stockholders' equity	$	2,749,850					$	2,101,292
Interest rate spread	Interest rate spread					3.32	%					3.37	%		Interest rate spread					3.07	%					3.32	%
Net interest income	Net interest income			$	66,701					$	55,566				Net interest income			$	81,079					$	66,701
Net interest margin	Net interest margin					3.39	%					3.50	%		Net interest margin					3.20	%					3.39	%


						$		%							$		%
(dollars in thousands)	(dollars in thousands)	2021		2020		Variance		Variance		(dollars in thousands)	2022		2021		Variance		Variance
Service charges on deposit accounts	Service charges on deposit accounts	$	6,213	$	5,293	$	920	17.38	%	Service charges on deposit accounts	$	7,875	$	6,213	$	1,662	26.76	%
Mortgage fee income	Mortgage fee income	13,213		9,149		4,064		44.42		Mortgage fee income	8,550		13,213		(4,663)		(35.29)
Gain on sales of SBA loans	Gain on sales of SBA loans	7,547		1,600		5,947		100.00		Gain on sales of SBA loans	6,216		7,547		(1,331)		(17.64)
Gain (loss) on sales of securities	Gain (loss) on sales of securities	(87)		926		(1,013)		-109.40		Gain (loss) on sales of securities	(82)		(87)		5		(5.80)
Gain on sales of assets		—		1,082		(1,082)		100.00
Interchange fees	Interchange fees	6,929		4,988		1,941		38.91		Interchange fees	8,381		6,929		1,452		20.95
BOLI income	BOLI income	1,041		743		298		40.11		BOLI income	1,313		1,041		272		26.09
Other	Other	1,434		463		971		209.81		Other	2,819		1,434		1,385		96.62
Total	Total	$	36,290	$	24,244	$	12,046	49.69	%	Total	$	35,072	$	36,290	$	(1,218)	(3.36)	%





COLONY BANKCORP, INC.
(Exact Name of Registrant Specified in its Charter)


(dollars in thousands)	(dollars in thousands)	December 31, 2021		December 31, 2020		December 31, 2019		December 31, 2018		December 31, 2016		(dollars in thousands)	December 31, 2022		December 31, 2021		December 31, 2020		December 31, 2019		December 31, 2018
Construction, land & land development	Construction, land & land development	$	165,446	$	121,093	$	96,097	$	60,310	$	53,762	Construction, land & land development	$	229,435	$	165,446	$	121,093	$	96,097	$	60,310
Other commercial real estate	Other commercial real estate	787,392		520,391		540,239		435,961		418,669		Other commercial real estate	975,447		787,392		520,391		540,239		435,961
Total commercial real estate	Total commercial real estate	952,838		641,484		636,336		496,271		472,431		Total commercial real estate	1,204,882		952,838		641,484		636,336		496,271
Residential real estate	Residential real estate	212,527		183,021		194,796		187,592		193,924		Residential real estate	290,054		212,527		183,021		194,796		187,592
Commercial , financial, & agricultural		154,048		213,380		114,360		74,166		64,523
Commercial, financial & agricultural												Commercial, financial & agricultural	223,923		154,048		213,380		114,360		74,166
Consumer & other	Consumer & other	18,564		21,618		23,322		23,497		33,911		Consumer & other	18,247		18,564		21,618		23,322		23,497
Total loans, net of unearned fees	Total loans, net of unearned fees	1,337,977		1,059,503		968,814		781,526		764,789		Total loans, net of unearned fees	1,737,106		1,337,977		1,059,503		968,814		781,526
Allowance for loan losses	Allowance for loan losses	(12,910)		(12,127)		(6,863)		(7,277)		(7,508)		Allowance for loan losses	(16,128)		(12,910)		(12,127)		(6,863)		(7,277)
Loans, net	Loans, net	$	1,325,067	$	1,047,376	$	961,951	$	774,249	$	757,281	Loans, net	$	1,720,978	$	1,325,067	$	1,047,376	$	961,951	$	774,249


(dollars in thousands)	(dollars in thousands)	One year or less		After one year through five years		After five years through fifteen years		After fifteen years		Total		(dollars in thousands)	One year or less		After one year through five years		After five years through fifteen years		After fifteen years		Total
Construction, land & land development	Construction, land & land development	$	99,837	$	35,389	$	12,953	$	17,267	$	165,446	Construction, land & land development	$	112,010	$	51,254	$	43,165	$	23,006	$	229,435
Other commercial real estate	Other commercial real estate	85,737		258,403		403,288		39,964		787,392		Other commercial real estate	80,789		381,248		466,351		47,059		975,447
Total commercial real estate	Total commercial real estate	185,574		293,792		416,241		57,231		952,838		Total commercial real estate	192,799		432,502		509,516		70,065		1,204,882
Residential real estate	Residential real estate	10,093		58,650		87,000		56,784		212,527		Residential real estate	36,909		78,586		114,471		60,088		290,054
Commercial, financial, & agricultural		29,889		70,186		51,757		2,216		154,048
Commercial, financial & agricultural												Commercial, financial & agricultural	51,680		115,116		50,449		6,678		223,923
Consumer & other	Consumer & other	4,236		12,813		1,515		—		18,564		Consumer & other	4,336		12,537		1,374		—		18,247
Total loans, net of unearned fees	Total loans, net of unearned fees	229,792		435,441		556,513		116,231		1,337,977		Total loans, net of unearned fees	285,724		638,741		675,810		136,831		1,737,106


(dollars in thousands)	Due in One Year or Less		After One, but within Five Years		After Five Years, but within Fifteen Years		After Fifteen Years		Total
Loans with fixed interest rates	$	134,376	$	393,599	$	460,333	$	50,558	$	1,038,866
Loans with floating interest rates	95,416		41,842		97,222		64,631		299,111

Total	$	229,792	$	435,441	$	557,555	$	115,189	$	1,337,977


		December 31,				December 31,				December 31,				December 31,				December 31,					December 31,				December 31,				December 31,				December 31,				December 31,
(dollars in thousands)	(dollars in thousands)	2021				2020				2019				2018				2017				(dollars in thousands)	2022				2021				2020				2019				2018
		Reserve		%(1)		Reserve		%(1)		Reserve		%(1)		Reserve		%(1)		Reserve		%(1)			Reserve		%(1)		Reserve		%(1)		Reserve		%(1)		Reserve		%(1)		Reserve		%(1)
Construction, land & land development	Construction, land & land development	$	1,127	12.4	%	$	1,013	11.4	%	$	215	9.9	%	$	131	7.7	%	$1,216		7.0	%	Construction, land & land development	$	1,959	13.2	%	$	1,127	12.4	%	$	1,013	11.4	%	$	215	9.9	%	$131		7.7	%
Commercial real estate	Commercial real estate	7,691		58.8		6,880		49.1		3,908		55.8		5,251		55.8		4,654		54.7		Commercial real estate	8,886		56.2		7,691		58.8		6,880		49.1		3,908		55.8		5,251		55.8
Residential real estate	Residential real estate	1,805		15.9		2,278		17.3		980		20.1		1,181		24.0		968		25.4		Residential real estate	2,354		16.7		1,805		15.9		2,278		17.3		980		20.1		1,181		24.0
Commercial , financial, & agricultural		1,083		11.5		1,713		20.1		1,657		11.8		618		9.5		633		8.4
Commercial, financial & agricultural																						Commercial, financial & agricultural	2,709		12.9		1,083		11.5		1,713		20.1		1,657		11.8		618		9.5
Consumer & other	Consumer & other	1,204		1.4		243		2.1		103		2.4		96		3.0		37		4.4		Consumer & other	220		1.1		1,204		1.4		243		2.0		103		2.4		96		3.0
		$	12,910	100.0	%	$	12,127	100.0	%	$	6,863	100.0	%	$	7,277	100.0	%	$	7,508	100.0	%		$	16,128	100.1	%	$	12,910	100.0	%	$	12,127	99.9	%	$	6,863	100.0	%	$	7,277	100.1	%


						After 1 Year But				After 5 Years But													After 1 Year But				After 5 Years But
		Within 1 Year				Within 5 Years				Within 10 Years				After 10 Years
Available for Sale																		Available for Sale	Within 1 Year				Within 5 Years				Within 10 Years				After 10 Years
(dollars in thousands)	(dollars in thousands)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		(dollars in thousands)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
U.S. treasury securities	U.S. treasury securities	$	—	—	%	$	33,405	1.06	%	$	54,146	1.02	%	$	—	—	%	U.S. treasury securities	$	1,135	2.59	%	$	487	2.90	%	$	—	—	%	$	—	—	%
U.S. agency	U.S. agency	—		—		6,812		1.13		10,969		1.40		—		—		U.S. agency	—		—		859		0.76		505		2.19		3,221		2.75
Asset backed securities																		Asset backed securities	—		—		550		2.59		—		—		29,438		5.43
State, county and municipal securities	State, county and municipal securities	453		3.47		1,036		1.84		41,753		1.73		206,911		1.92		State, county and municipal securities	171		2.19		1,699		2.20		39,690		2.04		63,196		2.07
Corporate debt securities	Corporate debt securities	—		—		8,369		3.45		36,143		3.97		3,896		5.13		Corporate debt securities	—		—		9,276		3.40		36,698		4.24		3,611		8.61
Mortgage-backed securities	Mortgage-backed securities	1,789		—		47,094		4.45		94,723		4.94		390,665		1.65		Mortgage-backed securities	16,025		7.22		50,515		4.10		13,786		2.57		161,691		2.26
Total debt securities	Total debt securities	$	2,242	3.51	%	$	96,716	2.93	%	$	237,734	3.17	%	$	601,472	1.76	%	Total debt securities	$	17,331	6.87	%	$	63,386	3.88	%	$	90,679	3.01	%	$	261,157	2.67	%


					After 1 Year But				After 5 Years But
Held to Maturity	Within 1 Year				Within 5 Years				Within 10 Years				After 10 Years
(dollars in thousands)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
U.S. treasury securities	$	—	—	%	$	72,558	1.05	%	$	19,057	1.12	%	$	—	—	%
U.S. agency	—		—		6,748		1.13		9,661		1.46		—		—
State, county and municipal securities	—		—		—		—		50,257		2.29		85,881		2.27

Mortgage-backed securities	—		—		27,079		1.88		49,428		1.83		145,189		1.76
Total debt securities	$	—	—	%	$	106,385	1.27	%	$	128,403	1.88	%	$	231,070	1.95	%


(dollars in thousands)	Time Deposits $250,000 or Greater		Time Deposits Less than $250,000		Total
Months to Maturity
3 or less	$	18,171	$	56,628	$	74,799
Over 3 through 6	19,808		47,154		66,962
Over 6 through 12	17,415		91,676		109,091
Over 12 Months	18,013		80,363		98,376
	$	73,407	$	275,821	$	349,228


(dollars in thousands)	(dollars in thousands)	Payments Due by Period										(dollars in thousands)	Payments Due by Period
		Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years			Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More Than 5 Years
Contractual Obligations:	Contractual Obligations:											Contractual Obligations:
Borrowings	Borrowings	$88,448		$5,313		$3,000		$11,750		$68,385		Borrowings	$	203,352	$	120,000	$	—	$	15,000	$	68,352
Operating lease liabilities	Operating lease liabilities	665		493		172		—		—		Operating lease liabilities	1,895		460		795		568		72
Time Deposits	Time Deposits	349,228		250,852		83,224		14,264		888		Time Deposits	473,540		322,413		137,794		12,967		366
		$	438,341	$	256,658	$	86,396	$	26,014	$	69,273		$	678,787	$	442,873	$	138,589	$	28,535	$	68,790

Other Commitments:	Other Commitments:											Other Commitments:
Loan commitments	Loan commitments	$	318,853	$	191,067	$	48,363	$	7,105	$	72,318	Loan commitments	$	379,997	$	156,854	$	46,067	$	26,074	$	151,002
Standby letters of credit	Standby letters of credit	4,869		2,923		1,946		—		—		Standby letters of credit	3,333		3,019		314		—		—
		323,722		193,990		50,309		7,105		72,318			383,330		159,873		46,381		26,074		151,002
Total Contractual Obligations and Other Commitments	Total Contractual Obligations and Other Commitments	$	762,063	$	450,648	$	136,705	$	33,119	$	141,591	Total Contractual Obligations and Other Commitments	$	1,062,117	$	602,746	$	184,970	$	54,609	$	219,792


Twelve Month Net Interest Income Sensitivity	Twelve Month Net Interest Income Sensitivity			Twelve Month Net Interest Income Sensitivity
		Estimated Change in Net Interest Income as of December 31,			Estimated Change in Net Interest Income as of December 31,
Change in Short-term Interest Rates (in basis points)	Change in Short-term Interest Rates (in basis points)	2021	2020	Change in Short-term Interest Rates (in basis points)	2022	2021
+200	+200	13.80%	12.55%	+200	2.59%	13.80%
+100	+100	6.83%	6.71%	+100	1.37%	6.83%
Flat	Flat	—%	—%	Flat	—%	—%
-100	-100	-3.18%	-2.91%	-100	-0.61%	-3.18%



FORM 10-K


						$		%							$		%
(dollars in thousands)	(dollars in thousands)	2021		2020		Variance		Variance		(dollars in thousands)	2022		2021		Variance		Variance
Salaries and employee benefits	Salaries and employee benefits	$	45,596	$	34,141	$	11,455	33.55	%	Salaries and employee benefits	$	52,809	$	45,596	$	7,213	15.82	%
Occupancy and equipment	Occupancy and equipment	6,149		5,311		838		15.78		Occupancy and equipment	6,534		6,149		385		6.27
Acquisition related expenses	Acquisition related expenses	4,617		862		3,755		435.61		Acquisition related expenses	142		4,617		(4,475)		(96.92)
Information technology	Information technology	7,673		5,746		1,927		33.54		Information technology	9,947		7,673		2,274		29.64
Professional Fees	Professional Fees	2,951		2,250		701		31.16		Professional Fees	3,432		2,750		682		24.80
Advertising and public relations	Advertising and public relations	2,657		2,111		546		25.86		Advertising and public relations	3,664		2,705		959		35.47
Communications	Communications	1,373		835		538		64.43		Communications	1,602		1,373		229		16.69
Writedown of building	Writedown of building	90		582		(492)		100.00		Writedown of building	—		90		(90)		(100.00)
FHLB prepayment penalty		—		925		(925)		100.00
Other	Other	7,609		5,538		2,071		37.40		Other	11,345		7,672		3,673		47.88
Total	Total	$	78,715	$	58,301	$	20,414	35.01	%	Total	$	89,475	$	78,625	$	10,850	13.80	%


/s/ T. Heath Fountain
T. Heath Fountain Chief Executive Officer/Director/Acting Chief Financial Officer


	2021		2020

Net income	$	18,659	$	11,815

Other comprehensive income:
Net unrealized gains (losses) on investment securities arising during the period	(16,491)		9,052
Tax effect	3,463		(1,901)
Reclassification adjustment for (gains) losses on sales of securities available for sale included in net income	87		(926)
Tax effect	(17)		194
Change in unrealized gains (losses) on securities available for sale, net of reclassification adjustment and tax effects	(12,958)		6,419
Comprehensive income	$	5,701	$	18,234


		Preferred Stock			Common Stock			Paid-in capital				Retained earnings			Accumulated other comprehensive income (loss)						Preferred Stock					Common Stock			Paid-in capital				Retained earnings				Accumulated other comprehensive income (loss)				Total
		Shares	Amount		Shares	Amount								Total			Shares				Amount			Shares		Amount
Balance, December 31, 2019		—	$	—	9,498,783	$	9,499			$	43,667				$	76,978		$	362			$	130,506
Other comprehensive income		—	—		—	—		—				—			6,419			6,419
Dividends on common shares		—	—		—	—		—				(3,800)			—			(3,800)
Goodwill adjustment		—	—		—	—		(485)				—			—			(485)
Stock-based compensation expense		—	—		—	—		33				—			—			33
Net income		—	—		—	—		—				11,815			—			11,815
Balance, December 31, 2020	Balance, December 31, 2020	—	$	—	9,498,783	$	9,499	$	43,215			$	84,993		$	6,781		$	144,488	Balance, December 31, 2020	—			$	—	9,498,783	$	9,499			$	43,215			$	84,993			$	6,781			144,488
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—				—			(12,958)			(12,958)		Other comprehensive loss	—			—		—	—		—				—				(12,958)				(12,958)
Dividends on common shares	Dividends on common shares	—	—		—							(4,463)			—			(4,463)		Dividends on common shares	—			—		—	—		—				(4,463)				—				(4,463)

Issuance of common stock	Issuance of common stock	—	—		3,987,815	3,988		67,394				—			—			71,382		Issuance of common stock	—			—		3,987,815	3,988		67,394				—				—				71,382
Issuance of restricted stock, net		—	—		187,300	187		(187)				—			—			—
Stock-based compensation expense		—	—		—	—		599				—			—			599
Issuance of restricted stock, net of forfeitures																				Issuance of restricted stock, net of forfeitures	—			—		187,300	187		(187)				—				—				—
Stock-based compensation expense, net																				Stock-based compensation expense, net	—			—		—	—		599				—				—				599
Net income	Net income	—	—		—	—		—				18,659			—			18,659		Net income	—			—		—	—		—				18,659				—				18,659
Balance, December 31, 2021	Balance, December 31, 2021	—	$	—	13,673,898	$	13,674	$	111,021			$	99,189		$	(6,177)		$	217,707	Balance, December 31, 2021	—			$	—	13,673,898	$	13,674	$	111,021			$	99,189			$	(6,177)			217,707
Other comprehensive loss																				Other comprehensive loss	—			—		—	—		—				—				(60,263)				(60,263)
Dividends on common shares																				Dividends on common shares	—			—		—	—		—				(7,158)				—				(7,158)
Issuance of common stock, net																				Issuance of common stock, net	—			—		3,848,485	3,848		55,620				—				—				59,468
Issuance of restricted stock, net of forfeitures																				Issuance of restricted stock, net of forfeitures	—			—		130,720	131		(131)				—				—				—
Tax withholding related to vesting of restricted stock																				Tax withholding related to vesting of restricted stock	—			—		(14,980)	(15)		(216)				—				—				(231)
Repurchase of shares																				Repurchase of shares	—			—		(40,000)	(40)		(500)				—				—				(540)
Stock-based compensation expense, net																				Stock-based compensation expense, net	—			—		—	—		1,743				—				—				1,743
Net income																				Net income	—			—		—	—		—				19,542				—				19,542
Balance, December 31, 2022																				Balance, December 31, 2022	—			$	—	17,598,123	$	17,598	$	167,537			$	111,573			$	(66,440)			$	230,268



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	10,222	$	4,387
Cash paid during the period for income taxes	3,836		3,859

NONCASH INVESTING AND FINANCING ACTIVITIES
Transfers to other real estate	405		145
Change in goodwill	(3,984)		—
Carrying amount of securities AFS transferred to HTM, net of $34.0 million unrealized loss	510,956		—


(dollars in thousands, except market price)	Initial Fair Value Adjustments
Purchase price consideration:
Shares of CBAN common stock issued to SouthCrest shareholders as of August 1, 2021	3,987,815
Market price of CBAN common stock on July 30, 2021	$	17.90
Estimated fair value of CBAN common stock issued	71,382
Cash consideration paid	21,620
Total consideration	$	93,002

Assets acquired at fair value:
Cash and cash equivalents	$	59,131
Investments securities available for sale	317,857

Restricted investments	3,196
Loans	307,456
Premises and equipment	8,543
Core deposit intangible	4,025
Other real estate	538
Prepaid and other assets	25,393
Total fair value of assets acquired	$	726,139

Liabilities assumed at fair value:
Deposits	$	(631,375)
FHLB advances	(29,064)
Payables and other liabilities	(7,735)
Total fair value of liabilities assumed	$	(668,174)

Net assets acquired at fair value:	$	57,965

Amount of goodwill resulting from acquisition	$	35,037


(dollars in thousands)
Contractually ~~Required Principal~~required principal and ~~Interest~~interest	$	1,154
Non-accretable ~~Difference~~difference	—
Cash ~~Flows Expected~~flows expected to be ~~Collected~~collected	1,154
Accretable ~~Yield~~yield	—
Total ~~Purchased Credit-Impaired Loans Acquired~~purchased credit-impaired loans acquired	$	1,154


	Fair value of acquired loans at acquisition date		Contractually required principal and interest payments		Nonaccretable difference
(dollars in thousands)
Acquired receivables subject to ASC 310-30	$	1,154	$	1,154	$	—
Acquired receivables not subject to ASC 310-30	306,302		306,937		—


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
U.S. treasury securities	$	88,638	$	—	$	(1,087)	$	87,551
U.S. agency	17,916		5		(140)		17,781
State, county and municipal securities	252,632		877		(3,356)		250,153
Corporate debt securities	48,153		520		(265)		48,408
Mortgage-backed securities	539,172		2,160		(7,061)		534,271
Total debt securities	$	946,511	$	3,562	$	(11,909)	$	938,164


		Less Than 12 Months				12 Months or More				Total					Less Than 12 Months				12 Months or More				Total
(dollars in thousands)	(dollars in thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		(dollars in thousands)	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
December 31, 2022														December 31, 2022
U.S. treasury securities														U.S. treasury securities	$	1,377	$	(17)	$	245	$	(5)	$	1,622	$	(22)
U.S. agency														U.S. agency	3,221		(257)		1,364		(193)		4,585		(450)
Asset backed securities														Asset backed securities	10,780		(319)		19,208		(1,161)		29,988		(1,480)
State, county and municipal securities														State, county and municipal securities	29,284		(3,629)		75,472		(17,734)		104,756		(21,363)
Corporate debt securities														Corporate debt securities	17,258		(1,463)		30,651		(3,857)		47,909		(5,320)
Mortgage-backed securities														Mortgage-backed securities	122,031		(7,890)		119,409		(21,301)		241,440		(29,191)
Total debt securities														Total debt securities	$	183,951	$	(13,575)	$	246,349	$	(44,251)	$	430,300	$	(57,826)

December 31, 2021	December 31, 2021													December 31, 2021
U.S. treasury securities	U.S. treasury securities	$	87,302	$	(1,087)	$	—	$	—	$	87,302	$	(1,087)	U.S. treasury securities	$	87,302	$	(1,087)	$	—	$	—	$	87,302	$	(1,087)
U.S. agency	U.S. agency	10,969		(140)		—		—		10,969		(140)		U.S. agency	10,969		(140)		—		—		10,969		(140)
State, county and municipal securities	State, county and municipal securities	180,551		(3,131)		5,970		(225)		186,521		(3,356)		State, county and municipal securities	180,551		(3,131)		5,970		(225)		186,521		$	(3,356)
Corporate debt securities	Corporate debt securities	31,977		(265)		—		—		31,977		(265)		Corporate debt securities	31,977		(265)		—		—		31,977		(265)
Mortgage-backed securities	Mortgage-backed securities	377,413		(6,421)		21,129		(640)		398,542		(7,061)		Mortgage-backed securities	377,413		(6,421)		21,129		(640)		398,542		(7,061)
Total debt securities	Total debt securities	$	688,212	$	(11,044)	$	27,099	$	(865)	$	715,311	$	(11,909)	Total debt securities	$	688,212	$	(11,044)	$	27,099	$	(865)	$	715,311	$	(11,909)

December 31, 2020
State, county and municipal securities		$	8,282	$	(65)	$	—	$	—	$	8,282	$	(65)
Corporate debt securities		999		(1)		—		—		999		(1)
Mortgage-backed securities		28,835		(77)		3,949		(271)		32,784		(348)
Total debt securities		$	38,116	$	(143)	$	3,949	$	(271)	$	42,065	$	(414)


	Less Than 12 Months				12 Months or Greater				Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
December 31, 2022
U.S. Treasury	$	—	$	—	$	87,466	$	(4,149)	$	87,466	$	(4,149)
U.S. agency	—		—		14,571		(1,838)		14,571		(1,838)
State, county & municipal securities	9,858		(1,392)		105,734		(18,126)		115,592		(19,518)
Mortgage-backed securities	13,580		(729)		178,995		(28,392)		192,575		(29,121)
	$	23,438	$	(2,121)	$	386,766	$	(52,505)	$	410,204	$	(54,626)


		Securities Available for Sale					Available for Sale				Held to Maturity
(dollars in thousands)	(dollars in thousands)	Amortized Cost		Fair Value		(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	Due in one year or less	$	453	$	453	Due in one year or less	$	1,319	$	1,304	$	—	$	—
Due after one year through five years	Due after one year through five years	49,599		49,622		Due after one year through five years	14,126		12,871		79,306		75,759
Due after five years through ten years	Due after five years through ten years	144,692		143,011		Due after five years through ten years	89,731		76,895		78,975		69,275
Due after ten years	Due after ten years	212,595		210,807		Due after ten years	113,831		99,466		85,881		73,655
		$	407,339	$	403,893		$	219,007	$	190,536	$	244,162	$	218,689

Mortgage-backed securities	Mortgage-backed securities	539,172		534,271		Mortgage-backed securities	271,199		242,017		221,696		192,575
		$	946,511	$	938,164		$	490,206	$	432,553	$	465,858	$	411,264


(dollars in thousands)	Pass		Special Mention		Substandard		Total Loans

Construction, land & land development	$	215,265	$	290	$	651	$	216,206
Other commercial real estate	827,300		14,236		6,148		847,684
Total commercial real estate	1,042,565		14,526		6,799		1,063,890
Residential real estate	239,570		5,976		3,844		249,390
Commercial, financial & agricultural	207,935		812		1,666		210,413
Consumer & other	17,206		54		36		17,296
Total loans	$	1,507,276	$	21,368	$	12,345	$	1,540,989


		Accruing Loans													Accruing Loans
(dollars in thousands)	(dollars in thousands)	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans		(dollars in thousands)	30-89 Days Past Due		90 Days or More Past Due		Total Accruing Loans Past Due		Nonaccrual Loans		Current Loans		Total Loans

Construction, land & land development	Construction, land & land development	$	6	$	—	$	6	$	—	$	119,947	$	119,953	Construction, land & land development	$	—	$	—	$	—	$	149	$	216,057	$	216,206
Other commercial real estate	Other commercial real estate	349		—		349		577		594,813		595,739		Other commercial real estate	395		—		395		1,389		845,900		847,684
Total commercial real estate	Total commercial real estate	355		—		355		577		714,760		715,692		Total commercial real estate	395		—		395		1,538		1,061,957		1,063,890
Residential real estate	Residential real estate	421		—		421		2,641		156,407		159,469		Residential real estate	870		—		870		1,875		246,645		249,390
Commercial, financial, & agricultural		69		—		69		708		112,263		113,040
Commercial, financial & agricultural														Commercial, financial & agricultural	403		—		403		878		209,132		210,413
Consumer & other	Consumer & other	93		—		93		26		15,884		16,003		Consumer & other	40		—		40		21		17,235		17,296
Total loans	Total loans	$	938	$	—	$	938	$	3,952	$	999,314	$	1,004,204	Total loans	$	1,708	$	—	$	1,708	$	4,312	$	1,534,969	$	1,540,989


(dollars in thousands)	(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded investment		Related allowance		Average Recorded Investment		(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded investment		Related allowance		Average Recorded Investment

With No Related Allowance Recorded	With No Related Allowance Recorded									With No Related Allowance Recorded
Construction, land & land development	Construction, land & land development	$	62	$	62	$	—	$	4,311	Construction, land & land development	$	40	$	40	$	—	$	10
Other commercial real estate	Other commercial real estate	7,203		6,369		—		8,113		Other commercial real estate	3,754		3,754		—		5,311
Residential real estate	Residential real estate	958		997		—		1,083		Residential real estate	62		62		—		570
Commercial, financial & agricultural	Commercial, financial & agricultural	75		75		—		56		Commercial, financial & agricultural	—		—		—		306
Consumer & other	Consumer & other	—		—		—		—		Consumer & other	—		—		—		1
Total Impaired Loans with no Allowance	Total Impaired Loans with no Allowance	8,298		7,503		—		13,563		Total Impaired Loans with no Allowance	3,856		3,856		—		6,198

With An Allowance Recorded	With An Allowance Recorded									With An Allowance Recorded
Construction, land & land development	Construction, land & land development	—		—		—		—		Construction, land & land development	474		474		44		177
Other commercial real estate	Other commercial real estate	430		483		148		4,429		Other commercial real estate	—		—		—		503
Residential real estate	Residential real estate	685		773		108		1,029		Residential real estate	—		—		—		588
Commercial, financial & agricultural	Commercial, financial & agricultural	—		—		—		79		Commercial, financial & agricultural	—		—		—		369
Consumer & other	Consumer & other	—		—		—		1		Consumer & other	—		—		—		—
Total Impaired Loans with Allowance	Total Impaired Loans with Allowance	1,115		1,256		256		5,538		Total Impaired Loans with Allowance	474		474		44		1,637

Purchased Credit Impaired Loans	Purchased Credit Impaired Loans									Purchased Credit Impaired Loans
Construction, land & land development	Construction, land & land development	—		—		—		51		Construction, land & land development	—		—		—		—
Other commercial real estate	Other commercial real estate	2,003		1,916		18		802		Other commercial real estate	798		798		33		760
Residential real estate	Residential real estate	4		—		6		7		Residential real estate	—		—		—		13
Commercial, financial & agricultural	Commercial, financial & agricultural	—		—		—		35		Commercial, financial & agricultural	—		—		—		—
Consumer & other	Consumer & other	192		73		96		72		Consumer & other	—		—		—		65
Total Purchased Credit Impaired Loans	Total Purchased Credit Impaired Loans	2,199		1,989		120		967		Total Purchased Credit Impaired Loans	798		798		33		838

Total	Total									Total
Construction, land & land development	Construction, land & land development	62		62		—		4,362		Construction, land & land development	514		514		44		187
Other commercial real estate	Other commercial real estate	9,636		8,768		166		13,344		Other commercial real estate	4,552		4,552		33		6,574
Residential real estate	Residential real estate	1,647		1,770		114		2,119		Residential real estate	62		62		—		1,171
Commercial, financial & agricultural	Commercial, financial & agricultural	75		75		—		170		Commercial, financial & agricultural	—		—		—		675
Consumer & other	Consumer & other	192		73		96		73		Consumer & other	—		—		—		66
		$	11,612	$	10,748	$	376	$	20,068		$	5,128	$	5,128	$	77	$	8,673


(dollars in thousands)	Construction, land and land development		Other commercial real estate		Residential real estate		Commercial, financial & agricultural		Consumer and other		Total
Year ended December 31, 2022
Beginning balance	$	1,127	$	7,691	$	1,805	$	1,083	$	1,204	$	12,910
Charge-offs	—		(58)		(48)		(314)		(60)		(480)
Recoveries	25		85		50		139		29		328
Provision	807		1,168		547		1,801		(953)		3,370
Ending balance	$	1,959	$	8,886	$	2,354	$	2,709	$	220	$	16,128

Period-end amount allocated to:
Individually evaluated for impairment	$	44	$	—	$	—	$	—	$	—	$	44
Collectively evaluated for impairment	1,915		8,853		2,354		2,709		220		16,051
Purchase credit impaired	—		33		—		—		—		33
Ending balance	$	1,959	$	8,886	$	2,354	$	2,709	$	220	$	16,128

Loans:
Loans individually evaluated for impairment	$	514	$	3,754	$	62	$	—	$	—	$	4,330
Loans collectively evaluated for impairment	228,921		970,895		289,992		223,923		18,247		1,731,978
Purchased credit impaired	—		798		—		—		—		798
Ending balance	$	229,435	$	975,447	$	290,054	$	223,923	$	18,247	$	1,737,106


Description	Description	Maturity Date	Amount		Interest Rate	Description	Maturity Date	Amount		Interest Rate
(dollars in thousands)	(dollars in thousands)					(dollars in thousands)
FHLB Advances	FHLB Advances	February 3, 2023	$	3,000	3.51%	FHLB Advances	March 21, 2028	$	5,000	2.67%
FHLB Advances	FHLB Advances	March 21, 2028	5,000		2.67%	FHLB Advances	January 5, 2023	20,000		4.18%
FHLB Advances	FHLB Advances	August 15, 2025	4,500		2.62%	FHLB Advances	January 9, 2023	20,000		4.15%
FHLB Advances	FHLB Advances	July 30, 2029	10,000		1.01%	FHLB Advances	March 8, 2023	10,000		4.65%
FHLB Advances	FHLB Advances	July 11, 2029	10,000		1.03%	FHLB Advances	January 17, 2023	20,000		4.15%
FHLB Advances	FHLB Advances	November 9, 2029	20,000		1.07%	FHLB Advances	January 20, 2023	15,000		4.23%
Term Note		May 24, 2025	7,250		4.70%
Revolving Credit		July 30, 2022	5,313		2.85%
FHLB Advances						FHLB Advances	December 22, 2027	15,000		4.00%
FHLB Advances						FHLB Advances	January 30, 2023	20,000		4.23%
FRB Discount Window						FRB Discount Window	January 5, 2023	15,000		4.10%
Subordinated notes						Subordinated notes	May 20, 2032	39,123		5.25%
Subordinated debentures	Subordinated debentures	(2)	24,229		(3)	Subordinated debentures	(1)	24,229		(1)
Fair Value Adjustment for FHLB Borrowings acquired from SouthCrest			(844)

Total borrowings	Total borrowings		$	88,448		Total borrowings		$	203,352


Supplemental Lease Information: (dollars in thousands)	Supplemental Lease Information: (dollars in thousands)	December 31, 2021		December 31, 2020		Supplemental Lease Information: (dollars in thousands)	December 31, 2022		December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (cash payments)	Operating cash flows from operating leases (cash payments)	$	335	$	238	Operating cash flows from operating leases (cash payments)	$	549	$	335

Operating lease right-of-use assets obtained in exchange for leases entered into during the period	Operating lease right-of-use assets obtained in exchange for leases entered into during the period	742		196		Operating lease right-of-use assets obtained in exchange for leases entered into during the period	1,750		742


	Quantity	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2020	1,884	$	17.73
Granted	187,600	17.93
Vested	(1,884)	17.73
Forfeited	(300)	17.93
Outstanding at December 31, 2021	187,300	17.93
Granted	139,720	16.11
Vested	(71,154)	17.93
Forfeited	(9,000)	17.36
Outstanding at December 31, 2022	246,866	16.92


		Contract Amount					Contract Amount
		2021		2020			2022		2021
(dollars in thousands)	(dollars in thousands)					(dollars in thousands)
Commitments to extend credit	Commitments to extend credit	$	318,853	$	198,029	Commitments to extend credit	$	379,997	$	318,853
Standby letters of credit	Standby letters of credit	4,869		3,634		Standby letters of credit	3,333		4,869


		Carrying		Estimated		Level							Carrying		Estimated		Level
(dollars in thousands)	(dollars in thousands)	Amount		Fair Value		1		2		3		(dollars in thousands)	Amount		Fair Value		1		2		3
December 31, 2022												December 31, 2022
Assets												Assets
Cash and short-term investments												Cash and short-term investments	$	80,678	$	80,678	$	80,678	$	—	$	—
Investment securities available for sale												Investment securities available for sale	432,553		432,553		—		416,957		15,596
Investment securities held to maturity												Investment securities held to maturity	465,858		411,264		—		411,264		—
Other investments												Other investments	13,793		13,793		—		13,003		790
Loans held for sale												Loans held for sale	17,743		17,743		—		17,743		—
Loans, net												Loans, net	1,720,978		1,469,707		—		—		1,469,707

Liabilities												Liabilities
Deposits												Deposits	2,490,997		2,489,481		—		2,489,481		—
Federal Home Loan Bank advances												Federal Home Loan Bank advances	125,000		125,163		—		125,163		—
Other borrowed money												Other borrowed money	78,352		69,930		—		69,930		—

December 31, 2021	December 31, 2021											December 31, 2021
Assets	Assets											Assets
Cash and short-term investments	Cash and short-term investments	$	197,232	$	197,232	$	197,232	$	—	$	—	Cash and short-term investments	$	197,232	$	197,232	$	197,232	$	—	$	—
Investment securities available for sale	Investment securities available for sale	938,164		938,164		87,551		850,613		—		Investment securities available for sale	938,164		938,164		87,551		850,613		—
Other investments	Other investments	14,012		14,012		5,574		4,183		4,255		Other investments	14,012		14,012		5,574		4,183		4,255
Loans held for sale	Loans held for sale	38,150		38,150		—		38,150		—		Loans held for sale	38,150		38,150		—		38,150		—
Loans, net	Loans, net	1,325,067		1,328,853		—		—		1,328,853		Loans, net	1,325,067		1,328,853		—		—		1,328,853

Liabilities	Liabilities											Liabilities
Deposits	Deposits	2,374,608		2,375,385		—		2,375,385		—		Deposits	2,374,608		2,375,385		—		2,375,385		—
Federal Home Loan Bank advances	Federal Home Loan Bank advances	51,656		51,162		—		51,162		—		Federal Home Loan Bank advances	51,656		51,162		—		51,162		—

Other borrowed money	Other borrowed money	36,792		36,796		—		36,796		—		Other borrowed money	36,792		36,796		—		36,796		—

December 31, 2020
Assets
Cash and short-term investments		$	183,506	$	183,506	$	183,506	$	—	$	—
Investment securities available for sale		380,814		380,814		245		380,569		—
Other investments		3,296		3,296		—		3,296		—
Loans held for sale		52,386		52,386		—		52,386		—
Loans, net		1,047,376		1,063,785		—		—		1,063,785

Liabilities
Deposits		1,445,027		1,445,984		—		1,445,984		—
Federal Home Loan Bank advances		22,500		20,817		—		20,817		—
PPPLF		106,789		106,789		—		106,789		—
Other borrowed money		37,792		37,792		—		37,792		—


				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
(dollars in thousands)	(dollars in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		(dollars in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2022										December 31, 2022
Nonrecurring										Nonrecurring
Impaired loans										Impaired loans	$	521	$	—	$	—	$	521
Other real estate										Other real estate	651		—		—		651

December 31, 2021	December 31, 2021									December 31, 2021
Nonrecurring	Nonrecurring									Nonrecurring
Impaired loans	Impaired loans	$	1,837	$	—	$	—	$	1,837	Impaired loans	$	1,837	$	—	$	—	$	1,837
Other real estate	Other real estate	281		—		—		281		Other real estate	281		—		—		281

December 31, 2020
Nonrecurring
Impaired loans		$	5,939	$	—	$	—	$	5,939
Other real estate		1,006		—		—		1,006