Colony Bankcorp, Inc. Announces Third Quarter Results

FITZGERALD, Ga., Oct. 16, 2013 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $701,000, or $0.08 per diluted share for the third quarter of 2013 compared to $411,000, or $0.05 per diluted share for the comparable 2012 period, while net income available to shareholders for nine months ended September 30, 2013 was $1,879,000, or $0.22 per diluted share compared to $1,003,000, or $0.12 per share for the comparable 2012 period. This increase of 87.34 percent in net income for the comparable nine month period was primarily driven by an increase in net interest income and noninterest income (excluding securities gains) – along with a reduction in provision for loan losses. "In addition to outstanding core earnings improvement, Colony again had noticeable improvement in asset quality. Substandard assets to tier one capital plus loan loss allowance ratio improved to 40.94 percent at September 30, 2013 from 43.00 percent at June 30, 2013. On October 4, 2013, the company received notification from regulatory agencies that the memorandum of understanding ("MOU") agreement in place since November 2010 has been terminated. The agreement required Colony to take steps to reduce credit risk and improve asset quality and earning performance. Our primary regulators have acknowledged the significant progress we have made in addressing the MOU agreement. Though much has been accomplished, our board, management and staff remain committed to making incremental progress toward earnings and asset quality improvement," said Ed Loomis, President and Chief Executive Officer.

Capital

Colony continues to maintain a solid capital position to be categorized as "well-capitalized" by regulatory benchmarks. At September 30, 2013, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 10.40 percent, 15.40 percent and 16.66 percent, respectively, compared to the previous quarter end of 10.36 percent, 15.63 percent and 16.89 percent, respectively, at June 30, 2013 and to 10.07 percent, 15.39 percent and 16.65 percent, respectively, at September 30, 2012. Regulatory benchmarks to be categorized as "well-capitalized" for tier one leverage ratio, tier one and total risk-based capital ratios are 5.00 percent, 6.00 percent and 10.00 percent, respectively.

Net Interest Margin

During the third quarter of 2013, the Company reported net interest income of $9.49 million and a net interest margin of 3.67 percent, compared to $9.22 million and 3.56 percent, respectively, for third quarter 2012, while net interest income for the nine months ended September 30, 2013 was $28.00 million and a net interest margin of 3.59 percent compared to $27.20 million and 3.39 percent, respectively, for the nine months ended September 30, 2012. The improvement is indicative of the Company's focus on balance sheet restructuring and maximizing its net interest margin through deposit and loan pricing guidance.

Asset Quality

The Company continues to closely monitor our substandard and non-performing assets and focus on problem asset resolution. Substandard assets that include non-performing assets totaled $55.39 million at September 30, 2013 compared to $58.15 million and $85.04 million, respectively, at June 30, 2013 and September 30, 2012. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 40.94%, 43.00% and 63.87%, respectively, at September 30, 2013, June 30, 2013 and September 30, 2012. Non-performing assets decreased slightly from the previous quarter end to $40.64 million or 5.32 percent of total loans and other real estate owned as of September 30, 2013. This compares to $41.18 million or 5.42 percent and $51.74 million or 6.96 percent, respectively, as of June 30, 2013 and September 30, 2012. Loan loss reserve methodology resulted in nine months ended September 30, 2013 provision for loan losses of $4.20 million compared to $5.63 million for the comparable 2012 period. As we begin to see stabilization in the economy and the housing and real estate market, we expect continued improvement in our substandard assets.

Other real estate ("OREO") totaled $16.11 million at September 30, 2013 compared to $15.94 million and $17.09 million, respectively, at December 31, 2012 and September 30, 2012. During nine months ended September 30, 2013, $8.26 million has been added to OREO, thus a reduction from sales and/or write-downs of $8.09 million. Two auctions scheduled for early November should result in additional reduction upon consummation of the sales contracts. Colony has established a target of twelve months to liquidate improved properties due to the high carrying cost of taxes, insurance, maintenance and repairs associated with holding these properties on our books.

In the third quarter of 2013 net charge-offs were $1.51 million, or 0.20 percent of average loans as compared to net charge-offs of $2.65 million, or 0.36 percent of average loans in third quarter 2012, while for the nine months ended September 30, 2013 net charge-offs were $3.99 million, or 0.54 percent of average loans as compared to net charge-offs of $6.89 million, or 0.96 percent of average loans for the comparable 2012 period. The loan loss reserve was $12.95 million on September 30, 2013, or 1.73 percent of total loans compared to $12.96 million, or 1.74 percent on June 30, 2013 and to $14.39 million, or 1.98 percent on September 30, 2012. Management believes that the 2013 contributions to Allowance for Loan Losses address the level of non-performing assets and the related level of substandard assets to be adequately reserved at September 30, 2013.

Noninterest Income

Total noninterest income decreased in the comparable periods as noninterest income for nine months ended September 30, 2013 was $6.36 million compared to $7.09 million in the comparable 2012 period, or a decrease of 10.32 percent. Service charge fee income on deposit accounts increased $957 thousand, or 37.87 percent. Mortgage fee income increased $81 thousand, or 27.36 percent and gains on the sale of SBA/USDA loans increased $46 thousand, or 15.03 percent. Offsetting these increases was security gains and losses in which losses were $2 thousand for nine months ended September 30, 2013 compared to gains of $2.07 million for the comparable 2012 period. The company continues to explore revenue enhancement products and services to improve fee income.

Noninterest Expense

Total noninterest expense was relatively flat with $25.62 million in nine months ended September 30, 2013 compared to $25.64 million in the comparable 2012 period. Credit-related expenses continue to be a strain on earnings as write down and losses on OREO property and repossessed assets along with repossession and foreclosure expenses totaled $2.81 million in nine months ended September 30, 2013 compared to $3.79 million in the comparable 2012 period. Salaries and employee benefit expenses increased to $12.50 million in nine months ended September 30, 2013 compared to $11.49 million in the comparable 2012 period, or an increase of 8.79 percent. This increase is primarily attributable to an increase in headcount to support operational improvement, much of it related to compliance. Occupancy expenses remained flat in the comparable periods. Other noninterest expense decreased to $10.28 million compared to $11.25 million, or a decrease of 8.62 percent – primarily due to the decrease in credit-related expenses noted above.

Colony Bankcorp, Inc. is a bank holding company headquartered in Fitzgerald, Georgia that consists of one operating subsidiary, Colony Bank. The Company conducts a general full service commercial, consumer and mortgage banking business through thirty offices located in the central, southern and coastal Georgia cities of Albany, Ashburn, Broxton, Centerville, Chester, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, Pitts, Quitman, Rochelle, Savannah, Soperton, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins, Georgia.

Colony Bankcorp, Inc. Common Stock is quoted on the Nasdaq Global Market under the symbol "CBAN".

Certain statements contained in the preceding release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in the Company's future filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute forward-looking statements within the meaning of the Act. Examples of forward-looking statements include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or nonpayment of dividends, capital structure and other financial items; (ii) statement of plans and objectives of Colony Bankcorp, Inc. or its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Forward-looking statements speak only as of the date on which such statements are made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on these forward-looking statements.

COLONY BANKCORP, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
QUARTER ENDED YEAR-TO-DATE
EARNINGS SUMMARY 09/30/13 09/30/12 09/30/13 09/30/12
Net Interest Income $9,494 $9,222 $27,995 $27,197
Provision for Loan Losses 1,500 1,742 4,200 5,627
Non-interest Income 2,109 2,903 6,359 7,091
Non-interest Expense 8,488 9,247 25,619 25,635
Income Taxes 535 364 1,532 953
Net Income 1,080 772 3,003 2,073
Preferred Stock Dividend 379 361 1,124 1,070
Net Income Available to Common Shareholders 701 411 1,879 1,003
QUARTER ENDED YEAR-TO-DATE
PER COMMON SHARE SUMMARY 09/30/13 09/30/12 09/30/13 09/30/12
Common Shares Outstanding 8,439,258 8,439,258 8,439,258 8,439,258
Weighted Average Basic Shares 8,439,258 8,439,258 8,439,258 8,439,258
Weighted Average Diluted Shares 8,439,258 8,439,258 8,439,258 8,439,258
Earnings Per Basic Share (b) $0.08 $0.05 $0.22 $0.12
Earnings Per Diluted Share (b) $0.08 $0.05 $0.22 $0.12
Common Book Value Per Share $7.45 $8.13 $7.45 $8.13
Tangible Common Book Value Per Share $7.43 $8.10 $7.43 $8.10
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 09/30/13 09/30/12 09/30/13 09/30/12
Net Interest Margin (a) 3.67% 3.56% 3.59% 3.39%
Return on Average Assets (b) 0.25% 0.15% 0.22% 0.12%
Return on Average Total Equity (b) 3.09% 1.69% 2.67% 1.38%
Efficiency (c) 72.88% 84.27% 74.30% 79.31%
(1) Annualized
(a) Computed using fully taxable-equivalent net income
(b) Computed using net income available to shareholders
(c) Computed by dividing non-interest expense by the sum of fully taxable-equivalent net interest income and non-interest income and excluding security gains/losses.
QUARTER ENDED
ENDING BALANCES 09/30/13 09/30/12
Total Assets $1,113,141 $1,097,437
Loans, Net of Reserves 734,792 711,971
Allowance for Loan Losses 12,951 14,389
Intangible Assets 197 232
Deposits 949,463 941,204
Common Shareholders' Equity 62,859 68,584
Common Equity to Total Assets 5.65% 6.25%
Total Equity 90,815 96,369
Total Equity to Total Assets 8.16% 8.78%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 09/30/13 09/30/12 09/30/13 09/30/12
Total Assets $1,106,631 $1,111,524 $1,113,632 $1,147,419
Loans, Net of Reserves 733,479 709,627 728,160 699,511
Deposits 941,698 953,380 948,882 973,670
Common Shareholders' Equity 62,918 69,279 66,092 69,139
Total Equity 90,852 97,044 93,983 96,861
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 09/30/13 09/30/12 09/30/13 09/30/12
Nonperforming Loans $24,165 $34,283 $24,165 $34,283
Nonperforming Assets 40,638 51,741 40,638 51,741
Substandard Assets 55,391 85,037 55,391 85,037
Net Loan Chg-offs (Recoveries) 1,506 2,646 3,986 6,888
Reserve for Loan Loss to Total Loans 1.73% 1.98% 1.73% 1.98%
Reserve for Loan Loss to Non-performing Loans 53.59% 41.97% 53.59% 41.97%
Reserve for Loan Loss to Non-performing Assets 31.87% 27.81% 31.87% 27.81%
Net Loan Chg-offs (Recoveries) to Avg. Total Loans 0.20% 0.36% 0.54% 0.96%
Nonperforming Loans to Total Loans 3.23% 4.72% 3.23% 4.72%
Nonperforming Assets to Total Assets 3.65% 4.71% 3.65% 4.71%
Nonperforming Assets to Total Loans And Other Real Estate 5.32% 6.96% 5.32% 6.96%
Substandard Assets to Tier One Capital and Allowance for Loan Losses 40.94% 63.87% 40.94% 63.87%
Quarterly Comparative Data (in thousands, except per share data)
3Q2013 2Q2013 1Q2013 4Q2012 3Q2012
Assets $1,113,141 $1,106,454 $1,118,865 $1,139,397 $ 1,097,437
Loans 734,792 730,920 723,651 734,079 711,971
Deposits 949,463 943,337 953,575 979,685 941,204
Common Shareholders' Equity 62,859 63,828 67,567 67,932 68,584
Total Equity 90,815 91,740 95,437 95,759 96,369
Net Income 1,080 986 937 568 772
Net Income Available to Common Shareholders 701 611 567 203 411
Net Income Per Share 0.08 0.07 0.07 0.02 0.05
Key Performance Ratios 3Q2013 2Q2013 1Q2013 4Q2012 3Q2012
Return on Average Assets (1) 0.25% 0.22% 0.20% 0.07% 0.15%
Return on Average Total Equity (1) 3.09% 2.56% 2.37% 0.85% 1.69%
Common Equity to Total Assets 5.65% 5.77% 6.04% 5.96% 6.25%
Total Equity to Total Assets 8.16% 8.29% 8.53% 8.40% 8.78%
Net Interest Margin 3.67% 3.64% 3.45% 3.49% 3.56%
(1) Computed using net income available to shareholders
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
Sept. 30, 2013 Dec. 31, 2012 Sept. 30, 2012
(unaudited) (audited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $19,033 $29,244 $22,077
Federal Funds Sold 18,526 20,002 42,946
37,559 49,246 65,023
Interest-Bearing Deposits 4,117 21,795 9,210
Investment Securities
Available for Sale, at Fair Value 257,354 268,301 242,097
Held for Maturity, at Cost (Fair Value of $39, $42 and $46 as of Sept. 30, 2013, Dec. 31, 2012 and Sept. 30, 2012, Respectively) 39 41 45
257,393 268,342 242,142
Federal Home Loan Bank Stock, at Cost 3,164 3,364 3,139
Loans 748,044 747,050 726,522
Allowance for Loan Losses (12,951) (12,737) (14,389)
Unearned Interest and Fees (301) (234) (162)
734,792 734,079 711,971
Premises and Equipment 24,833 24,916 25,212
Other Real Estate 16,106 15,941 17,091
Other Intangible Assets 197 224 232
Other Assets 34,980 21,490 23,417
Total Assets $1,113,141 $1,139,397 $1,097,437
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $110,870 $123,967 $101,852
Interest-Bearing 838,593 855,718 839,352
949,463 979,685 941,204
Borrowed Money
Subordinated Debentures 24,229 24,229 24,229
Other Borrowed Money 40,000 35,000 30,000
64,229 59,229 54,229
Other Liabilities 8,634 4,724 5,635
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 28,000 Shares 27,956 27,827 27,785
Common Stock, Par Value $1 a share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of Sept. 30, 2013, Dec. 31, 2012 and Sept. 30, 2012, Respectively 8,439 8,439 8,439
Paid in Capital 29,145 29,145 29,145
Retained Earnings 32,248 30,498 30,337
Accumulated Other Comprehensive Loss, Net of Tax (6,973) (150) 663
90,815 95,759 96,369
Total Liabilities and Stockholders' Equity $1,113,141 $1,139,397 $1,097,437
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Nine Months Ended
09/30/13 09/30/12 09/30/13 09/30/12
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income $10,303 $10,538 $31,023 $31,391
Loans, Including Fees 7 16 27 72
Federal Funds Sold 5 4 21 34
Deposits with Other Banks
Investment Securities 880 1,116 2,454 4,125
U. S. Government Agencies 30 42 94 173
State, County and Municipal 14 14 42 62
Corporate Obligations/Asset-Backed Sec. 21 18 59 55
Dividends on Other Investments 11,260 11,748 33,720 35,912
Interest Expense
Deposits 1,361 2,110 4,452 6,833
Borrowed Money 405 416 1,273 1,882
1,766 2,526 5,725 8,715
Net Interest Income 9,494 9,222 27,995 27,197
Provision for Loan Losses 1,500 1,742 4,200 5,627
Net Interest Income After Provision for Loan Losses 7,994 7,480 23,795 21,570
Noninterest Income
Service Charges on Deposits 1,236 917 3,484 2,527
Other Service Charges, Commissions and Fees 442 372 1,289 1,119
Mortgage Fee Income 117 103 377 296
Securities Gains -- 1,187 (2) 2,067
Other 314 324 1,211 1,082
2,109 2,903 6,359 7,091
Noninterest Expense
Salaries and Employee Benefits 4,178 3,833 12,496 11,486
Occupancy and Equipment 974 1,000 2,842 2,901
Other 3,336 4,414 10,281 11,248
8,488 9,247 25,619 25,635
Income Before Income Taxes 1,615 1,136 4,535 3,026
Income Taxes 535 364 1,532 953
Net Income 1,080 772 3,003 2,073
Preferred Stock Dividends 379 361 1,124 1,070
Net Income Available to Common Shareholders $701 $411 $1,879 $1,003
Net Income Per Share of Common Stock
Basic $0.08 $0.05 $0.22 $0.12
Diluted $0.08 $0.05 $0.22 $0.12
Weighted Average Basic Shares Outstanding 8,439,258 8,439,258 8,439,258 8,439,258
Weighted Average Diluted Shares Outstanding 8,439,258 8,439,258 8,439,258 8,439,258

CONTACT: Terry L. Hester Chief Financial Officer (229) 426-6002Source:Colony Bankcorp, Inc.