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Colony Bankcorp, Inc. Announces Third Quarter Results

FITZGERALD, Ga., Oct. 23, 2014 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $1,384,000, or $0.16 per diluted share for the third quarter of 2014 compared to $701,000, or $0.08 per diluted share for the comparable 2013 period, while net income available to shareholders for nine months ended September 30, 2014 was $3,533,000, or $0.42 per diluted share compared to $1,879,000, or $0.22 per share for the comparable 2013 period. This increase of 88.03 percent in net income for the comparable nine month period was primarily driven by a reduction in provision for loan losses, an increase in net interest income and an increase in noninterest income. "While we are pleased to report solid earnings for the second consecutive quarter, of particular significance is continued progress with our non-performing assets. Total non-performing assets were $24.01 million at September 30, 2014 which is a 23.99 percent reduction from the previous quarter end of $31.59 million. Substandard assets to tier one capital plus loan loss reserve now stands at 30.23 percent – down from the peak level of 98.52 percent in 2011," said Ed Loomis, President and Chief Executive Officer. "With strong regulatory capital, improved earnings and asset quality improvement, Colony is poised for sustained profitability and long-term success."

Capital

Colony continues to maintain a strong regulatory capital position to be categorized as "well-capitalized" by regulatory benchmarks. At September 30, 2014, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 11.01 percent, 16.51 percent and 17.76 percent, respectively, compared to 10.57 percent, 15.81 percent and 17.06 percent, respectively, at December 31, 2013 and to 10.40 percent, 15.40 percent and 16.66 percent, respectively, at September 30, 2013. 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 2014, the Company reported net interest income of $9.74 million and a net interest margin of 3.73 percent compared to $9.49 million and 3.67 percent, respectively, for third quarter 2013, while net interest income for nine months ended September 30, 2014 was $28.46 million and a net interest margin of 3.60 percent compared to $28.00 million and 3.59 percent, respectively, for the comparable 2013 period. Though the low interest rate environment continues to be challenging for the banking industry, the company continues to focus on maximizing its net interest margin through deposit and loan pricing guidance and balance sheet restructuring.

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 $43.49 million at September 30, 2014 compared to $53.41 million and $55.39 million, respectively, at December 31, 2013 and September 30, 2013. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 30.23%, 38.18% and 40.94%, respectively, at September 30, 2014, December 31, 2013 and September 30, 2013. Non-performing assets decreased significantly from the previous quarter end to $24.01 million or 3.18 percent of total loans and other real estate owned as of September 30, 2014. This compares to $39.61 million or 5.17 percent and $40.64 million or 5.32 percent, respectively, as of December 31, 2013 and September 30, 2013. Loan loss reserve methodology resulted in three months ended September 30, 2014 provision for loan losses of $0.50 million compared to $1.50 million for the comparable 2013 period, while in nine months ended September 30, 2014 the provision for loan losses was $1.31 million compared to $4.2 million for the comparable 2013 period. With continued stabilization in the economy, we expect continued improvement in our substandard assets.

Other real estate ("OREO") totaled $10.83 million at September 30, 2014 compared to $15.50 million and $16.11 million, respectively, at December 31, 2013 and September 30, 2013. We continue to devote much time and effort in reducing our level of OREO properties and the current balance is at the lowest level in a number of quarters. 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 2014 net charge-offs were $1.18 million, or 0.16 percent of average loans as compared to net charge-offs of $1.51 million, or 0.20 percent of average loans in third quarter 2013, while net charge-offs for nine months ended September 30, 2014 were $3.33 million, or 0.45 percent of average loans as compared to net charge-offs of $3.99 million, or 0.54 percent of average loans for the comparable 2013 period. The loan loss reserve was $9.79 million on September 30, 2014, or 1.32 percent of total loans compared to $11.81 million, or 1.57 percent on December 31, 2013 and to $12.95 million, or 1.73 percent on September 30, 2013. Management believes that the 2014 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, 2014.

Noninterest Income

Total noninterest income increased in the comparable periods as noninterest income for nine months ended September 30, 2014 was $6.72 million compared to $6.36 million in the comparable 2013 period, or an increase of 5.65 percent. The significant increase was debit card interchange fees and ATM fees increasing $514 thousand, or 41.32 percent. Offsetting the increase was service charge fee income on deposit accounts decreasing $115 thousand, or 3.30 percent, mortgage fee income decreasing $66 thousand, or 17.51 percent and gains on the sale of SBA/USDA loans decreasing $352 thousand, or 100.00 percent.

Noninterest Expense

Total noninterest expense remained relatively flat as noninterest expense for nine months ended September 30, 2014 was $25.69 million compared to $25.62 million for the comparable 2013 period, or an increase of 0.28 percent. 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 $1.82 million in nine months ended September 30, 2014 compared to $2.60 million in the comparable 2013 period, or a decrease of 30.00 percent. Salaries and employee benefit expenses increased to $13.15 million in nine months ended September 30, 2014 compared to $12.50 million in the comparable 2013 period, or an increase of 5.23 percent. Occupancy expenses increased to $3.07 million in the nine month period ended September 30, 2014 compared to $2.84 million in the comparable 2013 period, or an increase of 7.99 percent. Other noninterest expense decreased to $9.47 million compared to $10.28 million, or a decrease of 7.86 percent. A significant reduction in noninterest expense is FDIC insurance assessment which has decreased to $731 thousand in 2014 from $1.10 million from the comparable 2013 period, or 33.36 percent.

Colony Bankcorp, Inc. is a bank holding company headquartered in Fitzgerald, Georgia that consists of one operating subsidiary, Colony Bank. Colony Bank conducts a general full service commercial, consumer and mortgage banking business through twenty-nine 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 09/30/14 09/30/13 09/30/14 09/30/13
Net Interest Income $9,738 $9,494 $28,460 27,995
Provision for Loan Losses 500 1,500 1,308 4,200
Non-interest Income 2,410 2,109 6,718 6,359
Non-interest Expense 8,534 8,488 25,691 25,619
Income Taxes 1,033 535 2,625 1,532
Net Income 2,081 1,080 5,554 3,003
Preferred Stock Dividend 697 379 2,021 1,124
Net Income Available to
Common Shareholders 1,384 701 3,533 1,879
QUARTER ENDED YEAR-TO-DATE
PER COMMON SHARE SUMMARY 09/30/14 09/30/13 09/30/14 09/30/13
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) $0.16 $0.08 $0.42 $0.22
Earnings Per Diluted Share (b) $0.16 $0.08 $0.42 $0.22
Common Book Value Per Share $8.09 $7.45 $8.09 $7.45
Tangible Common Book Value Per Share $8.07 $7.43 $8.07 $7.43
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 09/30/14 09/30/13 09/30/14 09/30/13
Net Interest Margin (a) 3.73% 3.67% 3.60% 3.59%
Return on Average Assets (b) 0.49% 0.25% 0.42% 0.22%
Return on Average Total Equity (b) 5.78% 3.09% 5.02% 2.67%
Efficiency (c) 70.08% 72.88% 72.85% 74.30%
(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 09/30/14 09/30/13
Total Assets $1,114,414 $1,113,141
Loans, Net of Reserves 733,139 734,792
Allowance for Loan Losses 9,788 12,951
Intangible Assets 161 197
Deposits 941,200 949,463
Common Shareholders' Equity 68,272 62,859
Common Equity to Total Assets 6.13% 5.65%
Total Equity 96,272 90,815
Total Equity to Total Assets 8.64% 8.16%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 09/30/14 09/30/13 09/30/14 09/30/13
Total Assets $1,118,848 $1,106,631 $1,126,625 $1,113,632
Loans, Net of Reserves 728,146 733,479 728,570 728,160
Deposits 946,255 941,698 958,728 948,882
Common Shareholders' Equity 67,806 62,918 65,773 66,092
Total Equity 95,806 90,852 93,773 93,983
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 09/30/14 09/30/13 09/30/14 09/30/13
Nonperforming Loans $13,178 $24,165 $13,178 $24,165
Nonperforming Assets 24,011 40,638 24,011 40,638
Substandard Assets 43,494 55,391 43,494 55,391
Net Loan Chg-offs (Recoveries) 1,182 1,506 3,326 3,986
Reserve for Loan Loss to Total Loans 1.32% 1.73% 1.32% 1.73%
Reserve for Loan Loss to Non- performing Loans 74.28% 53.59% 74.28% 53.59%
Reserve for Loan Loss to Non-performing Assets 40.76% 31.87% 40.76% 31.87%
Net Loan Chg-offs (Recoveries) to Avg. Total Loans 0.16% 0.20% 0.45% 0.54%
Nonperforming Loans to Total Loans 1.77% 3.23% 1.77% 3.23%
Nonperforming Assets to Total Assets 2.15% 3.65% 2.15% 3.65%
Nonperforming Assets to Total Loans And Other Real Estate 3.18% 5.32% 3.18% 5.32%
Substandard Assets to Tier One Capital and Allowance for Loan Losses 30.23% 40.94% 30.23% 40.94%
Quarterly Comparative Data (in thousands, except per share data)
3Q2014 2Q2014 1Q2014 4Q2013 3Q2013
Assets $1,114,414 $1,118,382 $1,141,836 $1,148,551 $1,113,141
Loans 733,139 724,939 726,125 739,052 734,792
Deposits 941,200 948,269 976,854 987,529 949,463
Common Shareholders' Equity 68,272 67,210 64,348 61,954 62,859
Total Equity 96,272 95,210 92,348 89,954 90,815
Net Income 2,081 2,016 1,457 1,626 1,080
Net Income Available to Common Shareholders 1,384 1,335 814 1,241 701
Net Income Per Share 0.16 0.16 0.10 0.15 0.08
Key Performance Ratios 3Q2014 2Q2014 1Q2014 4Q2013 3Q2013
Return on Average Assets (1) 0.49% 0.47% 0.29% 0.44% 0.25%
Return on Average Total Equity (1) 5.78% 5.69% 3.55% 5.43% 3.09%
Common Equity to Total Assets 6.13% 6.01% 5.64% 5.38% 5.65%
Total Equity to Total Assets 8.64% 8.51% 8.09% 7.81% 8.16%
Net Interest Margin 3.73% 3.61% 3.47% 3.68% 3.67%
(1) Computed using net income available to shareholders
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
Sept. 30, 2014 Dec. 31, 2013 Sept. 30, 2013
(unaudited) (audited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $17,120 $25,692 $19,033
Federal Funds Sold 6,712 20,495 18,526
23,832 46,187 37,559
Interest-Bearing Deposits 10,682 21,960 4,117
Investment Securities
Available for Sale, at Fair Value 273,547 263,258 257,354
Held for Maturity, at Cost (Fair Value of $33, $37 and $38 as of Sept. 30, 2014, Dec. 31, 2013, and Sept. 30, 2013, Respectively) 33 37 39
273,580 263,295 257,393
Federal Home Loan Bank Stock, at Cost 2,831 3,164 3,164
Loans 743,281 751,218 748,044
Allowance for Loan Losses (9,788) (11,806) (12,951)
Unearned Interest and Fees (354) (360) (301)
733,139 739,052 734,792
Premises and Equipment 24,976 24,876 24,833
Other Real Estate 10,833 15,502 16,106
Other Intangible Assets 161 188 197
Other Assets 34,380 34,327 34,980
Total Assets $1,114,414 $1,148,551 $1,113,141
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $116,131 $115,261 $110,870
Interest-Bearing 825,069 872,269 838,593
941,200 987,530 949,463
Borrowed Money
Subordinated Debentures 24,229 24,229 24,229
Other Borrowed Money 40,000 40,000 40,000
64,229 64,229 64,229
Other Liabilities 12,713 6,838 8,634
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 28,000 Shares 28,000 28,000 27,956
Common Stock, Par Value $1 a share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of Sept. 30, 2014, Dec. 31, 2013 and Sept. 30, 2013, Respectively 8,439 8,439 8,439
Paid in Capital 29,145 29,145 29,145
Retained Earnings 36,978 33,445 32,248
Accumulated Other Comprehensive Loss, Net of Tax (6,290) (9,075) (6,973)
96,272 89,954 90,815
Total Liabilities and Stockholders' Equity $1,114,414 $1,148,551 $1,113,141
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Nine Months Ended
09/30/14 09/30/13 09/30/14 09/30/13
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income
Loans, Including Fees $10,170 $10,303 $29,815 $31,023
Federal Funds Sold 6 7 23 27
Deposits with Other Banks 9 5 32 21
Investment Securities
U. S. Government Agencies 1,165 880 3,574 2,454
State, County and Municipal 24 30 75 94
Corporate Obligations/Asset-Backed Sec. -- 14 -- 42
Dividends on Other Investments 26 21 85 59
11,400 11,260 33,604 33,720
Interest Expense
Deposits 1,260 1,361 3,869 4,452
Borrowed Money 402 405 1,275 1,273
1,662 1,766 5,144 5,725
Net Interest Income 9,738 9,494 28,460 27,995
Provision for Loan Losses 500 1,500 1,308 4,200
Net Interest Income After Provision for Loan Losses 9,238 7,994 27,152 23,795
Noninterest Income
Service Charges on Deposits 1,231 1,236 3,369 3,484
Other Service Charges, Commissions and Fees 622 442 1,842 1,289
Mortgage Fee Income 130 117 311 377
Securities Gains (Losses) -- -- 1 (2)
Other 427 314 1,195 1,211
2,410 2,109 6,718 6,359
Noninterest Expense
Salaries and Employee Benefits 4,432 4,178 13,149 12,496
Occupancy and Equipment 1,049 974 3,069 2,842
Other 3,053 3,336 9,473 10,281
8,534 8,488 25,691 25,619
Income Before Income Taxes 3,114 1,615 8,179 4,535
Income Taxes 1,033 535 2,625 1,532
Net Income 2,081 1,080 5,554 3,003
Preferred Stock Dividends 697 379 2,021 1,124
Net Income Available to Common Shareholders $1,384 $701 $3,533 $1,879
Net Income Per Share of Common Stock
Basic $0.16 $0.08 $0.42 $0.22
Diluted $0.16 $0.08 $0.42 $0.22
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) 426-6000 (Ext 6002)Source:Colony Bankcorp, Inc.