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Colony Bankcorp, Inc. Announces Second Quarter Results

FITZGERALD, Ga., July 23, 2015 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $1,555,000, or $0.18 per diluted share for the second quarter of 2015 compared to $1,335,000, or $0.16 per diluted share for the comparable 2014 period, while net income available to shareholders for six month period ended June 30, 2015 was $2,808,000, or $0.33 per diluted share compared to $2,149,000, or $0.25 per share for the comparable 2014 period. This increase of 30.67 percent in net income for the comparable six month period was primarily driven by a reduction in provision for loan losses, an increase in noninterest income and a reduction in noninterest expense. "While we had solid improvement in earnings, we also are pleased to report asset quality improvement. Total non-performing assets were $26.16 million at June 30, 2015 which is a reduction of 2.27 percent from the prior quarter end and 17.18 percent from the year ago period. Substandard assets to tier one capital plus loan loss reserve now stands at 28.74 percent – down from the prior year end level of 32.39 percent," said Ed Loomis, President and Chief Executive Officer. "Noteworthy during the quarter was continued positive trends with loan activity as total loans increased to $759.69 million at June 30, 2015 compared to $753.24 million at March 31, 2015. The quarter culminated with the inclusion of Colony in the Russell Microcap Index. The Index is completely reconstituted annually to ensure new and growing equities are reflected and companies continue to reflect appropriate capitalization and value characteristics. This is indicative of the marked progress the company has made over the past several quarters."

Capital

Colony continues to maintain a strong regulatory capital position to be categorized as "well-capitalized" by regulatory benchmarks. At June 30, 2015, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 11.28 percent, 16.42 percent and 17.49 percent, respectively, compared to 11.18 percent, 16.78 percent and 17.95 percent, respectively, at December 31, 2014 and to 10.80 percent, 16.44 percent and 17.69 percent, respectively, at June 30, 2014. Effective January 1, 2015, new regulatory regulations (commonly referred to as Basel III capital regulation) required new risk-weighting of certain assets and an additional capital ratio to be calculated. The common equity tier one capital ratio at June 30, 2015 of 9.92 percent exceeded the minimum requirement of 4.50 percent. The Company's capital ratios were all in excess of regulatory minimums required to be classified as "well-capitalized".

Net Interest Margin

During the second quarter of 2015, the Company reported net interest income of $9.25 million and a net interest margin of 3.44 percent compared to $9.53 million and 3.61 percent, respectively, for second quarter 2014, while net interest income for first half 2015 was $18.45 million and a net interest margin of 3.44 percent compared to $18.72 million and 3.54 percent, respectively, for first half 2014. The low interest rate environment continues to be challenging for the banking industry. While the company continues to focus on maximizing its net interest margin through deposit and loan pricing and balance sheet restructuring, we await Federal Reserve action to modestly begin the process of increasing interest rates from their record lows.

Asset Quality

The Company continues to monitor our substandard and non-performing assets and focus on problem asset resolution. Substandard assets that include non-performing assets totaled $39.65 million at June 30, 2015 compared to $43.29 million and $47.12 million, respectively, at December 31, 2014 and June 30, 2014. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 28.74%, 32.39% and 32.54%, respectively, at June 30, 2015, December 31, 2014 and June 30, 2014. Non-performing assets decreased from the previous quarter end to $26.16 million or 3.39 percent of total loans and other real estate owned as of June 30, 2015. This compares to $28.74 million or 3.80 percent and $31.59 million or 4.22 percent, respectively, as of December 31, 2014 and June 30, 2014. With continued economic recovery and stabilization, we anticipate further reduction in our substandard assets.

Other real estate ("OREO") totaled $12.03 million at June 30, 2015 compared to $10.40 million and $12.21 million, respectively, at December 31, 2014 and June 30, 2014. Much of the increase during 2015 comes from non-performing loans or loans in bankruptcy that we were able to gain control of the collateral and are now able to resolve through liquidation of the real estate. 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 second quarter of 2015 net charge-offs were $25 thousand, or 0.00 percent of average loans as compared to net charge-offs of $1.72 million, or 0.23 percent of average loans in second quarter 2014, while first half 2015 net charge-offs were $813,000, or 0.11 percent of average loans as compared to net charge-offs of $2.14 million, or 0.29 percent of average loans for first half 2014. The loan loss reserve was $8.48 million on June 30, 2015, or 1.12 percent of total loans compared to $8.80 million, or 1.18 percent on December 31, 2014 and to $10.47 million, or 1.42 percent on June 30, 2014. Loan loss reserve methodology resulted in three months ended June 30, 2015 provision for loan losses of $129 thousand compared to $481 thousand for the comparable 2014 period, while first half 2015 provision for loan losses was $491 thousand compared to $808 thousand for the comparable 2014 period.

Noninterest Income

Total noninterest income increased in the comparable periods as noninterest income for six months ended June 30, 2015 was $4.57 million compared to $4.31 million in the comparable 2014 period, or an increase of 6.08 percent. The significant increase was debit card interchange fees and ATM fees increasing $135 thousand, or 12.11 percent. Also, mortgage fee income increased $66 thousand, or 36.46 percent and gain from the sale of other real estate and repossessions was $53 thousand compared to $4 thousand gain in the year ago period. Offsetting the increases was service charge fee income on deposit accounts decreasing $132 thousand, or 6.05 percent.

Noninterest Expense

Total noninterest expense decreased in the comparable periods as noninterest expense for six months ended June 30, 2015 was $16.61 million compared to $17.16 million for the comparable 2014 period, or a decrease of 3.21 percent. Though credit-related expenses remain high, the company realized significant improvement from a year ago as repossession and foreclosure expenses totaled $349 thousand in the six month period ended June 30, 2015 compared to $1.31 million in the comparable 2014 period, or a decrease of 73.30 percent. Salaries and employee benefit expenses remained relatively flat with an increase of 1.81 percent. Occupancy expenses decreased to $2.01 million in the six month period ended June 30, 2015 compared to $2.02 million in the comparable 2014 period, or a decrease of 0.50 percent. Other noninterest expense decreased to $5.72 million compared to $6.42 million, or a decrease of 10.89 percent. While much of this reduction relates to the credit-related expense noted above, the Company continues to reap benefits from recent initiatives that include implementation of VOIP telephone system to reduce telephone expense and promotion of e-statements versus mailing out statements to reduce postage expense. The efficiency ratio improved to 71.99 percent for six months ended June 30, 2015 compared to 74.32 percent for the comparable 2014 period, or a decrease of 3.14 percent. The company continues to explore opportunities to further improve its' operating efficiency.

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 06/30/15 06/30/14 06/30/15 06/30/14
Net Interest Income $9,247 $9,528 $18,449 $18,722
Provision for Loan Losses 129 481 491 808
Non-interest Income 2,358 2,246 4,570 4,308
Non-interest Expense 8,320 8,291 16,606 17,157
Income Taxes 971 986 1,854 1,592
Net Income 2,185 2,016 4,068 3,473
Preferred Stock Dividend 630 681 1,260 1,324
Net Income Available to Common Shareholders 1,555 1,335 2,808 2,149
QUARTER ENDED YEAR-TO-DATE
PER COMMON SHARE SUMMARY 06/30/15 06/30/14 06/30/15 06/30/14
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 8,441,628 8,439,258 8,440,443 8,439,258
Earnings Per Basic Share (b) $0.18 $0.16 $0.33 $0.25
Earnings Per Diluted Share (b) $0.18 $0.16 $0.33 $0.25
Common Book Value Per Share $8.85 $7.96 $8.85 $7.96
Tangible Common Book Value Per Share $8.83 $7.94 $8.83 $7.94
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 06/30/15 06/30/14 06/30/15 06/30/14
Net Interest Margin (a) 3.44% 3.61% 3.44% 3.54%
Return on Average Assets (b) 0.54% 0.47% 0.49% 0.38%
Return on Average Total Equity (b) 6.05% 5.69% 5.52% 4.63%
Efficiency (c) 71.54% 70.26% 71.99% 74.32%
(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 06/30/15 06/30/14
Total Assets $1,139,050 $1,118,382
Loans, Net of Reserves 751,210 724,939
Allowance for Loan Losses 8,480 10,470
Intangible Assets 134 170
Deposits 968,634 948,269
Common Shareholders' Equity 74,658 67,210
Common Equity to Total Assets 6.55% 6.01%
Total Equity 102,658 95,210
Total Equity to Total Assets 9.01% 8.51%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 06/30/15 06/30/14 06/30/15 06/30/14
Total Assets $1,150,811 $1,127,707 $1,150,725 $1,130,582
Loans, Net of Reserves 757,167 728,928 750,350 728,785
Deposits 979,628 959,247 979,477 969,688
Common Shareholders' Equity 74,760 65,808 73,700 64,740
Total Equity 102,760 93,808 101,700 92,740
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 06/30/15 06/30/14 6/30/2015 06/30/14
Nonperforming Loans $14,128 $19,378 $14,128 $19,378
Nonperforming Assets 26,159 31,585 26,159 31,585
Substandard Assets 39,650 47,120 39,650 47,120
Net Loan Chg-offs (Recoveries) 25 1,721 813 2,144
Reserve for Loan Loss to Total Loans 1.12% 1.42% 1.12% 1.42%
Reserve for Loan Loss to Non- performing Loans 60.02% 54.03% 60.02% 54.03%
Reserve for Loan Loss to Non-performing Assets 32.42% 33.15% 32.42% 33.15%
Net Loan Chg-offs (Recoveries) to Avg. Total Loans 0.00% 0.23% 0.11% 0.29%
Nonperforming Loans to Total Loans 1.86% 2.63% 1.88% 2.63%
Nonperforming Assets to Total Assets 2.30% 2.82% 2.30% 2.82%
Nonperforming Assets to Total Loans And Other Real Estate 3.39% 4.22% 3.43% 4.22%
Substandard Assets to Tier One Capital and Allowance for Loan Losses 28.74% 32.54% 28.74% 32.54%
Quarterly Comparative Data (in thousands, except per share data)
2Q2015 1Q2015 4Q2014 3Q2014 2Q2014
Assets $1,139,050 $1,156,711 $1,146,898 $1,114,414 $1,118,382
Loans 751,210 744,866 736,930 733,139 724,939
Deposits 968,634 985,856 979,304 941,200 948,269
Common Shareholders' Equity 74,658 74,363 71,027 68,272 67,210
Total Equity 102,658 102,363 99,027 96,272 95,210
Net Income 2,185 1,883 1,978 2,081 2,016
Net Income Available to Common Shareholders 1,555 1,253 1,310 1,384 1,335
Net Income Per Share 0.18 0.15 0.16 0.16 0.16
Key Performance Ratios 2Q2015 1Q2015 4Q2014 3Q2014 2Q2014
Return on Average Assets (1) 0.54% 0.44% 0.46% 0.49% 0.47%
Return on Average Total Equity (1) 6.05% 4.98% 5.37% 5.78% 5.69%
Common Equity to Total Assets 6.55% 6.43% 6.18% 6.13% 6.01%
Total Equity to Total Assets 9.01% 8.85% 8.62% 8.64% 8.51%
Net Interest Margin 3.44% 3.43% 3.59% 3.73% 3.61%
(1) Computed using net income available to shareholders
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
June 30, 2015 Dec. 31, 2014 June 30, 2014
(unaudited) (audited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $19,550 $24,473 $21,867
Federal Funds Sold -- 20,132 11,081
19,550 44,605 32,948
Interest-Bearing Deposits 24,323 21,206 11,372
Investment Securities
Available for Sale, at Fair Value 273,878 274,594 276,062
Held for Maturity, at Cost (Fair Value of $27, $30 and $32 as of June 30, 2015, Dec. 31, 2014, and June 30, 2014, Respectively) 27 30 32
273,905 274,624 276,094
Federal Home Loan Bank Stock, at Cost 2,731 2,831 2,831
Loans 760,078 746,094 735,763
Allowance for Loan Losses (8,480) (8,802) (10,470)
Unearned Interest and Fees (388) (362) (354)
751,210 736,930 724,939
Premises and Equipment 24,465 24,960 24,951
Other Real Estate 12,031 10,402 12,208
Other Intangible Assets 134 152 170
Other Assets 30,701 31,188 32,869
Total Assets $1,139,050 $1,146,898 $1,118,382
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $125,541 $128,340 $114,757
Interest-Bearing 843,093 850,963 833,512
968,634 979,303 948,269
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 3,528 4,339 10,674
Stockholders' Equity
Preferred Stock, Stated Value $1,000 a Share; Authorized 10,000,000 Shares, Issued 28,000 Shares 28,000 28,000 28,000
Common Stock, Par Value $1 a share; Authorized 20,000,000 Shares, Issued 8,439,258 Shares as of June 30, 2015, Dec. 31, 2014 and June 30, 2014, Respectively 8,439 8,439 8,439
Paid in Capital 29,145 29,145 29,145
Retained Earnings 41,097 38,288 35,594
Accumulated Other Comprehensive Loss, Net of Tax (4,022) (4,845) (5,968)
102,658 99,027 95,210
Total Liabilities and Stockholders' Equity $1,139,050 $1,146,898 $1,118,382
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter Year-to-Date
Three Months Ended Six Months Ended
06/30/15 06/30/14 06/30/15 06/30/14
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income
Loans, Including Fees $9,873 $9,956 $19,582 $19,645
Federal Funds Sold -- 8 15 17
Deposits with Other Banks 24 10 41 23
Investment Securities
U. S. Government Agencies 979 1,225 2,048 2,409
State, County and Municipal 25 23 50 51
Dividends on Other Investments 30 29 60 59
10,931 11,251 21,796 22,204
Interest Expense
Deposits 1,220 1,288 2,438 2,609
Borrowed Money 464 435 909 873
1,684 1,723 3,347 3,482
Net Interest Income 9,247 9,528 18,449 18,722
Provision for Loan Losses 129 481 491 808
Net Interest Income After Provision for Loan Losses 9,118 9,047 17,958 17,914
Noninterest Income
Service Charges on Deposits 1,040 1,087 2,051 2,183
Other Service Charges, Commissions and Fees 664 623 1,302 1,175
Mortgage Fee Income 134 114 247 181
Securities Gains (Losses) -- 1 3 1
Other 520 421 967 768
2,358 2,246 4,570 4,308
Noninterest Expense
Salaries and Employee Benefits 4,407 4,305 8,875 8,717
Occupancy and Equipment 1,017 1,000 2,010 2,020
Other 2,896 2,986 5,721 6,420
8,320 8,291 16,606 17,157
Income Before Income Taxes 3,156 3,002 5,922 5,065
Income Taxes 971 986 1,854 1,592
Net Income 2,185 2,016 4,068 3,473
Preferred Stock Dividends 630 681 1,260 1,324
Net Income Available to Common Shareholders $1,555 $1,335 $2,808 $2,149
Net Income Per Share of Common Stock
Basic $0.18 $0.16 $0.33 $0.25
Diluted $0.18 $0.16 $0.33 $0.25
Weighted Average Basic Shares Outstanding 8,439,258 8,439,258 8,439,258 8,439,258
Weighted Average Diluted Shares Outstanding 8,441,628 8,439,258 8,440,443 8,439,258

CONTACT: Terry L. Hester Chief Financial Officer (229) 426-6000 (Ext 6002)Source:Colony Bankcorp, Inc.