Colony Bankcorp, Inc. Announces Third Quarter Results

FITZGERALD, Ga., Oct. 19, 2012 (GLOBE NEWSWIRE) -- Colony Bankcorp, Inc. (Nasdaq:CBAN), today reported net income available to shareholders of $411,000, or $0.05 per diluted share for the third quarter of 2012 compared to net income available to shareholders of $208,000, or $0.02 per diluted share for the comparable 2011 period, while net income available to shareholders for nine months ended September 30, 2012 was $1,003,000, or $0.12 per diluted share compared to $1,103,000, or $0.13 per share for the comparable 2011 period. "Our pre-tax, pre-provision core earnings continue to support the credit-related expenses needed to address our problem assets. We remain cautiously optimistic about recent signs of improvement in the economy and housing and real estate market. This is reflected on our balance sheet as total loans outstanding have increased over the previous quarter end for the second consecutive quarter. The Company focus continues to be problem asset resolution and those efforts resulted in further improvement during the quarter as nonperforming assets decreased to $51.74 million at September 30, 2012 from $53.97 million at June 30, 2012, or a decrease of 4.13 percent, while the substandard assets to tier one equity plus loan loss allowance ratio improved to 63.87% at September 30, 2012 from 67.97% at June 30, 2012. Though improvement was realized this quarter, we still have much work ahead to meet our goals of reducing our problem assets to an acceptable level and returning to acceptable earnings. Our board, management and staff remain committed to making incremental progress toward these goals during 2012 and we were able to again accomplish that this quarter," said Ed Loomis, President and Chief Executive Officer.

Capital

Colony continues to maintain a strong capital position to be categorized as "well-capitalized" by regulatory benchmarks. At September 30, 2012, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 10.07 percent, 15.39 percent and 16.65 percent, respectively, compared to the previous quarter end of 9.71 percent, 15.67 percent and 16.94 percent, respectively, at June 30, 2012 and to 9.33 percent, 15.38 percent and 16.64 percent, respectively, at September 30, 2011. 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 2012, the Company reported net interest income of $9.22 million and a net interest margin of 3.56 percent, compared to $8.74 million and 3.21 percent, respectively, for third quarter 2011, while net interest income for nine months ended September 30, 2012 was $27.20 million with a net interest margin of 3.39 percent, compared to $26.14 million with a net interest margin of 3.05 percent for the comparable 2011 period. The improvement is indicative of the Company's focus on maximizing its net interest margin through deposit and loan pricing guidance and balance sheet restructuring. Anticipated loan growth along with pricing discipline should result in continued net interest margin improvement for the balance of 2012.

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 $85.04 million at September 30, 2012 compared to $87.75 million and $108.93 million, respectively, at June 30, 2012 and September 30, 2011. Substandard assets adjusted for SBA guarantees to tier one capital plus loan loss reserve ratio was 63.87%, 67.97% and 84.75%, respectively, at September 30, 2012, June 30, 2012 and September 30, 2011. Though much work remains to reduce substandard assets, improvement in these ratios reflects solid work in addressing and bringing resolution to substandard assets. Non-performing assets decreased from the previous quarter end to $51.74 million or 6.96 percent of total loans and other real estate owned as of September 30, 2012. This compares to $53.97 million or 7.35 percent and $63.29 million or 8.31 percent, respectively, as of June 30, 2012 and September 30, 2011. Loan loss reserve methodology resulted in nine months ended September 30, 2012 provision for loan losses of $5.63 million compared to $6.00 million for the comparable 2011 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 totaled $20.45 million at year end December 31, 2011 compared to $17.09 million at September 30, 2012. During this period, $5.76 million has been added to other real estate, thus a reduction from sales and/or write-downs of $9.12 million. This significant movement of properties in a challenging real estate market is indicative of the commitment by Colony management to address its problem assets in a timely and prudent manner. 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 2012 net charge-offs were $2.65 million, or 0.36 percent of average loans as compared to net charge-offs of $734 thousand, or 0.10 percent of average loans in third quarter 2011, while net charge-offs for nine months ended September 30, 2012 were $6.89 million, or 0.96% of average loans as compared to net charge-offs of $17.37 million, or 2.25% of average loans for the comparable 2011 period. The loan loss reserve was $14.39 million on September 30, 2012, or 1.98 percent of total loans compared to $15.29 million and $16.91 million, or 2.13 percent and 2.28 percent, respectively, at June 30, 2012 and September 30, 2011. Management believes that the 2012 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, 2012.

Noninterest Income

Total noninterest income decreased in the comparable periods as noninterest income for nine months ended September 30, 2012 was $7.09 million compared to $7.20 million in the comparable 2011 period. Fee income from the sale of SBA loans was $306 thousand in nine months ended September 30, 2012 compared to $864 thousand in the comparable 2011 period that primarily accounted for the decrease. On a positive note, service charge on deposits increased 5.69% and mortgage fee income increased 83.85% over the prior comparable period. The Company began an initiative during 2012 to enhance our secondary mortgage lending operations. Mortgage lending training was provided to several current employees to boost our secondary market loan originators. This has resulted in better penetration in the markets that Colony serves and resulted in increased mortgage fee income.

Noninterest Expense

Total noninterest expense increased to $25.64 million in nine months ended September 30, 2012 compared to $24.25 million in the comparable 2011 period, or an increase of 5.73 percent. Credit-related expenses continue to be a strain on earnings as write down and losses on OREO property and repossession and foreclosure expenses totaled $3.85 million in nine months ended September 30, 2012 compared to $2.79 million in the comparable 2011 period. Salaries and employee benefit expenses increased to $11.49 million in nine months ended September 30, 2012 compared to $10.78 million in the comparable 2011 period, or an increase of 6.59 percent. This increase is primarily attributable to an increase in headcount related to additional "back-office" regulatory compliance demands. Occupancy expenses decreased to $2.90 million in nine months ended September 30, 2012 compared to $3.08 million in the same comparable 2011 period, or a decrease of 5.84 percent. The decrease was primarily attributable to less depreciation expense for the comparable periods.

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 twenty eight 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 09/30/12 09/30/11 09/30/12 09/30/11
Net Interest Income $9,222 $8,743 $27,197 $26,142
Provision for Loan Losses 1,742 2,250 5,627 6,000
Non-interest Income 2,903 2,423 7,091 7,198
Non-interest Expense 9,247 8,090 25,635 24,247
Income Taxes 364 268 953 940
Net Income 772 558 2,073 2,153
Preferred Stock Dividend 361 350 1,070 1,050
Net Income Available to
Common Shareholders 411 208 1,003 1,103
QUARTER ENDED YEAR-TO-DATE
PER COMMON SHARE SUMMARY 09/30/12 09/30/11 09/30/12 09/30/11
Common Shares Outstanding 8,439,258 8,442,258 8,439,258 8,442,258
Weighted Average Basic Shares 8,439,258 8,442,278 8,439,258 8,441,070
Weighted Average Diluted Shares 8,439,258 8,442,278 8,439,258 8,441,070
Earnings Per Basic Share (b) $0.05 $0.02 $0.12 $0.13
Earnings Per Diluted Share (b) $0.05 $0.02 $0.12 $0.13
Common Book Value Per Share $8.13 $8.33 $8.13 $8.33
Tangible Common Book Value Per Share $8.10 $8.30 $8.10 $8.30
QUARTER ENDED YEAR-TO-DATE
OPERATING RATIOS (1) 09/30/12 09/30/11 09/30/12 09/30/11
Net Interest Margin (a) 3.56% 3.21% 3.39% 3.05%
Return on Average Assets (b) 0.15% 0.07% 0.12% 0.12%
Return on Average Total Equity (b) 1.69% 0.87% 1.38% 1.56%
Efficiency (c) 84.27% 77.75% 79.31% 76.90%
(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 09/30/12 09/30/11
Total Assets $1,097,437 $1,145,983
Loans, Net of Reserves 711,971 724,030
Allowance for Loan Losses 14,389 16,910
Intangible Assets 232 268
Deposits 941,204 948,356
Common Shareholders' Equity 68,584 70,308
Common Equity to Total Assets 6.25% 6.14%
Total Equity 96,369 97,931
Total Equity to Total Assets 8.78% 8.55%
QUARTER ENDED YEAR-TO-DATE
AVERAGE BALANCES 09/30/12 09/30/11 09/30/12 09/30/11
Total Assets $1,111,524 $1,172,997 $1,147,419 $1,220,352
Loans, Net of Reserves 709,627 750,810 699,511 773,615
Deposits 953,380 977,130 973,670 1,012,519
Common Shareholders' Equity 69,279 68,244 69,139 66,437
Total Equity 97,044 95,847 96,861 93,994
QUARTER ENDED YEAR-TO-DATE
ASSET QUALITY 09/30/12 09/30/11 09/30/12 09/30/11
Nonperforming Loans $34,283 $42,148 $34,283 $42,148
Nonperforming Assets 51,741 63,289 51,741 63,289
Substandard Assets 85,037 108,933 85,037 108,933
Net Loan Chg-offs (Recoveries) 2,646 734 6,888 17,370
Reserve for Loan Loss to Gross Loans 1.98% 2.28% 1.98% 2.28%
Reserve for Loan Loss to Non-performing Loans 41.97% 40.12% 41.97% 40.12%
Reserve for Loan Loss to Non-performing Assets 27.81% 26.72% 27.81% 26.72%
Net Loan Chg-offs (Recoveries) to Avg. Gross Loans 0.36% 0.10% 0.96% 2.25%
Nonperforming Loans to Gross Loans 4.72% 5.69% 4.72% 5.69%
Nonperforming Assets to Total Assets 4.71% 5.52% 4.71% 5.52%
Nonperforming Assets to Total Loans And Other Real Estate 6.96% 8.31% 6.96% 8.31%
Substandard Assets to Tier One Capital and Allowance for Loan Losses 63.87% 84.75% 63.87% 84.75%
Quarterly Comparative Data (in thousands, except per share data)
3Q2012 2Q2012 1Q2012 4Q2011 3Q2011
Assets $1,097,437 $1,133,170 $1,176,644 $1,195,376 $1,145,983
Loans 711,971 700,917 690,533 700,614 724,030
Deposits 941,204 972,135 994,014 999,985 948,356
Common Shareholders' Equity 68,584 69,265 69,422 68,950 70,308
Total Equity 96,369 97,009 97,125 96,613 97,931
Net Income 772 760 541 381 558
Net Income Available to Common Shareholders 411 403 189 31 208
Net Income Per Share 0.05 0.05 0.02 0.00 0.02
Key Performance Ratios 3Q2012 2Q2012 1Q2012 4Q2011 3Q2011
Return on Average Assets (1) 0.15% 0.14% 0.06% 0.01% 0.07%
Return on Average Total Equity (1) 1.69% 1.66% 0.78% 0.13% 0.87%
Common Equity to Total Assets 6.25% 6.11% 5.90% 5.76% 6.14%
Total Equity to Total Assets 8.78% 8.56% 8.25% 8.07% 8.55%
Net Interest Margin 3.56% 3.39% 3.23% 3.28% 3.21%
(1) Computed using net income available to shareholders
Consolidated Balance Sheets Colony Bankcorp, Inc.
(in thousands)
Sept. 30, 2012 Sept. 30, 2011
(unaudited) (unaudited)
ASSETS
Cash and Cash Equivalents
Cash and Due from Banks $22,077 $16,777
Federal Funds Sold 42,946 10,561
65,023 27,338
Interest-Bearing Deposits 9,210 4,409
Investment Securities
Available for Sale, at Fair Value 242,097 313,119
Held for Maturity, at Cost (Fair Value of $46 and
$48 as of Sept. 30, 2012 and Sept. 30, 2011, Respectively) 45 49
242,142 313,168
Federal Home Loan Bank Stock, at Cost 3,139 5,573
Loans 726,522 740,999
Allowance for Loan Losses (14,389) (16,910)
Unearned Interest and Fees (162) (59)
711,971 724,030
Premises and Equipment 25,212 26,024
Other Real Estate 17,091 20,662
Other Intangible Assets 232 268
Other Assets 23,417 24,511
Total Assets $1,097,437 $1,145,983
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-Bearing $101,852 $88,491
Interest-Bearing 839,352 859,865
941,204 948,356
Borrowed Money
Subordinated Debentures 24,229 24,229
Other Borrowed Money 30,000 71,000
54,229 95,229
Other Liabilities 5,635 4,467
Stockholders' Equity
Preferred Stock, Par Value $1,000; Authorized 10,000,000
Shares, Issued 28,000 Shares 27,785 27,623
Common Stock, Par Value $1; Authorized 20,000,000
Shares, Issued 8,439,258 and 8,442,258 Shares as of
Sept. 30, 2012 and 2011, Respectively 8,439 8,442
Paid in Capital 29,145 29,166
Retained Earnings 30,337 29,466
Restricted Stock- Unearned Compensation -- (10)
Accumulated Other Comprehensive Loss, Net of Tax 663 3,244
96,369 97,931
Total Liabilities and Stockholders' Equity $1,097,437 $1,145,983
Consolidated Statements of Income Colony Bankcorp, Inc.
(in thousands except per share data)
Quarter
Three Months Ended
Year-to-Date
Nine Months Ended
09/30/12 09/30/11 09/30/12 09/30/11
(unaudited) (unaudited) (unaudited) (unaudited)
Interest Income
Loans, Including Fees $10,538 $10,920 $31,391 $33,623
Federal Funds Sold and Securities Purchased
Under Agreements to Resell 16 19 72 91
Deposits with Other Banks 4 11 34 37
Investment Securities
U. S. Government Agencies 1,116 1,703 4,125 5,397
State, County and Municipal 42 44 173 102
Corporate Obligations/Asset-Backed Sec. 14 23 62 68
Dividends on Other Investments 18 12 55 36
11,748 12,732 35,912 39,354
Interest Expense
Deposits 2,110 3,124 6,833 10,228
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase -- -- -- 338
Borrowed Money 416 865 1,882 2,646
2,526 3,989 8,715 13,212
Net Interest Income 9,222 8,743 27,197 26,142
Provision for Loan Losses 1,742 2,250 5,627 6,000
Net Interest Income After Provision for Loan Losses 7,480 6,493 21,570 20,142
Noninterest Income
Service Charges on Deposits 917 835 2,527 2,391
Other Service Charges, Commissions and Fees 372 296 1,119 941
Mortgage Fee Income 103 57 296 161
Securities Gains 1,187 813 2,067 1,945
Other 324 422 1,082 1,760
2,903 2,423 7,091 7,198
Noninterest Expense
Salaries and Employee Benefits 3,833 3,639 11,486 10,778
Occupancy and Equipment 1,000 1,040 2,901 3,084
Other 4,414 3,411 11,248 10,385
9,247 8,090 25,635 24,247
Income Before Income Taxes 1,136 826 3,026 3,093
Income Taxes 364 268 953 940
Net Income 772 558 2,073 2,153
Preferred Stock Dividends 361 350 1,070 1,050
Net Income Available to Common Shareholders $411 $208 $1,003 $1,103
Net Income Per Share of Common Stock
Basic $0.05 $0.02 $0.12 $0.13
Diluted $0.05 $0.02 $0.12 $0.13
Weighted Average Basic Shares Outstanding 8,439,258 8,442,278 8,439,258 8,441,070
Weighted Average Diluted Shares Outstanding 8,439,258 8,442,278 8,439,258 8,441,070
CONTACT: Terry L. Hester Chief Financial Officer (229) 426-6002Source:Colony Bankcorp, Inc.