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) 426-6002

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